KWEKWE POLYTECHNIC

DEPARTMENT OF ENTREPRENEURSHIP

ENTREPRENEURIAL SKILLS DEVELOPMENT: QUESTION AND ANSWERS

COMPILED BY DZOMIRA S AND MATEMADOMBO S

2023 DECEMBER

Discuss the effects of risks in business

 Financial Risk effect: financial loss due to factors like changes in interest rates,
foreign exchange rates, default of customers, increase in costs etc. can impact profits
and viability of business.
 Compliance Riskeffect: financial loss due to risk of fines or sanctions due to non-
compliance of laws and regulations related to operations, taxation, employment,
health and safety standards etc.
 Strategic Riskeffect: Risk of losses due to wrong strategic decisions around new
markets, products.
 Operational Riskeffect: risk of losses due to inadequate systems and processes, human
errors, system failures etc. Can impact efficiency, productivity and service quality.
 Reputational Riskeffect: Risk of losses due to negative publicity around quality
issues, unethical practices, data breaches etc. Can damage brand value and consumer
trust.
 Market Riskeffect: Risk of losses due to changes in demand, competition, technology
disruptions etc. Market shifts are difficult to predict and prepare for.
 People Riskeffect: Risk of losses due to key person dependencies, talent attrition,
cultural misalignments post mergers etc. People issues impact operations.
 Environmental Riskeffect: Risk of losses due to natural disasters, climate change
impacts eg destruction of property by lighting, loss of stock due to exposure to rain or
floods etc. External environment-related factors are usually uncontrollable risks.

Describe the various types of risks that can affect businesses.

 Strategic risk - Risks associated with long-term goals and strategies of a business.
Includes risks from strategic decisions, mergers & acquisitions, product development,
business expansion plans etc.
 Operational risk - Risks arising due to gaps or failures in internal processes, people,
systems or external events. Includes risks of data breaches, workplace accidents,
supply chain disruptions, equipment failure etc.
 Financial risk - Risk of losses due to fluctuations in foreign currency exchange rates,
interest rates, credit/default risks, liquidity risks etc. Affects profitability.
 Compliance risk - Legal and regulatory risks due to non-compliance with laws and
industry standards. Can lead to lawsuits, fines and penalties.

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  Reputational risk - Risk of loss of goodwill, brand value and reliability due to
negative publicity over issues like poor quality, unethical practices etc.
 Market risk - Risks arising from changes in demand-supply conditions, price
fluctuations, competitor actions, new technologies etc. in the target market.
 Credit risk - Risk of losses arising due to a borrower or counter-party failing to make
required payments. Affects lenders, investors.
 Political and country risk - Risks due to political instability, war, terrorism, trade
restrictions in a foreign country.
 Environmental risk - Risks to business from environmental factors like natural
disasters, climate change impacts, environmental regulations.
 People risk - Losses due to human resource factors like attrition, disputes, skills
obsolescence, key person dependencies etc.
Describe the risk management process in business.
 Risk is defined in terms of uncertain events which may have positive or negative
effect on the project objectives.

 Risk Identification
Identifying possible risks is the first step in successful risk management. Project
managers should collaborate with their team and stakeholders to identify all potential
hazards to the project. They should think about the project's scope, resources, budget,
timetable, and stakeholders. To identify common hazards, project managers can also
look at past data from previous projects. All potential hazards should be documented
in a risk register, which is a living document that should be maintained throughout the
project.
 Risk Assessment
The second step is to assess the likelihood and impact of each identified risk. Project
managers can use a risk matrix or other risk assessment tools to help them assess the
risks. A risk matrix is a tool that helps project managers prioritise risks based on their
likelihood and impact.
 Planning for Risk Response
Once the risks have been identified and assessed, risk response plans must be
developed. Risk response techniques are actions that can be taken to lessen the
severity of a risk if it occurs. There are four main risk response strategies: avoidance,
transference, mitigation, and acceptance. Taking steps to eliminate a risk is what it
means to avoid it. A risk is transferred when it is transferred to another party, such as
an insurance company. Mitigating a risk entails taking actions to lessen the impact of
the risk if it occurs. Accepting a risk entails admitting the risk and developing a plan
to manage it if it arises.
 Risk Prevention or Mitigation Implementation

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 The fourth step in the process is to put risk-mitigation techniques in place. This entails
taking the activities outlined in the risk response plan to mitigate the impact of the
risk if it occurs. To ensure that risk reduction measures are effective, project managers
should monitor their progress.
 Consider Contigency
Risk contingency is a strategy used in risk management to prepare for and mitigate
potential risks. It involves identifying potential risks and developing a plan to address
those risks if they occur. The purpose of a risk contingency plan is to minimize the
negative impact of a risk event and to ensure that the project can continue to move
forward.
There are two types of risk contingency plans: proactive and reactive. Proactive
contingency plans involve taking steps to prevent the risk from occurring. This can
include increasing the budget, extending the timeline, or changing the scope of the
project. Reactive contingency plans involve responding to a risk event after it has
occurred. This can include allocating additional resources, changing the project plan,
or executing a backup plan.
Having backup suppliers in case the primary supplier cannot deliver products or
services, having a backup plan in case a vital team member becomes unavailable, or
having a disaster recovery plan in case of natural disasters or other catastrophic events
are all examples of risk contingency plans.
 Creating a trigger point
Setting trigger points is an important part of risk management. Trigger points are
precise occurrences or conditions that indicate when a risk has occurred or is on the
verge of occurring. These indications alert project managers to the need to take action
to mitigate or respond to the identified risk.

Discuss the principles of risk management

 Risk Identification: Involve stakeholders to identify all potential risks that can affect
the business. Map operational processes to trace risks.
 Risk Assessment: Analyze the likelihood and impact of each risk. Prioritize critical
risks based on their significance.
 Risk Mitigation: Design control activities to modify risks that threaten business
objectives. Controls could include policies, procedures, redundancies etc.
 Risk Monitoring: Regularly monitor the performance of risk mitigating controls and
track emerging risks. Review risk profile periodically.
 Responsibilities: Clearly define risk management roles and accountabilities. Top
management provides oversight while operational teams execute controls.
 Continual Improvement: Risk management is a continuous process. Learn from
failures and improve mitigation strategies based on feedback.

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  Resources: Adequate funding, skills and technology tools are required to implement
robust risk management capabilities.
 Documentation: Formally document risk management policies, procedures, risk
registers and reports for transparency and governance.
 Communication: Timely and effective internal/external communication about risks
and risk strategies builds awareness and trust.
 Independence: Independent review provides objective assurance that risks are
properly identified and managed.
 Training: Regular training keeps employees equipped to recognize and escalate risks
encountered at work.

Describe the risk management strategies

 Risk Avoidance - Not undertaking an activity that could carry risks, e.g. quitting a
high-risk product line.
 Risk Reduction - Actions taken to lower the severity/likelihood of a risk, e.g.
incorporating safety standards.
 Risk Transfer - Shifting risks to a third party through insurance, contracts, hedging
etc. Common for financial and liability risks.
 Risk Retention - Accepting responsibility for potential financial losses from a risk.
Typically used for small acceptable risks.
 Diversification - Reducing overall risk by spreading investments/resources across
different business lines or geographical regions.
 Contingency Planning - Developing advance response plans for if a risk event occurs,
e.g. backup servers, disaster recovery plans.
 Risk Financing - Using financial approaches like self-insurance or reserves to cover
potential losses.
 Risk Monitoring - Constant assessment of risk levels and factors through audits,
reporting and key risk indicators.
 Loss Prevention - Security measures, quality checks etc. to stop risk events from
triggering losses in the first place.
 Crisis Management - Having protocols to effectively handle emergencies and protect
reputation if risks do materialize.

Good business ethics is good marketing strategy. Discuss.

 Builds Trust and Credibility: Customers are more likely to trust and do business with
a company that acts ethically and treats all stakeholders well. This builds the brand's
credibility.

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  Loyal Customers: Ethical business practices related to good products, customer
service, data privacy etc. create happy customers who remain loyal to the brand and
become its advocates.
 Attracts Talent: Acting ethically helps a company attract better quality talent who
want to work for an organization with strong values. This improves productivity and
innovation.
 Positive Public Image: Unethical issues can severely damage reputation, but ethical
operations earn goodwill and positive media coverage which enhances brand image.
 Competitive Advantage: Following ethics sets the company apart from competitors
and satisfies customer demands for responsible businesses, gaining a marketing edge.
 Premium Pricing Power: Ethical brands are often able to charge slightly higher prices
because customers feel the value justifies the premium for peace of mind.
 Avoid Legal Problems: Unethical actions often invite lawsuits and penalties but ethics
ensure legal and regulatory compliance to avoid such troubles.
 Sustainability Focus: Being ethical is consistent with sustainability goals valuable to
many consumers and investors concerned with ESG practices.

Justify the significance of ethics in business

 Long Term Growth: Unethical practices may provide short term gains but ultimately
erode trust and reputation, hampering long term growth prospects. Ethics ensure
viability.
 Regulatory Compliance: Strict laws and oversight today mandate ethical operations
relating to areas like corruption, discrimination, customer data privacy etc. Non-
compliance invites penalties.
 Talent Attraction: Ethical policies help attract and retain best talent who seek purpose-
driven work culture aligned with their values. This improves productivity and
innovation.
 Customer Loyalty: Ethical practices relating to responsibility, transparency,
community support etc. build strong customer relationships and foster brand loyalty
over the long run.
 Enhanced Credibility: Ethical standards demonstrate the organization's integrity,
which garners goodwill from key stakeholders like investors, partners, media and
society at large.
 Competitive Advantage: In today's conscious environment, ethical differentiation sets
businesses apart and satisfies growing preferences for sustainability focused
operations.
 Risk Mitigation: Unethical misdeeds severely damage reputation and can even
threaten long term viability through consumer disenchantment, penalties or litigation
costs.
 Societal License to Operate: Businesses depend on resources and support from local
communities. Ethics ensure organizations fulfill their responsibilities as good
corporate citizens

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Justify the significance of corporate social responsibility in business.
 Reputation and trust: Engaging in CSR helps build trust with stakeholders and
enhances corporate reputation. It shows the company is invested in the community.
 Attract talent: Employees, especially younger generations, prefer working for socially
responsible organizations. CSR improves employer branding.
 Customer loyalty: Customers feel proud to support brands engaging in ethical
practices. It encourages repeat purchases and positive word of mouth.
 Managing risk: CSR mitigates regulatory, legal and reputational risks. It helps address
social, environmental and ethical issues proactively.
 Innovation: Tackling social/environmental challenges through CSR can lead to new
products/services and improve operational efficiencies.
 Financial performance: Studies show CSR leads to improved profitability, sales and
better access to capital over the long term.
 Competitive advantage: CSR leadership differentiates the organization from
competitors and satisfies growing consumer demand for sustainability.
 Partnerships: CSR opens avenues for strategic alliances with NGOs, governments and
other stakeholders working on development initiatives.
 Societal license to operate: Businesses depend on local communities for resources and
labor. CSR ensures they fulfill their responsibilities.

Discuss the importance of computers in business

 Automation: Computers automate repetitive and menial tasks, increasing productivity
and efficiency. This frees up employee time for more strategic work.
 Data Processing: Computers can process huge amounts of data at high speeds. This
enables businesses to analyze data insights, crunch numbers, and generate reports
effortlessly.
 Connectivity: Networks and internet allow seamless communication and data sharing
between branch offices worldwide in real-time. This facilitates collaboration.
 Documentation: Documents and records can be stored digitally on computers and
servers. This eases retrieval, archiving and adds an extra layer of security from
disasters.
 Accounting: Applications help easily maintain books of accounts, process payrolls,
manage taxes and perform other accounting tasks accurately.
 Customer Management: CRM software helps track customer interactions, support
inquiries, maintain databases and run targeted marketing campaigns.
 Data-driven Decisions: Data-driven insights from computers equip managers to take
more informed decisions based on facts and trends rather than guessing.
 Online Presence: Computers and internet are crucial for companies to have an
online/e-commerce presence, engage customers virtually and boost sales.

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  Job Applications: Knowledge of computer applications like MS Office, Tally,
databases etc. is now mandatory in majority of job roles.
 Future Growth: Technology will continue redefining businesses. Computers ensure
organizations leap ahead of digital transformation curves.

Describe the applications of e-commerce in business.

 Online Shopping: Allow customers to directly purchase products/services via
company website on desktop or mobile app from remote locations.
 Online Payments: Integrate secure digital payment options like credit cards, net
banking, wallets etc. to facilitate fast and convenient transactions.
 Order Tracking: Provide order tracking facility to customers to check status of their
purchase from order placement to delivery.
 Inventory Management: Use e-commerce solutions to effectively manage stocks
across warehouses, track real-time inventory levels and replenish supplies.
 Digital Marketing: Leverage e-commerce platforms to run targeted online advertising
campaigns, manage affiliate programs and promote branded offerings.
 Data Analytics: Gather valuable customer insights from online sales data to find
trends, design personalized experiences and improve conversion rates.
 Customer Support: Offer 24/7 online support through chat, email, ticketing for
pre/post sales assistance and feedback from e-commerce customers.
 Omnichannel Presence: Integrate brick-and-mortar Point of Sale with online stores for
seamless shopping experience across all relevant touchpoints.
 New Market Reach: E-commerce enables businesses to tap global geographies and
audiences beyond limitations of physical stores.

