COMMERCE FORM TWO SUBJECT NOTES
CHAPTER : 1  ENTERPRENEURSHIP

ENTREPRENEURSHIP.

By the end of this topic, student should be able to;

     Describe the characteristics of a successful entrepreneur

     Assess the entrepreneurial activities conducted by Tanzania entrepreneurs

     Evaluate their own ideas for an entrepreneurial endeavour in their community

     Explain internal motivating factors

     Discuss external motivating factors

     Discuss the importance of motivation

 KEY TERMS AND CONCEPTS.

  •                               Knowledge- is the collection and retention of information
  •                               Skill- ability to demonstrate systematically a sequence of actions which results into observable something.
  •                               Motive- this is a desire or intention to obtain something
  •                               Creativity- ability to come up with a novel idea or something that has never existed before.
  •                               Self determination- ability to continue putting effort to something despite obstacles
  •                               Vision- having long term goals and visions
  •                               Persuasiveness- Ability to convince a person or customer to agree to your idea, or buy a product.
  •                               Flexibility- being receptive to other peoples needs, opinions and ideas and being open minded.
  •                               Decisiveness- ability to make decision under any circumstance

Meaning Of Entrepreneurship.

The capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of new businesses.

In economics, entrepreneurship combined with land, labor, natural resources and capital can produce profit. Entrepreneurial spirit is characterized by innovation and risk-taking, and is an essential part of a nations ability to succeed in an ever changing and increasingly competitive global marketplace

The characteristics of successful entrepreneurs.

Success in entrepreneurship isn’t just about your idea or your money. Plenty of people have interesting ideas or a lot of cash to throw around — and they never quite manage to find success in their ventures.

If you want to be an entrepreneur, take a step back and evaluate whether or not you have the following characteristics. Have the gut to begin and implement an idea. The following are characteristics that makes entrepreneurs stand out from the rest.

1. Self-Motivation

Self Motivation is one of the most important traits of entrepreneur.  When you want to succeed, you need to be able to push yourself. You aren’t answerable to anyone else as an entrepreneur, and that sometimes means that it’s hard to get moving without anyone to make you. You need to be dedicated to your plan and keep moving forward — even if you aren’t receiving an immediate paycheck.

2. Understand What You Offer

As an entrepreneur, you need to  what you are offering in the market and how it fits into the market. Whether it’s a product or a service, you need to know where you fit in. That means you need to know when it’s time to tweak things a little bit. This also includes knowing whether you are high end, middle of the road or bargain. Being able to position yourself and then adjust as needed is an important part of entrepreneurship.

3. Take Risks

An entrepreneur must have the audacity to take risks. Successful entrepreneurs know that sometimes it’s important to take risks. Playing it safe almost never leads to success as a business owner. It’s not about taking just any risk, though. Understanding calculated risks that are more likely to pay off is an important part of being an entrepreneur. You’ll need to be willing to take a few risks to succeed.

4. Know How to Network

Networking is having connections and contacts with people who you are in the same field. Knowing how to network is an important part of entrepreneurship. Sometimes who you know is an important part of success. Being able to connect with others and recognize partnership opportunities can take you a long way as a business owner. Figure out where to go for  networking opportunities and make it a point to learn how to be effective.

5. Basic Money Management Skills and Knowledge

We often think of successful entrepreneurs as “big picture” people who don’t worry so much about managing the day to day. And it’s true that you might have an accountant or other team members to help you manage the business. However, if you want to be successful, you should still have basic money management skills and knowledge. Understand how money works so that you know where you stand, and so that you run your business on sound principles.

6. Flexibility

To a certain degree, you need to be flexible as an entrepreneur. Be  willing to change as needed. Stay on top of your industry and be ready to adopt changes in processes and product as they are needed. Sometimes, you also need flexibility in your thinking. This is an essential part of problem-solving. You want to be able find unique and effective solutions to issues.

