EVELYN HONE COLLEGE MANAGEMENT BOARD

DIPLOMA IN TECHNICAL AND VOCATIONAL TEACHING (DTVT)

OPEN DISTANCE AND FLEEXIBILITY LEARNING

DEPARTMENT

ENTREPRENEURSHIP

MODULE NO: 320- 09-A

(1/3 term one)

BY: ROBERT.M. NDOPU

MA (UNZA) BSW (UNZA) DAE (UNZA) APC (NISTICOL) CAE (UNZA)

1ST EDITION

© 2016
Table of Contents

Acknowledgement...................................................................................................................iii
Copyright.................................................................................................................................iv
Overview of the Module...........................................................................................................v
Learning outcomes...................................................................................................................v
On completion of this module, you will be able to:...............................................................v
Duration....................................................................................................................................v
Assessment criteria.................................................................................................................vi
Help?........................................................................................................................................vi
Prescribed readings:..............................................................................................................vii
How to use this module..........................................................................................................vii
Marginal icon........................................................................................................................viii
List of acronyms or abbreviations.........................................................................................ix
UNIT 1. INTRODUCTION TO ENTREPRENEURIAL CONCEPTS...........................1
1.1 Concept of entrepreneurship........................................................................................1

1.2 Types of entrepreneurs.................................................................................................3

1.3 Form of business..........................................................................................................5

1.4 Sole proprietorship.......................................................................................................6

1.5 Partnership...................................................................................................................7

1.6 Limited company.........................................................................................................8

1.7 Co-operative.................................................................................................................9

1.8 Registration procedure.................................................................................................9

1.9 Incorporation of Limited Companies.........................................................................10

1.9.1 Registration of Co-operatives.............................................................................10

1.9.2 Background to emergence of entrepreneurship..................................................10

1.9.3 Natural resource as they relate to entrepreneurship............................................11

1.9.4 Informal Sector Growth......................................................................................12

1.9.5 Government policy on enterprises development................................................15

1.9.6 Benefits of entrepreneurship...............................................................................17

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 1.9.7 Differences between an employee and en entrepreneur and the concept of self
employment......................................................................................................................18

UNIT 2. BUILDING POSITIVE ATTITUDE TOWARD ENTREPRENEURSHIP. .21

2.1 Positive thinking........................................................................................................21

2.2 Positive thinking and positive ambitions...................................................................24

2.3 Positive outlook and constructive ambition...............................................................27

2.4 Constructive ambition................................................................................................28

UNIT 3. DEMOSTRATING PERSONAL ENTREPRENUARSHIP

COMPETENCES (PECS)..............................................................................................31
3.1 Identification, assessment and application of entrepreneurial competences.............32

3.2 Assessment of competences – (attitudinal)..............................................................34

3.3 Application of entrepreneurial competences.............................................................36

UNIT 4. ESTABLISHING AN ENTERPRISE................................................................39

4.1 How to identify or generate a business idea..............................................................41

4.2 Assessing and selecting the most viable business idea..............................................43

4.3 How to establish an enterprise...................................................................................43

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Acknowledgement

Evelyn Hone College of applied arts and commerce, Open, Distance and Flexible Learning
(ODFL) Department would like to acknowledge and thank the following people sincerely for
their contributions to this module.

Mr. Ndopu. M. Robert (Writer)

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Copyright

“All rights reserved. No part of this module may be reproduced, stored in any retrieval
system, or transmitted in any form by any means, electronic, recording, photocopying, or
otherwise, without permission from Evelyn Hone College of applied arts and commerce”.

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Overview of the Module

Welcome to Evelyn Hone College of applied arts and commerce, particularly to the Open,
Distance and Flexible Learning (ODFL) department. I also welcome you to module one of
Entrepreneurship, which is one of the subjects in Diploma in Technical and Vocational
Teaching Course. In this subject, you will be introduced to the basics of Entrepreneurship.
You will be equipped with the necessary skills needed to solve small business issues in order
to understand as you translate theories into practice. The subject is both demanding and
interesting. You will be expected to interact with a number of social problems which will
need social interventions for you as an entrepreneur to appreciate the contents of this module.
You are advised to effectively use this module as we will have limited face to face interaction
during residential school. The main aspects covered in this module are as outlined in the table
of contents.

Learning outcomes

On completion of this module, you will be able to:

1. Use entrepreneurial concepts

2. Build positive attitude towards entrepreneurship
3. Demonstrate Personal Entrepreneurial Competences (PECs)
4. Establish an enterprise

Duration

You are expected to complete this module in one academic calendar according to TEVETA
and EHC specifications

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Assessment criteria

You will be assessed through written assignments, tests, projects and field attachments. You
will be expected to do four official assessments each term except for third term when you will
only have three assessments translating into a total of eleven assessments making your
Continuous Assessment (CA). Tests will be written during residential school. The actual
distribution of marks will be:

Continuous Assessments

Six assignments

Five tests

Total marks………….. 50 marks

Final examination

Total marks…………. ………. 50 marks

It is important that you write the final examination because you cannot graduate if you do not
write or fail the final examination.

Help?

When you need help you can use these contacts details:

College website: http/www.evelynhone.edu

Evelyn Hone College-ODFL department: phone number:

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 Email: evelynhonecollegeaac@gmail.com

Phone number: +260211225127

Fax: 227240

You can also visit the College to meet specialists through the ODFL department located at
printing building during working hours from 08: 00 to 17:00hrs.

Prescribed readings:

Mumba.E.(2010).Entrepreneurship and Small Business 2nd edition,Management.

Hawker.S. (2002).Existing Strategy Planning: Grooming Your Business .Gower Publishing,

Ltd

McLaughlin S (2015).Unlocking Company Law: Routledge UK.

Matimba.A (2004).Distinction in Commerce .Livingstone; A .Matimba (self).

Wokorach, J.B (1999).Commerce: A Complete Course.3rd Edition.Mochudi: Salama

Publishers

HOW TO USE THIS MODULE

This module should be studied together with the recommended readings given in each unit.
Each unit will comprise of learning outcome that you should use as yardsticks as you study. A
variety of self-assessment activities will help you grasp the theory and practical part of this
subject. Familiarise yourself with the icons used in this module to signpost different activities
and emphasis.

MODULE PURPOSE: To equip you with knowledge, skills and appropriate attitudes
required to effectively and efficiently own and manage a viable business enterprise.

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Marginal icon

Learning outcome
Need help
Timeframe/Duration

Tip Assessment Group work

Unit summary
Self-assessment
Activity

New terminology

Discussion Reading point

Case study
Quick Tip Personal reflection

viii
LIST OF ACRONYMS OR ABBREVIATIONS

ODL- Open Distant Learning

ZCCM Zambia Consolidated Copper Mines

PACRO- Patents and Companies Registration Office

PACRA Patents and Companies Registration Agency

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UNIT 1. INTRODUCTION TO ENTREPRENEURIAL CONCEPTS

Learning objectives: On completion of this unit you will be able to:-

1. Discuss the concept of entrepreneurship, Self-employment and

enterprises

2. 2...Explain the types of Entrepreneurs

3. Explain the background to emergence of Entrepreneurship

4. Discuss the benefits of Entrepreneurship

Learning Conditions: you must have access to:

Library

Computer and internet connectivity

Duration: you will be expected to spend a minimum of 6 hours on this unit.

Introduction

The aim of this unit is to create awareness of the importance of entrepreneurship, its
relevance to careers growth and to you with knowledge, skills and values to this program. At
Independence there was a policy of Zambianazation where almost all major industries were
under state control. Such policies coupled with the leadership code curtailed the culture of
entrepreneurship among most Zambians despite it benefits. In your own view do you think
this was a good thing for Zambians not to own any business? To this effect, let us now define
the concept of entrepreneurship and thereafter we shall look at various types of entrepreneurs
in Zambia and beyond.

1.1 CONCEPT OF ENTREPRENEURSHIP

What is Entrepreneurship?

There are various definitions of the term “entrepreneurship”. The most commonly used
definition of entrepreneurship is “the art of creating or developing a business through

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innovation, creativity, progressive imagination and risk taking initiative”. The key words in
this definition are:-

of an entrepreneur. From the key words above, it is very clean that concept of entrepreneur
Art, Developing, Innovation, Creativity, Progressive imagination, and Risk taking.

The above key words in the definition of entrepreneurship already represent the fundamental
characteristics calls having an artistic mind; being focused about development; being
innovative, creative, and imaginative and having the ability to take calculated risks.

Activity 1

1. As an entrepreneur write down why it is important to have a creative mind?

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..........................................................................................................................................

2. Explain why as an entrepreneur you have to take calculated risks.

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3. Is it important for you to be innovative? And why?

