You are on page 1of 426

ENTREPRENUERSHIP DEVELOPMENT

MANUAL FOR TRAINERS/INSTRUCTORS

MODULE NO. MODULE TITLE: UNIT A1.1

138-01-A Introduction to Entrepreneurship The Concepts of Entrepreneurship, SelfEmployment and Enterprise Concept of Entrepreneurship

UNIT 1.1 .1

Session Duration Session Rationale

60 minutes

For a long time, entrepreneurship has been recognized as an essential ingredient of economic development. The manner in which it has been exploited in the western societies has varied from time-to-time to suit the changing ethos of socio-economic reality. From early centuries (16th to 19th) the definition of entrepreneurship has changed from time-to-time. In France, the term entrepreneur was used in the early days for army leaders. Later, architects and builders of roads and bridges were called entrepreneurs. In the 19th it was applied to businessmen/trades who bought and sold goods at a profit. |It was in the 20th century that an entrepreneur was identified as the person who identifies and opportunity, takes risk, consolidates resources and sets up an enterprise. This session will explain the attitudes required and the functions carried out in relation to entrepreneurial activities.

Session Learning Objectives


At the end of the session, trainees will be able to define the terms, entrepreneurship, intrapreneurship and entrepreneur

Learning Outcomes
On completion of this session, the trainees will be able to: Define the terms entrepreneurship, intrapreneurship entrepreneur Distinguish between entrepreneurship and entrepreneur

and

Learners Activities / Environment


Ensure that the learning activities for the trainee include explanations of entrepreneurship, intrapreneurship and entrepreneur.

Methodology: Lecture and Discussions Trainers Preparation


1. 2. Go through the Reference Paper (enclosed) and also refer Reading Paper HO 1.1 Make flipcharts or transparencies as enclosed

Session Delivery
1. Open the session with the following statement: Today we will be learning about the concept of entrepreneurship Ask participants what they understand by entrepreneurship. Intrapreneurship and entrepreneur Elicit answers and put all the answers on the blackboard or on flipcharts.

Trainers Tips
1. Consolidate all answers and take a small Lecture on the definition of entrepreneurship, entrepreneur and intrapreneurship. Go through the process of entrepreneurship, referring reference paper HO1.1 By referring to all the gathered answers, take a Lecture on the process of entrepreneurship using flipcharts. (use TransparencyTR1.1) Elicit answers to note the difference between entrepreneurship and intrapreneurship, from the participants, and put it on flipcharts. Explain to the participants with the help of flipchart/Transparency (TR1.2), that entrepreneurship is a chain of functions and decisions taken at different stages of enterprise building. Explain the different stages of enterprise building with the help of transparency TR1.3 or flipcharts. Summarize the learning.

2.

3.

4.

6. 9.

Reading Material
Entrepreneurship can be described as a creative and innovative response to the environment. Such responses can take place in any field business, industry, agriculture, education, and the like. Doing new things or doing things that are already being done in new ways is therefore, a simple definition of entrepreneurship. Or you may emphasize that for our understanding, a person involved in a business activity where the person sells a product/service and makes profit is an entrepreneur. This may include manufacturing, trading, or service oriented business (i.e. laundry, restaurant, petrol pump, etc.). Whatever may be the activity, entrepreneurship has two distinct aspects one is the entrepreneur herself and the other is the enterprise.