Discuss the benefits of buying an existing business over starting a new enterprise.
 Less risk - An existing business already has revenue streams, customers, suppliers etc.
established. There is less uncertainty than starting from scratch.
 Shorter ramp-up time - An existing business can start generating income right away
unlike a startup that requires time to develop its product/service and clientele.
 Lower startup costs - Taking over an existing business does not require expenditure
on market research, product development, hiring initial team etc. that startups
demand.
 Proven product/market fit - The business being acquired has already proven there is
demand for its offerings and it can generate profit in the target industry/market.
 Established brand and goodwill - Buyers get an existing brand name that customers
may already recognize and trust rather than building brand new.
 Ready customer base - The existing customer database can be leveraged right away
rather than having to build new client relationships from the beginning.
 Supplier relationships - Valuable vendor contracts and logistic networks may already
be in place saving time to forge new arrangements.

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  Infrastructure - Existing operational infrastructure like equipment, premises,
employees etc. may have capacity to support future scaled up operations.
 Transfer of expertise - Acquiring team has access to business knowledge and
expertise accumulated over years by existing operators

Describe the socio-economic benefits of entrepreneurship

 Job creation - Establishing new businesses creates both direct jobs for
founders/employees as well as indirect jobs in supplier/support industries. This
reduces unemployment.
 Economic growth - A thriving entrepreneurial ecosystem boosts competition,
innovation and productivity in the market which drives sustainable long-term
economic growth.
 Tax revenues - As businesses make profits and employees earn salaries, government
tax collections rise which can be invested in community development programs.
 Competition and choice - New ventures disrupt existing competitors, offer new
products/services and give customers more options to choose from which spurs
development.
 Income generation - Entrepreneurship empowers individuals to earn stable livelihoods
instead of living off state support or charity by starting their own ventures.
 Wealth creation - Successful entrepreneurs and their staff become wealthier over time
which has trickle-down effects as they spend more in the local economy.
 Industry clusters - Agglomeration of interlinked firms in mobility, biotech, fintech
hubs etc further cross-pollinate ideas and boost communal progress.
 Regional development - Rural enterprises address local needs and help stem migration
to cities by providing opportunities closer to home.
 Innovation and adaptation - Through necessity or vision, startups pioneer new
business models, technologies and ways of addressing key social issues
Justify the benefits of venturing into business as a first career option
 Be your own boss - Take on the challenge of running your own show and being in
charge of decisions rather than reporting to others. Satisfies entrepreneurial spirit.
 Higher earning potential - Successful business owners can earn significantly more
compared to employment income ceilings over the long term.
 Learning by doing - There is no better teacher than hands-on experience. By starting
early, an individual learns invaluable real-world lessons about various business
aspects.
 Flexibility - Set own work timings and manage professional and personal
responsibilities with flexibility not afforded in regular jobs.
 Job security - Being self-employed ensures career is not at the mercy of redundancies
or company politics. Business ownership provides higher security.
 Early mover advantage - Younger generation is familiar with digital tools. Starting
business early allows capturing market before others when such skills are rare.

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  Network building - The connections formed in early career become a invaluable asset
for sourcing opportunities, support etc. as the venture grows.
 Passion driven - Individuals are energized and motivated to succeed when pursuing a
path aligned with their true interests and calling from the beginning.
 Skills development - Running a business from start hones valuable abilities like team
leadership, strategic planning, financial management needed regardless of future
career steps.
 Family legacy - Early entrepreneurs can establish multi-generational family
businesses providing successive kin career opportunities and continuity.

Describe the functions of management in business.

 Planning: Involves setting goals and determining steps needed to achieve those goals.
Management draws up both long-term and short-term plans.
 Organizing: Is about allocating duties and responsibilities to various positions or
departments. It involves structuring the organization and coordination of activities.
 Staffing: Includes manpower planning, recruiting employees with the required skills
and experience, overseeing training and development programs.
 Directing: Guiding and leading employees to ensure goals are accomplished
efficiently. Management directs employee efforts towards organization's objectives.
 Controlling: Monitoring activities to check if plans are being implemented correctly
and desired results being achieved. Involves setting performance standards and taking
corrective actions.
 Decision Making: Managers have to make various operational and strategic decisions
related to finance, production, marketing etc. on a daily basis.
 Problem Solving: Management addresses issues faced in implementing plans and
resolving conflicts among employees or departments.
 Coordination: Involves interlinking various departments and sequences of
activitiesstriking a balance of goals and resources use.
 Communication: Effective exchange of information up, down and across the
organization is vital. Management communicates policies, plans, performance reviews
etc.
 Budgeting: Preparing budgets in line with plans, monitoring expenses and taking
actions to optimize resource usage.
 Leading: involves influencing, motivating, training and coaching organizational
members in order to achieve the organizational goals

Describe the role of management in business

 Interpersonal role: As a figurehead, management performs ceremonial duties and
represents the organization externally.
 Informational role: Management monitors the external environment, disseminates
internal information and acts as a spokesperson.

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  Decisional role: Management makes routine operating decisions, resolves conflicts
between subordinates and allocates organizational resources.
 Figurehead role: Management symbolizes the organization and serves as a prestigious
public representative at formal events and functions.
 Leader role: Management motivates subordinates to achieve goals through inspiration,
mentoring and directing work activities.
 Liaison role: Management builds external networks, establishes contacts and
maintains relations with peers, suppliers, customers etc.
 Monitor role: Management scans the environment for potential opportunities and
threats, collects related data and monitors organizational performance.
 Disseminator role: Management distributes important internal and external
information to employees through formal and informal channels.
 Disturbance handler role: Management fixes problems, handles crises and removes
barriers faced by subordinates in goal accomplishment.
 Resource allocator role: Management assigns funds, materials, equipment and
personnel to different projects, tasks and departments.
 Negotiator role: Management negotiates agreements with third parties on behalf of the
organization like contracts, compromises etc.

How would you motivate employees in an environment where wages and salaries are
low due to depressed economic conditions?
 Recognition and praise - Formally recognize top performers and provide informal
praise/appreciation for good work. Public acknowledgment boosts morale.
 Empowerment and autonomy - Give employees ownership over their work by
allowing flexibility, decision making authority and responsibility.
 Learning opportunities - Provide on-the-job training, skills development programs,
certifications to help employees progress in their careers.
 Meaningful work - Align individual tasks to the bigger purpose and vision so
employees feel their contribution matters.
 Work-life balance - Be flexible with schedules, offer remote working where possible
so jobs don't take a toll on personal life.
 Non-monetary incentives - Reward high achievers with extra paid time off, gift
vouchers, special perks instead of money alone.
 Career growth paths - Clearly outline potential next roles and promotions so
ambitious staff have goals to work towards.
 Positive feedback culture - Frequently acknowledge small wins, receive feedback in
both directions to strengthen relationships.
 Fun social activities - Organize team outings, contests, events to boost camaraderie
and engagement beyond work requirements.
 Visible leadership - Leading by example through transparency, empathy, solutions-
orientation can inspire staff in tough time

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Justify the significance of motivating employees in business.
 Productivity - Motivated employees work with more enthusiasm, energy and
dedication to complete tasks efficiently. This directly boosts organizational
productivity.
 Retention - Happy, motivated staff are less likely to switch jobs frequently. Low
turnover saves recruitment and retraining costs for companies.
 Performance - Inspired employees are committed to performing to the best of their
abilities and exceeding job requirements and goals.
 Innovation - Motivation encourages creativity and employees willingly contribute
new ideas to solve problems and improve processes.
 Customer service - Demotivated staff provides poor customer experience affecting
brand image and loyalty. Engaged employees ensure great CX.
 Profits - With improved productivity, performance, retention and customer
satisfaction, business profitability increases due to reduced costs and enhanced
revenues.
 Morale - Positively motivating the workforce develops high morale which creates a
supportive and encouraging overall working environment.
 Leadership impact - Managers who can inspire teams command more respect and are
influential in driving organizational culture and change agendas.
 Talent attraction - Employers with a reputation of empowering workforce find it
easier to attract top talent from the job market.
 Compliance - Motivated employees willingly follow rules without supervision and are
less likely to compromise on quality or ethics.

Discuss how you would apply any named motivational theory to motivate employees in
an enterprise.(Choose one theory in this case)
Maslow's Hierarchy of Needs: Try to satisfy different layer of needs - physiological, safety,
social, ego and self-actualization. Offer competitive pay, job security, opportunities for
recognition, growth. This helps retain talent, meaningful work, autonomy, learning. Extrinsic
- bonuses, rewards, promotions based on performance. This engages employees.

Equity Theory: Ensure fair and equitable compensation, benefits, treatment of all. Address
perceived inequities promptly to prevent demotivation.

McClelland's Theory: Identify individual achievement, power or affiliation needs. Design

work, incentives accordingly. Challenge high achievers with stretch goals for example.

Herzberg's Theory: Focus on motivators like recognition, growth, responsibility, achievement

rather than just job security or pay which create no dissatisfaction but no motivation.

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Vroom's Expectancy Theory: Link effort to performance, performance to rewards explicitly.
Ensure employees value said rewards to boost their motivation to achieve set targets.

Proper application of these theories helps understand employee needs better and design
specific interventions that resonate with them individually as well as team to maximize
engagement and productivity. Regular feedback ensures continuous refinement.
Discuss the Causes of Business Risk
Natural Factors
There are some natural factors like earthquakes, floods, etc., which can damage the business.
It is said to be uncontrollable by humans so any loss incurred by natural calamities is also
unavoidable.
Competition
Having strong competitors in the market, manufacturers may involve in cutthroat competition
by reducing the price of the goods or even produce cheap quality products which are
considered a great hazard to the business.
Fluctuation in Demand for the Product
A sudden change in demand for a product is also considered a business risk. The rise of new
products in the market may affect the demand for current products. For instance, when a new
version of the mobile phone is introduced then the demand for the old model may reduce.
Use of Modern Technology
By using modern technology for production, cost per unit may decrease. This is possible for
financially sound businesses but for small businesses it may not be possible. This may
eventually lead to loss.
Human Causes
A loss in business may also occur due to forgery, theft, heavy expenditure, etc.
Change in Government Policies
Government policies are unavoidable for business. When there is a sudden change in the
government policies and if it is not favorable for a business then it may lead to loss.
Mismanagement
The management needs to be capable of running a business. If not, it may lead to loss.
Improper planning may not enable a business to achieve the planned objectives. All this can
affect the cash flow and also increase the cost per unit.
Technological Cause
Technological causes of business risks involve a technology failure that may disrupt a
business. The types of technology risks include cyber-attacks, security incidents, password
theft, service outages, etc.

Describe the stock control methods.

 First In First Out (FIFO): The oldest stock is sold or used first. Helps ensure stock
does not pass expiry/best before dates. However, may result in higher valued stock
being sold first.

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  Last In First Out (LIFO): The most recently received stock is sold or used first. The
opposite of FIFO. Helpful to reduce taxes by showing lower valuations of closing
stock.
 Average Cost Method: Calculation of cost of goods sold and closing stock is based on
average unit cost. Mitigates FIFO and LIFO distortions. More accurate reflection of
periodic income.
 Maximum-Minimum Method: Setting targets for max-min levels of stock. Reorder is
triggered once minimum level is reached. Ensures uninterrupted production and
sufficient buffer against stock-outs.
 Economic Order Quantity (EOQ): Calculates optimal reorder quantity balancing
holding and ordering costs. Balancing inventory carrying cost risk against frequent
small replenishments.
 Vendor-Managed Inventory (VMI): Suppliers monitor and replenish stock directly
based on agreed targets. Relieves resource pressure but lessens control for businesses.
 Just-In-Time (JIT): Minimal stock levels, frequent small deliveries synchronized
tightly with production schedule. Eliminates waste but increases dependency on
reliable suppliers.(Search more )

Discuss the principles of business ethics

Honesty - Businesses should engage in open and truthful communication with all
stakeholders. This involves avoiding misrepresentation or fraud.
Integrity - Companies must conduct business in a morally upright way and fulfill promises
and commitments even in difficult situations. Actions match intentions.
Trustworthiness - Establishing an ethical culture where leaders and employees are reliable
and dependable builds trust with customers, suppliers and society over time.
Loyalty - A business should be loyal to legitimate expectations of stakeholders and not betray
the trust placed in it for short term gains.
Respect - There should be mutual care, concern and consideration for interests of every
individual affected by business decisions and actions.
Transparency - Ethical organizations maintain a high level of transparency in business
transactions, policies, fees etc. and are willing to be held accountable.
Fairness - All people and groups are treated impartially according to their merits, without
prejudice or favoritism. Just distribution of costs and benefits.
Citizenship - Businesses operate as responsible members within local and global
communities by protecting environment and human rights.
Commitment to values - Upholding principles of ethics cannot be situational. There must be
consistency in compliance even duringdifficult economic conditions
Justify the significance of controlling stocks in business.