..........................................................................................................................................
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..........................................................................................................................................

4. Define entrepreneurship

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Who is an Entrepreneur?

Going by the definition of entrepreneurship above, an entrepreneur is, therefore, a person

who upon identifying a viable business opportunity uses innovation, creativity, progressive
imagination and risk taking initiative, to start a new business enterprise or develop an existing
one.

1.2 TYPES OF ENTREPRENEURS

Entrepreneurship experts contend that there are basically two types of entrepreneurs in the
word pulled entrepreneurs and pushed entrepreneur. Pulled entrepreneurs are those who are
attracted into venturing because they either associated with successful entrepreneurs or have
admired certain entrepreneurial role models and attempted to emulate them. Examples of
pulled entrepreneurs may be off springs that start business because of their parents
entrepreneurial nature or college graduates who decide to venture into business because they
have seen an older fellow graduate running a successful business ventures. On the other hand,
push entrepreneur are those that find themselves venturing in business due to circumstances
that may be described as beyond their control. Examples of pushed entrepreneur may be
people who suddenly find themselves retrenched, retired, declared redundant or dismissed ad
switch to doing business as their only survival means.

Pulled entrepreneurs are generally said to prepare adequately before launching their
enterprises and have therefore, a higher rate of success.

Pushed entrepreneurs on the other hand, are said to response to unplanned circumstances
and normally start business through trial and error. They, therefore, exhibits lower rates of
success. The learning point is therefore, that success in entrepreneurship calls for a lot of
planning preparations. Entrepreneurs are both male and female and can be both indigenous or
immigrants. Most of the Zambians of Asia origin who are successful entrepreneurs had their
grandparent originally coming into Zambia as immigrants from the Far East. Zambia has also
seen a number of successful indigenous entrepreneurs such as the Tom Mtines, Enoch
Kavindeles, Emmanuel Kasonde’s and many others.

Entrepreneurs normally operate different ways such as:

An enterprise is a business undertaking that is created to offer goods and service to the
satisfaction of the target customers whilst offering its initiators (owners) a livelihood

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(employment) and profit for growth and sustainability. Enterprises may take one or more of
the following form:-

Manufacturing/ Produces refers to the combination of various raw materials and/ or inputs
to come up with an end product or service. For example, Tailoring is a form of manufacturing
where raw materials like fabric; cotton thread, zipper, buttons and stiffener are combined
together in a given pattern to come up with an end product such as trouser or a dress. Another
example is baking which is a form of product where raw material like flour; milk, egg, butter,
baking powder and sugar are combined together in a given recipe to come up with an end
product such a cake or scones.

Construction

Another form of enterprises is contraction where a firm business may involve construction of
houses, bridge, road, factories, schools, hospitals, power station, rail lines, etc.

Service operations

Service operation involves business that produces an intangible product called a service.
Usually a service is consumed as it is produced. Examples of service operations include
telephone services, transport services, health care service, accounting service, hair dressing
services, etc.

Retail or Wholesale Operation (Trading)

This form of enterprise involves basically buying and selling that which has already been
produced elsewhere. As the sub heading suggests, trading may refer to retail and wholesale
operations.

Mining

This involves mining for minerals and quarrying activities for items like stone, lime, etc.

Agriculture

Soloist Operating basically alone

Acquirer Entrepreneurs, who may, for instance, inherit a business and develop it to
prosperity

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Grouper An entrepreneur who identifies different talents and brings them together to form a
vibrant group

Professional Someone how uses his professional competencies for entrepreneurial purpose

Inventor An entrepreneur who invents something and discovers that it is on high demand and
sets up an enterprise based on his discovery

High Tech An entrepreneur who uses the state of art technology to enhance his
entrepreneurial appeal

Speculator An entrepreneur who develop entrepreneurial traits through trail- and – error and
speculating. He is a chancer.

Manipulator An entrepreneur who manipulates various business stakeholders and gets

things going.

Workforce Builder: Just like a grouper, this entrepreneur identifies and mobilises a
workforce and develops it into a skilled and experienced team.

Committed Uses his managerial skills and experience to develop a committed

Manager entrepreneurial management approach to business.

Conglomerator An entrepreneur with highly diversifiable skills and believers in building

business conglomerates.

Capital aggregator An entrepreneur with insatiable “appetite” for mobilizing capital, which
is then ploughed into enterprise development.

Key Partner An entrepreneur who may not necessarily be directly involved in enterprise
operations but provides key resources to the continued survival of an enterprise.

Lifestyle An entrepreneur whose lifestyle is generally doing business

1.3 FORM OF BUSINESS

An entrepreneur planning to start and register a business has basically four (4) options to
choose from namely sole Proprietorship, Partnership, Co-operative and Limited Company.
Each of these four (4) forms of business has its own advantages and disadvantages. It
therefore means that before you settle for any of these forms of business, there is need to get

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detailed information of each and choose the one which provides the best option given the
available resources and business objectives. Some simple criteria for you to compare the
four different forms of business include:-

Will the form of business help the enterprise to easily access capital?

Will the form of business continuity

Is the liability of the owner limited?

How does management participate?

Is it easy to transfer ownership

What are the record keeping requirements

How do the tax burden compare

What is the cost of starting and registering the business

What is the simplicity of starting the business?

Below is a summary of the four forms of business

1.4 Sole proprietorship

As the term “Sole” suggests, this is a business owned by one person. The owner has all the
authority to make decisions about the business. The procedures of starting the business are
simple and the cost is low.

A sole proprietorship is an easy and cheap form of business to start. However, it is the most
risky, because an owner is personality responsible for all the debts of the business. If the
business fails to pay its debts, the creditors can make you pay with your private money or
even force you to sell your personal effects to pay off the debts. The profit of the business is
calculated and the owned must pay tax the profit.

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Figure 1. A Super Market and a Market place

Advantages

1 .All the business profits belong to the owner

2. The cost of starting is low

3. Easy to start and register

4. The owner makes decisions

Disadvantages

1. The is personally liable for all losses and debts

2. Difficult to borrow from Banks

3. There is no continuity

4. The owner suffers alone

1.5 Partnership

Partnership is a form of business formed by two or more people, with a maxim of twenty
partners. To start a partnership, partners must enter into a partnership agreement that can
either be verbal or written. Entrepreneurs planning to start partners are, however, advised to
put their partnership agreement in writing to avoid unnecessary future disputes. A partnership
agreement may include; line of business, capital contributions duties of partners, profits
sharing ratio and how to resolve conflicts.

Advantages

1. Earning flow directly partners

2. Can bring together people with different skills, experiences and knowledge

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3. The cost of starting s low

4. It is easy to raise capital

5. The prospects of shared risks

6. In the event of sickness of one partner, the other partner fills in the gap

Disadvantages

Just like sole proprietorship, a partnership has unlimited liability

Conflict of interest amongst partners

Mistrust among partners

Delayed decision making processes

5. Shared profits

1.6 Limited company

Two or more people called shareholder form a limited company. The major characteristics of
a limited company are that it has perpetual existence, limited liability and is incorporated at
registration. For an entrepreneur to register a limited company, he must seek the assistance of
a legal expert or practitioner.

Advantages

1. Easier to finance and sell shares

2. Greater status and credibility

3. Shareholder not personally liable

Disadvantages

1. Cost and complexity of legal requirements

2. Profits are shared among the stakeholders business pays tax on profit and shareholders pay
tax on dividends

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1.7 Co-operative

A co-operative is a voluntary association of a group who decide to work together for a

common goal or purpose. A cooperative usually has a democratic form of governance where
the member own and control it. There is equitable distribution of earning in a co-operatives
are formed for economic gain, marketing and other strategic reasons such as cost sharing. In a
Co-operative, all the members have one vote each in the decision making process. Usually, a
management committee is elected to oversee the day-to-day operations of the Co-operation

Advantages

1. Favourable taxation

2. Limited liability to the extent of member’s contributions

3. The cost registration is low shared losses and risks

Disadvantages

1. Co-operative is aid to have a poor performance record

2. Political interferences and internal politics

3. Decisions making rather slow

1.8 Registration procedure

In Zambia, registration of Business name and in cooperation of limited companies is done by

the Patents and Companies Registration Office (PACRO), whose headquarters are at Mwayi
House along Haile Selassie Road.

Registration of Business Name

For the registration of Sole Proprietorship and Partnership, the procedure is simple and
straightforward. An applicant is required to pay a fee for the forms and name search. The
filled in forms are then submitted to the Patents and Companies Registration Office. The
officers at Patents and Companies Registration office can actually assist an applicant fill in
the forms appropriately. Once the forms have been submitted to PACRO, they are scrutinized
and if successful, the applicant is informed of the approval and issued with a Certificate of
Registration.