Entrepreneur + Enterprise = Entrepreneurship Entrepreneurs by and large have been found to be people with a high drive and higher activity level, constantly struggling to achieve something which they could call as their own accomplishment. They like to be different from others and strive to accomplish goals which are not otherwise very easy to achieve. At the same time, they do not strive to achieve something which is practically impossible. Constantly motivated by their goals, they work very hard. It has been found that some of the highly motivated entrepreneurs have developed awareness of their worn strengths and weaknesses and also about the resources and constraints in the environment while striving to reach their goals. This concept is gender free. TR1.1 Entrepreneurship Concept What is Entrepreneurship Entrepreneurship is one of the four mainstream economic factors: land, labor, capital, and entrepreneurship The word itself, derived from 17th-century French entreprendre - refers to individuals who were undertakers, meaning those who undertook the risk of new enterprise Entrepreneurship is the dynamic process of creating incremental wealth. This wealth created by individuals who assume the major risks in terms of equity, time, and/or career commitment of providing value for some product or service. The product / service may or may not be new or unique but value must be infused by the entrepreneur by securing and allocating the necessary skills and resources. Process as involving all the functions, activities, and actions associated with the perceiving of opportunities and the creation of organizations to pursue them Who is an Entrepreneur A business founder Someone who has turned a normal community activity into business Anyone who creates and introduces value to customers through a product or service and expect to get a financial reward

The entrepreneur is the individual (or team) that identifies the opportunity, gathers the necessary resources, creates and is ultimately responsible for the performance of the organization. Entrepreneurial Businesses

The two most important categories of businesses to consider when discussing entrepreneurship are small businesses and micro enterprises. Though these two categories do not capture all entrepreneurial enterprises, they comprise the lion's share of businesses that fit within the definition discussed above. TR

Creating An Entrepreneur

entrepreneurship

Creating an enterprise

TR Different Stages of Enterprise Building Realisation of Opportunity when an entrepreneur scans the environment and selects the product

Consolidation of resources, Services

an

entrepreneur

consolidates

(finance, land, buildings etc)

Implementation and entrepreneur Creation of venture Reference materials

resources are put together and starts an enterprise

1. Women Entrepreneurship Development Manual (ICECD) 1993 2. Change and Entrepreneurship, Jenks L. H, Harvard Univ. Press 1949

Unit 1.1.2

Types of Entrepreneurs : : 60 minutes

Session Duration Session Rationale

This session will expose the trainees to the various types and forms of entrepreneurs with a view to widen up the mind set of the trainees

Entrepreneurship Attributes:
The entrepreneurship attributes being addressed include the need to be open-minded, creative and ability to identify business opportunities, risk taking

Session Learning Objectives


At the end of the session, trainees should be able to describe the various types of entrepreneurs

Learners Outcome
At the end of the session, trainees should be able to identify and describe various types of entrepreneurs

Trainers Preparation
go through the Reference transparencies as given Paper (enclosed) and prepare

Methodology
Lecture and focused group discussions

Session Delivery
1. Show TR2.1 and define the term Entrepreneur 2. Show TR2.2 and discuss the traits and characterises of entrepreneurs 3. Divide the trainees into small groups of five.

4. Using a flip chart, ask the groups to identify and describe the types of entrepreneurs within their communities. Explain to them that at this point they are no wrong or correct answers. 5. After 15 minutes have a plenary session. Capture their contribution on a flip chart These should be but not restricted to the following: Women entrepreneurs: Indigenous Immigrants Mum & bop Sole trader Innovator inventor TR 2.1 Who is an Entrepreneur A business founder Someone who has turned a normal community activity into business Anyone who creates and introduces value to customers through a product or service and expect to get a financial reward The entrepreneur is the individual (or team) that identifies the opportunity, gathers the necessary resources, creates and is ultimately responsible for the performance of the organization. TR 2.2 Types of entrepreneurs o o o o o Sole traders Inventors Innovators Agents of change Curious

HO 2.0 Entrepreneurial Traits Assessed in a Behaviour Test 1. The need to achieve: This is evident in an individuals desire to achieve some standard to excellence and success in performance 2. Risk taking: They have an inclination to take calculated, moderate and, intelligent risks. They tend to avoid both excessive high as well as low risks 3. Positive self-control: This includes self confidence as well as self-efficacy and, a positive image of ones abilities and achievements Such people not only show 4. Initiative and independence: initiative but also exhibit a great deal of independence in their day to day behaviour 5. Problem solving: They have the tendency to approach problems with a view to solve them 6. Hopeful about the future: Even in a situation where there are a lot` lot of disappointment and frustration, they dont loss hope 7. In constant search: Always scanning the environment for opportunities 8. Time conscious: They set goals for themselves and try to accomplish them within the set time framework

