Cam 206 Module - Entrepreneurship

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS
MANAGEMENT
ENTREPRENEURSHIP AND SMALL

BUSINESS MANAGEMENT
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TABLE OF CONTENTS
Contents
Assignments/self-tests ..................................................................................................................... 3
Examinations ................................................................................................................................... 3
Module Objectives .......................................................................................................................... 3
LESSON 1: INTRODUCTION .......................................................................................................... 4
LESSON 2: THE PROCESS ENTREPRENEURSHIP MYTHS ............................................................... 8
LESSON 4: WAYS OF GETTING INTO SELF EMPLOYMENT.......................................................... 15
LESSON 5: IDENTIFICATION OF A BUSINESS OPPORTUNITY...................................................... 23
LESSON 6: TYPES OF ENTREPRENEURS ...................................................................................... 26
LESSON 7: ENTREPRENEURIAL SKILLS........................................................................................ 29
LECTURE 8: THE ENTREPRENEURS TASKS ................................................................................. 32
LECTURE 9: ENTREPRENEURIAL MOTIVATION .......................................................................... 35
LECTURE 19: SOURCES AND TYPES OF BUSINESS FINANCE ...................................................... 38
LESSSON 10: THE ENTREPRENEUR AND RISK ............................................................................ 46
LECTURE 11: COPING WITH COMPETITION ............................................................................... 49
LESSON 12: BUSINESS INCUBATION .......................................................................................... 56
Public/Private Incubators ...................................................................................................... 59
LESSON 13: THEORIES OF ENTREPRENEURSHIP ........................................................................ 63
LESSONS 14 &15: THE BUSINESS PLAN ..................................................................................... 69
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CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT

Introduction
The module introduces the learner to entrepreneurship and small business
management. The learner will gain an appreciation of tools on how to identify business
opportunities and other related issues in entrepreneurship and small business
management.
Assignments/self-tests
There are two (2) assignments and two (2) continuous assessment tests that the learner
will undertake in the course of the study. These assignments will account 30% of the final
score.
Examinations
The examination will be a sit-in at the appropriate centre to be advised and will
contribute 70% of the final score.
Module Objectives
At the end of the course, the student should be able to:
1) Understand the concept of entrepreneurship and small business.
2) Appreciate the role of entrepreneurship in society.
3) Prepare a business plan
Recommended reading
Kuratco, D. F. & Hodgets, R. M. (2007). Entrepreneurship Theory, Process,Practice.
Quebec, Canada: Thomson, Southwestern
Additional reading
Hisrich, R. D., Peters, M.P., & Shepherd, D. A. (2008). Entrepreneurship (7th Ed. ) New
York: M cGraw Hill.
Holt, H D. (2003). Entrepreneurship (New venture creation). India: Prentice Hal
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LESSON 1: INTRODUCTION
1.1. Introduction
This will be the first lesson. The learner will be expected to know basic definitions
regarding entrepreneurship. The terminologies include entrepreneurship among others.
1.2: Lesson objectives
At the end of this lecture, you should be able to:
1) Define the term entrepreneur and other related terminologies
2) Highlight the advantages and disadvantages of self-employment
1.3 Lesson outline

This lesson is organized as follows:
1.
2.
3.
4.
5.
6.
7.
8.
9.
1.4
Introduction
Lesson objectives
Lesson outline
Definition of terms
Advantages of self-employment.
Disadvantages of self-employment.
Revision questions
Summary
Suggested reading
Terminologies
Self-employment
A person is said to be self-employed when he has identified a business opportunity,
started a business and is involved in running the business.
Entrepreneur
Self-employed people are commonly referred to as entrepreneurs. Entrepreneurs are
people who are able to identify business opportunities in a certain environment, gather
and put in place the necessary resources and start a business enterprise.
In this course, the terms entrepreneur and self-employment shall be taken to mean the
same thing.
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A small Business Enterprise

A business is considered small if it meets the following criteria:
a) It is independently owned, operated and financed
b) One or very few people run the business
c) It has fewer than 50 staff
d) It has relatively little impact on the industry within which it operates
A business opportunity is any idea that an entrepreneur can exploit to make profit.
Entrepreneurial attributes: These are the characteristics that are often possessed by
successful entrepreneurs.
INTRAPRENEUR
SOCIAL ENTREPRENEURSHIP
Entrepreneurial competencies: Are some of the skills an entrepreneur an entrepreneur
requires to manage the business successfully, for example: financial skills, human
resource management skills etc.
Manufacturing: This is the process of transforming a raw material from its original form
to another one that is acceptable to the user for example a person in the Jua Kali sector
transforms metal into jikos, sufurias etc.
A carpenter transforms wood into furniture etc.
Service: This is the provision of intangible items. For example, a person who owns a
canteen, a hair dresser, a barber etc.
Wholesaling: This is the buying and selling of goods in bulk. For example, buying maize
from Kenya Cereals and Produce Board and then selling it to other buyers.
Retailing: This is the sale of goods to the final user or consumer. Supermarkets,
boutiques etc. are examples of retail businesses.
1.5 ADVANTAGES OF SELF EMPLOYMENT TO INDIVIDUALS
Independence
Independence: this means that you are be your own boss. You are able to make your own
decisions regarding your business.
Potential
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You are able to exploit your potential to full capacity and become more creative and
innovative by exploiting all your talents and abilities.
Employment creation
You are able to create employment: not only are you able to employ yourself, but as the
business grows and expands, you will be able to employ other people.
Income
The business provides you with a source of income from the profits derived from the
business.
Prestige
Successful entrepreneurs are admired in society and their opinions are sought by many
people.
Role model
You become a role model to young people who would also like to be entrepreneurs.
Ownership
Self-employment provides you with an opportunity to own a business enterprise
DISADVANTAGES
Risk of failure
Risk of failure can be very high especially for someone engaging in business for the first
time. This could be due to lack of experience among other factors.
Personal liability
Most start-ups are usually registered as sole proprietorships which means that the
entrepreneur is liable for any losses in the business.
Uncertain income
Frequently limited income especially before the business breaks even and starts to make
profit and grow
Stress due to long working
Owning and running a business requires a lot of commitment of time and effort
Loneliness
Owning and running a business means that the entrepreneur has to spend long hours in
the business most often at the expense of his social li
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1.7 Revision questions

1. Define the term entrepreneurship
2. Identify five examples of manufacturing businesses
3. Identify five examples of retail businesses
4. Identify five examples service businesses
Summary
In this lesson, you learned:
1) how to define entrepreneurship terminologies
2) advantages and disadvantages of self-employment
Suggested reading
Kuratco, D.F., & Hodgets, R.M. (2007). Entrepreneurship. Theory, Process, Practice.
Quebec, Canada: Thomson South western
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LESSON 2: THE PROCESS ENTREPRENEURSHIP MYTHS

2.1 Introduction
Welcome to the second lesson on Entrepreneurship and Small Business Management.
The lesson is about the entrepreneurship process and entrepreneurship myths.
2.2 Lesson objectives:
At the end of the lecture you should be able:
1) Explain the entrepreneurship process
2) Describe the entrepreneurship myths
2.3 Lesson outline

1)
At lesson
the endisoforganised
the lecture
should be able:
The
as you
follows:
1) Differentiate between self employment and entrepreneurship
2.1 introduction
2) Outline the benefits of self employment to individuals
2) Highlight
the disadvantages of self employment to an individual
2.2 lesson
objectives
3) outline
2.3 lesson
2.4 The entrepreneurship process
2.5 entrepreneurship myths
2.6 revision questions
2.7 summary
2.8 suggested reading.
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2.4 THE ENTREPRENEURSHIP PROCESS

An entrepreneur must find, evaluate and develop an opportunity by overcoming the
forces that resist the creation of something new. The process of starting a SBE involves
five distinct phases:
Phase one: identification of a business opportunity
An opportunity is a gap in the market where the potential exists to do something. New
opportunities exist all the time but they do not necessarily present themselves. They must
be looked for. The identification of new opportunities is one of the key tasks of
entrepreneurs who must constantly scan the business landscape to find the gaps left there
by existing players (including themselves) in the market place.
Phase two: evaluation of the environment
Once an opportunity has been identified, it must be carefully evaluated. This involves
looking at the opportunity at length and establishing if it is viable.
An opportunity must fit the personal goals and skills of the entrepreneur. The assessment
of the opportunity requires answering the following questions: What market need does it
fill? What is the nature of completion in the industry where the opportunity occurs? etc.
Phase three: develop a business plan

A business plan is a document that demonstrates persuasively that enough
products/services can be sold for the business to become viable. A good business plan is
essential for developing the opportunity and determining the resources required, for
obtaining those resources and successfully managing the resultant venture.
Phase four: determine the resources

An entrepreneur must determine the resources required for exploiting the opportunity.
Care must be taken not to under estimate the amount or variety of the resources required.
These resources should then be acquired in a timely and cost effective manner.
Phase five: open and manage the enterprises

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After the successful acquisition of resources, the entrepreneur must use them to start and
manage his business successfully. He needs to develop an appropriate management style,
understand the key variable for the success of the business, identify potential problems
and put in place control systems. Some entrepreneurs have difficulty managing and
growing their businesses.
2.5 LESSON 2 B: ENTREPRENEURIAL MYTHS

The following are some of the myths of entrepreneurship as stipulated in Kuratco &
Hodgetts, 2007).
1)
2)
3)
4)
5)
Entrepreneurs are doers not thinkers

Entrepreneurs are born, not made
Entrepreneurs are always inventors
Entrepreneurs are academic and social misfits
Entrepreneurs must fit into the profile presented in books and articles which
describe the characteristics which are supposed to be possessed by the successful
entrepreneur
6) All the entrepreneur needs is money for the business to succeed
7) Entrepreneurs are high risk takers (gamblers)
8) All entrepreneurs must first fail before they can succeed.