7. Passion

Finally, successful entrepreneurs are passionate. They feel deeply about their product or service or mission. Passion is what will help you find motivation when you are discouraged and it will drive your forward. Passion is fuel for successful entrepreneurship. If you find yourself losing your passion, that might be the clue that it’s time to move on to something else (that stokes your passion). There are many serial entrepreneurs that create successful businesses, sell them, and then create something else.

As you consider your characteristics, think about how to better develop them to help you become a better entrepreneur

Other Characteristics of Entrepreneurship

While there can be as many characteristics of entrepreneurship as there are people in this world with opinions, there are some characteristics that are considered indispensable or necessary in an entrepreneur. These are listed here as follows.

Ability to take Risks

This is the first and foremost trait of entrepreneurship. Starting any business involves a considerable amount of risk of failure. Therefore, the courage and capacity to take the said risk are essential for an entrepreneur.

Innovation

In a world, where almost everything has been done, innovation is a priceless gift to have. The word innovation basically means generating a new idea with which you can start a business and achieve a substantial amount of profits. Innovation can be in the form of a product, i.e., launching a product that no one has ever sold in the market. It can also be in the form of process, i.e., doing the same work in a more efficient and economical way.

An easy example of product innovation could be the launching of touch screen cell phones when the world was still using a keypad on cell phones.

Process innovation can be seen in capital-intensive industries that have to replace manual labour with machines, therefore, increasing their production and reducing their costs.

Another type of innovation can be the one concerned with usage. For examples, cell phones are now used for various functions such as viewing, creating and editing various files and documents, thus, eliminating the need for computers to a large extent.

Visionary

Every entrepreneur needs to be a visionary. Without a vision for the future of his investment, he or she would just be working aimlessly without reaching any point of success.

Leadership

An entrepreneur has a vision. However, it takes a lot of resources to turn that vision into reality. One of these resources are the people that the entrepreneur hires to perform various functions like production, supplying,etc.

A single person cannot perform all the tasks and therefore it is important to bring some more people to do it. This also makes leadership very important as a leader provides the required direction to the efforts of the workers. Without proper leadership and management skills, everyone would be working independently without achieving the desired results.

Confident and Well Informed

An entrepreneur needs to be confident about his ideas and skills. This confidence also inspires the confidence of the people working for him as well as the other stakeholders  involved in his business. 

This confidence comes from being well informed about the industry and environment. Various legal and political policies enhance business and trade  opportunities, while some hinder them. Having knowledge about these can really help an entrepreneur make the right decision at the right time.

 

Entrepreneurial Activities Conducted in Tanzania.

Tanzania has being experiencing rapid economic growth. However bulky of the growth is in agriculture sector. The government of Tanzania understands that for the country to achieve meaningful growth, a great deal of entrepreneurial activities should be conducted.

The following are some of the entrepreneurial activities that are conducted in Tanzania.

1. Agri-business- This is farming done especially using smart technologies, to produce large out put in small parcels of land using efficient farming methods. Agribusiness is carried out mainly for sale of the produce. This sector is expanding rapidly due to high unemployment rates in the country.

2. Mining – there are many companies which are carrying out mining activities in the country. It is important to note Tanzania is blessed with a lot of minerals. The companies export the minerals and help the country to earn foreign exchange currency.

3. Manufacturing- The manufacturing sector in the country has not being vibrant the way it is supposed to be. The government is however encouraging individual citizens and investors from outside to set-up industries that will see, more things being manufactured in the country.

4. Food processing- This sector is supported by the agriculture sector. There are many companies which are involved in food processing. Notable is the Bakhresa group of companies, which process, grains, fruits and milk to add value and pack them.

5. Information and telecommunication- Many entrepreneurs have invested in this sector leading to employment of very many youths. Companies like Vodacom, Airtel, Tigo and Zantel have invested heavily in telecommunication sector.

6. Import of goods and services- We have entrepreneurs who import goods from other countries and come to sell in the country at a profit. These ranges  from clothes, shoes, cars, electronics among other. 