Reference materials

1. Women Entrepreneurship Development Manual (ICECD) 1993 2. Change and Entrepreneurship, Jenks L. H, Harvard Univ. Press 1949

Unit 1.1.3 Session Duration Session Rationale :

Forms of Business

A business organisation in contrast to a public service organisation or a charity, exist to provide goods and services at a profit. Making a profit may not necessary be the sole aim of the business, but it is certainly what distinguishes it from a non-business organisation. The business organisation we are concerned with here range from one-man business to a large public company thousands of staff in a variety of locations. The session will therefore, identify and explain the various forms of business and relate the legal requirement to their formation Entrepreneur Attributes for the Session

Learning Objectives
At the end of the session, trainees will be able to: identify and understand the various form of business describe the form of business and, relate the regal requirement to each form of business

Learning Outcomes
Various forms of business identified and described Legal requirement relating to each form of business identified and discussed

Instructional Methodology Trainers Preparation

: Lecture and discussions

Go through the handout HO 3.1 and reference material Make flipchart or transparencies as enclosed

10

Training Delivery
1. Start the session by stating the rationale of the session as outline above 2. Show TR 3.1 and discuss the four main forms of business 3. Show TR 3.2 on Legal requirements and discuss how this relates o businesses 4. Administer Exercise HO 3.2 after the exercise distribute handout H.O 3.1 TR 3.1 Forms of Business 1. Sole Trader One man business. Owner takes all risks and profits 2. Partnership Consist of at least two to 20 persons who have agreed to form business Take all the risks and profits 3. Limited company Formed by two or more people (shareholders) The business is a separate entity from owners o liability falls on the business Fall into categories Public limited companies o (plc) and Private limited companies

11

TR 3.2 Legal Requirements Sole Trader The legal requirements for setting up such business are minimum. All profits made by sole trade are subjected to income Partnership Few formalities required for starting up No obligation to publish accounts Sharing of profits or losses Limited company In registering a limited company, the following are the legal requirements: The companys name The location of the registered office The objectives/purposes of the company A statement that the liability of members is limited The amount of share capital

HO 3.0 Forms of Business There are basically four form of business The sole trader The partnership Limited company Cooperatives The sole trader This is the simplest form of business. This means going it alone with oneperson business. The owner of the business takes all the profits but suffers all its losses and has all the problems and worries to himself

12

The legal requirements for setting up such business are minimum. All profits made by sole trade are subjected to income tax rather than corporate tax levied on company profits

The main advantages of operating as a sole trader are The formalities for starting up are minimum Complete autonomy to run the business as the individual wishes The profits of the business belong to the trader No public disclosure of accounts Disadvantages The sole trade is entirely responsible for the debts of the business The individual as a manager has to be responsible for all aspects of the business (marketing, sales, product development finance etc) Partnership A partner exists when at least two, and usually not more than twenty, persons agree to carry out a business together. Such an agreement can specify the right and obligation of each partner. As with sole trader, the members of the partner are owners of the property and liable for its contracts. Therefore, they are responsible for meeting their debts to third parties Advantages of Partnership Few formalities required for starting up Sharing of partners knowledge and skills Sharing of management of business\ No obligation to publish accounts Sharing of profits or losses Disadvantages Each partner is liable for the debts of the partnership

13

Risks that the partners may not be able to work together at a personal level The death or bankruptcy of one of the partner will automatically dissolve the partnership, unless otherwise provided for in the partnership agreement