1) Outline five other myths associated with entrepreneurship
2) Come up with explanations to counter the myths listed above
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1.5 Summary
In this lecture you have learnt:
1) The process of entrepreneurship
2) The myths associated with entrepreneurship
1.6 Suggested reading

Kuratco & Hodgetts: Entrepreneurship theory, process and practice
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LESSON 3: REQUIREMENTS FOR ENTRY INTO SELF EMPLOYMENT
3.1
Introduction
Welcome to the third lesson on Entrepreneurship and Small Business Management. The
lecture is divided into two sections: section one is on the entrepreneurs contribution to
national development; section two deals with requirements for self-employment.
2.2 Lesson Objectives:

1) Explain the entrepreneurship contribution to national development
2) Analyse the requirements for self-employment
3.3 The lesson is organised as follows:

4)
3.1 introduction
3.2 lesson objectives
3) Differentiate between self employment and entrepreneurship
4) Outline
3.3 lesson
outlinethe benefits of self employment to individuals
5) Highlight the disadvantages of self employment to an individual
3.4 The entrepreneurs contribution to national development
6)
3.5 requirements for entry into self-employment
3.7 summary
3.8 suggested reading
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3.4 HOW ENTREPRENEURS CONTIBUTE TO NATIONAL DEVELOPMENT

National development is concerned with the sound and proper utilization of resources
so as to improve the living standards of the people through the provision of quality goods
and services.
Some of the ways through which an entrepreneur can contribute to national
development include the following:
1) Employment creation not only to self but to others as well
2) Improving of the standards of living
3) Contribution to the GDP and GNP of the country
4) Wealth creation
5) Seedbed for industrialization through creativity and innovation
6) Source of revenue to the government
7) Generation of foreign exchange
8) Conservation of foreign exchange through export of goods
9) Conservation of the environment
10) Reduction in crime etc.
3.5 REQUIREMENTS FOR SELF EMPLOYMENT

There are certain things that must be put in place before one starts his own business.
The business idea
This is the business opportunity or the gap you have identified and want to fill.
Capital
This is the initial capital required by an entrepreneur to meet pre operational expenses
such as licences etc.
Skills
A skill is an ability to perform a certain task
An entrepreneur requires two types of skills to run his business successfully:
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a) Technical skills is the skill required to perform a specific task successfully e.g.
accounting skills, carpentry skills etc.
b) Management skills are the skills required for the daily running of the business
e.eg people management skills, money management skills etc.
Business premises
The business must be located somewhere. The entrepreneur needs to establish where the
business will be located, the size of the business premises. He needs to obtain the finance
to rent or purchase the premises.
Technology
This is the machinery, tools or equipment the entrepreneur will require in manufacturing
the goods or providing the services.
Market
These are the potential customers. Business cannot be started before establishing the
existence of potential customers.
1) outline five requirements of initial capital
2) explain five characteristics of a good business location
3.7 Summary
1) Definition of the main terms in entrepreneurship
2) Advantages of self-employment to an entrepreneur
3.7 Suggestion for further reading

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LESSON 4: WAYS OF GETTING INTO SELF EMPLOYMENT

4.1 Introduction
Welcome to the fourth lesson on Entrepreneurship and Small Business Management. The
lecture is on ways of getting into self-employment.
4.2 Lesson objectives

1) list the various ways of getting into self-employment
2) highlight the advantages and disadvantages of each of these methods
Lesson outline
This lesson is organised as follows:
4.1 introduction
4.3 lesson outline
4.4 ways of getting into self-employment
4.5 advantages of buying an existing business
4.6 disadvantages of starting from scratch
4.6 franchising
4.7 advantages of franchising
4.8 disadvantages of franchising
4.4 The following are the ways people get into self-employment:
Buy an existing business
Starting from scratch
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Franchising arrangements
Inheriting a family business
4.5: Buying an existing business
Advantages
i.
Inherit an existing clientele
ii.
Physical facilities (location) are already in place
iii.
Reduces the risk of failure
iv.
Inherent equipment (experiences and production is already high)
v.
Inherent good will
vi.
Reduces the need to spend time, money, energy for a thorough planning (initial)
hence profits come faster. Stress of starting from scratch
vii.
Inherent faster proven management system
viii.
In most cases its inventory or stock is already present
ix.
Suppliers and inherited suppliers
x.
Inherent equipment
xi.
Financing the purchase of the bus is restricted to one single transaction
4.6
Starting from scratch
Disadvantages
a) Chances of failure are high.
b) Unproven operations therefore running the business may be more difficult.
c) Possibility of improper/ inadequate planning.
d) No history to show suppliers or banks/ No history to fall on.
e) No knowledge of how competitors behave;
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f) Stressful
g) Expensive in terms of advertising etc.
4.7
Franchising
A franchise is an agreement that brings a franchiser (the parent company of a product or

method) with a franchisee (small business that pays fees and royalties for exclusive rights
to local distribution of the product or service.
Through the franchise agreement the franchisee gains the benefit of the parent companys
expertise, experience, management systems, marketing and financial help. The franchiser
benefits by expanding its operation through building a base of franchisee rather than
using its own capital and resources for expansion. The franchiser normally regulates the
location of the franchises so that they do not compete against each other.
Franchising systems
There are two types of franchises: product distribution franchises and business format
franchises
a) Product/trade name franchising
This allows the franchisee (the dealer) to buy product from the franchiser (the supplier) or
to license the use of a trade name.
This approach typically connects a single manufacturer with many deals. The idea is to
make product available to consumers in a specific geographical region through exclusive
dealers. Soft drink bottlers and petrol stations for example use this type of franchising.
b) Entire Business Franchising
This means that the franchisee purchases not only the franchiser products but also the
entire way of doing business including operational procedures, marketing strategies,
physical building layout, equipment, and full business services.
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Advantages and disadvantages of franchising.

Advantages to the Franchisee
Proven product
The franchisee gets to sell a product or service that has proved to be successful.
Customers are aware of the product. They know the name and they know what to expect
when coca cola launched Dasani, more likely bought it because of the fact that it is made
by coca cola.
Marketing experience
Franchisers spend millions advertising to help build an image that independent business
could not afford. Franchisees share in theses advertising costs, usually based on their
gross revenues, but it is still a great advantage to have access to the marketing expertise
of the franchisor.
Financial assistance
Some franchisors provide financial assistance to franchisees in the form of trade credit on
inventory or overhead reductions by the franchisor choosing, purchasing and owning
buildings.
Professional guidance
A franchisor can provide technical and managerial assistance not available to an
independent business. Most franchisors provide training, both as preparation for running
the business and as instruction after the business takes off. A good franchisor is available
to provide day to day assistance and professional guidance should a crisis arise.
Franchisees can also receive a great deal of technical help regarding store layout and
design, location, purchasing and equipment.
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Opportunity to learn about the business

For people who go into business on an unfamiliar field, franchising provides an
opportunity to learn. In fact, some franchisors prefer that their franchisees not have
experience in that particular field. They prefer to train them from scratch so there are no
bad habits to break.
Recognized standards
Franchisors impose quality standards on for franchisees to follow. This ensures
consistency to customers. As a franchisee, you will benefit from quality control standards
of cleanliness, service and productivity.
Efficiency
Because of increased efficiency, a franchise can sometimes be stated and operated with
less capital than it takes to start an independent business. Franchisors have already been
through the learning curve and learnt their lessons. Inventory needs such as what to stock
and what will sell quickly, are known before you open the doors so you will not waste
money on inventory, equipment or supplies that you dont need. Many franchisors often
provide financial resources for start-up and working capital inventory.
Potential for growth
If you are successful with a franchise, you will have the opportunity to multiply that
success by expanding to other franchises in other locations.
Disadvantages to the franchisee
Cost of franchise
The services, assistance and assurance in buying a franchise comes at a price. Every
franchisor will charge a fee and or a percentage of the sales revenue to franchiser. These
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may seem excessive after you have been in business for a while and you begin to feel
how they affect your bottom line.
Restriction of freedom and creativity
Most people open their businesses because they have a desire for independence but franchises
have policies and procedures that must be followed to maintain the franchise agreement. Also the
size of your market will be limited by territorial restrictions. Also, although you may feel that
some products, promotions or policies are not appropriate for your area, you will have little
recourse after the agreement has been signed
Overdependence on the franchisor
Franchisors do not always know what is best for every set of local conditions. The franchisee
must be willing and able to apply his own managerial decisions in running the business in a way
best suited to the local market and avoid being over dependent on the franchisor.
The franchisee might have very high expectation which might not be realized.
Termination of the franchise agreement

There could be difficulty in terminating the franchise agreement or having it terminated
against you.
Most franchise agreements run between 5-20 years. What if you want to transfer your
rights to a family member or sell the franchise to someone else or terminate the
agreement?
Poor performance of other franchisees
The poor performance of one franchisee can seriously affect your business as franchisees
are looked as one unit because the implicit message from franchises is that we are all
alike for good or bad
Advantages to the franchisor
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Expansion with limited capital investment

