QUESTION 1 An entrepreneur decides to sell his woolen garments in the month of February on discount . Name the environmental factor which prompted him to take his decision . Four traits \characteristics of Steve Jobs that helped him to be successful in his business High degree of commitment Launching a venture successfully requires total commitment from entrepreneurs . Steve Jobs commitment helped him to overcome business –threatening mistakes and obstacles .His commitment to his idea and venture helped his business to be successful . Creative and Innovative Creativity and innovativeness are important for entrepreneurs to gain a competitive advantage in their ventures. Through Steve Jobs’ creative and innovative minds and imagination, he managed produce unique goods and services for customers. Confident and Optimistic Skilled at Organising Ability to set a vision Steps taken before entrepreneur decides to pursue a opportunity Entrepreneurs need to evaluate the environment prior to the business start –up of the business. An environment is where the business venture operates Question 2 Three types of Franchise that exist There are 3 main types of franchise that exist and these are Business format franchises Product franchise or single operator franchises Manufacturing franchises Business format franchise This type of franchise facilitates the expansion of the franchiser business by allowing individuals to buy a business with an established brand name .New business owners will e supported throughout the initial business stages and will continue to receive support in running their business .In return for the offered support ,access to experienced professionals ,and the right to use the business name and trademark ,the new business owner is obliged to pay royalty to the owner of the business on a regular basis . Product franchise or single operator franchises This type of franchise focuses on individuals who are selling products or delivering a service in a specific trade or industry field . The franchiser will allow you to use their brand name and trademarks, provide you with uniform and equipment needed to properly represent the brand and offer you ongoing support. Product franchises are a great option for first time business owners since the investment needed is usually smaller than that of business franchises Manufacturing franchises In manufacturing franchises, the franchiser allows the franchisee to produce items using their brand name and tradename .While this type of franchise is most popular among food and drink companies ,can also be found throughout the manufacturing industry. The best example is would be a soft drink company, the parent company will produce the concentrated syrup then sell it as well as the right to use the brand name and trademark to a bottling company Five pros and cons of buying a franchise A proven system When buying a franchise you are gaining years of experience spent by the franchisor building their brands and systems .They have been through the process of trying what works and what doesn’t so that you don’t have to Training and support Perhaps one of the biggest advantages to buying a franchise is training and ongoing support you receive from the franchisor .There will always be someone to call when a problem or question arises. Name and recognition Building a brand is no small feat and can also be quite expensive and time consuming .When you sign on with a franchise the work has been done for you .Your customers already know your name and what to expect Ongoing fees Franchisors require the franchisee to pay on going royalties \ or advertising fees ,though you benefit from the support and marketing efforts this affords ,you will always owe a percentage of your profits to the franchisor . Contractual agreement When you buy a franchise you sign an agreement which locks you in a specific period of 5 to 20 years. Breaking a franchise agreement can be difficult and costly Presentation on Creativity and innovation Creativity is defined as the tendency to generate or recognize ideas ,alternatively or possibilities that maybe useful in solving problems ,communicating with others . Creativity is the ability to come up with new ideas and to identify new and different ways of looking at a problem and opportunities . Innovation is finding ways to deliver new or better goods and services An entrepreneur needs to think of new ideas to implement new strategies .According to Kuratko and Hodgetts there are four main phases of the creative which are incubation Knowledge accumulation Incubation Ideas Evaluation and implementation Knowledge accumulation To start the creative process , one must ready to gather all relevant information and investigation .This involves some form of reading ,dissussion with others working in the same field ,attending professional seminars or workshops and so forth.with exposure ,it gives the individual a wide perspective of problems and a foundation for creativity in order to develop a new product ,service and business . The second phase is the incubation, in this phase individuals may not be directly involved in the related activities or problems instead they will to get rid of the problems and their subconscious minds at work on it .creative ideas are welcome regardless of their source .This may happen when one is sleeping ,relaxing ,reading materials unrelated to existing problems . The third phase is called idea and it is the most exciting phase in the process of creativity .During this phase , the solution or answer of the existing problem is finally found .Sometimes this phase is referred to as the eureka factor .Whenever the individual is thinking of something unrelated to the business or problem ,ideas could emerge easily .Slowly this allows the person to begin formulating solutions as he / she may obtain ideas that are usually difficult to obtain. The last phase which is the evaluation and implementation will transform the ideas into reality .This is an extremely difficult phase because it requires courage ,self evaluation , high confidence and perseverance .The ability to identify ideas that are workable and practical will determine the success of the entrepreneur in business .As the ideas that emerge from phase 3 is in a rough form the entrepreneur needs to re-work the ideas by modifying and transforming the rough idea into its final shape .After that ,the entrepreneur can choose the best idea to carry out profitable business activity . Question 3 Ownership structures Sole proprietorship Is one individual in business alone and this the most common type of ownership. This type of business is simple to form and operate and may enjoy greater flexibility of management , fewer legal controls and fewer taxes. However the business owner is personally liable for all debts incurred in the business .Legally the sole appropriator is inseparable from its owner this means and the owner of the business reports business income and losses on his /her personal tax is personally liable for any business related obligation such as debts and court judgement. The advantages of a sole proprietorship include: Owners can establish a sole proprietorship instantly, easily and inexpensively. Sole proprietorships carry little, if any, ongoing formalities. A sole proprietor need not pay unemployment tax on himself or herself (although he or she must pay unemployment tax on employees). Owners may freely mix business or personal assets. The disadvantages of a sole proprietorship include: Owners are subject to unlimited personal liability for the debts, losses and liabilities of the business. Owners cannot raise capital by selling an interest in the business. Sole proprietorships rarely survive the death