Limited companies A limited company can be formed by two or more people who become its shareholder. When a limited company is formed it is said to be incorporated i.e. endowed with separated body, or persons. The corporation so formed is treated, according to law, as a separate entity, independent of its members. Limited companies fall into categories Public limited companies (plc) and Private limited companies. A public limited company must make its shares available to the public for purchase and the company name must end with words, Public limited company. A private limited company on the hand is not compelled to of float is share to the public In registering requirements: 1. 2. 3. 4. 5. a limited company, the following are the legal

The companys name The location of the registered office The objectives/purposes of the company A statement that the liability of members is limited The amount of share capital

Advantages of a limited company In the event of failure of business, shareholders are protected against the loss of more than the nominal value of their shares The separate legal person of the company exist independently of the members Shares (in plc) are readily transferable

14

Disadvantages Precisely because liabilities are limited, it may be difficulty for a small company to borrow as extensively as desired since banks may be unable to recover their funds if business fails There are considerable legal procedures to be followed when setting up a company

Cooperatives Small groups of people who wish to set up a business along explicitly democratic lines and with the benefits of a limited liability can chose to establish a cooperative. Usually promotion of cooperative has been encouraged by the government. Some of the rules governing cooperatives are Each member must have equal control on the one person one vote principle Members must benefit primarily fro their participation in the business Interest on the loan or share capital has to the limited Advantages Provide an opportunity for pooling of capital Encourages active collaboration between all section of the workforce Provide limited liability (if registered) Provides rewards on an equitable basis Disadvantages There is less likelihood of a level of profitability and growth that could be achieved by a limited company Relationships can deteriorate Decision making process can be lengthy

15

HO 3.2 Questions for Discussion 1. What is the significance of limited liability to 2. a. shareholder? b. creditors? c. banker? 3. for what overall purpose are companies obliged to make public their constitution and activities? 4. What is the principle distinction between a private limited company and public limited company? 5. Why do some people prefer to establish a registered cooperative rather say a private limited company? Reference Materials

1. 2. 3. 4.

Management Theory and Practice by G. A Cole ( Business Law - Sixth Edition by Keenan and Riches (2002) Women Entrepreneurship Development Manual (ICECD) 1993 Barnet H G. Innovation, the Strategy for Economic Development. New Haven. Yale Unv. Press

Unit 1.1.4

DIFFERENCE BETWEEN AN EMPLOYEE AND ENTREPRENEUR

Session Duration 60 minutes Session rationale


Being an entrepreneur does not only mean having a business. Entrepreneurial attributes could still be found even in an employee. Entrepreneurial Attributes:

Learning Objectives
At the end of the session, trainees will be able to explain the differences between an employee and an entrepreneur

16

Session Delivery
1. Divide the trainees into two groups to read, discuss questions on TR 4.1 on Group 1 to discuss Advantages and disadvantages of being an entrepreneur or Group 2 to discuss Advantages and disadvantages of being an employee. Group 3 to discuss the difference between an employee and an entrepreneur 3. Distribute HO4.1 as a supplement to your the answers given from the group discussion TR 4.1 Questions for Discussion 1. Group 1: Identify and discuss the difference between an employee and an entrepreneur 2. Group 2: Identify and discuss Advantages and disadvantages of being an entrepreneur 3. Group 3: Identify and discuss Advantages and disadvantages of being an employee.

HO4.1 Difference between an Employee and Self-employment A woman running a small business establishment by working on one or two machines and looking after her business all alone is said to be self-employed. When a woman starts a small business venture and employs a few people to keep it running, but manages the show herself, she is an entrepreneur. Thus, we can say that all entrepreneurs are self-employed but all selfemployed are not entrepreneurs. The entrepreneur is one who initiates and established an economic activity or enterprise. (This could be a selfemployment unit or an enterprise with other)