7. Consultancy-This is another entrepreneurial activities. We have people who are experts in  a certain field. Consultancy can be in information and communication technology, management, in insurance and in banking.

8.Transportation- Many entrepreneurs are involved in this type of business. It involves the movement of goods and services from one place to another. Transport companies such Dar express, Kilimanjaro express,etc have dominated the passenger transport sector.

9.Media- By media we mean radio, newspapers, television magazines which are used to pass information. Nowadays we have social media as a form of passing information from one place to another. We also have media houses such as I.T.V, Star T.V, Cahnnel Ten, T.B.C etc

10. Music and entertainment- Music has become a full paying job for many people. It has turned from being a hobby to a source of employment for many young people. Other activities such as acting, comedy etc have become source of income for many people.

The list is not exhaustive as there are so many of other entrepreneurial activities taking place in the country.

 

 

 

Ideas for entrepreneurship endeavor in Tanzania.

There are thousands of ideas that passes on our minds everyday concerning entrepreneurship which are worth pursuing. However not all people can put these ideas into action and become entrepreneurs.

The following are some entrepreneurial activities which are carried out in rural Tanzania

  •                               Animal farming- This is keeping animals for family use and for selling to earn income. Many people in rural Tanzania are farmers.
  •                               Bee keeping- this is good source of income, carried out in rural area. Bee keeping is easier to carry out because it needs little attention from the farmer. 
  •                               E-commerce- By providing a platform for all these people to sell their items, you will make good money. Come up with an online store such as jumia. Ask people to place their items for sale at a small fee and market this platform vigorously. Your platform should have categories for example cars, real estate, households, electronics, furniture, clothes, gift items, jewellery, books, foods, services etc. complete with beautiful pictures for easy navigation.
  •                               Vending Machine- Suitable for busy people who  would like to buy things quickly and move on. You can meet this need by installing a vending machine for stuff such as water, milk, juice, soft drinks, snacks, sweets, cigarettes, newspapers etc. This business idea  will best work with items sold in small compact forms. Shop around for the appropriate vending machine and locate it in a strategic position such as a busy residential area, near busy bus terminus, near a college or school etc.
  •                               Event and Party Planning- Every day, week, month and year, people are partying. Company and religious entertainment events, weddings, birthdays and many other events are taking place everywhere all the time. Planning and holding parties can be a very stressful undertaking. Many people who are throwing these parties and events could be busy and may desperately need others to plant and execute for them. Generally this work goes for a flat fee, depending upon the size of the party. By targeting at least 2 or 3 parties or events in a week, imagine what you will make in a year.
  •                               Coaching-If you are good at a particular subject or area, you can also teach others at a fee. Thus could be students, business people or employees. You stand a good chance of making money with this business idea in Kenya. You could choose to do it face to face or online.
  •                               Janitorial services- Residential and commercial buildings must be regularly cleaned. With many companies and county governments now outsourcing their cleaning needs. For buildings and business premises, the opportunity is in offering cleaning services. With a few cleaning tools and shampoos, you can negotiate with owners of these buildings and businesses to clean their premises at a monthly fee. 
  •                               School and College - Every year, thousands of children sit for national exams in Kenya but only a few get admitted to secondary schools or universities. The demand for schools and other colleges in Tanzania  outstrips supply. Year after year, thousands of school leavers are unable to get places to advance their education.
  •                                Bakery and Fast Food. - From wheat flower, to corn flower, and to other forms of flour, Kenyans just love to eat baked meals. This is one of the reasons why you may want to consider starting a bakery business. Before you start out it is vital garner all the necessary information that you will need along the line. 
  •                               Poultry Business- Starting a poultry farm might appear easy but starting it as a business too is something entirely different. This means that you are not only just a chicken farmer but an entrepreneur as well. Starting this business you would need to define your target market. And the part of the chicken industry you intend to go into. The chicken industry has two main parts; Layers, where the chickens bred also lay or produce eggs, or Broilers, where chicken are bred mainly for meat.