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1.9 Incorporation of Limited Companies

The incorporate of Limited Companies goes through the following stages:-

Submission of proposed business name to PACRO now PACRA

Approval of proposed name by PACRO

Preparation of Articles of Association for submission to PACRO (Articles of Association

should be Submitted in four (4) Copies

Issuance of Certificates of Incorporation and shares

1.9.1 Registration of Co-operatives

Usually Co-operatives are registered with the Registrar of Societies whose offices are within
the same premises as the National Achieves Headquarters, along Government Road near
Ridgeway Post Office. The procedure for registration is rather long and follows the following
steps:-

Submission of proposed name constitution and filling in forms

Clearance with the Zambia Police and the Local Municipality

Submission of duty endorsed forms to the registrar of societies

Issuance of certificate of Registration

1.9.2 BACKGROUND TO EMERGENCE OF ENTREPRENEURSHIP

ECONOMIC TRENDS IN ZAMBIA HISTORICAL BACKGROUND TO THE ZAMBIAN

ECONOMY AND AND INFORMAL SECTOR GROWTH

From independence to date, the Zambian economy has gone through several changes, which
were a reflection of the government of the day’s economic policies. At independence, the
country inherited a very rich national treasury and Zambia was then rated among the richest
countries in Africa. To be able to fulfil the pre-independence promises, the new leaders in
1964, decided to use the reserved the inherited for free education, medical facilities, water
and sanitation and the development of general infrastructure. Zambia was also a member of
the Front Line States meaning that a lot of resources were used in the liberation of

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neighbouring states. Zambia, from independence has always been largely a mono culture
economy with heavy dependency on copper production, which was still fetching high prices
on the London metal exchange and the oil prices were still relatively favourable.

There was also the policy of Zambianization at independence where almost all major
industries were put state control. Such policies coupled with the leadership code curtailed the
culture of entrepreneurship among most Zambians. The country witnessed the mushrooming,
of state controlled enterprises and conglomerates like the Zambia Industrial and Mining
Corporation (ZIMCO), the Industrial Development Corporation (INDECO), the Mining
Development Corporation (MINDECO) and Financial Development Corporation
(FINDECO).

Under each of these conglomerates were equally several state run enterprises such as
Zambia Airways, United Bus Company of Zambia, Zambia Consolidated Copper mines
(ZCCM), National Import and Export Corporation (NIEC), Zambia Consumer Buying
Corporation, Livingstone Motor Assemblers, Mansa Batteries, Mwinilunga Cannery, etc. All
these conglomerates and their enterprises were largely top heavy organization s that tended to
be a drain on the national coffers. Much as these organizations that created relatively high
levels of employment in the public sector especially during the period of repaid urbanization,
the majority of them were loss making. The employees in these organizations were heavily
dependent on their employers for survival and a livelihood. There were very few signs if any,
on entrepreneurship and self-employment. This trend went on until in the early 80s when
the continued economic decline deal to and the increase in unemployment levels prompted
government to start looking at ways and means of inculcating a culture of entrepreneurship
and self-employment . Organizations like the Small Industries Development Organization
(SIDO). Village Industry Service (VIS) and the small Enterprises promotions (SEP) stated
emerging on the scenes.

1.9.3 Natural resource as they relate to entrepreneurship

The extent to which a country is endowed with natural resources may contribute a great deal
to that country’s level of entrepreneurship. By their nature, resources are a building block for
entrepreneurial activities. There are several entrepreneurship activities that emanate from the
efficient and effective utilization of natural resources. In fact, everything. We see under the
sun comes from the various natural resources that God has endowed us with. Examples
included:

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Land resources.

1. Farming 2.Clay for pottery 3.stone for masonry 4.Stone for minerals and gemstone. 5.
Sand for glass 6.Stone for cement and ultimate for building blocks

Water resources

1. Fishing 2.Reeds for mats, baskets 3.water for domestic use, construction and building etc

4.irrigationj

Forest resources

1. Saw milling 2.wood 3.Furniture manufacturing 4.Windows, doors and door frames.5.
Curios, wooden carpentry tools 6. Honey production 7. Wild fruits 8. Flowers 9. Herbal
medicines 10. Thatching 11.Wildlife providing tourism and conservation activities.12.
Human resources.

It can be observed from the above examples that the list of entrepreneurship activities that
emanate from natural resources is endless. The learning point for an entrepreneur is that
natural resources must be critically examined and exploited as sources of a variety of
entrepreneurship activities.

Figure 2.Entrepreneur in transport business

1.9.4 Informal Sector Growth

The growth of the informal sector in Zambia has a lot to do with the economic policies that
were formulated since the return of multiparty system of politics in 1991. There are two (2)

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sides of the story that may clearly show the development and growth of the informal sector
namely the periods before and after 1991. Below is a simple illustration of how informal
sector situation has evolved in Zambia:

Before 1991; Commandist, Socialist, Economic Polices

These socialist economic policies were characterized by

Nationalism of industries

State run economy through state controlled enterprises like

1.ZIMCO 2.MINDECO 3.INDECO 4.FINDECO

State controlled and protected monopolies e.g.

1. Zambia Airways in the aviation Industry

2. United Bus Company of Zambia in the passengers road Services sectors

3. Post and telecommunications Ltd (PTC) in the Telecommunication sector

4. Trade Restriction (import /Export controls)

Price

Restrictions of Foreign Exchange Transactions

Results of the socialist economic policies of the 1960s, 70s and 80s

No competition in the economy

Creative , Innovation and Entrepreneurship curtailed/absent

Inefficiency, ineffectiveness and poor performance by the economy

Poor quality goods and services and services constant shortages of essential commodities

Constant queuing for essential commodities

Continued decline of the economy

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Dependency syndrome cultivated in the minds of the citizenry

No initiative

After 1991: Liberalized, free Market Economic policies

1. Transfer of control of the economy from state to private owned through privatization

2. Closure/ liquidation of non-profit making organization e.g Zambia Airways, United

Bus Company of Zambia and many other

3. The era of retrenchment, liquidation and redundancies dawns

4. The dwindling and downsizing of the public sector and the salaried labour market and
raising need for inculcating and introducing the concept of entrepreneurship in the
training curricula

5. The rise in the “survival instinct”

6. The corresponding rise in self-employment initiatives

7. The birth of entrepreneurship and entrepreneurial tendencies

8. The growth of the informal sector in Zambia

9. Increase in innovation, creatively and imagination in a free and liberalized economy

leading to increased competition

10. Increased need for entrepreneurship Skills Training to cope with rising levels of
Entrepreneurship

The Role of enterprises in economic growth and development.

Enterprises whether micro, small, medium or large scale play a major role in the economic
growth and development of any nation. In Zambia, there are various roles

That enterprises play in contribute towards economic growth and development the major ones
including the following

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Inculcating a culture of entrepreneurship

It is through existing enterprises that potential and future entrepreneurs sometimes get their
inspiration and role models. This tendency tends to spread the culture of entrepreneurship
thereby resulting in increased economic growth and development.

Utilization of local raw materials

Most enterprises also contribute to economic growth and development by adding value to the
abundant locally available raw materials and this may have a positive import substitution
effect on the country.

1.9.5 Government policy on enterprises development.

: Policy instrument supporting enterprises development

The policy instruments supporting enterprises development are basically the industrial, trade
and commercial dated 1994. The major focus of the industry, trade and commercial policies
is to develop an open, competitive, dynamic and sustainable industrial sector, which is
dominated by the private sector to be the principal actor for carrying out industrial and
commercial activities. The policy has specific objectives on varies economic sectors such as;

Manufacturing

The major policy objectives for manufacturing sector is to achieve efficient and sustainable
growth and development for the sector by focusing on valued added linkages which
maximize the use of local raw materials to foster long run inter sectorial relationships, within
the manufacturing sector and among other sectors in the economy.

Industrial policy aims at supporting and strengthening those potentially internationally

competitive industries that emerge on the basis of stronger internal linkages.

Commerce and trade

Government policy has been to liberalise the sector through phasing out of state trading,
reform of company legislation of licensing regulations, encouraging private sector
participation, with no interference with market mechanism and formulating legislation to
guard against interference by other economic actors in the market.

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The main goal of commercial sectors policy is to create a more competitive and dynamic
business environment and establishing a competition commission with statutory powers to
look at issues such as pricing, mergers, takeovers and franchising.

Government policy on trade is to create and further develop a market economy with a
liberalized import and export regime, which will support enterprise growth by promoting the
export of non-traditional goods so as to diversify and expand the export base.

Government will purse the principle of fair trade, competition and reciprocity trade relations
by using anti-dumping and countervailing measures to counter unfair trade practice.