17

Different Kinds of Employment

HO 4.2

There are several ways in which people can be employed Wage employment: This means working for weekly or monthly payment called wage or salary. The work is done in a shot, factory, office or other places of business. An important thing to remember about wage employment is that it is usually obtained in competition with other people who want the some job Sheltered employment: Though not that common in Zambia, in this kind of employment people also get a wage or salary, but their work is done in a special condition where they do not have to compete with others who want a job. An example of sheltered employment is the special workshop which are sometimes established for persons with disabilities Cooperatives: Sometimes workers join together to share the running of a business. Instead of paying a wage, each worker gets a share of the profits. These are common in agriculture industry Self-employment: This is a situation where an individual establishes their own business and pay themselves out of the profits

Reference Materials
1. Small Business Management II, Unit 8, Open Learning Programme for Entrepreneurs, EDI, FNST 2. Handbook of New Entrepreneurs. P. C Jain, Oxford Unv. Press, 1998

18

Unit 1.1.5 Duration Rationale 45 Minutes

Self-employment

Most countries in Africa, Zambia included face a serious shortage of employment. There are not nearly enough jobs for everyone. Most of the young people with good qualifications have great difficulties to find employment. The difficulties are usually greater in rural areas where there is far much less development What can be done to improve the situation? Certainly, the answer does not lie in the government or indeed anybody else creating jobs for the many unemployed. The answer is in individuals creating business for themselves and earning a leaving out of it Entrepreneurship Attributes: The attributes being addressed in this session include the need to be creative, innovative, independent, and a risk taker

Learning Objectives
At the end of the session, trainees should be able to Identify self-employment as a viable option Explain the benefits of being self-employed Explain the challenges of being self-employed

Learning Outcomes
Self-employment defined Benefits of self-employment as an alternative appreciated Challenges of self-employed explained and appreciated

Session Delivery
1. Using a flip chart discuss the generic explanation of self-employment. This should be followed by a discussion on self-employment as viable option for trainees as shown in HO 5.1 Show TR 5.1 and discuss the pros and corns of being self-employed Have the trainees tackle an individual exercise on HO 5.2 19

2. 3.

4.

Distribute HO 5.1 onSelf-employment as a supplement material

Instructional Methodology: Lecture Handout


HO 5.1 Self-employed Self-employed are those workers who earn a living by running their own business. Examples include plumbers, gardeners and freelance photographer etc. Many people start their business adventure dreaming of riches and freedom. And while both are certainly possible, the first thing to understand is that there are trade offs in being self employed. Difficulty bosses, annoying co-workers, peculiar policies, demand upon your time and limits on how much money you can make are traded for independence, creativity, opportunities, and power. But by the same token, you also swap a regular paycheque and benefits for no paycheque and no benefits. A life of security, comfort, and regularity is traded for one of uncertainty There are definitely pros and cons to be self-employed. These include: 1. Control- Even if you like your boss and your job, possibilities remain that you can be laid off any time; the company can go bankrupt. But if you are self-employed, you are in control of you work and career 2. Money- Many people chose to be self-employed because they think they are worth more money than they are making on a job or they want to provide a better life for their families. There is a limit to what amount of money one can make when employed. There are far fewer limits when you are an entrepreneur 3. Creativity and independence- Self employment provides for grate creativity and independence. Running your own business may require you to be marketing wizard, salesman, bookkeeper, secretary and manager all rolled into one 4. Freedom- Working at your own business gives you the flexibility to decide when and where you will work. You decide your hours and place of business

20

But there are downsides to being self-employed 1. Uncertainty- The life of an entrepreneur is not necessary an easy one. It is fun. It is challenging, exciting, spontaneous. The hardest part of being in business for your self is that there is no steady source of income; paycheque does not come every 30 days 2. Risk- Not all entrepreneur ventures are successful. The willingness to take a smart, calculated risk is the hallmark of smart entrepreneurs 3. Lack of structure-Many people like the structure for working for someones. They know what is expected of them and what they need to accomplish each day. This is not true when you work for yourself. The work is very unpredictable There is need to consider both risks and rewards of entrepreneurship before deciding to jump in. It is easy to become infatuated with the idea of owning a business. But if one was to do it right, and be successful, then there is need to take emotions out of the equation. One has to begin thinking like a businessman, consider risks, and make informed, intelligent, calculated decisions TR 5.1 Pro and Cons of Self Employment