The franchiser expands his distribution sources with limited equity investment. Fees from the
franchisee provide capital for the franchiser rather than having to borrow from lenders or attract
outside investors.
Multiple sources of revenue

The franchise fee which is paid when the agreement is signed, a certain percentage of the
franchisee monthly gross revenue and money earned from selling the necessary products
and suppliers to franchisees earn the franchisor money from many sources.
Motivated Franchisees
Try their best to ensure the success of the business which translates to more money of franchiser.
Bulk purchasing
A centralized purchasing of products and supplies allows the franchiser to take advantage
of volume discounts, since they are buying for all the franchise location.
Disadvantages to franchisor
1. Loss of control
Franchisees who do not maintain their business to the required standards reflect poorly
not only on other franchisees but also on the parent company, while the franchiser
controls the business to the extent of the franchise agreement.
Franchisees are still independent business people and franchiser must get permission on
them before any products are changed, added or eliminated.
2. Profit sharing with the franchisee.
3. Disputes may arise over issues such as payment of fees, termination of franchisee
agreement, method s of operation, etc.
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1) Outline the disadvantages of buying an existing business
2) Highlight the advantages of starting a business from scratch
4.10 Summary
3) The various ways of getting into self-employment
4) Advantages of buying an existing business
5) Disadvantages of starting a business from scratch
6) Advantages and disadvantages of franchising
4.11Suggested reading
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LESSON 5: IDENTIFICATION OF A BUSINESS OPPORTUNITY

1.1 Introduction
Welcome to the fifth lesson on Entrepreneurship and Small Business Management. The
lecture deals with the various factors that can help a potential entrepreneur to identify a
business opportunity.

1) List the various factors that can aid an entrepreneur to identify a business
opportunity.
2) Provide examples of business opportunities you have identified.
5.3 Lesson outline

The lesson is organised as follows|
5.1 introduction
5.3 lesson outline
5.4 factors that assist an entrepreneur to identify a business opportunity
5.6 summary
5.4 Some factors that assist an entrepreneur to identify a business opportunity
1. Environment
The entrepreneurs studies /scans the environment to see what business opportunities may
exist there. He looks at the demographic patterns in terms of composition of the
population regarding age, gender, occupation, purchasing income, the lifestyle, culture
and religion etc.
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2. Government Policy
The entrepreneur must keep up to date with the latest information including government
policies as these could offer business opportunities e.g. the laptop project.
3. Prior work experience
Working for someone else in your area of interest can help you avoid many errors and
begin to build competitive advantages. It gives you the chance to ask yourself: what
would I do differently if I was running this business?
5. Exploit your talents/hobbies
You could have certain talents that you could exploit to start a business.
6. A hobby is something that a person enjoys doing. This can also be exploited to start a
business.
7. Skills
You could have undergone some kind of training and acquired the relevant skills. This
could be exploited to start a business.
8. Exploit the change in technology.
Technology is dynamic and keeps changing. The changes in technology often provide
business opportunities.
9. Exploit the change in lifestyles, tastes and preferences.
10. Examine the weaknesses of existing businesses and exploit these weaknesses.
5. 5 Revision questions
List five business opportunities you have identified
5.6 Summary
In this lecture, you have learnt:
1. What a business opportunity is
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2. How to identify a business opportunity
Suggested Reading
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LESSON 6: TYPES OF ENTREPRENEURS

6.1Introduction
Welcome to the sixth lecture on Entrepreneurship and Small Business Management. The
lecture is divided into two parts. Part one tackles types of entrepreneurs and part two
looks at skills of entrepreneurs.

At the end of this lesson, you should be able to:
1) Describe the various types of entrepreneurs
2) Describe the skills required by entrepreneurs to run a business successfully
6.3 Outline
The lesson is organised according to the following outline:
6.1 introduction
6.3 outline
6.4 types of entrepreneurs
6.6 summary
6.4 Different sources have classified entrepreneurs using different criteria. In this
case entrepreneurs are classified as follows:
1. The Cantillon Entrepreneur (Named After the 18th Century French economist Richard
Cantillon)
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This is a classic type of entrepreneur who identifies an opportunity which has not been
exploited then innovates in order to exploit it. This entrepreneur brings people money and
materials together to bring entirely a new business.
2. The Industry Maker Entrepreneur

He goes beyond merely creating a new firm. The innovation is of such importance that a
whole industry is created on the back of it. They develop not only new products but also
whole technology to produce them e.g. Henry Ford who invented the Assembly line;
Thomas Edison-domestic electrical products; Bill Gates-Software operating systems
3. Entrepreneur/Corporate entrepreneur
Is a manager who operates within an established firm but does so in an entrepreneurial
fashion, usually the chief executive officer or a senior manager, they are called upon to
be innovative and to provide dynamic leadership to the organization particularly when it
is facing a period of change?
4. The Small Business Enterprise (S.B.E) Owner
This is an entrepreneur who takes responsibilities for owning and running their own
business. The business may be small because it is in its early stage of growth or the
owner may actually wish to limit their size of business because they are satisfied that it
gives them a reasonably secure income and control over their lives.
5. Technology based Entrepreneur
They are especially important in modern business as they take advantage of new
scientific development especially in areas of information technology, biotechnology and
engineering science to offer their benefit to the wider world. Investors are attracted by the
high growth potentials of such business.
6. Serial and portfolio Entrepreneurs
The motivations of entrepreneurs are many and varied; they are driven by desire for
independence, prestige, a sense of achievement as much as if not more than by a desire to
make money. This is the most evident in a group of entrepreneurs whom having led one
business to success move on to start another. They are called serial or habitual
entrepreneurs.
Portfolio entrepreneurs are those who run several businesses simultaneously.
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7. Craft Entrepreneurs
Any entrepreneur who uses a particular knowledge or skill to start a business is called a
craft entrepreneur. Such entrepreneurs have the required technical job experience but they
usually lack managerial training. They have the following characteristics: they are usually
paternalistic they manage the business as his/her family; they are reluctant to delegate
authority; they start off and operate with limited capital. They usually employ family
members such business owners seek merely to make enough money to provide a steady
income for self and family.
8. Expansion Oriented Entrepreneur
Such entrepreneurs start off as craft entrepreneurs. However he takes the risk of
expanding his business and to face the challenge of changing their role from being a craft
operator to expanding craft production capacity and to grow.

1) Look around your locality and identify five different types of entrepreneurs
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LESSON 7: ENTREPRENEURIAL SKILLS

7.1Introduction
Welcome to the seventh lesson in entrepreneurship and small business management. The
lecture is about the skills required by an entrepreneur for the success of the enterprise.

1) Explain the general management skills an entrepreneur requires to run the
business successfully
2) Describe the human resource skills required by an entrepreneur for the successful
running of the business
7.3 Outline
This lesson outlined as follows:
7.1 introduction
7.3 outline
7.4 definition
7.5 general management skills
7.5 human resource management skills
7.7 summary
7.4 Definition
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A skill is simply knowledge which is demonstrated by action. It is an ability to perform a

certain task
An entrepreneur cannot successfully manage the business without certain skills.
1) The entrepreneur requires general management skills to organize the physical and
financial resources needed to run the venture.
2) Human resource management skills are needed to obtain the necessary support from
others for the venture to succeed.
7.5
Some important general management business skills include;
Strategy skills an ability to consider the business as a whole, to understand how it fits
within its market place, how it can organize itself to deliver value to its customers, and
the ways in which it does this better than the competition.
Planning skills an ability to consider what the future might offer, how it will impact on
the business and what needs to be done now to prepare it.
Marketing skills an ability to see past the firms offerings and their features, to be able
to see how they satisfy the customers needs and why the customer finds them attractive.
Financial skills an ability to manage money, to be able not only to keep track of
expenditure and to monitor cash flow, but also to assess investments in terms of their
potential and their risks.
Project management skills an ability to organize projects, to set specific objectives, to
set schedules and to ensure that the necessary resources are in the right place at the right
time.
Time management skills an ability to use time productively, to be able to prioritize
important jobs and get things done to schedule.
7.6
Human Resource Management Skills
Leadership skills an ability to improve people to work in a specific way and to

undertake the tasks that are necessary for the success of the venture. Leadership is about
more than merely diverting people, it is also about supporting them and helping them
achieves the set goals.
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Motivation skills an ability to entice people and get them to give their full commitment
to the task in hand, being able to motivate demands and understanding of what drives
people and what they expect from their jobs. If not be forgotten that for an entrepreneur
an ability to motivate himself is as important as an ability to motivate others.
Delegation skills an ability to allocate tasks to different people. Effective delegation
involves more than instructing. It demands a full understanding of the skills that people
possess, how they use them and how they may be developed to fulfil future needs.
Communication skills an ability to use written and spoken language effectively to
express ideas and inform others and to influence their actions.
Negotiation skills an ability to understand what is wanted from a situation, what is
motivating others in that situation, and recognizing the possibilities of maximizing the
outcomes for all parties.
All the above human resource management skills are interrelated.
Revision questions
1) Describe the types of entrepreneurs that exist within your locality
2) List the types of skills you believe they possess.
Summary
In this lecture, you learnt about:
1)the various types of entrepreneurs
2) the skills required by entrepreneurs for success of a business
7.7 Suggestions for further reading
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LECTURE 8: THE ENTREPRENEURS TASKS