In support the goals and ideas of African economic integration, government will conclude
bilateral trade agreements with important trade partners when necessary.

Agriculture policy

Government’s agriculture policy aims to encourage and empower farming as a business. It

provides so many initiatives among small-scale farmers so that they can do better and
improve productivity for sustainable livelihood. Those initiatives include ASIP, which is the
Agricultural Structural Investment Program. It also provides incentives such as credit
schemes.

Investment policy

The government’s policy seeks to create dynamic, competitive, stable and predictable
environment in which the private sector can make efficient investment decisions. The aim is
to attract both local and foreign investors to boost the growth of the industrial sector.
Incentives will be provided to encourage investment. Refer to the investment Act.

Small scale Enterprises/ informal/ rural industries

The policy state that government will encourage local government to review their
infrastructure services and licensing regulations to support small scale enterprises and
provide legislation and incentives that promote rapid growth of the sector. It will facilitate the
re-training of retrenched people in entrepreneurial skills in order to accommodate them in the
small-scale sector.

The Government will encourage the private sector to build industrial estates. It will
decentralize the business registration process to enable the sector operate efficiently and have

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access to incentives. The government will set out to review and harmonize all existing laws
and regulations with a view of identifying and removing impediments to operations of the
sector. Government recognizes the role of the emerging informal sector and will promote
measures, which make them graduate into small-scale enterprises. The sector is important
because its activities normally spring from initiative and inventiveness. It is important
training ground for potential entrepreneurs.

Government will take steps to encourage the diffusion of industries, into rural areas.
Appropriate incentives will be given to enterprises that locate in such areas.

1.9.6 BENEFITS OF ENTREPRENEURSHIP

Any individual, who possesses a business, firm, or venture, is known as an entrepreneur. He

or she is accountable for its development, the inherent risks and returns associated with it.
Entrepreneurship is defined as the practice of beginning a new trade or reviving an existing
business, for capitalizing on fresh opportunities. Normally, entrepreneurship is a difficult
proposition as many new businesses fail to survive in their initial periods and never take off.
The entrepreneurial activities for a particular kind of business depends upon various factors
and is quite specific on the kind of business or firm being run. Whatever may be the course of
action, entrepreneurship has a lot of benefits both for the entrepreneurs and the society in
which these businesses are carried out. Some of these benefits include:

1. Opportunity to get control.

Owning a firm or a business endows the entrepreneurs with the independence and
opportunity to control their own business. They can aim to achieve targets that are important
to them. Entrepreneurship provides entrepreneurs a chance to take decisions according to
their own wishes.

2. Offers a chance to make a difference

Some people begin and put a lot of effort just to make a difference in society. This has given
rise to the concept of social entrepreneurship, which is a recent phenomenon. Such people

17
search for opportunities to serve a cause that is significant to them and try to find pioneering
solutions to some of the most pressing and challenging problems of society.

3. To reap high Profits

Reaping high profits by being an entrepreneur is one of the most important factors that
motivate people to become one and take up all the challenges associated with it. The profits
their companies and businesses make play a vital role in any decision made by entrepreneurs.
Owning a business or a firm is the best way towards accumulation of wealth.

4. Helps people work to their full potential

Many entrepreneurs find their work to be extremely enjoyable. They consider their business
as an instrument of self-actualization and self-expression. Owning a firm or a business acts as
a test for the creativity skills, abilities, and determination of an entrepreneur and is taken up
as a challenge towards success.

5. Offers a chance to pursue their interests.

Most entrepreneurs don’t believe their work to be actual work. Most of them establish
businesses closely associated with their interests. As such, there is no particular age for
retirement of entrepreneurs.

With all these benefits people now consider the alternative of running their own small
businesses rather than doing jobs for others.

1.9.7 Differences between an employee and en entrepreneur and the concept of self
employment
There are several differences between being an employee and being an entrepreneur, which
effectively entails self-employment. In the final analysis, it has been universally accepted that
being an entrepreneur or self-employed is a lot better than being an employee and therefore,
people should aspire to be entrepreneurs and be self-employed. The major differences
between an employee and an entrepreneur who is self-employed is that an entrepreneur is:-

18
Ownership

When you an entrepreneur, you are your own boss and are not answerable to anyone because
your own the enterprise whereas when you are an employee, you are answerable to your
employer.

Security

An entrepreneur is his own boss and therefore much more secure than an employee. An
entrepreneur will normally create jobs for others through his business enterprise.

Independence in decision making

An entrepreneur s usually independently of any outside interference in the running of his

business affairs. On the other hand, an employee is dependently instructions and thinking of
his boss.

Uncertainties

An entrepreneur is a personal who controls all his resources and make his own decisions. He,
therefore, determines his destiny and is more certain of the future whereas an employee may
not have full control of the resources or participate in the decision making process of his
employer’ business and is not certain of his future.

Income

An entrepreneur owns all the income and profits that his enterprise may make whereas an
employee may not get his salary and perhaps a small bonus each time his employer’s
business makes a profit

Gender

In entrepreneurship anyone whether male or female can start any enterprise of their choice
whereas in employment, certain are specifically designed for specific gender.

Age Discrimination

An entrepreneur can be of any age whilst an employee should be of a specific age

19
 Unit Summary

In this Unit we have introduced you to the concepts of Entrepreneurship including

(innovation and creativity), types of Entrepreneur and the benefits of Entrepreneurship.

Self-assessment

a) Define Entrepreneurship

b) Outline types of Entrepreneurs

c) List the benefits of Entrepreneurship

d) Briefly explain the background to emergence of Entrepreneurship

Further Readings

Mumba.E.2ND (2010).Entrepreneurship and Small Business Management.

Hawker.(2002).Existing Strategy Planning :Grooming Your Business .Gower

Publishing ,Ltd

McLaughlin S (2015).Unlocking Company Law: Routledge UK.

Matimba.(2004).Distinction in Commerce .Livingstone; A .Matimba (self).

Wokorach, J.B (1999).Commerce: A Complete Course.3rd Edition.Mochudi: Salama

Publishers

20
UNIT 2. BUILDING POSITIVE ATTITUDE TOWARD ENTREPRENEURSHIP

Learning Outcome: On completion of the unit, you will be able to:

1. Explain positive thinking

2. Identify Positive ambitions

3. Explain positive outlook

4. Discuss Constructive ambitions

Learning Conditions: you must have access to:

 Library
 Computer and internet connectivity

Duration: you will be expected to spend a minimum of 6 hours on this unit.

Introduction

This presentation will discuss the assertion that entrepreneurship calls for being focus about
development and being innovative (a) positive thinking,(b) Identify positive ambitions
(c),positive outlook and (d)constructive ambition. As an entrepreneur is it really necessary to
build up these positive attitude towards a viable business enterprise? Positive thinking simply
means putting more into the environment or society than a business takes out, with a
resulting positive footprint (cohen,2006).innovation refers to the behaviour pattern of an
individual who has interest and desire to seek changes in techniques and ready to introduce
such changes into his operations when practical and feasible .innovation involves the targeted
renewal of products and services or working methods .Schumpter (1934) believed that
innovation was the central characteristic of the entrepreneurial undertaking , as he argues
that one behaves as an entrepreneur only when carrying out innovations. 2.1 Discovering
oneself and positive thinking

2.1 POSITIVE THINKING

To succeed in business, one ought to be positively and constructively ambitious. To be

positively ambitious means to have that personal conviction that you can make it if you have

21
the right attitude and psychological preparedness (“if others have made it, why can’t I”). On
the other hand to be constructively ambitious means setting very realistic and achievable
targets. With increased competition and liberalization of most economies, business has
increasingly become very difficult to run and manage and constantly, different problems keep
coming up. This, therefore, means that entrepreneurship calls for the need to persevere during
difficult times. Perseverance is the art of looking at problems and difficulties as challenges
and seeking to find solutions to those challenges. Entrepreneurship calls for positive thinking.
Only those entrepreneurs who are positive about whatever they do and always seek to find
solutions to any problems and difficulties they encounter, will eventually succeed in whatever
they aspire to do. Perseverance builds a strong character, which normally leads to the
generation of a variety of ideas from which solutions to any problems or difficulties may be
sought. Perseverance and positive thinking are therefore, very essential to business success. It
is difficult to discover one’s full potential if you don’t try. It is, therefore, only by trying and
trying again even in the face of poor results that one discovers themselves and forge ahead.
These are critical requirements in entrepreneurship.

Imagination, innovation and creativity of an entrepreneur

As already examined earlier on the document, the term entrepreneurship may be defined as
“the act of creating or developing a business through innovation, creativity, progressive,
imagination and risk taking initiative.” The key words in this definition are art, developing
innovation, creativity, progressive imagination and risk taking initiative.