or incapacity of their owners and so do not retain value. Partnership Is a business owned by two or more people who agree to contribute money, labour and skills to a business. Each partner shares the profits , losses and management of the business and each partner is personally and equally liable for debts of the partnership. Formal terms of the partnership are usually contained in a written partnership agreement A partnership agreement clearly outlines the financial and managerial contributes of the partners and carefully delineates the roles in the partnership relationship . Advantages of partnerships Partnerships are easier and less expensive than companies to set up. Partners may carry on business under a trading name Partnerships combine the resources and expertise of a number of people. Partnerships are simple to administer. Profits and losses are shared between partners according to his/her share (as specified in the 'partnership agreement'). Unlike companies, partnerships do not have to disclose their profits to the public (i.e. greater privacy). Changing the legal structure is relatively simple (i.e. changing from a partnership into a company at a later stage). Disadvantages of partnerships All partners together are personally responsible for business debts. Each partner is individually liable for debts incurred by the other partners. This is known as being 'jointly and severally' liable (i.e. unlimited liability). All partners have a right to participate in the management of the partnership (unless otherwise agreed). Tax is charged at the personal tax rate. As business earnings increase, so does the tax rate. Partners cannot transfer their ownership to someone outside the partnership unless the other partner(s) agree. Personal differences may interfere with business Corporation A corporation is the most advantageous way to start a business because it is a separate legal entity apart from the individuals that own it .It is a more complex business structure .A corporation has certain rights and privileges and liabilities beyond those of an individual. Doing business as a corporation may yield taxes or financial benefits ,but they can be offset by other considerations such as increased licensing fees or decreased personal control. A corporation has responsibility over ownership of capital and can take legal action against others or vice versa. The life span of a corporation is not dependent on its members. You can incorporate your business by filing articles of incorporation with the appropriate agency in your state. Usually, only one corporation can have any given name in each state. After incorporation, stock is issued to the company's shareholders in exchange for the cash or other assets they transfer to it in return for that stock. Once a year, the shareholders elect the board of directors, who meet to discuss and guide corporate affairs anywhere from once a month to once a year. Question 4 Components included in a business plan Executive summary Market Analysis Marketing and sales Strategies Service and Product Line Funding request Executive summary This is the most important of the business plan . It is the first section that should tell readers where the company is and where it wants to go .The items included in an executive summary is the mission statement date when the business started name of the business founders and the role they play the number of the employees location of the business and the branches or subsidiaries description of the plans or facilities , product manufactured bankers name ,the progress and the growth . Market Analysis The Analysis section illustrates the entrepreneur’s knowledge about a particular industry which the business is in .It should also present a general overview and conclusion research data that has been collected . Marketing and Sales strategies Marketing is the process of creating and attracting customers to the business .Entrepreneurs should realize that customers are the lifeblood of the business .A business plan should include a sales forecast based on the market analysis .Market strategy should be part of the on-going self- evaluation process and unique to the company .It should include market penetration ,business growth ,channels of distribution and communication .Overall sales strategy should be included in the sales strategy and sales activities .Include also the marketing budget in this section Services and product Line This section describes the uniqueness of the company’s services or products and the benefits to potential and current customers .It should also focus on the areas where a distinct advantage exists by identifying the problems for which the services or product provides a solution What is the Guerilla Marketing approach? It is an advertising strategy that focus on low cost unconventional marketing tactics that yields maximum results .it promotes products in public places or streets with little money .It is done in public places such as shopping centers to attract big audience. Timmons entrepreneurship Model According to Timmons Model of entrepreneurship the three critical factors of successful venture are opportunity , teams and resources .A successful entrepreneur is one that balance the factors .The Timmons model bases itself on the entrepreneur .The entrepreneur search for an opportunity and finds it ,shapes the opportunity into a high –potential venture by drawing up team and gathering the required resources to starting the business ,the entrepreneur risks risk his or her own carrier ,personal cash flow and worth . The model also basis itself on the promise that entrepreneur earns rewards in commensuration with the risk and effort involved in starting a business . Communication Resources Opportunity Leadership capital context Creative uncertainty Team Opportunity Factor The Timmons model of entrepreneur states that entrepreneurship is an opportunity driven or that the market shapes the opportunity .A good idea is not necessarily a good business opportunity and the underlying market demand determines the potential of the idea .An idea becomes viable only when it remains anchored in products and services that create or add value to customers and remains attractive ,durable and timely. Unlike a conventional entrepreneurship model that starts with business plan and identify an opportunity ,the Timmons model starts with the market opportunity . Team Factor Once the entrepreneur identifies an opportunity he/ she works to start a business by putting together the team and gathering the required resources. The size and nature of the opportunity determines the size and shape of the team .Timmons model places special importance on the team and considers a good team indispensable for success .A bad team can waste a great idea .Among all resources ,only a good team can unlock a higher potential with any opportunity and manage the pressure related to growth . Resources factor The Timmons model discounts the popular notion that extensive resources reduce the risk of starting a venture and encourages bootstrapping or starting with the bare minimal requirements as a way to attain competitive advantages .The advantages of bootstrapping include : Drives down market cost Instills discipline and leanness in the organization Encourages creative resources to archive more with the limited amount of money and other resources available The entrepreneur works to minimize and control rather than maximize and own .The role of entrepreneur in managing resources includes building a good resource base to draw from when required and drawing up a business plan through a fit and balance method that balances the available resources with the opportunity and potential of the team. .