8.1 Introduction
Welcome the eighth lecture on entrepreneurship and small business management. The
lecture looks at the tasks performed by an entrepreneur

By the end of this lecture, you should be able to:
1) Explain the tasks performed by an entrepreneur
8.3 outline
8.1 introduction
8.3 outline
8.4 entrepreneurial tasks
8.6 summary
8.4 Entrepreneurial Tasks

Entrepreneurs differ from other types of managers in the tasks they perform. Some of the
more important ones are:
i)
Owning the organization

An entrepreneur is a person who identifies a gap in the market and then innovates
in order to exploit the gap. He is the owner of the business. He works for himself.
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He is not employed by anyone. He is also described as the owner manager as he is

also involved in the management of the business.
ii)
Founding new organizations

The entrepreneur is recognized as the person who undertakes the task of bringing
together the different elements of the organization (people, property, productive
resources etc.), and giving them a separate legal identity.
However, many people who buy into organizations that have already been
founded and then extend them, develop them or absorb them into their existing
organizations are also entrepreneurs.
iii)
Innovation
Innovation is a crucial part of the entrepreneur process. Entrepreneurs must do
something new or there would be no point in their entering the market. (Peter
Drucker & J. A Schumpeter). However, innovation in a business sense can mean
a lot more than merely developing a new product or technology. The idea of
innovation encompasses any new way of doing something so that value is created.
Innovation can mean a new product/ service but it can also include a new way of
delivering an existing product/ service so that its cheaper/ more convenient to use
etc.
iv)
Identification of a business opportunity

The identification of the new opportunities is one of the key tasks of
entrepreneurs who must constantly scan the business landscape for gaps left by
existing players. (Including themselves) in the market place. That opportunity
must then be exploited by something new (innovation) which fills the market gap.
v)
Application of expertise
It has been said that entrepreneurs are characterized by the way that they bring
some sort of expertise to their jobs. This expertise may lie in their ability to
innovate or to spot new opportunities. However, they also have a special ability
in deciding how to allocate scarce resources in the situations where information is
limited.
vi)
Provision of leadership
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Entrepreneurs need the support of other people both from within the business and
outside e.g. investors, customers, suppliers, credit controllers etc. If all these
people are to pull in the same direction, to be focused on the task at hand and to
be motivated, then they must be supported and directed by the entrepreneur.

Explain how the tasks of an entrepreneur differs from those of an ordinary
manager
8.6 Summary
In this lecture, you learned about the tasks performed by an entrepreneur

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LECTURE 9: ENTREPRENEURIAL MOTIVATION

9.1 Introduction
Welcome to the ninth lesson on entrepreneurship and small business management. The
lecture is about entrepreneurial motivation

1)explain the internal motivating factors to an entrepreneur
2) explain the external motivating factors to an entrepreneur
9.3 Outline
This lesson is organised as follows
9.1 introduction
9.3 outline
9.4 internal motivating factors
9.6 summary
9.4 Motivation
Motivation can be internal (intrinsic) or external (extrinsic).
Entrepreneurial motivation can be internal and/or external. This section looks at the
internal motivators to an entrepreneur.
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Entrepreneurs are often driven by the following factors:

Profit maximization
The desire to make as much money as possible can be a very powerful drive to
entrepreneurship. This will drive the entrepreneur to work extremely hard, become
innovative and even diversify their businesses.
Desire to succeed
Successful entrepreneurship brings not only economic power but also social power where
the entrepreneur. The entrepreneurs opinion will be sought after as he will be a respected
member of the society.
Independence/self-reliance
Entrepreneurs are usually independent people who like to be their own bosses and dont
like to be controlled by others. They like to do things their own way and to be as
innovative and creative as they can.
Survival
Sometimes, people find themselves in self-employment not out of their own choice but as
the only means of survival. Such a person could have lost his salaried employment or
cannot secure salaried employment for some reason.
Adventure
You must be adventurous by taking risks or facing challenges without knowing the
outcome. This gives you the opportunity to explore new areas and opportunities and helps
you to enhance your innovativeness.
Power
Highly successful entrepreneurs are some of the most powerful people in the world. They
have power over the lives of people and institutions that rely on them for employment
etc.
Self-actualization
Having achieved the basic human needs, you will become more confident in your
abilities. You will now afford to take time to be more creative and innovative.
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Analyse five external sources of motivation to an entrepreneur
9.6 Summary
In this chapter, you learnt about the internal factors that motivate entrepreneurs

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LECTURE 19: SOURCES AND TYPES OF BUSINESS FINANCE

9.1Introduction
Welcome the tenth lesson on entrepreneurship and small business management. The
lesson looks at the tasks performed by an entrepreneur
1) Explain the types of business finance
2) Identify sources of business finance
9.3 Outline
9.1 introduction
9.3 outline
9.4 definition
9.5 Sources of business finance
9.6 criteria for evaluating sources of business finance
9.7 types of business finance
9.8 conditions for borrowing
9.10 summary
9.4 Definition of business finance

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Note that the source and type a business finance you are likely to choose will influence
the nature of business enterprise you intend to start.
Business finance is the amount of money you need to start your business. It enables you
either to buy the machinery and equipment, build your business premises, hire labour or
meet daily obligations of your business. Finance needed to start your business is
commonly known as capital.
As an entrepreneur the primary types of capital you are likely to arrange for included
start-up capital, working capital and expansion capital. Start -up capital is the capital you
will require to begin a business while working capital is the amount of money you will
need to meet the day to day activities of the business. Expansion capital is the capital you
require to help your business grow.
9.5 The source of business finance
The source of business finance refers to where the capacity you need for starting your
business come from. Such sources may include personal savings, inheritance, borrowing
from friends, banks, Co-operatives, government organizations, non-government
organizations, among others.
9.6 Criteria for evaluating sources of business finance selection
One of your most important decisions is to select the right source of financing. The
choice affects the future of your business activities. The key decision that you will be
forced to make is to determine which is appropriate source of financing for your current
needs.
Receiving a short term bank loan, when a long term loan is required, can soon create
crisis for your business. Selling part of your business to raise capital that could have
been borrowed may be extremely costly.
When you select the right source of finance, the capital obtained is free from unnecessary costs, risks and possibilities of losing control of your own business.
Primary evaluation factors
To determine the most suitable source of raising capital for your business, you may
consider the following factors.
a) Costs
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Which source exposes your business to the lowest degree of risk? The cost of your capital
source is measured by its impact on your earnings and not the increased expenses
incurred by the business. Consider a company that is deciding between a Shs. 20,000
loans at 10% interest or selling 25% of the shares in the business in order to raise Shs.
20,000. The business expects to pay interest on the loan of Shs. 200 per year which
would reduce its net profit by Shs. 2,000 before taxes. If the business expects to earn Shs.
30,000 interest expense would reduce it to Shs. 28,000. In the equity alternative, the net
income would be Shs. 30,000 since there would be no interest expense. However, only
Shs. 22,500 would be applicable to the present owners since Shs. 7,500(30,000x25%)
would represent the participation of the new shareholders. Therefore the income of the
business under the equity alternative would be higher, but the participation of the present
owners would be less.
You should be able to know that each capital source has its own cost. Internal sources
such as the sale or the liquidation of assets could lead to loss of revenue following
inventory disposal or added operation costs if machinery were sold to generate costs. If
you use trade credit, discount is forfeited. In reaching a decision, it is important that you
consider all relevant costs for each source.
b) Risk
You take general risks when raising capital. Use of trade credit could lead to supplier
dissatisfaction and possible damage to your credit worthiness.
Because borrowed money must be repaid with interest, debt capital imposes obligations
upon the cash flow of your business which must be paid to avoid default. A default could
cause you a number of actions such as forfeiture of collateral or forced bankruptcy. The
only money source that frees your business from the risk is equality capital because the
equity investor is the risk taker but not the business.
c) Flexibility
If you rely upon asset management to meet your capital needs then deny your business
credit extensions or inventory purchases which leads to lost sales.
Use of trade credit as a major capital source makes your business depend on a few
suppliers which denies you the chance to buy from other suppliers who charge low
prices.
Loans carry conditions that prevent your business from securing additional debts because
the assets are tied as security.
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d) Control
The use of internal financing and trade credit, is unlikely to have an impact upon the
control of the business exercised by you. If you are an equity investor you are entitled to
some degree of control in the company operations. Shares issued to your partners usually
carry voting rights in proportion to the number of shares purchased.
Lenders do not ordinarily participate in the affairs of the business but are legally entitled
to a vote in corporate matters as are common shareholders. However, major loans from
banks, insurance companies, or others may require that the lenders interest in keeping
abreast of corporate affairs could affect your control of the business.
e) Availability
Your business may be restricted in its abilities to raise capital due to non-availability of
preferred resources. Regardless of the source considered most feasible, your business
only has access to whatever is available.
9.7 Types of business Finance.
Being an entrepreneur exposes you to many types of business finance. Some of these
include:
a) Short term funds
These are funds from external sources used in your business but are repayable within a
year. Such funds include trade credit, bank overdraft, bank loan, borrowing from private
sources e.g. family, friends, relatives etc.
b) Medium term funds
These are external funds used in your business and are repayable within a period of five
years. For example you may use bank loans and loans from non-banking institutions such
as small enterprise finance company(SEFCO), Industrial commercial development
corporation(ICDC), Agricultural Finance Corporation(AFC), Industrial development
bank(IDB), Kenya Industrial Estates(KIE), Rural development fund(RDF) and many
others.
c) Long term funds
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Funds from external sources used in your business and are repayable for a period
exceeding five years are called long term funds. They may include bank loan and loans
from non-bank financial institutions such as ICDC, IDB, KIE, AFC, etc..
9.8 Factors in selecting types of business finance
Your ability as entrepreneur to obtain the finance needed is necessary for the operation of
your business. Some of these factors which may assist you in deciding the types of
finance to use are as the amount of money required.
When you set out to borrow money for your firm it is important to know the amount of
money you need from a bank or any lending institution. For huge sums of money you can
borrow from banks and non-bank financial institutions. However, for little funds you can
borrow from traders, friends, relatives, etc.
The purpose of money
In financing your new business it is necessary to determine what you need the money for.
There are many costs and expenses to consider. Some of these may include
a) Start-up costs
These are expenses which occur once when beginning your business. Some examples of
start-up costs are costs on fixtures and equipment, starting inventory, deposits for rent
and utilities, business license and permits, legal fees, and advertising for the grand
opening.
If you were opening a restaurant, you would have many start-up costs. You would have
to buy tables and chairs, for your customers to sit on, ovens and fryers to cook food,
plates, knives, spoons and forks. You would also have to buy or lease a building, pay for
a business license and restaurant permit and get your menu printed.
b) Operating expenses
These are expenses incurred daily to make the business operational/functional e.g.
payments for inventory, advertising, wage/salary, insurance, repairs to equipment,
monthly rents and other utilities.
Once your restaurant is open you will have to incur regular operating expenses. For
example you will continually have to buy food pay the cooks and the waitresses, pay
sales tax (VAT), monthly rents, replace stock, etc.
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c) Personal expenses
These are the costs that are necessary for you to live. Although the money you need to
start and operate the business is important, do not overlook the money you need for
personal of living expenses, some examples include food, transportation, clothing
insurance cover, utilities, medical bills and entertainments.
Some businesses take between 1-3 years to be able to generate profits. Hence there will
be very little for personal expenses. You must plan for these expenses when thinking
about your money needs. Sometimes people will start a new business while working on
another job or they have a spouse who earns money from an outside job. This helps to
limit the money needed to finance the business.
Conditions of borrowing
When you want to borrow money from banks or other lending institutions certain
conditions and terms may be put to you so as to protect the financiers against unnecessary risk and poor management practices by borrowers.
Some limitations which you will encounter when you borrow money are
a) Repayment terms should the money be repaid monthly or yearly, in large sum or
by instalments
b) Security requirements
c) Periodic reporting of business progress
Collateral
Sometimes your signature is the only security the bank needs when requesting for a loan.
At times, the bank requires additional assurance that you will repay the money. The kind
and amount of security depends on the bank and on your situation.
If your financial statements cannot justify the amount of loan you need then the bank may
require you to produce any of the following security types:
a)
b)
c)
d)
e)
f)
Title deed
Share certificate
Insurance policies
Fixed bank deposits
Log book
Jewellery and precious stones
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Sometimes the bank may require you to look for a guarantor.