The above key words in the definition of entrepreneurship define the fundamental
characteristics and com, competencies of an entrepreneur. From the key words above, it is
very clear that the concept of entrepreneurship calls for resourceful; the desire to constantly
want to make improvements; and having an artistic mind that is always attempting to craft
strategies for success. Entrepreneurship also calls for being focused about development;
being innovative, creative and imaginative and having the ability to take calculated risks.

22
Goal setting

Another critical requirement in developing entrepreneurial competencies and attitudes is the

ability to forecast into the future and set goals. An entrepreneur will only succeed in business
if they can set goals that are accomplished by “SMART” objectives.

The term “SMART” means:

S - Specific

M - Measurable

A - Achievable

R - Realistic

T - Time Bound

For goal setting to be said to be prudent, you as an entrepreneur must ensure that the goals set
are accompanied by specific objectives, which have been set and designed in incremental and
priority order after careful planning. These objectives must be measurable so that at
monitoring stage, it is easy to measure actual results against planned results. The objectives
must also be achievable in that they should be based on anticipated resource availability and
projected capacity of the business. Then your objectives must be on a clear mission and
vision as an entrepreneur. Explain and do the following exercise:

Activity 2.

 Making toy cars from empty oils cans

 Foam rubber used to make duvets

 Soya meal used take vegetable products

 Cow dung used for heating. Etc

So, dear prospective entrepreneur, find extra-ordinary uses for ordinary things to start a
business. A great future awaits you.

23
Man’s Basic Needs: In life, Man’s basic needs have been described as: Clothing, Food, and
Shelter

The above needs are daily needs that every day, man needs food, clothing and shelter. This
makes the demand for the above needs perpetual. Therefore, you, as a prospective
entrepreneur must seek to identify business ideas based on the daily needs of man. Below are
some examples to prompt your mind;

Food Business Clothing Business Shelter

Food supply Second hand clothing Hardware shop

Gardening Tailoring Block making

Farming Knitting Cement Sales

Restaurants Trading Roofing sheets

Bakery Roofing Import and Export Rafters

Specialization Traditional attire

Business in traditional Etc.

Think of the basic needs of man in your area, which can be exploited into business ideas. All
you need is a lot of imagination and action. The world is waiting for you to start a business.

Establishing Agencies or Becoming Middlemen in Distribution

Many business organizations from foreign countries may want to work with a local with
suitable business credentials. Therefore, be pro-active, read magazines, trade journals and
search the internet for inquiries from foreign businesses and establish agencies. Learn to visit
institutions like the Zambian business ideas and opportunities.

2.2 POSITIVE THINKING AND POSITIVE AMBITIONS

As an entrepreneur you must think positively and positively thinking is being able to
communicate with other people effectively. This will make those people you will meet and
those near to pick your mental moods are affected accordingly .on your mind play around
thoughts of happiness , good health and success , and you cause people to like and want to

24
help you, because they enjoy the positive vibrations that your positive mind sends out
(napoleon,1996).

As an entrepreneur in order to have good results from positive thinking, you should do some
inner work in the mind; developing a positive attitude towards will result in a successful
outcome of whatever you do in business .positive will result will also make you take
necessary actions to ensure your entrepreneurial success. If you want to reap from positive
thinking it is not enough to carefully say few positive words and spent much of your time
crowding your mind with negative thoughts (Drucker 1985).

To successfully apply positive thinking, entrepreneurial goal has to be your main mental
attitude .in entrepreneurship, there are benefits and challenges too .as a person intending to
start your own business you have the choice to flood you mind with positive
thoughts .however, if you really want to succeed in business few words of advice are useful
you need to coat you inner dialogue with thoughts and feeling of happiness, strength and
success (Napoleon, 1996).

Avoid negative thoughts of business and swap them with constructive happy thought .in
discussions with employee’s .supplier. Customers and advisors use words that suggest scenes
of strength. Happiness and success in their minds. Visualize with concentration and belief the
pleasant outcome of your plan or action before you prepare or start disaster in the world are
there and you will always be there .if you have no power to do anything constructive do not
kill yourself with worries L: show confidence and self believe in you in your dealings with
other

people. Engage in physical exercise it helps in developing a positive altitude (Napoleon,

1996).

25
Activity 3: Fill in the blanks.

1. Perseverance is the art of looking

at .....................................................................................................................................
...........
…………………………………………....................................................................

2. To be positively ambitious means

……………......................................................................................................................
........................................................................................……………………………….

3. What does the acronyms SMART stand for?

..........................................................................................................................................
............................................................................... .........................................................

4. Positive thinking
means? .............................................................................................................................
................
…………………………………………………………….......................................…

With a positive mind comes a positive ambition. This is a positive ability to spot an
opportunity and imagine something where others have not yet been or imagine you in at an
advanced level .it desires for some type of achievement and the willingness to strive for its
attainment. Entrepreneurs have the desire to their own paths and work within their own vision
instead of functioning idly by in the constrains of modern society. (Cohen, 2006).

Entrepreneurs have a curiosity that identifies overlooked niches and puts them at the forefront
of innovation and emerging field’s .they imagine another world and have the ability to
communicate that vision effectively to investor’s .customers and staff. A good entrepreneur’s
driven to make something of him .he knows what he wants .and he set a course to get it .his
motivation to achieve something can sometimes be overwhelming and the urge to establish
him can be quiet consuming (Homaday .1992).

An entrepreneur s ambition is often the key ingredient that gets him/her off of the chair and
puts them into action. Turning the day dream into reality .the reality of the fact though is that
entrepreneur s positive ambitions innovations involve more than a good idea about how to

26
enhance or change an existing situation. Entrepreneurship is about having an
idea .formalizing that idea and having that idea be accepted by your target market.
(Cohen .2006).

When looking into the positive ambitions of entrepreneur you will find that it is usually the
overseeing factor that helps forward thinking individuals excel in their pursued endeavours.
Positive ambitions and hard work are synonymous with another and provide the energy for
entrepreneurial activity to take place and evolve .people tend to lessen the concentrations and
focus involved with ambition and formulates their own variations of how it is supposed to
work.

In entrepreneurship there is no room for playing around and begin being half assed so most
people are willingness to go to extra mile in order to succeed .being unwilling to put in the
necessary work only helps to secure the inevitable. As entrepreneur our positive ambition is
to win and succeed and this is what makes us different from the average person and is what
makes us a force to be reckoned with (Homaday, 1992).

an example of positive ambitious entrepreneurs can be that of Bill gates .Bill started with a
vision first .radical for the late 70s .that software itself was a business and articulated his
dissatisfaction with the fact that it was not and second .that software would change the whole
world; encapsulated in something that now seems attractive that is a computer in every home
and on every desk running Microsoft software. He saw the potential of PC s and importantly
the potential of the software as a business and did not hesitate to take the first of building
software for the hobby computer market of the day.

2.3 POSITIVE OUTLOOK AND CONSTRUCTIVE AMBITION

In entrepreneur success depends on having a positive outlook. A positive outlook emerges

from positive thinking. Ones success is determined with by one s limitations .in
entrepreneurship career there are many challenges and risks .if one is negative minded
success will be hard to achieve .the long term continued success comes to those that embody
the spirit of being positive in all situations regardless of the circumstances put forth in front
of them. If you can bring yourself to think good thoughts .you will be well on to have success
that positive people benefit from a daily basis .positive outlook on life and business is the
belief that good things are going to happen .if you maintain a positive outlook in your life.

27
2.4 CONSTRUCTIVE AMBITION

Constructive ambition is the direction of the full power of the mind and thought upon the goal
in view and to continue to direct the mind in the same manner regardless of the circumstances
or conditions .it call for making of every mental action positive. It is based upon a deep
seated desire to develop, to increase, to achieve, to attain in short to become larger and
greater and to do something of far greater worth than has been done before. Constructive
ambitions inspires somebody s mind constantly with a building desire and make this desire so
strong than every part of your system will constantly feel it wants greater .more capable and
more efficient. It does not permit reckless ambitions but directs all the powers of mind
(Brians .1968).

An entrepreneur perceives concern for high quality of his products and services to meet or
surpass existing standards of excellence in a faster, better and cheaply way. By doing this an
entrepreneur remains ahead of others in a market place. Locus of control is the system of
belief of an individual who perceives the outcome of an event as being either within or
beyond his personal control. Entrepreneur tend to believe in their own ability to control the
outcomes to their efforts by influencing the existing environment .rather than leave
everything to luck .they strongly believe that they can shape their own destiny .
(Cohen,2006).

Successful entrepreneur are characterized by a need for achievement which motivates them
to take up responsibilities for finding solutions to problems .further this quality help to set
challenging goals for themselves .assume personal responsibility for the goal accomplishment
and they are highly persistent in the pursuit of these goals . Entrepreneurs are driven to
succeed and expand their business .they are always on the move, full energy and highly
motivated .they are driven to succeed and have an abundance of self motivation.