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  Maintains optimal stock levels - Tracking and monitoring inventory helps ensure
adequate stock levels to meet demand without overstocking. This improves cash
flows.
 Reduces costs - Excess stock leads to higher carrying costs like storage, insurance,
obsolescence risks. Effective control minimizes these unnecessary expenses.
 Improves customer service - Sufficient stock availability ensures customers face
minimal out of stock situations. This boosts customer satisfaction and retention.
 Forecasts demand accurately - Managing inventory data provides insights into order
patterns, demand cycles that aid better demand forecasting and production planning.
 Identifies slow moving items - Stock control flags up excess stock of slow selling
products allowing management of clearances or returns to avoid blocking working
capital.
 Supports just-in-time production - Precise information about current inventory and
sales helps sync manufacturing schedules with actual needs to eliminate waste.
 Leverages purchasing power - Planning replenishments systematically gives
opportunities for bulk quantity discounts or contracts with suppliers.
 Complies with regulations - Industries like pharmaceuticals mandatorily require
documented inventory management for compliance.
 Prevents loss from obsolescence - Detailed records facilitate timely identification of
expired or near expiry products minimizing write-offs.

Discuss the functions of the human resources department in an enterprise

 Recruitment and Staffing: Identifying skill requirements, attracting candidates,
shortlisting, interviewing and onboarding new employees.
 Training and Development: Designing training programs to enhance skills, arranging
for external training, managing employee learning and career development.
 Performance Management: Establishing performance metrics, conducting appraisals,
providing feedback, addressing issues, and tying performance to
compensation/incentives.
 Compensation and Benefits: Administering payrolls, designing and reviewing salary
structures, determining annual pay raises, and managing various statutory and
voluntary employee benefits.
 Employee Relations: Handling employee grievances, disputes, and complaints in a
fair manner. Ensuring cordial relations through various engagement activities.
 Talent Management: Identifying and nurturing key talents, succession planning,
career pathing, and ensuring retention of critical skills.
 Compliance: Ensuring adherence to various labour laws and related regulations
pertaining to areas like leave, safety, discrimination etc.
 Health and Well-being: Organizing health check-ups, programmes on work-life
balance, addressing long term healthcare needs through insurance schemes.
Discuss the factors to consider when setting prices in an enterprise.

Page PAGE 32 of NUMPAGES 32

  Costs: Variable costs of production including materials, labor, overheads need to be
accounted for. Prices should allow for sufficient profit margins.
 Competition: Knowledge of competitors' pricing strategies and offerings helps
determine competitive pricing without undercutting.
 Demand: Price sensitivity and elasticity of demand impacts pricing. Lower prices may
boost demand but margins suffer.
 Target Customer: Customer profile, purchasing power and needs affect desirable price
points. Mass vs niche markets require different approaches.
 Product Life Cycle: Prices tend to be higher at introduction to cover R&D costs,
lower during growth/maturity to gain market share.
 Product Differentiation: Unique features, quality, image allow some flexibility in
prices compared to commoditized goods.
 Distribution Channels: Price differentials apply across channels based on associated
costs and market norms.
 Payment Terms: Discounts encourage early payment and bulk buying while credit
terms impact cash flows and risks.
 Psychological Factors: Behavioral pricing strategies exploit psychological triggers
like odd-even numerals.
 Market Conditions: Seasonality, supply/demand cycles, inflation can prompt periodic
price revisions
Describe the pricing strategies that can be adopted by an entrepreneur.
 Cost-plus pricing: Calculate the total cost of production and add a percentage markup
to determine the price. Simple but may not maximize profits.
 Market-based pricing: Analyze competitors' prices and set prices slightly higher or
lower than competitors. Risk of being seen as a competitor rather than unique brand.
 Penetration pricing: Price products very low at launch to rapidly gain market share.
Sustainable only in the short-run, losses may occur.
 Price skimming: Set high introductory prices to extract maximum value from price-
insensitive early adopters. Later lower prices for others.
 Value-based pricing: Determine customer demographics, needs and how much value
the product provides to determine the appropriate price point.
 Psychological pricing: Use odd numbers, just below reference points to subtly
influence perception of value for money. For example $9.99.
 Product line pricing: Coordinate price differences between different product variants
to maximize revenues across portfolio.
 Dynamic pricing: Adjust prices frequently based on demand, seasonality and
competitor activity using tools like algorithms.
 Bundling: Offer bundles/packages at discounted combined prices to boost value and
average order size
Describe the roles of marketing in business.
Customer Identification: Identify potential target customer segments and their
needs/preferences to develop suitable products/services.

Page PAGE 32 of NUMPAGES 32

Demand Stimulation: Promote products/services to boost awareness and stimulate demand
through effective marketing communication strategies.
Customer Retention: Build customer loyalty and repeat sales through superior customer
experience, quality, service and engagement.
Brand Building: Develop a strong, distinctive brand identity and positive brand image in the
minds of customers through consistent messaging.
Lead Generation: Generate sales leads and qualified prospects through activities like
digital/social media marketing, events etc.
Distributor Management: Liaison with channel partners like retailers and ensure wide product
reach through optimal distribution networks.
Pricing Optimization: Determine appropriate pricing strategies that balance profitability with
demand generation objectives.
Market Research: Conduct ongoing market and competitor research for insights to improve
business decision-making.
Performance Measurement: Track various metrics like sales, leads, ROI etc to evaluate
marketing effectiveness and return on investment.
New Market Exploration: Explore potential new markets, applications and avenues for
product/service extensions and growth.

Discuss the various business growth strategies available to an entrepreneur.

Product development - Expanding product lines, improving product features.
Market development - Targeting new geographic markets, industries, customer types.
Diversification - Pursuing new business ventures in unrelated industries to reduce risk.
Vertical integration - Taking control of upstream suppliers or downstream distributors.
Mergers and acquisitions - Purchasing other companies to combine resources.
Strategic alliances - Partnering through joint ventures for mutual benefits.
Brand building - Creating brand awareness and loyalty through strong marketing.
Increased production - Scaling up manufacturing capabilities to boost sales volumes.
Discuss the marketing mix elements and their usefulness in marketing.
Product - Features, quality, design, packaging, branding influence purchase decisions.
Price - Pricing strategy drives demand and profits while consider consumer budgets.

Page PAGE 32 of NUMPAGES 32

Place - Distribution channels, outlets, locations to reach target markets conveniently.
Promotion - Advertising, social media, PR create awareness and educate consumers.
Together these elements create a comprehensive marketing strategy for customer value.

Discuss the ten tips of good customer care.

Greet customers with a smile - Positive first impression builds confidence.
Listen actively - Understand needs by paying attention without interrupting.
Be knowledgeable - Expertise ensures right solutions and maintains credibility.
Follow up promptly - Address queries quickly to retain trust and satisfaction.
Apologize sincerely - Admit mistakes respectfully and offer remediation.
Exceed expectations - Surprise customers positively to create delight.
Say thank you - Express gratitude for patronage and positive feedback.
Be polite and respectful - Courtesy makes interactions pleasant experiences.
Maintain assurance - Calm manner and body language eases customer stress.
Follow up later - Check if solution worked and solicit additional feedback.

Justify the significance of good customer care in an enterprise.

Drives customer loyalty and repeat business through positive experience
Generates positive word of mouth publicity and recommendations
Enhances brand reputation and preference over competitors
Increases sales, profits and company value over long term relationship
Provides early feedback for improvements and new opportunities
Boosts employee motivation and engagement with customers
Builds trust necessary for upsells, cross-sells and premium services
Reduces complaints handling and dissatisfied customer expenses

Justify the significance of record keeping in business.

Provides historical reference for improved decision making
Demonstrates compliance with regulatory and statutory requirements

Page PAGE 32 of NUMPAGES 32

Justifies transactions and financial position for auditing, tax authorities
Supports organizational memory, knowledge transfer and continuity
Tracks business progress and performance against goals and KPIs
Identifies opportunities, inefficiencies and deviations from standards
Offers evidentiary proof and documentation in legal disputes
Facilitates accessing finance, creditworthiness assessment
Aids management reporting and communication of progress

Discuss why accurate costing and pricing are critical elements in business.
Establishes break-even sales to cover costs and earn a profit margin
Enables setting competitive and profitable prices for sustainability
Allows feasibility assessment of products, projects and investments
Provides transparency to avoid under or over-pricing of offerings
Supports quoting, tendering and achievement of profit targets
Facilitates budgeting, forecasting and cashflow management
Discourages predatory pricing of competition through price undercutting
Builds customer trust by justifying prices versus perceived value
Discuss the macro and micro environmental factors affecting entrepreneurs in
Zimbabwe.
Macro:

Economic conditions - Inflation, unemployment, GDP growth

Infrastructural developments - Transportation, electricity, technology
Regulatory environment - Laws, taxation, compliance requirements
Political stability - Supportive business ecosystem and policies
Competitive landscape - Local and foreign competition levels
Micro:

Customer demographics - Needs, buying patterns, locations

Supplier capabilities - Dependability, quality, lead times, prices
Page PAGE 32 of NUMPAGES 32
Entrepreneur skills and experience - Adaptability, education, networks
-Sector trends - Substitutes, new market opportunities
-Stakeholder expectations - Community, investors, employees

Describe the process of forming and registering a company in Zimbabwe.

 Decide company name, location, founders, initial capital and shares
 Prepare memorandum and articles of association
 Reserve company name with ROC (Registrar of Companies)
 Attend to other compliance formalities like tax, local council registration
 Publish notice in Government Gazette on company incorporation
 Print stationary, open company bank account, apply for tax clearance
 Commence business operations
Discuss the sources of finance for small businesses in Zimbabwe.
 Personal savings - Funds from owners, families and friends circle
 Retained profits - Re-investing profits generated internally
 Venture capital - Equity investments from specialized funding sources
 Angel investors - Wealthy individuals funding ideas pre-profit stage
 Crowdfunding platforms - Online funding from public supporters
 Microfinance lenders - Loans for underserved entrepreneurs
 Government support programs - Subsidies, training, market linkage
 Commercial banks - Overdrafts, loans against collateral security
 Suppliers - Deferred payment facilities on credit purchases

How do small businesses continue to exist despite the existence of large scale businesses
in Zimbabwe?
 Niche specialization - Filling gaps big businesses overlook in niches
 Flexibility - Quick decision making, customization for small clients
 Personal touch - Building relationships through empathy and service
 Local presence - Convenience and community patronage support
 Cost advantages - Lower overhead enables affordable prices
 Innovation - Testing new ideas unconstrained by bureaucracy
 Filling gaps - Transitioning until supply chains of larger players stabilize
 Resilience - Adapting business models to economic and market changes

Describe the challenges faced by entrepreneurs in Zimbabwe.

 Access to funding - Undercapitalization and high interest rates
 Bureaucracy - Complex regulatory compliance burdening SMEs

Page PAGE 32 of NUMPAGES 32

  Corruption - Predatory behavior increases costs of doing business
 Infrastructure deficits - Reliability of utilities like power hinders growth
 Skills shortages - Scarcity of technical, managerial expertise
 Imports dependency - Limited scalability due to reliance on imports
 Political instability - Policy unpredictability disrupts investment
 Inflation - Rising operating costs outpacing revenue growth
 Competition - Market saturation threatening sustainability

Describe the components of a business plan.

 Executive summary - Concise highlights of full plan for investors
 Company overview - Details of founders, vision, mission and objectives
 Products/services - Portfolio description and USPs for customers
 Market analysis - Size, trends, target segments and competition
 Marketing plan - Strategies, mix, budgets to promote business
 Operational plan - Manuals, equipment, people, processes, systems
 Organizational structure - Roles, responsibilities and charts
 Financial projections - Cashflows, profit/loss, balance sheets forecasts
 Funding requirements - Capital needs and funding request
 Risk analysis - Potential threats and mitigation counter-measures
 Appendix - Supporting charts, specs, permits, resumes if any
Discuss the significance of a business plan in an enterprise.
 Guides strategic direction - Establishes goals, workplans and control
 Supports funding proposals - Credibility for investment decision making
 Boosts analytical skills - Research hones problem-solving capabilities
 Gauges viability - Simulates feasibility under market, financial analysis
 Communicates purpose - Sharing of business model and opportunities
 Monitors progress - Benchmarks achievements against projections
 Envisions opportunities - Stimulates creativity beyond status quo
 Formalizes planning - Discipline to structure abstract ideas concretely
 Galvanizes teamwork - Collaborative process builds shared commitment

Discuss the reasons why many business plans fail

 Unrealistic projections - Overly optimistic forecasts lacking evidence
 Inadequate market research - Supposition rather than customer insights
 Simplistic assumptions - Ignoring risks, competition and complexity
 Lack of funding options - Sources not explored creatively enough
 Inexperienced team - Gaps in required expertise to execute strategies
 Constant changes - Failure to adapt plan as internal/external conditions shift
 Poor implementation - Inability to act on plan lacking accountability
 Not reviewing regularly - Stale plan becomes obsolete without updates

Page PAGE 32 of NUMPAGES 32

  Personal issues affecting focus - Health, family may distract owner-manager
 Macroeconomic impacts - External crises like inflation disrupt well-detailed plans

Discuss the importance of survival in business.