Other factors
There are additional factors you may consider when making a decision on the type of
finance to use
a) External influence e.g. when heavy borrowing makes lenders control your
business
b) The alternative sources of finance
c) The risk involved eg possibilities of losing your business in case of nonrepayment of debts, receivership.
Debt and equity financing
Debt financing refers to the borrowed funds used in the operation of your business which
are repayable in future. There are many types of debt financing. Some of them include:
a) Trade credit
b) Short term credit
c) Long term credit
Trade credit: This is money you owe your suppliers who permit you to carry inventory on
open account. A good credit experience determines your ability to repay borrowed money
Short term credit: Banks and other lenders will provide this type of money to make
purchases of inventory for special reasons such as buying inventory for the next selling
season. Such funds are useful because they increase sales which improves repayment
rate. You pay short term credit in less than one year.
Long term credit: Loans for more than a year are used for expansion or modernization of
your business. They are repaid out of accumulated profits.
Note: Money borrowed for a temporary purpose should be used in profit producing areas
of your business and will be repaid out of that operation.
Equity financing includes your personal contribution and the contribution of others whom
you agree to share profits with. You get it by relinquishing a part of your profits to other
investors. This is to say you sell an interest in tour business.
Equity funds are those which remain in the services and increase your net worth.
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1) Explain the advantages of equity financing to an entrepreneur
2) Explain the advantages of debt financing to an entrepreneur
9.10 Summary
In this chapter, you learnt about the sources and types of business financing to an
entrepreneur.

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LESSSON 10: THE ENTREPRENEUR AND RISK

10.1Introduction
Welcome to the tenth lesson on entrepreneurship and small business development. The
lecture is about the entrepreneur and risk.
By the end of this lesson, you should be able to:
1) Identify the different types of entrepreneurial risks
2) Determine the type of risk taker you are
10.3 Outline
10.1 introduction
10.3 outline
10.4 definition
10.5 types of risk takers
10.7 summary
10 8 suggested reading
10.4 Definition
Risk taking is undertaking to do something without knowing what the outcome will be.
When you start a business, you are taking a risk since the business could succeed or fail.
Your success in the business will depend on your ability to identify the risk, calculate the
risk, minimise it and take it.
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In order to do this, you need to start by knowing the types of risk taker you are. You can
be one of the following risk takers:
10.5 Types of risk takers
Low risk taker: you will be a low risk taker if you are afraid to take any type of risk at
all. You are involved in doing routine things in the business because you are afraid of the
outcome should you take any business risk.
Moderate risk taker: you will be considered a moderate risk taker when you take some
measure of risk. You will take risks in order to be innovative and make modifications in
procedures and functions.
High risk taker: you are a high risk taker when you are highly creative, innovative and
willing to accept change. You need to try various alternatives and develop innovations for
products and services in new areas of business.
However, before you take any risk, you first of all need to evaluate it and minimise it .
Some of the questions you can yourself before taking a risk involve:
Is the goal worth the risk involved?
How can the risk be minimised?
What preparations do I need to make before taking the risk?
What are the most likely obstacles in achieving the goal?
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1) Explain five different types of risk a business can face in the business
environment
2) Analyse how as an entrepreneur, you can tackle such risks.
10.7 Summary
In this lesson, you learnt about:
1) The different types of risk takers
.
10. Suggested reading
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LECTURE 11: COPING WITH COMPETITION

11.1 Introduction
Welcome to the eleventh lecture on entrepreneurship and small business management.
The lecture looks at how an entrepreneur can cope with competition.

1) To establish the types of competition
2) To establish what determines reaction patterns of firms
3) To analyse the importance of Customer Value Analysis
11.3 Outline
11.1 introduction
11.3 outline
11.4 definition
11.5 types of competition
11.6 strengths and weaknesses
11.7 reaction patterns
11.8 customer value analysis
11.9 Classes of competitors
11.11 summary
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11.4 Definition
Competition is where a group of firms offer a product or class of products that are close
substitutes of each other.
11.5 TYPES OF COMPETITION

Pure Monopoly
Is where only one firm provides a certain product/ service in a certain geographical area.
Oligopoly
A few firms selling the same products that range from highly differentiated to
standardise. Pure oligopoly consists of a few companies producing the same product.
They find it hard to change anything more than the going price. The only way to gain a
competitive edge is by lowering costs.
Duopoly
This is where only two firms are selling the same product or service.
Monopolistic
Many competitors are able to differentiate their products and to focus on particular
market segments where they can meet the needs of their customers in a superior ways and
command a price premium or they can charge the same as the competition and command
a larger market share.
Pure Competition
This is where very many competitors offer the same product because there is no basis for
differentiation, the competitors prices will be the same.
No competitor will advertise unless advertising can create psychological differentiation.
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11.6 STRENGTHS AND WEAKNESSES

The entrepreneur needs to gather information on the strength and weaknesses of each
major competitor
According to Arthur D. Little, a firm will occupy one of the following competitive
positions in the larger market.
Dominant
This firm controls the behaviour of all other firms and has a wide choice of strategic
options
Strong
This firm can take independent action without endangering its long term position and can
maintain this portion regardless of the actions of the major competitors.
Favourable
This firm has exploitable strength and more than average opportunities to improve its
position in the market place.
Tenable
This firm is operating at sufficiently satisfactory level to warrant continuing in business
but it exists at the sufferance of the dominant company and has a less than average
opportunity to improve its position.
Weak
This firm has unsatisfactory performance but an opportunity exists for improvement. It
must change quickly or else exit
Non-viable
This firm has unsatisfactory performance and no opportunities for improvement. The
sooner it exits the market place the better.
11.7 REACTION PATTERNS
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Each competitor has a certain way of doing business regarding the actions of the
competition and they fall into the following categories
The laid back competitor
It does not react quickly or strongly to the rivals move
Reasons
It may tell their customers are loyal
They may be milking the business
May be slow in noticing the move by the competitor
May lack funds to react
Rivals must access the reasons for this behaviour and exploit it.
The selective competitor
Reacts only to certain types of attacks e.g. he might respond to price reduction by the
competitor but not to increased advertising by the competitor
The tiger competitor
Reacts swiftly and strongly to any assault
The stochastic competitor
This is a competitor that doesnt exhibit a predicable reaction pattern. There is nothing in
his history or economic situation to give an indication of his reaction pattern, many SBE
fall into this categories, reacting only on miscellaneous when they can afford.
Selecting competitors to attack and avoid
With good competitive intelligence, managers will find it easier to formulate their
competitive strategies.
11.8 CUSTOMER VALUE ANALYSIS