Skills of a successful entrepreneur

Many entrepreneurs believe that the most important factor that will determine their level of success with a startup relates to their overall experience and skills in the niche area. However, the most successful entrepreneurs have developed a certain set of skills that have helped them reach their goals. While you definitely need nerve and patience to launch and run a new business, you also need to focus on nurturing these seven critical skills that are integral to your future success in very important ways.

 

                        Flexibility: means being receptive to other peoples needs, opinions, and ideas and being open-minded to feedback from your manager. Successful entrepreneurs are able to adapt to change and solve problems as they arise.

                        Problem-solving: all of us have to deal with problems and find solutions. A successful entrepreneur sees opportunities in these problems where many of us only see difficulties. Sometimes the best new ideas come from the urge in solving problems.

                        Good communicators: a successful entrepreneur communicate in a good language with employees, suppliers and customers. This makes good image of the enterprise to the community. Moreover, they are good networkers, inspired and motivate people so that they willingly support the entrepreneurs vision.

                        Decisiveness: successful entrepreneurs are precise in decision making whether being under pressure of underperforming business or at the height of success. In most cases, they tend to take time to make critical decision in solving the problems that arise within the business quickly without jeopardizing the business position.

                        Collaboration: successful entrepreneurs are effective team player. And they tend to hire employees who demonstrate strong teamwork skills. They are also open and willing to work together with other successful entrepreneurs during the early stages of their businesses.

                        Initiative: successful entrepreneurs have ability of conceptualise innovatory ideas. Innovative changes cause improvement in business activities such as product modification, new service, new found material, investment, marketing network, customer relations, financing, staff motivation, research and new organized business enterprise.

                        Good judgement: successful entrepreneurs have the ability to mobilize resources and are wise on how to use them. If the resources are organized well, the business will grow and succeed.

                        Good customer care: generally, successful entrepreneurs maintain good relationship with other people especially customers. Every business enterprise need customers, the aim of business enterprise is to sell products and services.

                        Ambition- It is easy to give up when the going get challenging but the most successful entrepreneurs persist because of their ambitious nature. They want to succeed, and they thrive on reaching small milestones that are stepping stones to their major goal. When you are highly ambitious, you may have an internal drive to work hard, and you may be committed to doing what it takes to make your business a success. Generally, you will not look for shortcuts and are willing put in the time necessary to get the job done right.

                        Willingness to Learn- Some people think that learning stops when you graduate college or earn a special certification, but this is not the case. Education is a life-long process. You must stay updated with changes in technology, the evolution of your industry, sales processes and more. Always seek new knowledge. More than that, look for the most successful people in your industry and do not be afraid to ask for their opinions or advice.

                        Ability to Listen- You simply cannot manage a great team or run provide a great customer service if you are not an effective communicator. Communication is a two-way street. In order to communicate outwardly in an effective manner, you must pay attention to others’ motivations, hot buttons, interests and more. You also must be aware of non-verbal cues, such as body language. Avoid coming off as being self-promotional or vain, and strive to show that you are helpful and interested in others. This can foster collaboration, get others excited about your goals and more rather than turn them off because you seem overly interested in your own self-interests.

                        Creativity- If you always do the same thing, you very likely will not enjoy new and better results. You must try new things to find what works best. You also need to enrich your live with new experiences regularly. This may be something as simple as talking to new people or taking a personal interest class. Each experience that you have can lead to new opportunities that you previously did not have available to you.

Assertiveness and Confidence

While listening is important for effective communication, you also must know when you need to take control of the conversation and  assert your opinions and beliefs. You should listen to others who are making reasonable claims and requests, but you also need to know when to say no. Be consistent yet open-minded to earn respect and trust from those around you. You need to know what you stand for, and you need to stand up for those beliefs.

