The topic entails:
-Understanding the meaning and importance of entrepreneurship.
-Discussing the characteristics a successful entrepreneur must have.
-Discussing the factors that inhibit entrepreneurial development.
Discussing the possible causes of business.
1. What are the factors that have contributed to the growth of entrepreneurship in Kenya.
- Need to exploit talent
-High market availability
-Growth in awareness
-Improved security
-Improved infrastructure
-Need to be own boss
-Availability of source of finance
2. Outline four reasons for establishment of a business enterprise
- Profit generation /maximization
- Creation of employment
- Provision of goods and services
- For prestige/enhancing own image
3. State four reasons to consider when evaluating a viable business opportunity
- Potential profits
- Potential market
- Future growth
- Acceptance by the community
- Cost of capital
- Ability to manage
4. A surgeon set up a clinic in a distant rural centre. The business was closed after six months. Identify four possible causes for the failure
- Inadequate capital Poor working strategies
-Unfavorable government policies
-Insecurity in the area
-Inadequate academic and technical knowledge
-Inadequate business management knowledge
-Inadequate demand market
-Poor record keeping
-Poor customer relations
-Large drawings from firm
-Lack of self discipline and poor moral character
-Poor planning Changes in technology
Changes in business environment
5. State four reasons why the government of Kenya is encouraging entrepreneurial knowledge in schools
- To reduce rate of unemployment
-Equip learners with entrepreneurial skills and knowledge
-Create informed population on commercial activities
-Learners to be able to utilize local resources
-Enable learners to be self-reliant
6. Identify four benefits of entrepreneurship to the developing economies such as Kenya
- Promotes job creation
- Promote production of a wide variety of goods
- Improves infrastructure of a country
-Promotes healthy competition hence production of high quality goods
-Enhances full exploitation of a country’s resource
-Promotes industrial development
-Provides consumer with variety of goods -Promotes savings and investments
-Promotes Kenyanisation/indigenization of trade/encourages participation of local profit in trade
7. The government of Kenya though the Ministry of Trade and Industry has developed policies to promote entrepreneurship. Explain five importance of such initiative to the economy of Kenya
Creation of employment.
- Exploitation of resources.
- Promotion of technology.
- Promotion of entrepreneur/culture.
- Formation of capital/joining.
- Increase of consumers’ choice.
-Development of infrastructure.
- Foreign exchange earnings and conservation
8. Entrepreneurship is becoming the driving force behind most economies in the world and most governments support it. Explain why entrepreneurship is important to these economies
- Creation of employment/jobs by absorbing people who would otherwise be jobless
-Formation of capital through profits which may be used to expand the business
-Reducing rural-urban migration as businesses in rural area offer employment opportunities
-Raising standards of living through receipt of salaries and wages as well as availing a variety of quality goods and services
-Saving on imports as entrepreneurs are able to produce goods and services that are substitutes to imports
-Improving infrastructure through improvement of roads and security by the government
-Reducing foreign dominance of the economy by increasing the participation of local entrepreneurs in various business activities
-Making use of local resources which would otherwise be idle or thought to be a waste
-Promotion of technology through the entrepreneur's creativity and innovation
-Promotion of entrepreneurial culture by using successful entrepreneurs as role models
9. Explain five factors that may hinder entrepreneurship development in Kenya
- Cultural practices that does not allow individuals to be successful
-Teachers do not encourage their student to be entrepreneurs
-Lack of relevant business courses in schools Lack of role models in the society
-Peer group influence the way people act
-Lack of financial and business consultancy institution
-HIV/AIDS is becoming a de-motivating factor
-Gender discrimination in many African traditions
10. Discuss five causes of the persistent balance of payment disequilibrium in East African countries
- Fall in volume of exports – rely on primary/agricultural products usually affected by draught yielding low production hence low exports hence reduced foreign earning
-Deteriorating terms of trade – value of exports are low relative to the value of imports hence pay more than the foreign earned
-Less capital inflow compared to outflow- they usually borrow money from developed countries at repay at high interest rates creating a net capital out flow.
-Devaluation policy – devaluation of local currency makes exports cheaper to foreigners and hence an increase in the cost importation
-Increase in import volume of capital goods and industrial raw materials for development purposes. This increases expenditure on foreign good.
11. Explain any five reasons why a new business may fail
- Wrong choice of business: Evaluate your business in terms of acceptability, finance, time, market e.t.c.
-Availability of finances and inadequate finances: Business take time before they can generate profits. It is then important to have enough money
-Failure to understand the market: You need to understand the market trends e.g. are a product seasonal, target consumers, competitors e.t.c.
-Poor pricing: Not too low as to realize losses and not too high for the target consumers
Competition: Always try to stay ahead of your competitors by doing the normal things in a different and appealing way e.g. packaging
-Ignoring consumers needs: always strive to satisfy your customers