 Validates the business concept and its relevance addressing needs
 Justifies investment of capital, time and other resources committed
 Demonstrates ability to withstand competition and challenges
 Establishes reputation and credibility in the industry over time
 Supports profitability contributing to stakeholders' prosperity
 Facilitates experience gains, refinements and sustainability practices
 Retains employment opportunities for staff contributing livelihoods
 Continues

 Customer Identification: Identify potential target customer segments and their

needs/preferences to develop suitable products/services.

 Demand Stimulation: Promote products/services to boost awareness and stimulate

demand through effective marketing communication strategies.

 Customer Retention: Build customer loyalty and repeat sales through superior
customer experience, quality, service and engagement.

 Brand Building: Develop a strong, distinctive brand identity and positive brand image
in the minds of customers through consistent messaging.

 Lead Generation: Generate sales leads and qualified prospects through activities like
digital/social media marketing, events etc.

 Distributor Management: Liaison with channel partners like retailers and ensure wide
product reach through optimal distribution networks.

 Pricing Optimization: Determine appropriate pricing strategies that balance

profitability with demand generation objectives.

 Market Research: Conduct ongoing market and competitor research for insights to
improve business decision-making.

 Performance Measurement: Track various metrics like sales, leads, ROI etc to
evaluate marketing effectiveness and return on investment.

 New Market Exploration: Explore potential new markets, applications and avenues
for product/service extensions and growth.

The right marketing orientation drives awareness, trust and purchases, thereby growing
revenues and supporting business success.

Page PAGE 32 of NUMPAGES 32

Discuss the various business growth strategies available to an entrepreneur.

 Product development - Expanding product lines, improving product features.

 Market development - Targeting new geographic markets, industries, customer types.

 Diversification - Pursuing new business ventures in unrelated industries to reduce

risk.

 Vertical integration - Taking control of upstream suppliers or downstream

distributors.

 Mergers and acquisitions - Purchasing other companies to combine resources.

 Strategic alliances - Partnering through joint ventures for mutual benefits.

 Brand building - Creating brand awareness and loyalty through strong marketing.

 Increased production - Scaling up manufacturing capabilities to boost sales volumes.

2. Discuss the marketing mix elements and their usefulness in marketing.

 Product - Features, quality, design, packaging, branding influence purchase decisions.

 Price - Pricing strategy drives demand and profits while consider consumer budgets.

 Place - Distribution channels, outlets, locations to reach target markets conveniently.

 Promotion - Advertising, social media, PR create awareness and educate consumers.

Together these elements create a comprehensive marketing strategy for customer value.

Discuss the ten tips of good customer care.

 Greet customers with a smile - Positive first impression builds confidence.

 Listen actively - Understand needs by paying attention without interrupting.

 Be knowledgeable - Expertise ensures right solutions and maintains credibility.

 Follow up promptly - Address queries quickly to retain trust and satisfaction.

 Apologize sincerely - Admit mistakes respectfully and offer remediation.

 Exceed expectations - Surprise customers positively to create delight.

 Say thank you - Express gratitude for patronage and positive feedback.

 Be polite and respectful - Courtesy makes interactions pleasant experiences.

Page PAGE 32 of NUMPAGES 32

  Maintain assurance - Calm manner and body language eases customer stress.

 Follow up later - Check if solution worked and solicit additional feedback.

Justify the significance of good customer care in an enterprise.

 Drives customer loyalty and repeat business through positive experience

 Generates positive word of mouth publicity and recommendations

 Enhances brand reputation and preference over competitors

 Increases sales, profits and company value over long term relationship

 Provides early feedback for improvements and new opportunities

 Boosts employee motivation and engagement with customers

 Builds trust necessary for upsells, cross-sells and premium services

 Reduces complaints handling and dissatisfied customer expenses

Justify the significance of record keeping in business.

 Provides historical reference for improved decision making

 Demonstrates compliance with regulatory and statutory requirements

 Justifies transactions and financial position for auditing, tax authorities

 Supports organizational memory, knowledge transfer and continuity

 Tracks business progress and performance against goals and KPIs

 Identifies opportunities, inefficiencies and deviations from standards

 Offers evidentiary proof and documentation in legal disputes

 Facilitates accessing finance, creditworthiness assessment

 Aids management reporting and communication of progress

Discuss why accurate costing and pricing are critical elements in business.

 Establishes break-even sales to cover costs and earn a profit margin

 Enables setting competitive and profitable prices for sustainability

Page PAGE 32 of NUMPAGES 32

  Allows feasibility assessment of products, projects and investments

 Provides transparency to avoid under or over-pricing of offerings

 Supports quoting, tendering and achievement of profit targets

 Facilitates budgeting, forecasting and cashflow management

 Discourages predatory pricing of competition through price undercutting

 Builds customer trust by justifying prices versus perceived value

Discuss the macro and micro environmental factors affecting entrepreneurs in

Zimbabwe.

Macro:

 Economic conditions - Inflation, unemployment, GDP growth

 Infrastructural developments - Transportation, electricity, technology

 Regulatory environment - Laws, taxation, compliance requirements

 Political stability - Supportive business ecosystem and policies

 Competitive landscape - Local and foreign competition levels

Micro:

 Customer demographics - Needs, buying patterns, locations

 Supplier capabilities - Dependability, quality, lead times, prices

 Entrepreneur skills and experience - Adaptability, education, networks

-Sector trends - Substitutes, new market opportunities
-Stakeholder expectations - Community, investors, employees

Describe the process of forming and registering a company in Zimbabwe.

 Decide company name, location, founders, initial capital and shares

 Prepare memorandum and articles of association

 Reserve company name with ROC (Registrar of Companies)

 Prepare Forms 1 & 21 for ROC registration submission

 Attend to other compliance formalities like tax, local council registration

Page PAGE 32 of NUMPAGES 32

  Publish notice in Government Gazette on company incorporation

 Print stationary, open company bank account, apply for tax clearance

 Commence business operations with ROC issued certificate

Discuss the sources of finance for small businesses in Zimbabwe.

 Personal savings - Funds from owners, families and friends circle

 Retained profits - Re-investing profits generated internally

 Venture capital - Equity investments from specialized funding sources

 Angel investors - Wealthy individuals funding ideas pre-profit stage

 Crowdfunding platforms - Online funding from public supporters

 Microfinance lenders - Loans for underserved entrepreneurs

 Government support programs - Subsidies, training, market linkage

 Commercial banks - Overdrafts, loans against collateral security

 Suppliers - Deferred payment facilities on credit purchases

How do small businesses continue to exist despite the existence of large scale businesses
in Zimbabwe?

 Niche specialization - Filling gaps big businesses overlook in niches

 Flexibility - Quick decision making, customization for small clients

 Personal touch - Building relationships through empathy and service

 Local presence - Convenience and community patronage support

 Cost advantages - Lower overhead enables affordable prices

 Innovation - Testing new ideas unconstrained by bureaucracy

 Filling gaps - Transitioning until supply chains of larger players stabilize

 Resilience - Adapting business models to economic and market changes

Describe the challenges faced by entrepreneurs in Zimbabwe.

 Access to funding - Undercapitalization and high interest rates

Page PAGE 32 of NUMPAGES 32

  Bureaucracy - Complex regulatory compliance burdening SMEs

 Corruption - Predatory behavior increases costs of doing business

 Infrastructure deficits - Reliability of utilities like power hinders growth

 Skills shortages - Scarcity of technical, managerial expertise

 Imports dependency - Limited scalability due to reliance on imports

 Political instability - Policy unpredictability disrupts investment

 Inflation - Rising operating costs outpacing revenue growth

 Competition - Market saturation threatening sustainability

Describe the components of a business plan.

 Executive summary - Concise highlights of full plan for investors

 Company overview - Details of founders, vision, mission and objectives

 Products/services - Portfolio description and USPs for customers

 Market analysis - Size, trends, target segments and competition

 Marketing plan - Strategies, mix, budgets to promote business

 Operational plan - Manuals, equipment, people, processes, systems

 Organizational structure - Roles, responsibilities and charts

 Financial projections - Cashflows, profit/loss, balance sheets forecasts

 Funding requirements - Capital needs and funding request

 Risk analysis - Potential threats and mitigation counter-measures

 Appendix - Supporting charts, specs, permits, resumes if any

Discuss the significance of a business plan in an enterprise.

 Guides strategic direction - Establishes goals, workplans and control

 Supports funding proposals - Credibility for investment decision making

 Boosts analytical skills - Research hones problem-solving capabilities

 Gauges viability - Simulates feasibility under market, financial analysis

Page PAGE 32 of NUMPAGES 32

  Communicates purpose - Sharing of business model and opportunities

 Monitors progress - Benchmarks achievements against projections

 Envisions opportunities - Stimulates creativity beyond status quo

 Formalizes planning - Discipline to structure abstract ideas concretely

 Galvanizes teamwork - Collaborative process builds shared commitment

Discuss the reasons why many business plans fail

 Unrealistic projections - Overly optimistic forecasts lacking evidence

 Inadequate market research - Supposition rather than customer insights

 Simplistic assumptions - Ignoring risks, competition and complexity

 Lack of funding options - Sources not explored creatively enough

 Inexperienced team - Gaps in required expertise to execute strategies

 Constant changes - Failure to adapt plan as internal/external conditions shift

 Poor implementation - Inability to act on plan lacking accountability

 Not reviewing regularly - Stale plan becomes obsolete without updates

 Personal issues affecting focus - Health, family may distract owner-manager

 Macroeconomic impacts - External crises like inflation disrupt well-detailed plans

Discuss the importance of survival in business.

 Validates the business concept and its relevance addressing needs

 Justifies investment of capital, time and other resources committed

 Demonstrates ability to withstand competition and challenges

 Establishes reputation and credibility in the industry over time

 Supports profitability contributing to stakeholders' prosperity

 Facilitates experience gains, refinements and sustainability practices

 Retains employment opportunities for staff contributing livelihoods

 Continues

Page PAGE 32 of NUMPAGES 32

Explain the importance of business documents.

 Provide evidence and record of transactions for reference

 Establish credibility in financial/legal matters like taxes, loans

 Serve as proof of ownership/origin of assets for insurance

 Support financial reporting and management decision making

 Aid continuity in case of staff turnover or management changes

 Enable performance monitoring and process improvements

 Facilitate audits and compliance requirements of regulators

 Evidence intellectual property creation timelines for patents

 Document standard policies, processes for training and rollout

 Archive completed projects, product research, client feedback

Identify the business documents

 Memorandum of Association

 Articles of Association

 Share certificates

 Minutes of board meetings

 Contracts/agreements

 Invoices/receipts

 Delivery notes

 Grants/patents

 Tax receipts/clearance certificates

 Audited financial statements

 Business plan

 Insurance policies

Page PAGE 32 of NUMPAGES 32

 Payroll records

 Account statements

 Stock records

Identify the factors that influence an entrepreneur in securing a place of business

operation.

 Rent/property prices

 Infrastructure access - roads, water, electricity

 Proximity to target markets/clients

 Security and safety standards

 Local authority regulations

 Supply chain/distribution challenges

 Talent availability

 premises size/capacity

 Amenities like parking, storage

 Scarcity of suitable options

 Investment costs including renovations

Discuss the roles of SMEs in Zimbabwe.

 Major job creation source - Labour intensive operations employ many

 Income generation - Uplift livelihoods and local economic participation

 Innovation incubation - Test unconventional, niche solutions and ideas

 Competition promotion - Prevent monopolies through viable alternatives

 Regional economic activity - Anchor local businesses and productivity

 Export contribution - Earn foreign currency pairing large firms exports

 Supplier/buyer networks - Interdependent industrial/commercial clusters

 Tax base expansion - Multiply government development funding sources

Page PAGE 32 of NUMPAGES 32

 Wealth distribution - Foster entrepreneurship and widespread prosperity

Describe the purposes of books of accounts in business.

 Record financial transactions systematically for reference

 Prepare financial statements like income, cashflow, balance sheet

 Determine profitability, losses through accurate costing

 Support financial decision making within organization

 Claim deductions, comply with taxation requirements

 Avail security for credit/loans from audited financial position

 Assess performance via ratios and KPIs for improvements

 Minimize errors and misplacement of documents

 Preserve organizational memory through documentation

 Prevent fraud/embezzlement through financial accountability

Outline effective stock control procedures.