Perseverance

Many of the most successful business owners have suffered devastating defeats and failures. Rather than look at these events as an end to a situation, they have looked at these events as important learning moments. They maintained their optimism and perseverance, but they also made calculated changes to future efforts. Remember that you only fail when you stop trying. Persistence is the key to success.

Courage and Risk Taking

In order to harness the power of creativity, you must have the courage to act on your great ideas and plans. While you need to research your ideas thoroughly, you must also  have the courage to take an unknown step and try things that are unfamiliar to you. In the words of John Burroughs, “Leap, and the net will appear.”

Finding a successful path in life is rarely a straight and narrow process. Many entrepreneurs must take numerous steps to develop the right combination of skills, traits and knowledge to be successful with their efforts. If you focus your attention on nurturing these traits in your own life, you may be able to enjoy better overall success with future entrepreneurial efforts. 

ENTREPRENEURSHIP MOTIVATION

The term, "Motivation" has come from the Latin word mover mean "to move". That means to move from present situation to better situation. Thus, motivation is the process of activating, maintaining, enraging and directing behavior of a person towards a particular goal. The process is usually terminated once the desired goal is attained by the person.

Motivating factors

The factors those mostly are motivating for entrepreneurs to start up new business or to improve on existing one and influence the successful entrepreneurs are classified into two types, internal and external.

Internal motivating factors

The inward factors motivate and influence a person to become a successful entrepreneur as discussed below:

  1.                                Desire to do something new and innovative: people have a strong desire to start new businesses and run them on their own to achieve higher goals. This desire to achieve higher goals motives and strengthens them to overcome difficulties along the way during the whole process of setting up and running the businesses.
  2.                                Experience: is a source of ideas for a new business; people who are working  for long time in different fields such as marketing, management technical, finance, production, planning and control do possess a lot of experience in those fields. The fact of an experienced person can perform well in any entrepreneurial activities.
  3.                                Desire to work freely and independently: entrepreneurs often decide to 
    start their own businesses in order to avoid working under somebody elses supervision. Also, they have such strong desire to be their own bosses. Some are paid less when they are working for someone else than what they would have earned if they were self employed.
  4.                                Family background: individuals are motivated to become entrepreneurs through family background. Most poor families have challenges like scars of food, settlement, health care, education, and other essential human needs. This can push an individual to start a business in order to solve these challenges.
  5.              Unemployment: lack of job opportunities motivates people to go into businesses. These people use their talents to create new ideas which enable them to start their own businesses. The income they earn from the business is used for food, settlements, health care, education, transport, communication and to solve other lifes challenges in large quantity and also to be able to distribute to the final consumers.
  1.                                  Education background: in all communities there are those who had not planned to become entrepreneurs, but after acquiring business knowledge, they are all sudden motivated to become success entrepreneurs.
  2.                                  To earn profits and to possess wealth: more money or wealth is an indication of higher social status for most people. For example, an individual desire to have a lot of money in order to get respect in the community and satisfaction in whatever he want to do or buy. This situation tend pushes many people into self-employment.

External motivating factors

These are outward factors that motivates, influence and push a person to become an entrepreneur.

  1.                          Government assistance and support: when the individual who aspire to become an entrepreneur realise that he /she can get the government support

This makes it easy for them to decide or plan to become entrepreneurs. For example, when government provide subsidiary in agricultural sector, manufacturing and other related sectors it motivate and attract him to become an entrepreneur because of to the government support,he/she anticipate to get.

  1.                          Availability of raw material: In the absences of raw material, no entrepreneur can emerge and successes. Raw materials are encouraging when it cause to starting new business. The availability of raw materials encourages people to invest at large.
  2.                          Availability of market: availability of potential markets motivates people to enter into entrepreneurial activities. Most of entrepreneurs are doing market research before starting new business. After realising that there are a big chance of market that is when they intended to start new business.
  3.                          Economic condition: this simply refers to availability of economic environment. The main economic factors such as raw material, capital, labour, and market, all of these influence the emergence of entrepreneurs.
  4.                          Capital: capital is important factor in starting a new business. Availability of capital pushes and encourages people to become entrepreneurs. Entrepreneurs can use capital to organise and bring together labour, raw material, machine, and combine them to produce goods.