Constructive ambitious calls for sacrifice; ambition without at least the willingness to
sacrifice is not ambition but mere fantasy. Unfortunately, in many cases, the price is not
worth the sacrifice ; indeed an argument could be made .when it comes to pure but usually
intermixed with more admirable ends ,even if these may be more incidental than deliberate
or determining.

It has been therefore, argued that entrepreneurship is not about self employment or new
firm .it has been therefore , argued that entrepreneurship is not about self employment or new

28
firm formation per sac’s most of the persons involved in this do not have an ambition to grow
.(Cohen,2006).

Growth motivation is a necessary factor for actual firm growth. Such growth motivation is
determined by the perceived ability. Need and opportunity for growth
(Drucker .1985).although some objective factor s directly actual growth. The entrepreneur s
perception of the ability, need and opportunity for growth is of the major important
mediated effects on growth. Entrepreneurship is about getting up whenever the business
fails and learning from that failure .an entrepreneurs believes that failure is part of the
entrepreneurial process and often without it , success would not be possible .further he is
able to make mistakes .learn from them, quickly recovers and change his direction and moves
into the future (Homaday,1992).

Unit Summary

In this Unit we have introduced you to concept of Positive attitude and positive thinking.

As an Entrepreneur you need to have a positive thinking in order to attract people. He /she
need to be so courageous in their thing and make them come up with ideas of attracting their
customers. They need to be of positive ambitions because it is ambitions that give you the
vision to pursue your dreams and it is only the positive thinking that will make you fulfil
your goals .And lastly an Entrepreneur should be of a constructive ambitions that make you
keep on seeking the success and that drives you to a position that will help you to achieve
divine goals. Nothing can be achieved without some positive ambitions.

Self-assessment

1. Define Positive attitude

2. Explain constructive ambition

3. Identify and explain positive thinking

4. Discuss positive attitude and constructive ambitions

29
Further Readings

Bain,J.S.(1968).Industrial Organization .2nd Edition .New York,USA:John Wiley.

Cohen. A (2006).The Entrepreneur and Small Business Problem Solver, 3rd

Edition .Hoboken.

Drucker, P.F. (1985) Innovation and Entrepreneurship :A Fuzzy Set Approach .Journal of
Small Management .30(4):12-23.

Napoleon, H (1996).Positive Action Plan –How to make every a Success .London: piatkus he

Schumpeter J.A. (1934).The Theory of Economic Development .Cambridge, Ma: Harvard

University press.

30
UNIT 3. DEMOSTRATING PERSONAL ENTREPRENUARSHIP
COMPETENCES (PECS)

Learning Outcome: completion of the unit will be able to:

1. Identify and discuss competences

2. Discuss the assessment of competences

3. Discuss application of entrepreneurial competences

Learning Conditions: you must have access to:

 Library
 Computer and internet connectivity

Duration: you will be expected to spend a minimum of 6 hours on this unit.

Introduction

This Unit introduces you to Personal Entrepreneurship competences identification,

assessment and application of entrepreneurial competences. Since competencies as said to be
measurable or observable knowledge, skills, abilities and behaviours which are critical to
successful job performance. As an entrepreneur how do you choose the right competencies to
allow an entrepreneur to plan, and select the best employees and manage to develop staff to
fill future vacancies?

Entrepreneurs are not the same since they come from different background with varying
interests in business type however .the similarities about entrepreneurs’ are the most
commerce personality traits they share and apply to succeed in developing a successful
enterprise .Therefore, this unit aims at demonstrating how personal entrepreneurial
competence is very important in any given business and discusses how one would identify
competences and apply these competences in an appropriate manner.

31
New Terminology

An entrepreneur is defined as individual who organize or operate a business or businesses.

In other words an entrepreneur is known as a business founder or someone who has turned a
normal community into business or who creates and introduces value to customers through a
product or service and expects to get a financial reward (Jenks 1949).

competencies according to Sartwell (1995) are defined as the measurable or observable

knowledge, skill s, abilities and behaviours’ (KSABs) critical to successful job
performance .choosing the right competencies allows an entrepreneur to; plan how they will
organize and develop their work force, determine which job class best fit their business
needs, recruit and select the best employees, manage and train employee effectively and
develop staff to fill future vacancies.

Competencies

Sartwell (1995).identifies the three groups of competences that an entrepreneur should posses
and these are knowledge competencies , which are practical or theoretical understanding of
subject s , skill and ability competencies which are natural or learned capacity to perform
acts and behavioural competencies that are pattern of action or conduct. Therefore,
entrepreneurial competencies are the skills necessary for an entrepreneur to venture into an
enterprise organize and manage an enterprise ably and competently realize the goal for which
the enterprise is established these competencies help an entrepreneur to successfully venture
into an enterprise.

3.1 IDENTIFICATION, ASSESSMENT AND APPLICATION OF

ENTREPRENEURIAL COMPETENCES

BEHAVIOURAL COMPETENCIES

Behavioural competency of an entrepreneur refers to the underlying characteristics of

having casual relationship with effective or superior performances in the process of carrying
on his business activities. The following attributes are tested in order to assesses and find out
the nature of behavioural competency among the respondents .these behavioural
competencies include; initiative of an entrepreneur refers to his behaviour with a preference

32
of taking action of different responsibilities or assignments .it further denotes that he is able
and willing to do more than what is expected of his job. Seeing and acting on opportunities
refers to the to the unique entrepreneurial behaviour which help to be alert of information and
ability to process it in order to identify and recognize the potential business opportunities
even before his competitor .additionally , persistence of an entrepreneur is a behavioural
competence that denotes the ability which keep him constantly motivated even when he is
confronted by obstacles that seem insurmountable and willing to keep trying when things go
wrong , and accepts that, ultimately , it is he who has to make his dream come true .
Entrepreneurs seldom give up when things are not going well.

Assertiveness of an entrepreneur is about his behaviour aspect affirms his rights or point of
view without either aggressively threatening the right of others (assuming a position of
dominance) or submissively permitting others to ignore .successful entrepreneurs for the most
part are assertive .further, successful entrepreneurs are characterized by a need for
achievement which motivates them and take up responsibilities for finding the solutions to
the problems. Further this quality help them to set challenging goals for themselves, assume
personal responsibility for the goal accomplishment and they are highly presto tent in the
pursuit of these goals .the need for autonomy of an entrepreneur is characterized by a drive
to control and influence others , a need to win arguments , a need to persuade and
prevail .research studies has asserted that strong need for autonomy / power /control
influence usually will let the enterprises in to trouble because doctorial , adversarial ,and
domineering styles make it very difficult to attract and keep people who thrived on
achievement , responsibility and results .therefore successful entrepreneurs have high need
for achievement while low need for power.

Managerial competences

Managerial competence of an entrepreneur is the ability to direct his staff and define the
expected outcomes clearly and finally to get things done at the best and cheapest ways and
means .managerial competency is an approach to managing others and to ensure optimal use
of available resources in meeting organizational objectives on an a sustained basis.

Information seeking is one of the managerial competence an entrepreneur should identify and
posses. An entrepreneur has an urge to look for the required information in order to make an
to make an informed decision, for example , selecting ,starting and successfully managing the
desired business .this calls for the entrepreneurs to personally seek and obtain information

33
that is required to enable him make decision and improve knowledge on his/her business.
Systematic planning an entrepreneur is expected to have systematic planning which will
help him to prepare an action plan for every area of operation in order to achieve the pre
determined goal .problem solving problem solving refers to application of appropriate
knowledge and skills in order to solve a problem arising while carrying on the business .it
requires an entrepreneur to have creative thinking in order to understand various techniques
involved in resolving different problematic issues of a business.