 Physical verification and counting regularly

 Min-max stock level monitoring for reorders

 FIFO or average costing valuation methods

 Economic order/lot sizes consideration

 Real time updating of stock records

 Review slow/non-moving stock timely

 Supplier rating and selection practices

 Damaged/expired stock disposal process

 Stocktaking variances identification

 Just in time and VMI implementation

 Production, sales, purchase order matching

 Perpetual vs periodic inventory system

Page PAGE 32 of NUMPAGES 32

 Describe the components of a marketing plan.

 Situation analysis - Market research, SWOT, objectives

 Target segments - Consumer demographics, profiles

 Marketing strategies - Mix, promotion, pricing tactics

 Communication plan - PR, advertising, digital strategies

 Budget - Allocation across initiatives, timelines

 Metrics - KPIs, ROI for each activity, overall goals

 Contingency plan - Adaptations for risks, opportunities

 Roles and responsibilities - Ownership, accountability

 Implementation schedule - Timeline, milestones, reviews

 Control and feedback - Benchmarking, flexibility

Explain the importance of business ethics to entrepreneurs.

 Build trust with customers, suppliers via integrity

 Attract, retain high quality talent with consistent values

 Strengthen brand reputation, credentials in community

 Avoid legal complications of malpractices

 Gain competitive edge through moral leadership

 Justify investors' funding responsibilities wisely

 Remain viable in long term avoiding scandals

 Express social role beyond profits sensitively

 Guide conducive organizational culture beyond rules

 Pursue innovation responsibly considering impact

Explain the Ps of marketing.

 Product - Features, quality, design, packaging, branding

 Price - Billing amount considering value, demand, costs

Page PAGE 32 of NUMPAGES 32

  Place - Distribution channels, outlets, locations for accessibility

 Promotion - Communication to raise awareness, educate customers

Together form the key controllable elements in marketing mix for customer appeal, order
wining and retention in target segments.

Explain the importance of pricing to a business.

 Influences demand for offerings via affordability signals

 Balances profits with competitiveness maintaining sales

 Impacts cashflows through optimal revenues generation

 Supports budgeting, forecasting financial projections

 Builds brand image and perceived value in relation to competition

 Galvanizes customer segments served effectively

 Strengthens competitive advantage through sensitive pricing

 Signals quality, credibility via appropriate premium/economy tiers

 Explores opportunities like bundles, packages, discounts

 Insulates from risk of predatory competition undercutting

Analyse the pricing processes of a business.

 Cost-based - Margins over total, variable or direct costs

 Competitive pricing - Reference competitor benchmarks

 Value-based - Value proposition justifying premium over substitutes

 Penetration/skimming - Attract/extract early based tiers of demand

 Product-line - Coordinate across portfolio for maximum revenues

 Bundling/versioning - Leverage joint/variant purchase incentives

 Psychological - Behavioral appeal of numbers below reference points

 Promotional pricing - Temporary discounts for trial, urgency boosts

 Geographical - Customization across regions with income variations

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  Dynamic pricing - Real-time adjustments responding to conditions

Describe the costing process in a business.

 Identify direct materials, labor, overhead expenses quantitatively

 Trace consumption/usage against production/services accurately

 Classify costs as fixed/variable relating to volume changes

 Estimate standard costs from norms to benchmark actuals

 Analyse variances driving inefficiencies via flexible budgeting

 Determine cost units to express productivity and future projections

 Apply absorption/direct/marginal costing logics as needed

 Account for inventory holding/handling periodic costs

 Review periodictly capturing shifts for continuous improvements

 Support managerial decision making through insights revealed

 Coordinate cost controls across departments horizontally

Analyse any 5 methods you can adopt to finance your business as an entrepreneur
operating in Zimbabwe(20)
- Personal savings
- Selling assets
- Buying on credit
- Borrowing money from friends
- Borrowing money from the banks
- Securing insurance policies
Describe the relationship between entrepreneurship and patriotism(20)
- As a sign of showing patriotism, entrepreneurs should pay taxes to the government
- Abiding by the laws of the land is also a sign of practising patriotism
- Creating employment for fellow citizens
- Generating foreign currency without externalising it
- Playing a supportive role to government and giant companies by being subcontracted
- Import substitution through innovation and / or invention for export
- Social responsibility
Describe any 5 major components of a business plan(20)
- Executive summary
The executive summary is the first and one of the most critical parts of a business plan. This
summary provides an overview of the business plan as a whole and highlights what the

Page PAGE 32 of NUMPAGES 32

business plan will cover. It's often best to write the executive summary last so that you have a
complete understanding of your plan and can effectively summarize it.
Your executive summary should include your organization's mission statement and the
products and services you plan to offer or currently offer. You may also want to include why
you are starting the company if the business plan is for a new organization.

- Business description
The next part of a business plan is the business description. This component provides a
comprehensive description of your business and its goals, products, services and target
customer base. You should also include details regarding the industry your company will
serve, and any trends and major competitors within the industry. You should also include you
and your team's experience in the industry and what sets your company apart from the
competition in your business description.

- Market analysis and strategy

The purpose of the market analysis and strategy component of a business plan is to research
and identify a company's primary target audience and where to find this audience. Factors to
cover in this section include:
Where your target market is geographically located
The primary pain points experienced by your target customers
The most prominent needs of your target market and how your products or services can meet
these needs
The demographics of your target audience
Where your target market spends most of their time, such as particular social media platforms
and physical locations
The goal of this section is to clearly define your target audience so that you can make
strategic estimations as to how your product or service will perform with this audience.

- Marketing and sales plan

This part of your business plan should cover the specifics of how you plan to market and sell
your products and services. This section should include:
Your anticipated marketing and promotion strategies
Pricing plans for your company's products and services
Your strategies for making sales
Why your target audience should purchase from your company versus your competition
Your organization's unique selling proposal
How you will get your products and services in front of your target audience

- Competitive analysis
Your business plan should also include a detailed competitive analysis that clearly outlines a
comparison of your organization to your competitors. Outline your competitors' weaknesses
and strengths and how you anticipate your company to compare to these. This section should
also include any advantages your competition has in the marketplace and how you plan to set
your company apart. You should also cover what makes your business different than other
companies in the industry, as well as any potential issues you may face when entering the
marketplace if applicable.

- Management and organization description

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This section of your business plan should cover the details of your business's management
and organization strategy. Introduce your company leaders and their qualifications and
responsibilities within your business. You can also include human resources requirements
and the legal structure of your company.
- Products and services description
Use this section to further expand on the details of the products and services your company
offers that you covered in the executive summary. Include all relevant information about your
products and services such as how you will manufacture them, how long they will last, what
needs they will meet and how much it will cost to create them.
- Operating plan
This part of your business plan should describe how you plan to run your company. Include
information regarding how and where your company will operate, how many employees it
will have and all other pertinent details related to your organization's operations.
- Financial projection and needs
The financial section of your business plan should detail how you anticipate bringing in
revenue and the funding you will need to get started. You should include your financial
statements, an analysis of these statements and a cash flow projection.

- Exhibits and appendices

The final section of your business plan should include any extra information to further
support the details outlined in your plan. You can also include exhibits and appendices to
support the viability of your business plan and give investors a clear understanding of the
research that backs your plan. Common information to put in this section includes:
Resumes/Profile of company management and other stakeholders
Marketing research
Permits
Proposed or current marketing materials
Relevant legal documentation
Pictures of your product
Financial documents

Examine the business social responsibility with regards to;

a) Corruption
b) Pollution
c) Community
d) Investors
e) Customers

a) Corruption
- the organisation must be one that avoids corruption and exercises honesty
- the organisation must be of high integrity
-the organisation must exercise fair labour practice
-the organisation must avoid nepotism etc

b) Pollution
- the organisation should avoid environmental pollution

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 - the organisation should avoid environmental degradation
- organisation should clear the air after pollution
- the organisation should avoid toxic pollutants or wastes into the environment

c) Community
-the organisation should give back to the community
- Undertake community share ownership
- create employment for the members of the community
- voluntary community service or projects

d) Investors
-Exercise utmost good faith ie provide correct and full disclosure of information
pertaining to profits ie should not underestimate profits
- facilitate payment of tax by their companies or organisation
- promote community share ownership schemes
e) customers
-promote good ethics in production ie products of the right quality
- promotion or advertising should not be misleading
- pricing must be fair
-
Explain how the customer care tips could benefit your business(20)
Increase sales.
Customer support is not just about retaining customers. It is also an effective way to increase
sales. It’s not just your existing customers who have questions — your prospects do too.
Provide online support or easy ways for your reps to get the answers they are looking for.
Save your sale by getting customers and prospects the information they need, when they need
it.
Retain customers.
If a customer has a good experience with a company, they’re more likely to return, and the
more loyal customers you have, the more your company can grow to its full potential. For
small businesses, with limited time and resources, customer satisfaction is even more
important. Customers leave because they are upset with the treatment they've received. That
Is why offering fast, helpful customer service is critical to retaining customers. Not to
mention that happy customers and word of mouth can also be some of the most effective
drivers for new business.
Boosts employee retention
Employees want to work for companies that treat their customers fairly. When your
employees see that your company is focused on delivering exceptional customer service, they
will be more likely to become advocates for the business. They are also far more likely to
remain with the company and be fully engaged in their work.
Reinforces company values and brand

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Your customer care team communicates with customers on a daily basis, which means that
they are directly responsible for representing your brand's mission and values. Great customer
service can result in positive reviews and word-of-mouth recommendations for your business
that can lead to new business. A positive public persona can strengthen the way people see
your company, products or services
Generates referrals
Positive word-of-mouth referrals come directly from previous and existing customers that
have had a great experience with your company. They tell their friends, relatives, colleagues
and may even post to their social network about your friendly and helpful customer service.
Their contacts, in turn, feel encouraged to buy from you. Word-of-mouth advertising is often
a company's best and least expensive form of advertising.
Good customer service builds trust and loyalty
When customers are happy with the service they receive, they are more likely to trust and be
loyal to that company. Good customer service creates a positive experience for customers,
which can result in repeat business and referrals.
It sets you apart from your competition.
In a world where it's all too easy to switch brands, good customer service is key to keeping
customers loyal. If they feel valued by their current provider, many are more likely to stay
put, even if competitors offer lower prices or better deal
Proactively addresses customer issues
Proactive customer care is when you reach out to customers before they know that problems
exist. By being proactive with your customer service approach, you can let customers know
that you're working to improve the user experience for them.
Improve the products and services you offer.
A good customer care will gather information from a huge variety of sources across your
business and beyond. It can tell you how customers are interacting with your product and if
they are having problems Through interaction with customers emtrepreneurs will get insights
on how to improve the products
Make better business decisions.
Your customer care tools can help you do more than just support customers. They can help
you improve virtually every aspect of your business. Data from your help desk lets you see
how your agents are performing and provides indicators for optimising your support team.
Your help desk can also provide an overview of CSAT (customer satisfaction) scores and
customer health indicators. Or track the most requested customer features. When you look at
a help desk solution, make sure it’s easy to get the insights you need to make faster, smarter
decisions.
Discuss the risk strategies that the entrepreneurs can use to reduce or prevent losses
-Risk is the possibility of occurrence of losses due to uncertainties

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- Risk management involves decisions to accept exposure or reduce vulnerabilities by either
mitigating the risks or applying cost effective control
Risk transfer strategy
Risk transfer or sharing helps you redistribute the impact of an adverse event over multiple
parties. This could include partners or company members, an outsourced entity or purchasing
an insurance policy. Sharing works best for risks that are unlikely to occur but could
potentially have a big financial impact. Contracts with suppliers or contractors may provide a
means to move risk away from your organisation, but keep in mind that this approach may
not always suit. For example, if your product is faulty due to a supplier's error, customers
may still associate it with you even if your supplier pays for damages.
Risk reduction strategy
Reducing risks involves taking measures to minimise the probability and the impact of the
risk occurring. The aim is to reduce the risk to an acceptable level, sometimes called a
residual risk level. Most businesses should try to reduce the risk whenever possible and
economically advantageous. For example, you could introduce new safety measures,
strengthen internal control or diversify your operations in order to mitigate the worst risks.
Risk avoidance strategy
If the probability and the impact of the risk are too high, it may be best to remove it
altogether. This might involve changing the way you produce your product or deciding to
avoid certain activities - for example, the launch of a new product or entering a new contract.
Whether this is a viable option depends on your particular circumstances. Bear in mind that
by stopping activities that carry the risk, you may also forfeit associated potential return and
opportunity.
Risk acceptance (risk retention)
Accepting the risk assumes not taking any action to mitigate its impact and probability.
This 'do nothing' approach accepts that some level of loss is likely to occur - usually the
type of loss that can be easily absorbed within the business, at least at the beginning.
However, if risk events occur regularly, business disruption and the costs for addressing it,
will likely mount. It's important to assess risk retention options alongside other possible
mitigation approaches, to determine suitable approach in the long term

Measuring the risk

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In order to mitigate potential risks, an entrepreneur needs to measure a risk before he takes
one. Most entrepreneurs specialise in risk weighting. They don’t lose much if the strategy
fails, but if it succeeds, they benefit a great deal by taking the risk. Therefore, they make their
company more viable and profitable by taking simple methods in their plan of action.
Effective entrepreneurs adhere to the core concepts of risk management. They search for
opportunities where only a certain amount is lost if they fall short. And the best entrepreneurs
never put more than they can afford to lose at stake. In the event that the current programme
does not work out as planned, they still suggest Plan B.
Having these parameters helps them to create viable companies and profitable by taking
simple methods in their plan of action.