 

 TOPIC SUMMARY.

  •                               Successful entrepreneur should posses certain traits which sets him from other people
  •                               There are several characteristics of entrepreneurs, some are inborn while other can be acquired.
  •                               There are so many entrepreneurial activities which are carried out in Tanzania.
  •                               Entrepreneurship is not easily and need courage and perseverance but its fruits are sweet.
  •                               Factors that drive people to enter into world of entrepreneurship are called motivation factors.
  •                               Motivation factors can be external or internal
  •                               Internal motivation arises from the person himself
  •                               External motivation might be incentives provided by government for people to start business.

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END OF TOPIC QUESTIONS.

  1.       The following are importance of motivation, except;
  1.      Low level of performance
  2.      Desire to work free and independently
  3.       Higher performance
  4.      Good human relations

2.   Motivation is important because;

  1.      Increases chances of profit making
  2.      Assist in job rotation
  3.       Creates constructive attitude
  4.      Enable one to achieve objectives

3. Which of the following is not a characteristic of  an entrepreneur?

  1.      Visionary
  2.      Perseverance
  3.       Generous
  4.      Courageous

4. Tanzania main economic activity is

  1.      Mining
  2.      Fisheries
  3.       Agriculture
  4.      Manufacturing

5. Which of the following traits can make an entrepreneur to fail?

  1.      Using time to network
  2.      Using  time to socialize
  3.       Taking calculated risks
  4.      Sharing ideas with other entrepreneurs

6. Identify the external motivation below

  1.      Experience
  2.      Family background
  3.       Unemployment
  4.      Government support

7. The word flexibility  means;

  1.      Sharing
  2.      Being open minded
  3.       Collaborating with others
  4.      Ability to make judgement.

8. An example of an external motivation factor is;

  1.      Family background
  2.      Desire for freedom
  3.       Unemployment
  4.      Government support

9. Which of the following is not a skill for successful entrepreneur?

  1.      Flexibility
  2.      Desire to innovate
  3.       Collaboration
  4.      Good communicator

10. Which among the following is not an entrepreneurial activity carried out in Tanzania

  1.      Trading
  2.      Mining
  3.       Car manufacturing
  4.      Crop processing

11.  List five characteristic of successful entrepreneurs

12. Mention ten entrepreneurial activities which can be carried out

13. State five external factors motivating entrepreneur

14. Mention five internal factors motivating entrepreneur

15. Why is motivation important to an entrepreneur?

16. State the skills needed by an entrepreneur.

 

Solutions To End Of Topic Questions

1

2

3

4

5

6

7

8

9

10

A

D

C

C

B

D

B

D

C

C

 

11.  Five characteristics of successful entrepreneurs;

  •      Knowledgeable
  •      Creativity
  •      Right skills
  •      Hard-working
  •      Visionary.

12. Example of entrepreneurial activities carried out

  •      Agribusiness
  •      Trading
  •      Consultancy
  •      Manufacturing
  •      Fishing

13. External motivating factors of an entrepreneur;

 

  •      Government support
  •      Availability of raw materials
  •      Good economic conditions
  •      Access to capital
  •      Availability of market

14. Internal factors affecting entrepreneurship

  •      Curiosity to innovate
  •      Experience.
  •      Desire for independency
  •      Family background
  •      Unemployment.

15. Importance of motivation to entrepreneur

  •      Increases productivity
  •      Promotes good relationship
  •      Increases the level of performance
  •      Enable a firm to achieve objectives
  •      Reduce turn over and absentee of employees.

16. Skills of an entrepreneur,

  •      Initiative.
  •      Good judgement
  •      Good customer care
  •      Flexibility
  •      Problem solving skills

 

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