Persuasion in entrepreneurship refers to the ability of entrepreneurs to link, convince and

influence other individual, group’s .agencies, creditors, debtors, customers and even
competitors in order to create and maintain good rapport. Goal setting and perseverance goal
setting refers to the ability of an entrepreneur to set clear and specific goals and
objectives .successful entrepreneurs are able to achieve great things only by overcoming the
obstacles that stand in their way. Therefore they need to have perseverance which implies
commitment, hard work, and patience .endurance apart from being able to bear difficulties
calmly and without complaint (Sartwell.1995) .communication skill refers to the ability of an
entrepreneur to transfer ideas , plans , policies and programmers' to employees ,debtors ,
creditors , customers and everyone who is connected with the business in order to inform ,
influence and to express his feeling .technical knowledge is a managerial competence that an
entrepreneur needs to address the rapid technical changes in the industry .higher level of
technology must be introduced in the production methods in order to achieve productivity
demands .therefore he must update his technical knowledge in order to serve customers
quickly and more effectively .and lastly social skills of entrepreneur include social perception
(the ability to perceive others accurately)expressiveness ( the ability to express feelings and
reactions clearly and openly).impression management (skill in making favourable first
impression on others ) and social adaptability ( proficiency in adapting one s actions to
current social contexts ) in the process of managing his business

3.2 ASSESSMENT OF COMPETENCES – (ATTITUDINAL)

An altitude is a hypothetical construct that represents an individual s degree of like or dislike

for something .altitudes are general positive or negative views of a person, place, thing or
event .altitudes are judgments of an individual .altitudinal competency is the ability to select,
maintain or adapt ones best attitude towards the situation .these altitudinal competences
includes self confidence , which is an essential trait in an entrepreneur because he is

34
regularly called upon to perform tasks and make decisions that require great amount of faith
in himself. He needs to have a strong but realistic belief in himself and his ability to achieve
the predetermined goals (Sartwell.1995).

Activity 4

1. Identify the three groups of competences

………………………………………....................................................................................
................................................................................................................................................
................................................................................................................................................
................................................................................................................................................

2. Tolerance for ambiguity in the entrepreneurial process refers to

………………………………………....................................................................................
................................................................................................................................................
................................................................................................................................................

3. Self esteem of an entrepreneur represents his ability to develop

………………………………………....................................................................................
................................................................................................................................................
................................................................................................................................................
................................................................................................................................................

Self esteem of an entrepreneur represent his ability to develop healthy confidence and respect
for himself .he feels confident for being capable for life, able and worth or to feel right to
achieve happiness. Entrepreneurs respect himself and defend his own interest and
needs .dealing with failure. Entrepreneurship is about getting up whenever the business fails,
and learning from that failure. An Entrepreneur believes that failure is part of the
entrepreneurial process. And often without it, success would not be possible .further he is
able to make mistakes, learn from them, and quickly recovers and changes his direction and
moves into future.

Tolerance for Ambiguity in the entrepreneurial process. Tolerance for Ambiguity refers to the
ability of an entrepreneur to perceive ambiguous situation as desirable , challenging and

35
interesting and neither denies nor distorts their complexity of incongruity .performance a
successful entrepreneurial perceive that his performance is different from others. He
believes that it is high performance which ultimately differentiates him from low performs.
Concern for high quality an entrepreneur perceives concern for high quality of his products
and services to meet or surpass existing of excellence in a faster, better and cheaply .by doing
this an head of others in the market .Locus of control (LOC) Is the system of belief of an
individual who perceives the outcome of an event as being either within or beyond his
control. Entrepreneurs tend to believe in their own ability to control the outcome to their
efforts by influencing the existing environment, rather than leave everything to luck. They
strongly believe that they can shape their own destiny (Jenks, 1949).

3.3 APPLICATION OF ENTREPRENEURIAL COMPETENCES

Involves the entrepreneur put lot of effort and in making a decision to take an initiative.
Once he is decided to an initiative he has to take the initiative ahead of other. Speed is an
important factor in the success of an enterprise because if the entrepreneur is slow in
implementing the initiative .chances are there that someone else will move forward and
implementing the initiative .chance are there that someone else will move forward and
implements it. This calls for alertness, agility and dynamism on the part of the
entrepreneur .due to these reasons speed of performance is required is required on the part of
the entrepreneur.

A good entrepreneur combines the quality of a creative individual and an innovator .in many
cases .a good entrepreneur adopts new ideas or services so that he will be the first to
implement them. Entrepreneur may not have new ideas and creative ideas .he might only use
the creative ideas and innovative products and services to meet the challenges of the
situation. He might take advantage of the utility of an idea a product to create wealth .he uses
the ideas and services only to solve the problem at hand to achieve the objective. Competency
in creativity and innovation are sometimes basic traits of certain individuals and help in
achieving the goal. Thus we can say that a good entrepreneur combines the quality of a good
entrepreneur combines and an innovator. (Jenks, 1949).

36
 Unit Summary

In this unit we have introduced you to concept of Entrepreneurship competences; we have

defined the concept of Entrepreneurial competences.

The entrepreneurship is a complex activity covering various parameters of the society .so it
is very difficult for any enterprise to be successfully in the first attempt .therefore, the failures
or roadblocks to success and achievement should not deter the entrepreneur .he needs to have
the quality of perseverance .behavioural skills to persist even when the failure is visible are
one of the quality of a successful entrepreneur .the ability of persistence is indicative of the
confidence of the entrepreneur in his system ,tools and techniques.

Self-assessment

1. Explain competences

2. Explain behavioural competences

3. Discuss assertiveness of an entrepreneur

4. Discuss Managerial competence of an entrepreneur

37
Further Readings

Bain,J.S.(1968).Industrial Organization .2nd Edition .New York,USA:John Wiley.

Cohen. A (2006).The Entrepreneur and Small Business Problem Solver, 3rd

Edition .Hoboken.Drucker, P.F. (1985) Innovation and Entrepreneurship :A Fuzzy Set
Approach .Journal of Small Management .30(4):12-23

.Napoleon, H (1996).Positive Action Plan –How to make every a Success .London: piatkus
he Schumpeter J.A. (1934).The Theory of Economic Development .Cambridge, Ma: Harvard
University press

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UNIT 4. ESTABLISHING AN ENTERPRISE

Learning objectives: On completion of the unit, you will be able to:

1. Identify/generate business idea

2. Assess and select the most viable idea

3. Develop business opportunity

4. Establish an Enterprise

Learning Conditions: you must have access to:

 Library

 Computer and internet connectivity

Duration: you will be expected to spend a minimum of 6 hours on this unit.

Introduction

This unit introduces you to how you can establish an Enterprise and how you can identify or
generate business idea. You have also been introduced to how you can assess and select the
most viable business ideas.

There are many ways through an entrepreneur can own business, thus include an enterprise.
However, this discourse will look at enterprise as a form through which an entrepreneur can
own business .in addition, a business plan is a structured and outlines, ideas and the
information needed to transform the ideas into an enterprise. And the key factor to be
considered before starting an enterprise and to identify or generate idea, to assess and select
the most viable business idea and how to establish an enterprise.

To begin with , the term enterprise is a business created by an entrepreneur who is a person
with an art of developing a business through innovation ,creativity , progressive imagination

39
and risk taking initiatives .thus to develop an enterprise , entrepreneur must have a business
idea which is a concept that can used for commercial purposes. It is typically centre on a
commodity or service that can be sold for money. A successful company always starts with a
compelling business idea. It is the first milestone in the process of founding a growth
company (Mumba, E, 2010).

However, an entrepreneur subjects his /her business ideas to three stages before
implementation or putting of the business into operation. The first stage is idea assessment
where the idea will be explored, refined and assessed, secondly decision making where an
entrepreneur decide to go on or not with the idea and lastly the business development, where
the idea has been found viable, the preparation and implementation of a business plan begins
and then the business is put into operational (Mumba, E, 2010).

On the other hand, each idea, no matter how brilliant, inititially has no commercial value .a
plausibility check gives more information about an idea s chances in market place and helps
to check its feasibility and innovative content .in addition, the term innovative is usually
applied to a new product or service produced with convectional production methods and
delivered to customers via convectional distribution channels. Innovation, however, can also
be referred to the entire business system. It is less obvious, but equally important, for
example, FedEx revolutionized letter through central sorting and 24hours operation (Matimba
2004)

Activity 4.

1. What is a business
plan? .......................................................................................,........................................
..........................................................................................................................................
..........................................................................................................................................
.........

2. If the product does not meet your own standards, what should you do?

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 ..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................

3. How do you establish business enterprise?

..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................

4.1 HOW TO IDENTIFY OR GENERATE A BUSINESS IDEA.

However, it may not sound profound, but this is fertile ground for a great business ideas. Ask
yourself .what bugs me? Keep a journal where you write down your everyday
frustrations .review the journal regularly and run it by others to see if it s a point for
them .which product or service could you create that would solve that problem?
(Hawkey ,J.2002).

Take an inventory of your hobbies and interests .what are the business opportunities you
could create from something you love anyway? here is a story about the famous restaurant
and travel guide zagat which often cited an example of finding a business in something you
love .the founders of Zagat , Tim and Nina Zagat ,were lawyers who loved to eat out at
restaurants .in 1979 , they started a newsletter asking their friends to rate a restaurants. As a
news letter got bigger every year, began charging money for their. (Hawkey.J 2002).

Therefore, a new methodologies and ways of thanking are constantly evolving and some
industries are better at embracing them than others .take design thinking for example,
designing thinking is a mindset and a methodology used to better understand problems and
implement creative solution. (Matimba 2004).