Very often, managers conduct customer value to reveal the companys streghts and
weaknesses relative to various competitors. The major steps in such an analysis are:
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Step one
Identify the major attributes that customers value in a product e.g. customers are asked
what attributes and performance level they look for when choosing a product.
Step two
Assess the quantitative importance of the different attributes e.g. customer are asked to
rate the importance of the different attributes.
Step three
Assess the companys and the competitors performance on the different customer values
against their rated importance customers are asked to describe where they see the
companys and the competitors performance on each of the attributes.
Step four
Examine how customers in a specific segment rate the companys performance against a
specific major competitor on an attribute by attribute basis. If the companys attribute
exceeds the competitors on all fronts the company can charge a higher price thereby
earning higher profits or it can charge the same price and gain a large market share.
Step five
Monitor customer values over time
The company must carry out this analysis periodically as the business environment is
constantly changing.
11.9 CLASSES OF COMPETITIORS

After the company has conducted its Customer Value Analysis, it can focus its attack on
one of the following classes of competitors.
Strong versus weak competitors
Most companies aim their attacks at weak competitors because this requires fewer
resources yet in attacking the weaker competitors the firm achieves little in the way of
improved capabilities. The firm should attract strong competitors as well so as to keep up
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with the best because even strong companies have their weaknesses which can be
exploited.
Close versus distant competitors
Most companies compete with firms resembling the most.
Good versus Bad competitors
Every industry contains these two. A company should support its good companies and
attack the bad ones. Good competitors play by the rules of the industry. They make
realistic assumptions about the industry growth potential. They set prices in reasonable
relationship to cost.
They limit themselves to a portion or segment of the industries.
They motivate others to lower cost or improve differentiation and they accept the general
level of their share and profit.
Bad competitors try to buy market share rather than earn it.
They take large risks.
They invest in over capacity.
They upset industrial equilibrium.
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1) Provide examples of companies that fall into the different types of
competition
2) Explain customer value analysis
3) Analyse the various ways that an SME can cope with competition.
11.11 Summary
In this chapter, you learnt:
1) The various types of competition
2) Reaction patterns of firms
3) Customer value analysis
4) Classes of competitors
11. 12Suggested reading

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LESSON 12: BUSINESS INCUBATION

12.1 Introduction
Welcome to the eleventh lesson on entrepreneurship and small business management.
The lecture looks at business incubation

1) Explain the importance of incubation
2) List the common services offered by incubation companies
3) Describe the factors considered by incubators
4) Explain the factors to consider when selecting an incubator
5) Describe the benefits of incubation
12.3 Outline
This lesson follows the following order
12.1 Introduction
12.3 Outline
12.4 definition
12.5 introduction
12.6 service offered by incubation companies
12.7 factors considered by incubators
12.8 factors to consider when selecting incubators
12.9 benefits of incubation
12.10 summary
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12.4 Definition
Business incubation can be defined as the interactive process which involves nurturing
and supporting newly started businesses by providing them with a conducive
environment to thrive.
12.5 Introduction
Small businesses are prone to failure and therefore the need for incubation. Business
incubation starts on a very fundamental level, often with a single individual who comes
up with a concept he or she thinks should be further explored. This individual brings
others in on the idea incubation process, making the idea stronger and more viable.
Ultimately, the idea may be turned into a product, assuming that funding can be secured
and that the idea is commercially viable.
Many companies foster idea incubation by clustering workers together in collaborative
environments. Cooperative groups work best for idea incubation because other members
of the group can identify strengths and weaknesses of the idea, resulting in a stronger
finished product. Some companies offer their services as professional idea incubators.
These companies use a staff of individuals who are trained to think innovatively. Idea
incubation firms often provide support for product development all the way through the
process from the initial vague concept to commercial production.
Successful idea incubation can result in products ranging from clothespins to computers.
Ultimately, strong leadership and executive skills are required along with an
entrepreneurial spirit. Once an idea has been incubated, it needs to be developed,
prototyped, and commercially presented. Appointing a team leader can encourage this,
along with creating a work environment in which all employees are encouraged to make
contributions.
Business incubators are designed to accelerate the successful development of
entrepreneurial companies through an array of business support resources and services,
developed and orchestrated by incubator management and offered both in the incubator
and through its network of contacts.
Incubators vary in the way they deliver their services, in their organizational structure,
and in the types of clients they serve. Successful completion of a business incubation
program increases the likelihood that a start-up company will stay in business for the long
term: Historically, 87% of incubator graduates stay in business.
12.6 Services offered by incubation facilities
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The following are the common services offered by most incubation facilities:
Coaching and mentoring
Intellectual property
Marketing assistance
High-speed Internet access/infrastructure
Help with accounting/financial management
Access to bank loans, loan funds and guarantee programs
Help with presentation skills
. Law, regulations and policy
Provision of a business premise
Referrals/networking
Financing
Comprehensive business training programs
Advisory boards and mentors
Management team identification
Help with business etiquette
Technology commercialization assistance
Help with regulatory compliance
Intellectual property management
Entrepreneurs who wish to join a business incubation program must apply for admission.
Acceptance criteria vary from program to program, but in general only those with
feasible business ideas and a workable business plan are admitted. It is this factor that
makes it difficult to compare the success rates of incubated companies against general
business survival statistics.
Although most incubators offer their clients office space and shared administrative
services, the heart of a true business incubation program is the services it provides to
start-up companies. The amount of time a company spends in an incubation program can
vary widely depending on a number of factors, including the type of business and the
entrepreneur's level of business expertise. Life science and other firms with long research
and development cycles require more time in an incubation program than manufacturing
or service companies that can immediately produce and bring a product or service to
market.
12.7 Types of Business Incubators
Classical Incubator/Business Centers
They are more like a nursery, start-up unit or a community workshop. They provide
start-up businesses with premises and a variety of services that are necessary at
the early stage of development.
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Industrial Estates
These offer a more dynamic approach to regional economic development agencies.
EPZ (Export Processing Zones)
They help to develop exports and foreign trade potential given that they have linkages to
foreign economies. The aim of EPZs is to attract foreign direct investments,
provide access to infrastructure and tax incentives.
Science and Technology Incubators
They provide a creative environment for attracting and promoting research
commercialization and technology based enterprises.
Virtual/Internet Business Incubators
They provide/make services available through a virtual media. They help to provide
networks by allowing enterprises to interact with partners, suppliers, customers,
etc. This is done through the internet or electronic data interchange.
Public Incubators/Publicly Sponsored Incubators (Non-profit)
They are mostly sponsored by government and other economic departments. Their main
objective is job creation and economic development rather than profit.
Non-governmental Incubators
These are sponsored by NGOs and other charitable organizations simply to provide
development in a given area.
Privately Sponsored Incubators
These are mostly owned by organized groups of private investors who put them up as an
Investment with a hope of getting a return on the investment. They charge a higher for
their services compared to those which are government sponsored.
Public/Private Incubators
These are owned by joint efforts of the government and other private organizations. Here
the government provides the funding while the private bodies provide the
expertise.
Academic related/research or scientific incubators
They are established as academic research projects with the objective of translating their
research findings into practice.
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12.8 Factors Considered By Business Incubators

Compatibility with other partners in the incubation facility so as to minimize conflict of
interest and unfair competition for resources.
The uniqueness of the idea which influences the survival of a project or the potential for
growth.
Whether the project specification suits that particular incubator.
Technical, social, economic, legal and political feasibility have to be weighed with a view
to evaluating the viability of such a project.
Size of the project in regard to funding process, implementation time and other
requirements.
The business plan and other elements of the business plan.
Availability of market or demand for the product produced.
12.9 Factors to Consider When Selecting a Business Incubator

Space and Services
Related issues like charges for space and service
Type of services offered
Lease charges/requirements
Availability of room for expansion
Quality
Does the incubator:
Provide quality services
Understand your business needs
Offer access to valuable contacts and networks
Success Rates
Ask yourself the following questions:
How is the track record of the incubator?
What is the experience of others who have used the incubator before you?
How do they current tenants feel about the incubator?
Policies and Procedures of the Incubators
How long can you remain as a tenant?
Can you easily move out if the business fails?
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How flexible are the policies

Does it offer training programs and other beneficial services?
Management
Does the incubator appear well managed?
Does it appear to relate well with the business community
Is it well supported by other sponsoring organizations?
12.10 Benefits of Business Incubators
Acts as a catalyst for economic development by boosting entrepreneurial growth
and services.
Helps young businesses to overcome challenges of new start-ups.
Encourages faster growth and survival or new businesses.
Help to convert ideas into ventures by supporting the tangible ideas.
They benefit those who cannot access mainstream services such as bank loans which
require high collateral.
Help to provide conducive environment for businesses to flourish.
Provide network facilities which are essential for business growth and marketing.
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1) List the kinds of services offered by incubation companies
2) Explain the factors that you could consider when looking for an incubator
company.
3) Analyse the benefits of incubation to a country such as Kenya.
12. 12 Summary
In this chapter, you learned about:
1) The different types of incubators
2) Factors considered by incubation companies in selecting businesses to incubate
3) Factors considered by potential entrepreneurs looking for incubators
4) Benefits of incubation
12. 13 Suggested reading

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LESSON 13: THEORIES OF ENTREPRENEURSHIP

13.11Introduction
Welcome to the thirteenth lesson on entrepreneurship and small business management.
The lecture covers theories of entrepreneurship.