Seeking a new opportunity/ Diversify your products or services.

Remember the expression – don’t put all of your eggs in one basket?
Whether you are offering products, services, or both, diversifying your business offerings is a
great idea. Not only does this help you offer more options to your customers, but it also helps
you have various streams of income as well.
Plus, diversifying your products or services help maintain the public’s interest in your
company. It also can give you an edge over your competitors.
So if your business only depends on one product or service, then it’s time for you to offer
more. In addition, always make sure that every new product or service you release is of high
quality.
Entrepreneurs also have the opportunity to recognise flaws in the market and find solutions to
the issue. Pursuing a new opportunity is a potential challenge, but entrepreneurs have the
opportunity to learn a lot from it – if their solution is feasible. First mover advantage is also
what pushes them to further innovate. Although savvy entrepreneurs understand their
limitations, they don’t allow their vision to be limited by a lack of resources.
Entrepreneurs see a consumer need and do all they can to make a business option possible,
even though at the moment they don’t have the resources available. For them, the threat is not
finding a new opportunity and their businesses remaining stagnant.

Insurance is a must
One of the best ways to reduce business risk is by getting insurance Insurance shields the
entrepreneurs from lost liabilities, accidents and illnesses and passes the risks to insurance
companies. By insuring all sorts of raw materials and processes, in the event of a company or
scheme failure, they have a chance to lose even less. Insurance may not reduce the risk of the
company, but you can use it as a financial instrument to protect against risk-related losses. It
guarantees that you will have some financial compensation in the event of a failure. In any
event, this can be critical to the survival of your organisation.

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Some costs, such as the harm to the reputation of a company, are uninsurable. On the other
hand, insurance is compulsory in certain regions.
Insurance firms also want assurance that risk is being handled. They want proof of the
efficient operation of processes in place to mitigate the risk of a lawsuit until they have
protection.
Cut back on financial risks
The key to risk management is to reduce financial risk by monitoring your receivable
accounts to mitigate outstanding balances and to recognise bad credit risks early in your
business. It is possible to introduce credit and payment requirements to further mitigate
financial risks, defining which credit ratings and payment histories are appropriate. Aim to
minimise outstanding loans and funding needs. Monitoring the growth rate and enabling the
business to expand to a sustainable degree is very critical. Ensuring financial stability is the
greatest ease in risk management
Learn how to anticipate and predict risks
Let the loss not come as an unexpected surprise. The definition, marketing plans, back-ups
and the post-success plan need to be extensively prepared. If you manage to almost predict a
risk, you have a chance to reduce it. Often, since you can foresee a risk, you can establish a
risk management plan to reduce its consequences and mitigate it rightly.
Entrepreneurs are not necessarily risk takers. People who are about to start projects are no
more risk-tolerant than others. However, entrepreneurs are more comfortable with risk over
time.
Many entrepreneurs realise that the challenge of starting a new company is inherent. They
also realise that there is no creativity, success and reward without some risk and they grow
more accepting and adaptive with having risks, they rather begin to anticipate risks.
Limit your business loan.
Business loans are just so attractive that many businesses always take them. They may
provide you enough capital to launch or expand a business, but they pose risks to your
business as well.
If you cannot avoid getting a business loan, make sure that the one you’re getting is
manageable and has the least interest. Compare plans from different banks beforehand, and
make sure you can actually afford the monthly payments.
Document everything important.
Always document important transactions in your business such as sales, tax payments, and
operations costs. It is also important for you to make sure that your employees are
documenting everything properly from signing cheques to balancing the sheets. On top of
that, managing your documents with minimal errors is a must.
Doing so minimizes the risk of theft and fraud. It’s because documenting helps you track
where your finances go. It also helps you identify whether your spending is actually

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appropriate or not. While it is true that many companies sometimes do not spend money
wisely, you can still avoid it.
Hire significant employees.
You know what they say – employees are the backbone of a business. Without them, your
business is going nowhere. However, there are many employees out there whose skills do not
match their jobs. We know you have heard at least one person whose degree is not related to
his or her job.
While there are some employees who do just fine with mismatched skill sets, there are many
who don’t. As a result, these employees hate their jobs. This clearly affects their job
performance. To avoid this, make sure that your employees’ skills match their jobs. If not,
then you can give them other roles.
Build your reputation.
While achieving short-term success is great for your business, it’s more crucial to keep it
running for a long time. You can do this by building your reputation. Having a great
reputation lets consumers trust your company. Consequently, maintaining your business
becomes easier.

Discuss type of risks entrepreneurs may encounter in business

 Competition risks. The threats section of your SWOT analysis is a good place to start
identifying possible competition risks.
 Compliance risks. The intentional or unintentional violation of state and laws could
result in fines and penalties.
 Economic risks, many of which are tied to the economy but include a business’s cash
flow and ability to operate on a lean budget.
 Financial risks come in all shapes and sizes but loom largest on the liability side of the
ledger. Customer credit and interest rate fluctuations are other financial risks.
 Operational risks are usually internal and known as people and process failures, but
business owners are wise to prepare for external events that can cause business
disruptions, too.
 Reputation risks form a broad umbrella that covers everything tied to a business’s
image. From customer relations to public relations, assigning someone to monitor
your company’s reputation makes good sense.
 Security risks, especially those related to customer data breaches, identity theft and
fraud, can pose significant dangers to a business’s viability. You can see where this
one risk could bleed into all the others and wreak widespread havoc.


Discuss 10 tips of good customer care

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 Anticipate the needs of the customer. Use knowledge about the customer and the products
that they have purchased in the past to predict future needs. These needs might be unusual or
recurring, either way getting to know your customers shows them that they have not been
forgotten and you have their best interests in mind.
Greet customers with a smile. If you operate a bricks and motor company, this can be done
with a warm and friendly greeting as soon as they enter your premises. Even if you are
dealing with customers over the phone, it’s thought that a warm smile can be sensed.
Make time for the customer. In a busy environment it can be frustrating for an employee if
a customer wants to stop and chat when they have a lot of work to get done. However, the
customer will be able to tell if the employees heart is not in the conversation, so always make
the customer top priority.
Make customers feel important. This can be achieved through little details such as
addressing them by their name or making them feel genuinely welcome when they do
business with you. If customers feel valued and appreciated by a business then they are more
likely to return and make more purchases.
Apologize when things go wrong. No business is perfect all of the time and mistakes may be
made. Often it is the way that the business deals with this mistake rather than the mistake
itself that will determine whether the customer returns to the business. As soon as it is
realized that a mistake has been made, the business should admit the mistake, apologize
sincerely and do everything in their power to rectify the mistake.
Give customers more than they expect. Customers are more likely to feel loyalty towards a
company that have exceeded their expectations, both in terms of customer service and the
products that they have purchased. Everybody likes to be surprised now and then!
Ask customers for feedback. A business may think that it is performing well in terms of
customer service but they can never really be sure until they ask their customers what they
think. After this information has been gathered it should be acted on to fix specific issues and
improve areas that are identified as having weaknesses. Take time to thank customers for
their help and reward them accordingly.
Treat employees well. In most cases it will be the employees of a business who have the
most face to face contact with the customers. The better they are treated, the happier they will
be while at work and this will be evident in the way that they deal with customers. The
atmosphere that is created by a good working environment will be more pleasant for
customers too.
Be truthful about the products that are being sold. If a customer asks advice about a
product then the advice that is given should be honest. If a customer is mislead in order to
make a sale then they will not appreciate it when they find the product doesn’t work as
expected and probably won’t return.
Bend the rules if needed. If a regular customer makes a special request that would not
normally be part of the business policy then this request should be given consideration rather

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than the customer being told no. Customers will appreciate that you have empowered your
employees with common sense and the ability to see the “big picture”.
Communication skills
Have good communication skill
Courtesy
Be courteous to customers. You can use their social titles or courteous title where you know
them like Dr or Mr or Prof etc
Responsiveness
Be responsive to customers updating them where there are delays and apologizing where
necessary
Security
Ensure security and safety to customers on the business premises

Distinguish between entrepreneurship and intrapreneurship? (4 marks)

Entrepreneurship-the process of bringing together creative and innovative ideas in order to
create wealth.

Intrapreneurship-focuses on innovation, creativity, transformation of ideas into profitable

venture while operating within the organisational environment.

What is the relationship between entrepreneurship and Patriotism

Patriotism is the spirit of loyally supporting one’s nation. The major thrust of patriotism in
the context of entrepreneurship in an economy is to refrain from corruption and sabotage or
subversion. Thus, the relationship between entrepreneurship and patriotism is reflected in the
following roles that a patriotic entrepreneur plays to the nation that is the entrepreneur should
have the spirit of:

a) Creating jobs without oppressing fellow citizen workers i.e. the entrepreneur will be
expected to provide good working conditions and be worker – centered.
b) Charging fair and affordable prices
c) Producing quality products which compare with international standards
d) Conserving natural resources

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 e) Practicing good ethics and social responsibility in business and the community
f) Generating foreign currency without externalizing it or taking it to the black or
parallel market for exchange, but to the registered banks for official exchange
g) Generating government revenue through paying corporate tax.
h) Playing supportive role to the giant firms by being subcontracted in construction,
manufacturing and distribution
i) Reducing anti-social activities such as theft, robbery, murder, promiscuity by creating
employment for self and other citizens
j) Reducing rural to urban migration by creating employment opportunities in rural
areas
k) Discuss the appropriateness of any one form of business organization you would
establish upon your graduation. (20)
A form of business relates to the legal status of the business. The common forms of business
in the private sector are;

 Sole traders
 Partnerships
 Co-operatives
 Limited companies ((pvt) ltd & plc

Any chosen form of business should be discussed in terms of the following factors

 Formation – legal requirements, documentation, registration,

 Capital contributions- amount, sources & cost of capital
 Liability- limited or unlimited
 Ownership, management & control
 Continuity of business
 Privacy of operations
 Advantages & disadvantages

With reference to businesses in your community, explain the factors which were
considered for their establishment? (10 marks)

- Number, size and location of competitors.

- Types of goods and services provided.

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 - Proximity and accessibility of suppliers.
- Proximity and accessibility of customers.
- Availability of services, water and network systems
- Availability of space.

Outline 5 reasons why SMEs fail to register their business organisations in Zimbabwe?
(5 marks)

-ignorance of proper procedure

-unfavourable business conditions
-lack of funds
-culture of resistance to formalities amongst Zimbabweans
-evading payment of taxes

List and explain five contributions of your business to the economy (20marks)

Small businesses create employment for the business owner as well as the other fellow
citizens (employment creation)
 Small businesses increase the range of goods and services available to the
local community (provision of goods and services) especially in rural areas
where goods and services were previously unavailable.
 Small businesses reduce anti-social activities such as theft, robbery,
promiscuity and burglary
 Small businesses reduce rural-urban migration as more goods and services and
employment opportunities become available in rural areas. This will help to
decrease the pressures on urban in terms of sanitary problems, theft, robbery
and promiscuity.
 Small firms contribute in the improvement of the standard of living of the
community
 Small firms contribute in stabilizing the economy through increased
employment, reduced prices and improved standard of living
 Small businesses help in indigenising the economy. If the economy is in the
hand so indigenous people, resources are not expatriated.
 Small firms help in the generation of foreign currency

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  Small firms contribute in the production of quality and affordable products by
being in competition with giant businesses
 Small firms contribute to government revenue through payment of business
and employment taxes
 Small businesses contribute to the national income of the country (GDP –
Gross Domestic Products) and to the improvement of the balance of payment

Examine the benefits of venturing into business as a first career option (20 marks)

 Self employed

 Own boss

 Independence

 Self motivated

 One does what he likes best

(a)The small and medium enterprise can solve the employment problem in Zimbabwe.
Discuss. (20 marks)

The following approaches are being used by SMEs in solving employment problem in
Zimbabwe

 Self employment creation

 Informal sector creation
 Creation of jobs for other people
 Inspiration of others to venture into entrepreneurship
 Being sub-contracted by large firms

Also discuss some challenges/limitations encountered by SMEs

(b)Briefly analyse the challenges the small and medium entrepreneur in Zimbabwe
faces. (10)

-Sceptical public that distrusts local products and prefer foreign products.
- Inexperienced labour

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 - Skills shortages
- Lack of access to cheap money
- Lack of collateral
- Lack of entrepreneurial skills
- Volatile political environment
- Stiff competition from cheap imports
- Low disposable income of potential customers

Analyse the advantages and disadvantages of the type or form or business you would
start and which is specific to your area of course specialisation.

- Identify all forms of business

 Sole proprietor
 Cooperative
 Partnership
 Private limited company

- Select and state reasons for selecting a skills specific form of business – advantages
and disadvantages.