On the other hand, there is a wide whole big world out there of great ideas that are not yet in
your market. If you see an idea you love in your travels, you can take it back home and give it
a new spin that specifically addresses the need of your market or community. Even if you
don’t find inspiration, travelling will help take you out of your surroundings and refresh your
system .there is also places around the world that have ideas waiting to be

41
commercialized ,such as universities that have technology transfer offices .take an existing
idea and launch it to market. (Matimba 2004)

Look up entrepreneurship and industry related communities .go on Twitter and search
relevant hash tags to see what people are talking about. You might learn about new fields,
networking opportunities or other topics that might spark something .become a student of
your industry and entrepreneurship. Research the market to see what is out there and where
your idea could fit in. Beside your standard online search and library, there are tons of
resources out there to help you along. Entrepreneurs with access to current, relevant and
timely information about your industries, competitors, markets, potential investors and
partners, intellectual properly and best business practice at no cost. (Hawkey.J.2002).

Tapping family for great business ideas may not seem like an obvious first step. Sure , you all
hit them up for cash once you have develop your idea ,it is foolish to think that your aging
father or cousin contribute this early in the process may be useless ? Plenty of good ideas are
discussed on the dining table (Hawkey.J.2002).

Unfortunately, many people insist on (creating business) themselves without any help from
their family .you are severely limiting yourself if you rely on solely on your own ideas
especially when your creative juices run dry .this is the reason enough to listen to ideas others
may have, if have 15 or 20 friends, chances are a couple of them have some incredible
business ideas.Hawkey J, (2002)

When you see something that attack your interest, ask yourself, what is it about this situation
that is special? Then narrow your focus so bring home the idea. The process of zeroing in on
the idea often generate important place in markets. (lobley,D.1993).

If the product does not meet your own high standards, create a better one. Your past
experience will help your business idea and give you better results and profit .there is no
better place to look into up and coming trends than city streets, “Great ideas can often be
found by just browsing happening inner city neighbourhoods in a virtually any big city in the
state...(Lobley, D.1993).

Many people ignore their dreams, and some don’t remember them at all. But sometimes it
pays to listen to those inner messages, no matter how stranger or unintelligible they are, you
never know , might just find the germ of a great idea, the tough is part is crawling out of the
bed in the dead of night to jot down those great ideas before they are forgotten

42
Many people ignore their dreams, and some don’t remember them at all. But sometimes it
pays to listen to those inner messages, no matter how stranger or unintelligible they are, you
never know , might just find the germ of a great idea, the tough is part is crawling out of the
bed in the dead of night to jot down those great ideas they are forgotten.

4.2 ASSESSING AND SELECTING THE MOST VIABLE BUSINESS IDEA

After identifying a number of business ideas and having prepared a reasonable list of business
ideas with the highest chance of success .to be able to do this, you need to formulate a
business idea assessment form .the focus of the business idea assessment form is to obtain
information such as personal competition, profitability and business growth. (Wokorach,J,B
1999).

The information is assessed by questions which include; does the business suit your personal
characteristic? Do you have knowledge; skill and experience that will help you run this type
of business? Do you know about the products and services from this business? Do you have
the ability to get the finances to provide what is needed in the business? Will it be the only
business of its kind in your area? Will your business be profitable? And does the business
have growth potential? . (Wokorach, J, B 1999).

These questions examine the factors which are necessary in the business ideas assessment
form. Through this form, an entrepreneur vividly selects the most viable business idea from
the many ideas. After the business identification, listing and assessment you are now ready to
go further and establish a business idea into business an operating business venture. .
(Wokorach,J,B 1999).

4.3 HOW TO ESTABLISH AN ENTERPRISE

Therefore once you have developed a business idea and prepared a business plan, the next
step is to formalize your business so that you can start operating legally .as discussed earlier,
and there are many options for you to choose from in formalizing your business.

It is however recommended that you start small by registering business activity under
business name registration before you can think of transforming your business into a
company .the advantage of registering your business name is that no one can use it.
Documentation for formalizing your micro/small business; information required by the
registrar of company for registration of business name includes proposed names ,nature of

43
business activities , place of business operations , full names of owners , nationality , sex and
age of partners (owners) and proposed date of commencement of business. (Mumba, E,
2010).

In addition, certificate of registration, issued once your application has been approved
certificate of registration as a small enterprise obtainable from the small enterprise
development board (SEDB) .In addition, a certificate of Tax exemption obtainable through
SEDB from the Zambia Revenue Authority. Other department, depending on what business
activities you will be undertaking, you might need addition legal documentation, for a
restaurants business clearance certificates from the municipal council. (Mumba, E, 2010).

However, you gone through, step by step approach to establishing your business .up until
now, the business is still a plan or paper .the next step is to consider how and where exactly
your business will locate. Therefore, to determine how you will set up your business, you
must get back to the business plan and look at the market plan, sub section location .that is
where you described when the physical location of your business would be (Lobley,D.1993).

Therefore, location and building assets and your level of operation and the number and size
of machines and equipments the business will need .this will help you to come up with the
appropriate space requirements for your business. Once you know the size of the building
you need, consider specific location you business will operate from. The location must be
attractive and easily accessible to customers .the business must fit in with the existing
business environment (mumba, E, 2010).

In addition, machinery equipment and future identify the right machine and equipment to suit
the level of your business operations. If the machine is too big or has too much capacity it
will only take up too much space or it will not fit in your building .and also furniture must be
bought to fit business requirements. You need simple and presentable furniture.
(Lobley,D.1998).

Therefore, it is important to have a business idea, because you can’t enter into business
without ideas. In addition, you need to plan which type of business you can venture into. You
need to have plans, to develop an enterprise; entrepreneurs’ must have a business idea which
is a concept which can be used for commercial purposes.

44
Therefore, once you have developed a business idea and prepared a business plan, the next
step is to formalize your business so that you can start operating legally .as discussed earlier,
and there are many options for you to choose from in formalizing your business.

it is however recommended that you start small by registering business activity under
business name registration before you can think of transforming your business into a
company .the advantage of registering your business name is that no one can use it.
Documentation for formalizing your micro/small business; information required by the
registrar of company for registration of business name includes proposed names ,nature of
business activities , place of business operations , full names of owners , nationality , sex and
age of partners (owners) and proposed date of commencement of business. (Matimba,
A2004).

In addition, certificate of registration, issued once your application has been approved,
certificate of registration as a small enterprise obtainable from the small enterprise
development board (SEDB) .In addition, a certificate of Tax exemption obtainable through
SEDB from the Zambia Revenue Authority. Other department, depending on what business
activities you will be undertaking, you might need addition legal documentation, for a
restaurants business clearance certificates from the municipal council. (Mumba, E, 2010).

However, you gone through, step by step approach to establishing your business .up until
now, the business is still a plan or paper .the next step is to consider how and where exactly
your business will locate. Therefore, to determine how you will set up your business, you
must get back to the business plan and look at the market plan, sub section location .that is
where you described when the physical location of your business would be (Lobley, D.1993).

Therefore , location and building assess your level of operation and the number and size of
machines and equipment the business will need .this will help you come up with the
appropriate space requirements for your business .once you know the size of building you
need, consider the Specific location your business will operate from. The location must be
attractive and easily accessible to customers .the business must fit in with the existing
business environment (Mumba, E, 2010).

In addition, machinery equipment and future identify the right machine and equipment to suit
the level of your business operations. If the machine is too big or has too much capacity it
will only take up too much space or it will not fit in your building .and also furniture must be

45
bought to fit business requirements. You need simple and presentable furniture.
(Lobley,D.1998).

Unit Summary

This unit has introduced you to how to establish an enterprise and how to identify business
ideas. It also introduces you to how you can assess and select the most viable business ideas.

In conclusion, it is important to have a business idea, because you can’t enter into business
without ideas. In addition, you need to plan which type of business you can venture into. You
need to have plans, to develop an enterprise; entrepreneurs’ must have a business idea which
is a concept which can be used for commercial purposes.

Self-assessment

1. How do you establish a business?

2. How do you assess and select the most viable business ideas?

3. Explain how you can establish an Enterprise?

4. Explain how you would identify or generate business ideas

46
Further Readings:

Mumba.E.2ND (2010).Entrepreneurship and Small Business Management.

Hawker.(2002).Existing Strategy Planning :Grooming Your Business .Gower

Publishing ,Ltd

McLaughlin S (2015).Unlocking Company Law: Routledge UK.

Matimba.(2004).Distinction in Commerce .Livingstone; A .Matimba (self).

Wokorach, J.B (1999).Commerce: A Complete Course.3rd Edition.Mochudi: Salama

END OF MODULE ONE

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