By the end of this lesson, you should have learnt about the different theories of
entrepreneurship
Outline
This lesson is structured as follows:
13.1 introduction
13.5 outline
13.4 The psychological approach
13.5 Joseph Schumpeters theory of entrepreneurship
13.7 summary
The following are some entrepreneurship theories
13.4 THE PSYCHOLOGICAL APPROACH

Over the past few decades, entrepreneurial research has identified a number of
personality characteristics that differentiate entrepreneurs from others. They are:
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The need for achievement (n Ach)

People with high levels of n Ach have a strong desire to solve problems, enjoy setting
goals and achieving them through their own efforts and like receiving feedback on how
they are doing. They are moderate risk takers.
Internal locus of control
Successful entrepreneurs believe in themselves. They do not believe that the success or
failure of their businesses is as a result of luck, fate, chance or forces beyond their
control.
They believe that for the most part, the future is theirs to control through their own
efforts. They believe that their accomplishments and setbacks are within their own
control and influence and not forces beyond their control.
Calculated Risk takers
Start-up entrepreneurs face uncertainty compounded by constant changes that introduce
ambiguity and stress into every aspect or their business. Setbacks and surprises are
inevitable making the entrepreneurial environment a highly risky. However, successful
entrepreneurs avoid taking unnecessary risks. When they decide to participate in a
venture, they do so in a calculated, carefully thought out manner. They do everything
possible to minimize the risk.
Innovative and creative
The role of an entrepreneur is to innovate. A successful entrepreneurial venture is usually
based on significant innovation. This might be a technological innovation, for example a
new product or a new way of producing something or it might be an innovation in
offering a new service etc.
Growth oriented
One of the key characteristics of entrepreneurship is business growth. Entrepreneurs take
the necessary risks that ensure business growth.
Hard work
Entrepreneurs put a lot of physical and mental effort into developing their ventures. They
often work long and antisocial hours. After all, the entrepreneur is their own most
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valuable asset. Most of them are married to their businesses, resulting in health
problems due to stress as well as family problems.
Setting of personal goals
Entrepreneurs to set themselves SMART goals. They benchmark their achievements
against these personal goals. As a result entrepreneurs tend to work to internal standards
rather than look to others for assessment of their performance.
Resilience
Not everything goes right all the time. In fact, failure may be experienced more often
than success. Entrepreneurs must not only pick themselves up after things have gone
wrong, but also learn positively from the experience and use that learning to increase the
chances of success next time round.
Confidence
Entrepreneurs must demonstrate that they not only believe in themselves, but also in the
venture they are pursuing in order for others to feel confident about the venture.
However, there is the risk of entrepreneurs becoming overconfident which could result in
various business problems such as being too sure of themselves to be receptive to good
advice.
Highly optimistic
Entrepreneurs have ceaseless optimism (even during bleak time). This is a key factor of
entrepreneurial success. They maintain a high enthusiasm level that allows others to
believe in them during tough periods.
Receptiveness to new ideas and change
Entrepreneurs should not be over confident. They must recognise their own limitations
and the possibilities that they have to improve their skills. They must be willing to revise
their ideas in the light of new experience. They must be receptive to change by being
willing to embrace the possibilities presented by change rather than resist them. Good
entrepreneurs are always aware that they could do things better and are receptive to a
chance to improve their skills and develop new ones.
Assertiveness
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Entrepreneurs are usually clear regarding what they want to gain from a situation and are
not shy to express their wishes. This does not mean being aggressive, nor does it mean
adopting a situation and refusing to budge. It means being committed to outcomes, not
means. True assertiveness relies on mutual understanding and is founded on good
communication skills.
Information seeking
Entrepreneurs are not, on the average, more intelligent than other people. They are,
however, characterised by inquisitiveness. They are never satisfied by the information at
any one time and constantly seek more. Good entrepreneurs tend to ask more questions
than making statements during communication.
Seeking feedback
Effective entrepreneurs are often described as quick learners. Unlike many people,
however, they also have a strong desire to know how well they are doing and how they
might improve their performance. Hence, they actively seek out and use feedback.
Feedback is also central to their learning from their mistakes and setbacks.
Attuned to opportunity
Successful entrepreneurs are constantly scanning the environment to identify gaps left
there by various players, including themselves. They are never really satisfied with the
way things are at any moment in time.
Good at networking
It has been established that businesses need to establish networks if they are to become
more competitive. Networking is the process of creating alliances with people and
alliances beyond the immediate boundaries of the venture. It is the process of linking up
with the right people to get things done and the success of a business depends, to a certain
extent, in knowing the right people in the right places.
Integrity and reliability
These two are a key factor to successful entrepreneurship. It is what makes successful
personal and business relationships to endure. Investors, partners, and creditors and
customers value them highly. They help build and sustain trust and confidence in the
enterprise.
Commitment, determination and perseverance
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More than any other, total dedication to success as an entrepreneur can overcome
obstacles and setbacks. Sheer determination and an unwavering commitment to succeed
often win out against odds that many people would consider insurmountable. They can
also compensate for personal shortcomings.
Persistent problem solving
Entrepreneurs are not intimidated by difficult situations. Yet they are neither relentless
nor foolhardy in their relentless attack on a business problem or an obstacle that is
impeding business operations. Simple problems bore them; unsolvable ones do not
warrant their time. However, they are realistic in recognising what they can or cannot do
and where they can get help in difficult but unavoidable problems.
13.5 Joseph Schumpeters Theory of Economic Development
According to Schumpeter, economic development consists of coming up with
innovation. He argues that entrepreneurship is the process of creating innovative and
evolutionary processes to create successful business undertakings. The essence of
entrepreneurship, therefore, lies not simply in putting together business activities in their
original formations but in establishing new innovative business combinations in terms of
supplies, products, markets processes or organization. This, according to Schumpeter, is
important because it brings forth a force that disrupts market equilibrium thereby creating
change, which results to new opportunities.
The theory accorded the entrepreneur the role of an innovator. The entrepreneur is not
merely a manager, but comes with something new. Schumpeter identified five types of
innovation. These include:
i) The introduction of a new product;
ii) The introduction of a new method of production;
iii) The opening up of new markets;
iv) The conquest of a source of raw materials or semi manufactured goods and
v) The creation of a new type of industrial organization such as the creation of a
monopoly.
However it is the introduction of a new product and its continued improvement that leads
to economic development. The entrepreneur is motivated by the following factors: i) the
desire to build his own business empire; ii) the desire to conquer and prove his
superiority, and iii) the joy of creating something entirely new and proving his ingenuity.
The nature and activities of the entrepreneur depend on his socio-cultural activities. In
order to perform his economic function, the entrepreneur requires two things: i) technical
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knowledge to make new products; ii) finance from banking institutions. Once the new
innovation becomes successful and profitable, other entrepreneurs want to copy it and
benefit from it. The theory continues by stating that innovation in one field may result in
a wave of innovations in other related fields; for example, the emergence of a motor
vehicle industry may stimulate a wave of new investments in the construction of
highways, tyres petroleum products and more.
Thus, Schumpeter, saw entrepreneurs not so much as the lubricant that oiled the wheels
of an economy, but as self-interested individuals who sought short term monopolies
based on some innovation. Once an entrepreneurial monopoly was established, as earlier
mentioned, a new generation of entrepreneurs came along with more innovations that
aimed to supersede that monopoly in a process Schumpeter called creative destruction.
Where the ordinary person (static man) sees nothing but routine, the entrepreneur (action
man), knows that there exists a nearly endless number of new relationships to move the
business forward. Schumpeter argues that an entrepreneurial economy is an
amalgamation of innovative combinations that defy the centrality of economic
equilibrium.

1) outline what you consider to the critical attributes for successful
entrepreneurship
13.7 Summary
In this lesson, you learnt about theories of entrepreneurship

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LESSONS 14 &15: THE BUSINESS PLAN

14.1Introduction
Welcome to the last lesson in entrepreneurship and small business management. The
lesson provides information about the business plan.

By the end of this lesson, you will be able to plan:
1) List the various uses of business plan
2) Write a business
14.3 Outline
The lesson is structured as follows:
14.1 introduction
14.3 The business plan
a) What is a Business Plan?