The extent to which the culture of seeking employment is a result of deliberate policy on
the part of settler colonial governments in Zimbabwe, discuss. (20 marks)
- - Prior to colonisation all people of working age were gainfully employed in the
agricultural area, in mining, other social activities like smelting tool making , making
of baskets painting etc.
- -settlers could not attract natives to work in their mines or farms so enacted deliberate
policy to force people to work e.g. the Hut Tax, Chibharo-forced labour, relocation to
marginal areas low prices of or for agricultural produce, forced sale of live stock the
Land Husbandry Act (1951). To survive natives had to seek employment for very low
wages.
-
- -these policies dispossessed and pauperised natives to the extent even today survival
for the native is seen as being through employment
- -Certain laws also hindered Africans from venturing into business.

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- -Labour laws barred Africans from formally learning technical trades which could
have effectively prepared them for self employment.
-
- (b)The challenges you are likely to encounter when establishing your business.
(5 marks)
-
- -Lack of collateral security
- -Lack of access to finance
- -Depressed markets
- -High labour costs
- -Unskilled labour
- -Sceptical market
- -limited capital means to get business started.
- -insufficient technical expertise to effectively run business
- - Stiff competition from imported products.
- - An economy experiencing liquidity crisis which limits consumer demand.
- - Inconvenient formation procedures.
- -competition for space to conduct business
- - High operating overheads.

- (c) The factors you would consider when you chose the “form” of business you
want to establish. (5
marks)
- -Location
- -type of goods / service
- -Transport and other infrastructure
- -Market
- -Services/utilities – electricity, water etc.
- - The extent of owner’s desire for control and independence.
- - Amount of start up capital available.
- - The nature of business activity which owner wants to venture into.
- -nature of the target market

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 -
- (d)The three factors you consider to be vital for the success of your business. (5
marks)
-
- - The generation of a good business idea
- -A good business plan
- -Dedication or commitments

Analyse the measures you would take in ensuring that your business practices are
sustainable. (20 marks)

-Sustainability in business refers to two aspects namely,

-The life of a business or its continuity.
-The practices of a business with reference to its resource utilisation
- Application or relating second part to own business and considering the following
points;
 Environmental friendly resource exploitation
 Environmental friendly disposal of waste
 Use of environmental friendly substances components.
 Ploughing back to the community i.e. social responsibilities.

Compare and contrast the factors that have led to successful entrepreneurship and
development in at least one country of your choice and the factors that inhibit the same
in Zimbabwe. (20marks)

- General factors that lead to successful entrepreneurship

- Conducive government policies
- Local ownership / participation in business
- Cheap money / credit
- Culture of entrepreneurship
- A good national education system.

Factors that inhibit entrepreneurship in Zimbabwe

- Lack of cheap money

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 - Hostile foreign market (tariffs quotas and other barriers to trade)
- Unhelpful government policies (trade liberalisation)
- Culture of employment and petty trading.
- Foreign ownership of major sectors of the economy – banks and industry

NB identify & mention the country you are comparing with in you presentation.

Discuss the socio-economic importance of entrepreneurship in Zimbabwe. (20)

The question requires a discussion of both the social and economic factors.

 Creation of employment
 Contribute to government revenue- pay tax
 Receive sub-contracts in manufacturing, distribution & construction
 Generation of foreign currency
 Exports improve balance of payments
 Increase competition in prices , quality etc
 Provides variety of goods & services
 Promotion of privatization
 Empower marginalized groups in society
 A means of mobilizing resources of a country & strengthening its capacity
 Promotes an innovative & competitive economic structure better equipped to respond
to the needs of the communities & markets they serve
 Improves the standards of living of locals
 Reduces rural- urban migration
 Reduces antisocial activities such as promiscuity, theft, robbery
 Social responsibility- assisting the less fortunate people in society through giving
back to the community
 Promotion of fair competition resulting in reduced prices, improved quality

Discuss the government entrepreneurship initiatives

Government entrepreneurship initiatives are efforts by the government to promote self-
sustenance, entrepreneurship and indeginisation in order to stabilize the economy. In an
effort to promote entrepreneurship and self-sustenance, the government established the
Ministry responsible for employment creation since 1980 i.e. Ministry of National Affairs

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and Employment creation now Ministry of Youth Development, Gender and Employment
Creation. Moreover, the following institutions were introduced by the government to enable
potential entrepreneurs to establish themselves:
a) Small enterprise development corporation (SEDCO)
b) Infrastructural Development Bank of Zimbabwe
c) Agribank
d) Affirmative Action Group (AAG)
e) Zimbabwe Cross Boarders Association
f) Zimbabwe Tuck shop Association
g) Indigenous and economic empowerment act
h) Land redistribution
i) Community share ownership trust
j) youth loans

Analyze the micro environmental factors that affect entrepreneurship in Zimbabwe.

(20)

The micro environment refers to factors that directly influence an organization’s activities.
The following

 Employees-potential employees availability, skill & knowledge, expectations on the

quality of work environment, motivation
 Shareholders & management – expectations, interests, knowledge, skills,
 Media – publicity can have positive or negative effects
 Government – set laws, price controls, foreign trade restrictions, wage restrictions,
working conditions, level of taxes
 Suppliers – prices, reliability, quality, convenience, delivery services, terms of
payment
 Customers – customers must be put forward by providing good value for money,
safe , durable products,, prompt attention, long term satisfaction, good customer care,
handling of grievances
 Competitors – keep track of rivals’ price levels, technology, quality, terms of
payments
 Financial institutions – supply financial services, interest rates, return on investment,
prove credit worthiness and credibility

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  Labour unions – have wider expectations in terms of work life, justice in treatment,
good remuneration, job security, right to bargain
Identify three macro-environmental factors that can affect businesses in your
community? (3 marks)

-political
-economic
-technological
-legal
-social
-ecological
Examine the history and culture of business ownership patterns in Zimbabwe?(20
marks)
Precolonial set-up(Phase 1)
-Zimbabwean practising various economic activities
-ownership of means of production
-economic activities ranging from extractive to manufacturing.

Colonial set-up(Phase 2)
-characterised by suppressive legislation militating against indigenous ownership of
businesses
-local entrepreneurship reduced to employees
-means of production in hands of foreigners
-entrepreneurial activities by whites

Post-independence phase
-indigenous ownership of the economy
-entrance into various economic sectors by locals
-emergence of indigenous prominent entrepreneurs.

Discuss the macro and micro-environmental factors affecting the indigenous businesses
in Zimbabwe? (20 marks).
Macro-factors
-political

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-economic
-technological
-legal
-social
-ecological
Micro-factors
-employees
-financiers
-creditors
-owners

In terms of feasibility the entrepreneur needs to consider the following:

 Availability of a viable market
 Competition
 Location
 Infrastructure and facilities
 Raw materials
 Machinery and equipment
 Labour and other costs such as electricity insurance, water,
security etc.
Give reasons why as an entrepreneur you should develop a business plan

 It provides a blueprint, or a plan, to follow in developing and operating the business.

It helps keep one’s creativity on target and helps one concentrate on taking the actions
that are needed to achieve the business goals and objectives.

 It helps to clarify the business idea. The process involved in creating a business plan
means that the entrepreneur has to ask a number of key questions about their idea.
This should ensure that before starting up, the business idea would have been
considered with care.

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  It can serve as a powerful money-raising tool. The Plan will often be used as a
means of sharing potential investors of lenders the viability and profitability of the
business. Financial institutions insist on seeing a business plan before any loan is
granted. Private shareholders may invest if they believe in the entrepreneur.
Professional providers of venture capital demand evidence of careful planning first.

 It can be an effective communication tool for attracting and dealing with personnel,
suppliers, customers, providers of capital, etc. It helps them understand your goals
and operations.

 It can help you develop as manager/entrepreneur, because it provides practice in

studying competitive conditions, promotional opportunities, and situations that can be
advantageous to your business.

It provides an effective basis for controlling operations so one can monitor progress over
time, to see if your actions are following your plans

Justify the significance of developing a business plan before the establishment of a

business. (20)

Reasons why entrepreneurs should develop business plans;

 Seeking finance from financial institutions

 Provides a “road map to riches” –pathway to a satisfactory profit
 An essential document for describing the aims & objectives
 Enables measurement of progress of business
 Establish a framework for action to achieve objectives
 Helps to monitor current operations, plan for the future & evaluate actions necessary
for the success of the business
 Attracts personnel, suppliers, customers etc
Provides an effective basis for controlling operations

Justify the significance of

(a) Business idea [5]

(b) SWOT analysis [15]

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a) Justification should centre around the fact that survival and sustainability of a business
venture depends on the soundness of the business idea
- Enables one to set goals
- Gives total commitment
- Enables one to seek advise
- One is able to study the operating environment

(b) marks for giving the full meaning of the acronym. SWOT.
Strengths, weaknesses, opportunities & threats

- Evaluate relevance of each Factor of SWOT analysis.

- Enables one to keep on keeping on on the positives, work on the negatives to improve
them & utilise existing gaps

Analyse the causes and origins of the employment syndrome of indigenous

Zimbabweans. [20]

- Examples of causes include;

- Past policies during the colonial era e.g. press ganging, hut tax, land Tenure Act
which forced Africans to seek employment rather than starting own ventures.
- Discriminating laws preventing Africans from conducting particular business ventures
should also be outlined.

Identify and explain the major elements of a business plan. (20)

A business plan is a document that shows the arrangement in advance of business activities,
commercial undertaking and how they will be implemented. It provides a blue print to follow
in developing and operating a business. It is made up of various components. The following
are the major components:

 Executive summary- business concept, financial features, current business position,

major achievements
 Description of the business-history, why starting it, industry it falls under, description
of its products and markets, critical risks
 Ownership and management structure- background , qualifications, experience,
salaries of owners & management

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  Marketing plan-R&D, feasibility study, target market, marketing strategies
 Production/operation plan- location, supplier relationships, costing and pricing in
detail
 Financial plan- cash budget, production & sales budget (forecast), balance sheet, cash
flow analysis

As a small business owner, outline how risk affects your business. In addition,
demonstrate how you would mitigate against the effect of risk.

-Risk refers to the likelihood of loss occurring.

-Risk affects business through

 the uncertainty and anxiety it instils within members of an organization

 The costs that a business incurs when trying to mitigate against the effects of the
perceived risk.
 Money that should have been further invested is spent on non-productive issues.

-Risk can be managed through a number of ways. These include;

 Insurance- this is some kind of risk transfer from the insured to the insurer through
pooling of risks.
 Diversification- a business organization can diversify its activities so as to minimize
the impact of risk.
 Prevention- this involves using preventive measures to minimize the effect of risk
e.g. a business may build fire resistant walls as a preventive measure against the risk
of fire.
Discuss the functions of management in an enterprise
Management is the process that entails planning, leading, organizing and controlling of
resources (human, material, & monetary) so as to achieve set organizational goals &
objectives. There are four fundamental functions of management. For theoretical purposes, it
may be possible to separate the functions of management but practically these functions are
overlapping in nature.
 Planning
Planning is the logical thinking through goals and making decision as to what needs to be
accomplished in order to reach the organization’s objectives. The following are involved
in planning;
 Defining objectives & standards

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  Deciding who is going to do it
 Determining actions & activities to be done in order to achieve the objectives
& standards
 Determine the resources to use
 Determining the time-frame for the activities
 Assigning responsibilities
 Designing a control procedure
 Results in business plans
 Can be motivational if challenging objectives are strategies are set

 Leading
Is the ability to initiate action, guide supervises & directs others (subordinate) in pursuit f
a common set goal.
 Results in motivated workforce
 Ensures efficient coordination of activities
 Improves manager- worker relationship
 Can lead to increased productivity
 Communication is enhanced whereby there is passing of information,
experience & opinion
 Ensures that staffing is done well- proper & effective selection, appraisal &
development of personnel to fill the designed role.

 Organizing
Is the process of bringing together physical, financial & human resources & developing
productive relationships amongst them for the achievement of set goals. Organizing as a
process involves:
 Identification of activities & allocation of resources
 Classification or grouping of activities
 Distribution & Assignment of duties
 Delegation of authority & creation of responsibility
 Coordinating authority & responsibility relationships

 Controlling
It implies a measurement of accomplishment against the standards & correction of
deviation if any to ensure achievement of set goals. The purpose is to ensure that
everything occurs in conformities with the standards. An effective control system helps to
predict deviation before they actually occur. Therefore controlling has the following
steps;
 Establishment of standards performance
 Measurement of actual performance
 Comparison of actual performance with the standards & finding out if there are
any deviations
 Taking of corrective action if necessary.

Describe the benefits of developing a business plan for business venture.