A document which spells out the goals and objective of a business and clear
outlines how and when they will be achieved.
b) Why Write a Business Plan?
To obtain financing.
Guide for opening a business.
Guide foe business expansion

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Guide for managing a business.
To communicate clearly with interested parties.
c) When is a Business Plan Written?
After deciding to go into business.
Before starting the business.
When an entrepreneur wants to expand.
d) Who Writes the Business Plan?
Each prospective business owner/manager writes a business plan for the business
he/she wants to open.
A support agency may assist in writing certain areas of the business plan.
e) How Is a Business Plan Organized?
Cover page
Table of contents
Executive summary
Business description
Marketing Plan
Organizational Plan
Operational/production Plan
Financial Plan
Potential risks and problems
Appendices
THE BUSINESS PLAN

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TOP PAGE
Student details
COVER PAGE
Name of business:
Logo
Mission
Vision
Address and telephone, Email address, website of the business
Prepared by:
Signature of owner
Name of owner:
Date
Contact details
TABLE OF CONTENTS
CHAPTER ONE
EXECUTIVE SUMMARY
Summarized statement on:
Business description
Opportunity and entry
Target market
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Competitive advantage
Management team
Financial plan
Critical risks and problems, and solution
CHAPTER TWO
BUSINESS DESCRIPTION
(a) Owner Details
Name:
Age:
Address:
Occupation:
Education/Professional Qualifications:
Business Experience:
NB: In a partnership, this information should be provided for all the partners
(b) The Business Venture
Name of business:
Location of business:
Legal form of business:
Major activity of business:
Principal customers:
Location of customers:
Amount to be invested by owners:

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Amount to be borrowed:
Total amount needed for the venture:
(c) The product/Service
Name of product/service:
Features of product/service:
Benefits obtained from product/service:
Unique features of product/service
(d) Entry Plan
Competitive advantage of the business:
Weakness of competition:
Pricing plan:
Plans to attract customers
(e) Growth Plan
Trends which signal business growth:
Opportunities arising from this trend:
Plans to take advantage of the opportunities:
State at least three short term goals
State at least three medium term goals
State at least one long term goal
f) The industry
Describe the industry under which your proposed business will fall
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What is the trend of the industry?
What is the general size of businesses in the industry?
What is the average number of employees in the firms of the industry?
What is the basic capital requirement for entry into the industry?
Are there any seasonal factors that are experienced in the industry?
CHAPTER THREE
THE MARKETING PLAN
(a) Potential Customers
Type of customers (individuals, institutions):
Total target market population:
Number of customers who can buy product/service:
(b) Competition
Names of the key competitors:
Location in relation to your business:
Size of the competitors:
Comparisons between your product(s) or service(s) and those of the competitors:
Strengths and weakness of the competitors:
Plans to capitalize on the weakness of the competitors:
(c) Pricing
Methods of calculating the selling price of your product/service:

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Factors which will influence your price setting, e.g. competitors prices:
Actual selling price(s) of your product(s) or service(s):
Credit terms to be offered:
Discounts to be allowed:
Any after-sales service(s) and relevant costs:
(d) Sales Tactics
Method of direct selling or personal selling:
Method of indirect selling:
Method of recruitment and retention of the sales force:
Utilization of distributors or agents:
Ways of selecting and motivating distributors or agents:
Geographical area you intend to serve:
(e) Advertising and Promotion
Media to be used:
Product/service image to be portrayed:
Image to be projected regarding business:
Frequency of advertisements:
Cost per advertisement placement:
Measuring effectiveness of the advertisements:
Plans for initial promotional campaign:
Plans for regular promotional methods:
Cost for each promotional event:

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Measuring effectiveness of promotional campaigns:
(f) Distribution
Channels to be utilized:
Means of transport you will use:
Transport cost per month:
Anticipated distribution problems:
Overcoming distribution problems:
CHAPTER FOUR
ORGANIZATION PLAN
(a) Organizational Structure
Draw the organizational chart of the business
(b) Key Personnel
Number of positions:
Title of positions:
Duties of positions:
Remuneration level:
Incentive package:
(c) Ordinary Employees
Numbers required:
Titles and duties:
Remuneration:
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Incentive package:
(d) Support Services
Banking:
Bookkeeping:
Legal:
Postal:
Management advice:
Other:
CHAPTER FIVE
OPERATIONAL PLAN
(a) Draw the ground plan of the proposed workshop/ business premises
(b) Production facilities
Give a detailed description of the machinery/tools/equipment which will be used

in the business
Their cost
The source
repairs & spare part which may be required in future
describe the other fixed assets to be used in the business

c) Production process
Give a detailed description of how the goods will be produced/ how the
service(s) will be provided.
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(c) Production Cost
TYPE OF COST
Source of materials
Materials required
Transportation
Workers/labour
Overhead expenses
Cost per unit
MONTHLY COST
TOTAL COST
(d) Complying With Operational Requirements

TYPE OF REQUIREMENT
Licences
Taxes
Other approvals
COST
TOTAL COST
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CHAPTER SIX
FINANCIAL PLAN
(a) Pre-operational Costs
ITEM
COST
Transport
Market research
Plan properties
Meeting people
Photocopying
Installations
TOTAL COST
b) Working Capital
ITEM
AMOUNT
Stock of raw materials
Work in progress
Stock of finished goods
Debtors
Cash
TOTAL WORKING CAPITAL
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c) Pro-forma Income Statement

Pro-forma income statement for the year ending:
ITEM
AMOUNT
Sales:
Cost of goods sold
Gross profit
Wages
Rent
Water
Telephone
Electricity
Advertising
Stationery
Postage
Transport
Expenses:
Repairs
Net profit before tax

Tax
NET PROFIT AFTER TAX
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d) Pro-forma Balance Sheet

ASSETS
AMOUNT
Current Assets:
Cash
Debtors
Stock of finished goods
Stock of raw materials
Total Current Assets

Fixed Assets:
Machinery and equipment (cost)

Accumulated depreciation
Vehicles (cost)
Furniture and fittings(cost)
Other (specify) fixed assets (cost)
Total Fixed Assets

TOTAL ASSETS
LIABILITIES
Current Liabilities:
Creditors
Other (specify) liabilities
Total Current Liabilities
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Long-term Liabilities
Bank loan
Other (specify)
Owners Equity
TOTAL LIABILITIES AND EQUITY
e) Projected Cash Flow Statement

YEAR 1
1
Beginning
balance
Add cash
sales
Accounts
receivable
Others
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CASH
RECEIPTS
TOTAL CASH
AVAILABLE
TOTAL CASH
PAYMENT
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ENDING CASH
BALANCE
f) Calculate the expected break-even point of your proposed business

Determine the sales and total variable costs. Calculate the total contribution margin.
e) Total contribution margin:
Sales Total Variable Costs = Sh.
(ii) Calculate the contribution margin percentage:
Contribution margin % =Contribution margin x 100 = Sh.
Sales
(iii) Determine the total fixed costs, ie. Operating expenses, for year 1:
Total fixed costs = Sh.
(iv) Calculate the break-even level of sales in shillings:
Break-even level =
Fixed costs
=Sh.
Contribution margin %
(v) Break-even revenue:
Total sales
Less cost of sales
Contribution
Contribution Ratio (%) = Contribution x 100 = Sh.
Total sales
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(vi) Break-even turnover =
Fixed cost
= Sh.
Contribution margin %
(vii) Break-even units = Contribution margin = Sh.
Fixed costs
g) Desired Financing
ITEM
AMOUNT
Pre-operational costs
Working capital
Fixed assets
TOTAL DESIRED FINANCING
h) Capitalization
ITEM
AMOUNT
Total investment
Owners contribution
Borrowed funds
i) Profitability
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(i) Gross profit percentage

Gross Profit (
Sales
(ii)
Return on equity
Net Profit after tax (

Owners equity
(iii)
x 100 = Sh.
x 100 = Sh.
Gross profit percentage
Net Profit after tax (
Total investment (
x 100 = Sh.
CHAPTER SEVEN
Potential risks
Problem
Solutions
14.5
1) Write a business plan
14.6 Summary
In these lessons, you learned how to write a business plan

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IMPORTANT
TYPING INSTRUCTIONS
THE BUSINESS PLAN WILL NOT BE ACCEPTED IF IT DOES NOT ADHERE
TO THE FOLLOWING INSTRUCTIONS:
The finished business plan should be spiral bound
Should not be less than 20 pages
Start each chapter on a new page
Theme font: Times New Roman
Font size 12
Line spacing: 1.5
Margins: standard
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CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

ENTREPRENEURSHIP AND SMALL

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

1.3 Lesson outline

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

A small Business Enterprise

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

1.7 Revision questions

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

LESSON 2: THE PROCESS ENTREPRENEURSHIP MYTHS

2.3 Lesson outline

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

2.4 THE ENTREPRENEURSHIP PROCESS

Phase three: develop a business plan

Phase four: determine the resources

Phase five: open and manage the enterprises

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

2.5 LESSON 2 B: ENTREPRENEURIAL MYTHS

Entrepreneurs are doers not thinkers

1.4 Revision questions

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

1.6 Suggested reading

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

LESSON 3: REQUIREMENTS FOR ENTRY INTO SELF EMPLOYMENT

2.2 Lesson Objectives:

3.3 The lesson is organised as follows:

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

3.4 HOW ENTREPRENEURS CONTIBUTE TO NATIONAL DEVELOPMENT

3.5 REQUIREMENTS FOR SELF EMPLOYMENT

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

3.7 Suggestion for further reading

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

LESSON 4: WAYS OF GETTING INTO SELF EMPLOYMENT

4.2 Lesson objectives

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

Inherit an existing clientele

Physical facilities (location) are already in place

Reduces the risk of failure

Inherent equipment (experiences and production is already high)

Inherent good will

Inherent faster proven management system

In most cases its inventory or stock is already present

Suppliers and inherited suppliers

Financing the purchase of the bus is restricted to one single transaction

Starting from scratch

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

A franchise is an agreement that brings a franchiser (the parent company of a product or

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

Advantages and disadvantages of franchising.

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

Opportunity to learn about the business

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

Termination of the franchise agreement

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

Expansion with limited capital investment

Multiple sources of revenue

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS

4.9 Revision questions

Kuratco & Hodgetts: Entrepreneurship theory, process and practice

CAM 206: ENTREPRENEURSHIP AND SMALL BUSINESS