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• It provides a blueprint, or a plan, to follow in developing and operating the business.
It helps keep one’s creativity on target and helps one concentrate on taking the actions that
are needed to achieve the business goals and objectives.
• It helps to clarify the business idea. The process involved in creating a business plan
means that the entrepreneur has to ask a number of key questions about their idea. This
should ensure that before starting up, the business idea would have been considered with
care.
• It can serve as a powerful money-raising tool. The Plan will often be used as a
means of sharing potential investors of lenders the viability and profitability of the business.
Financial institutions insist on seeing a business plan before any loan is granted. Private
shareholders may invest if they believe in the entrepreneur. Professional providers of venture
capital demand evidence of careful planning first.
• It can be an effective communication tool for attracting and dealing with personnel,
suppliers, customers, providers of capital, etc. It helps them understand your goals and
operations.
• It can help you develop as manager/entrepreneur, because it provides practice in
studying competitive conditions, promotional opportunities, and situations that can be
advantageous to your business.
• It provides an effective basis for controlling operations so one can monitor progress
over time, to see if your actions are following your plans.
Explain the marketing mix elements that are critical in enhancing efficiency of your
business venture.
• Product
Product refers to the goods and services presented by the organization or Product
refers to the goods or services a company wishes to sell. So, in few words, the
product can be known as a pack of advantages which a marketer presents to the
customer for a price. The product can also take the shape of a service like a train
travel, communication, etc. Thus, the product is the main element of anymarketing
mix
In coming up with the product, there is need for considering its features, design,
ingredients, style, size and colour in the eyes of the customers
 Price
The second most significant element in the Marketing Mix is the price. Price refers to
the price a customer pays for the service or a good. It can be known as the value
charged for any product or service). Fixing the product's price is a difficult job. The
marketers have to know that while fixing the price, so many factors like the need of
a product, cost involved, consumer’s ability to pay, government restrictions,
prices charged by competitors for comparable products, etc. can control this
process. In fact, pricing is a very critical decision zone as it has its impact on the need
for the product and also on the profitability of the organization

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• Place
Place refers to the ease of access that customers have to a service or a good. Goods
are produced to be sold to customers; they have to be made ready to the customers at
a suitable place where they can handily make deal. So, it is important that the product
is ready at markets in the city. This includes a chain of persons and organizations like
distributors, wholesalers and retailers who shape the distributing network of the
organization (the channel of distribution). The organization must choose whether to
sell directly to the persons or through the distributors. It can even plan to sell it
directly to customers The four variables of Marketing Mix are interconnected. By
increasing the product's price, the product demand will be decreased and lesser
distribution points will be desired
• Promotion refers to the different ways you communicate, describe, and advertise your
product. Promotion is one of the strongest elements in the Marketing Mix. Sales
promotion actions are publicity, public relations, fair and demonstrations etc. It is
marketing manager who decides the level of marketing expenses on promotion.
Promotional actions are mainly meant to complement personal selling,
advertising and publicity .Promotion helps the trader and sales force to show the
product to the customers in an effective manner and encourage them to purchase.
Promotion depends on many mixtures of its components which are used to realize
the organization's marketing objectives. Advertising is a strong element of promotion
mix. The main purpose of the advertising is to make and evolve the image of a
product in the market zone. It is one of the significant tools of competition which
saves the dynamism of industry. Promotion mix determines the positioning of the
product in the target market. It should be considered as an expense and hence added to
the cost of a product.

• Processes
Process refers to the procedures, mechanisms, and flow of activities that occur when
the customer and the business interact with each other.

When, for example, a customer books a hotel room a process is triggered. When the
customer then checks into the hotel another process is triggered, and when they
check-out yet another process is triggered.

All of these processes need to be tightly controlled to ensure consistent customer experience.
They are usually defined in written Standard Operating Procedure documents (SOPs).
• People
By people, we mean those people who are directly or indirectly involved in the
delivery of the service. This typically means employees of the company. But it can

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 also mean subcontractors with direct interaction with [Link] can even refer to
existing and past customers of the company. These customers represent the company
through word of mouth. People are a very important factor in the 7 P’s because
services tend to be produced and consumed at the same time. Because of this, the
behavior of these people is very important in determining the experience of the
[Link] service businesses should ensure that staff are well trained and
motivated. But there is another way to adjust the people tactic. This can be done by
adjusting customer experience to meet the needs of individual customers
• Physical evidence
Physical evidence involves the environment or place where the service is delivered and any
tangible elements that facilitate the service or provide information about the [Link] on
this definition, physical evidence includessuch things as the company’s website, Annual
accounts, Business cards, Logos and brochures, Equipment, Buildings etc
As an example, consider a potential customer who wishes to visit a hotel for the first time.
The physical evidence might include pictures of the hotel, past customer reviews, and the
hotel’s proximity to the center of town.

How would you motivate employees in an environment where wages and salaries are
low due to depressed economic conditions?
 To meet the Physiological needs of the employeesin an environment where wages
and salaries are low due to depressed economic conditions , employers should
provide employees with teas and lunches at work, food hampers, shelter(in terms of
company houses or even employee own houses), water etc
Transport to and from work should also be provided

 Although the company may be facing the financial challenges, Safety needs
should not be compromised. Employees are motivated when their safety needs
are being met- Thus employers should guarantee the employees’ safety by proving a
safe working environment. Measures should include providing protective
[Link] entrepreneurs must consider the safety and security issues such as
safe working conditions like danger warning signs, clean work environment and good
healthy facilities. It is also important to employees and social security after
employment i.e. pension and other related company benefits.

 Employers need to meet the Social needs of their employees in spite of the
depressed economic conditions. That is the entrepreneur needs to show love to
their employees and employees need to be loved
-employers should create a working environment that builds a sense of belonging,
socialisation and interaction amongst workers.
-measures to create such an environment include allowing workers to host parties,
form workers’ committees and recreational clubs among others [Link] needs of
workers have impact on the performance. Workers need to be loved and as such
entrepreneurs need to instill a sense of belonging in workers. Entrepreneurs also need
to employ friendly supervision, cohesive work group, and team spirit and general

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 sound relations with employees. Workers also need professional associations to meet
their professional associations to meet their professional problems

 In terms of Esteem needs, employees need recognition and respect.

-employers should make use of awards such bicycles, cars , clothes inscribed length
of service or for best performance, promotion of high performers and verbal
appraisals Another area of concern is self-esteem. In this case entrepreneurs should
make use of social recognition, job title, high status job and feedback from the job
itself if employees are to be motivated in their work.

 Self-actualisation need- need to reach one’s full potential. Employees can be given
room to make decisions in their areas of responsibility, to experiment, to invent or to
innovate
-employers can send workers for staff development [Link] actualization is
one aspect that does motivate employees i.e. workers are motivated by challenging
job, opportunities for creativity, achievement in work and advancement in the
organisation and as such entrepreneurs should not that.

Discuss the roles of management in a business enterprise

ROLES DESCRIPTION EXAMPLES OF

ACTIVITIES
1. INTERPERSONAL

a. Figurehead Symbolic head, obliged to Greeting visitors, signing

perform a number of team documents
duties of a legal or social
nature

b. Leader Responsible for the Performing all activities

motivation of subordinates, that involves subordinates
staffing and training,
selects and disciplines.

c. Liaison Maintains a network of Acknowledging mail,

outside contacts and external board work
informers who provide
favours and information

2. INFORMATIONAL

a. Monitor -Seeks and receives wide -reading periodical and

range of special reports
information -maintaining personal
-nerve centre of internal contacts
and external information -installation and

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 about the organisation maintenance of information
systems

b. Disseminator Transmits information form Holding meetings, making

outsiders or from the phone calls to relay
subordinates to members of information, sending
the organisation memos

Transmits information to
c. Spokesman outsiders on organizational Holding board meetings
policies, actions, results etc and giving information to
through speeches and the media
reports.

3. DECISIONAL

a. Entrepreneur Initiates new projects, spot Organising strategy review

opportunities, identify areas sessions to develop new
of business developments programmes

b. Disturbance handler Responsible for corrective Resolving conflicts among

action when organization staff, adapt to external
faces unexpected changes and organising
disturbances and crises strategies that involves
disturbances and conflict

c. Resource allocator Responsible for the Scheduling, requesting,

allocation of organizational authorization and budgeting
resources of all kinds, activities
setting of priorities,
budgeting

d. Negotiator Responsible for Participating in collective

representing the bargaining
organisation at major
negotiations with unions,
suppliers and generally
defend interests

Describe the formation of a limited company and outline the advantages and
disadvantages of limited companies.

Outline the main characteristics of successful entrepreneurs

. The success of a business largely depends on the entrepreneurial or personal characteristics.
The following are some of the characteristics of successful entrepreneurs.

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Action oriented
Successful entrepreneurs are action oriented, that is, they want to start producing results
immediately. The critical ingredient is getting off business and doing something. A lot of
people have ideas but they are a few who decide to do something about them now and not
tomorrow.

Success oriented/optimism
Successful entrepreneurs are optimistic, that is successful entrepreneurs do not have ‘ifs’ or
‘buts’ about succeeding. All they think about is how they are going to succeed and not and
not what they are going to do if they fail.

Perception of opportunity or opportunity seeking

Entrepreneurs should be able to see the unfilled areas or gaps in products, process and
application of services. That is successful entrepreneurs are able to see and act on new
business opportunities.

Moderate risk taking

Entrepreneurs are expected to be able to take moderate and calculated risks. This is contrary
to the stereotype that entrepreneurs are gamblers or high-risk takers.

Goal setting
In setting a new business, entrepreneurs are expected to have the ability to set goals which are
specific, measurable, achievable, realistic and time bound (SMART) basing on
their(ENTREPRENEURS) strengths, weaknesses, opportunities and threats (SWOT).
Moreover, their goals must be consistent with their interests, values and talents in order to
achieve the. Their belief in the reality of their goals is the primary factor in the fulfillment of
those goals. Their plans may seem illogical to others but they are perfectly logical in the
context of their own personal values and desires.

Long-term perspective
Successful entrepreneurs can tolerate considerable amount of frustration and delay in need
gratification and they devote a lot of time and effort in goals that often yield profits at a
distant point in the future. Entrepreneurs should be able to accommodate hurdles, difficulties
and temporary failures in business.

Self-motivation/self esteem/self faith/self confidence

Effective entrepreneurs have solid and stable self-esteem and self-motivation which stem
from healthy feeling of self worth and self-acceptance. Entrepreneurs with a positive self-
image are basically satisfied to be the type of people they are. This self-faith is even
important than self-confidence especially when serious setbacks and failure occur.

Innovativeness/initiative ness/creativeness
Effective entrepreneurs have the ability to come up with new products, methods or techniques
of production and the accompanying machinery and tools.

Adventuresome ness
Successful entrepreneurs are adventuresome i.e. they are interested in testing out and
experimenting phenomena in an endeavor to come up with solutions to the needs and wants
of people.

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Commitment
To succeed in business, you must be committed. Commitment means that you are willing to
put your business before almost everything else.

Some of the characteristics of an entrepreneur include; patience, friendliness, hardworking,

reliability, dedicated ness, responsibility, objectivity, rationality, honesty, determination,
courage, flexibility, imaginativeness and knowledge.

In a word, successful entrepreneurs must have appropriate personal characteristics, business

skills where necessary.

Discuss the reasons why many business plans fail

 Poor or lack of market research
Market research is a vital part of starting a new business or project. If you don’t fully
understand the competition and the current situation of your marketplace, you don’t
have enough information to go forward. Before a business plan is drawn up or a
project is begun, thorough market research needs to take place and the results need to
be viewed realistically. If your niche is saturated, then you need to come up with a
plan that will set your business or project apart and help it succeed. Otherwise, your
voice will simply be drowned out in the crowd or never heard because there just isn’t
a market for it.

 Risks
What are the risks attached to the plan? Think through these and the costs of failure as
well as the rewards of success. Do not ignore risks.
Unforeseen risks can result in business plan failure

 Poor customer care

There is need for high customer care or courtesy in business. If customers feel that
they have not been treated well they will not do business with the entrepreneur
resulting in loss of sales

 Poor pricing
Prices need to be competitively reasonable and realistic or affordable

 Poor distribution strategy

Goods and services should be convenient to customers or easily accessed.

 Lack of effective promotion strategies

Information on the availability of products , instructions on their usage, prices, place
must be passed to customers

 Poor human resources management

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 Project management requires the skills, experience and knowledge necessary to assign
the correct staff members to tasks on a project. Project team members that
complement one another and are able to work in tandem toward common goals are
more effective than staffers who have personality issues or are not well versed on the
subject area to which they are assigned. Being able to read people and develop
effective teams is an essential organizational skill. Business plans can fail because
employees are not compensated in a way that aligns the goal of the employee with the
goals of the company

 Ignoring Competition
Business plans commonly assume that the competition will make no competitive
response or indeed, will have no new initiatives of their own. Study your competitors
and try to second-guess their plans. A living document will take into account their
actions.

 Improper Budgeting
Lack of realistic budgeting is another important reason why business plans fail and why
projects fail. Research needs to be conducted ahead of time on the approximate cost of
starting a business or a project and keeping it running through the first year and through
growing pains. Funding sources need to be found ahead of time and eventualities need to
be planned for before you get in too deep.

Don’t forget the presentation

Introduction
Definition of key terms
Main body (subheadings followed by paragraphs)
Conclusion

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