Pros
Full control of oneself No limit to the amount of money to make Creativity and independence More flexibility Uncertainty Risks of not being successful Lack of structure

Cons

21

HO 5.2 Self-assessment Instrument Assessing Yourself 1. Are you a self-starter? a) Yes, I like to do things on my own b) If someone helps me get started, I will definitely follow through. c) Most of the time, I would rather follow than lead. 2. How do you fee about taking risks? a) I really like the feeling of being a bit on the edge. b) Calculated risks are acceptable at times. c) I like the tried and true. 3. Are you a leader? a) I usually get people to go along when I initiate something. b) I can give the orders if I have to. c) I let someone else get tings moving, then I take part if I feel like it. 4. Do you like to assume responsibility? a) Yes, I enjoy taking charge of things and seeing them through. b) I will take over if I have to, but would rather let someone else be responsible. c) Theres always some eager beaver around wanting to show how smart he is. I say let him. 5. How organized are you? a) I like to have a plan before I start. b) Being well organize isnt my strongest suit, but I can do it when necessary. c) I just like to take things as they come. 6. How hard are you willing to work? a) I can stay motivated as long as necessary. b) I will work hard for a while, but when Ive had enough, thats it. c) I think many other things are more important than work.

22

7.

8.

9.

Are you decisive? a) I can make up my mind in a hurry if I have to. b) If I have to make up my mind quickly, I do, but I dont like it. c) I dont like to be the one to decide things. Can you live with uncertainty? a) Yes. b) I can if I have to, but I dont like it. c) No. I like knowing what to expect. Can you stick with it? a) If I make up my mind to do something, I dont let anything get in the way. b) Usually. c) If things dont go right, I may just quit. How good is your health? a) I never run down! b) I have enough energy for most of the things I want to do. c) I run out of energy sooner than most of my friends. Are you competitive? a) You bet. b) When I need to be, I can be c) Not really, my nature is more laid-back. Do you have a lot of willpower and self-discipline? a) Yes. b) I am disciplined when I need to be c) Not really. Do you plan ahead? a) In my book, failure to plan is planning to fail. b) Planning is important, but so is spontaneity. c) I take one day at a time and let life take me where it will. Are you creative? a) Yes I am. I am always thinking up new ideas. b) I have an occasional brainstorm. c) No, not really.

10.

11.

12.

13.

14.

23

15.

Can you live without structure? a) Yes b) Actually, the idea of living without a regular job or pay check makes me nervous. c) No, I like routine and structure in my life.

If you answered a on more than half of the questions, you have the personality needed to run your own business. If most of your answers were b youre likely to encounter more trouble than you may want. If you have several c answers, then you are not quite ready to start your own business. But that does not mean that you cant get ready. While certain aspects of entrepreneurship are innate (the willingness to take a risk, for example), many are learned (such as knowing how to conduct market research). If the results of this quiz tell you to slow down, that is good. You can always take business classes, read more books, or listen to business tapes in order to learn more. Another option would be to get a partner who has the skills you lack. There are many ways to start your own business, and if you are not ready now, it does not mean you will never be ready.

Reference Material
1. 2. Small Business Management II, (EDI- India) 1999 Fredrick Harbison, Education, Manpower & Economics (New York, MacGrow-Hill)

24

UNIT A1.2:

ECONOMIC TRENDS IN ZAMBIA

Unit 1.2.1 Historical Background to the Zambian Economy Session Duration Session Rationale
To establish the various economic and social factors that have been at play in the shaping of entrepreneurship in Zambia since independence

60 Minutes

Session Objective
At the end of the session, trainees will be able to: Appreciate the historical background to the Zambian economy and its impact on the entrepreneurship growth Will be able to explain the various social-political trends in Zambia and how these relate to entrepreneurship growth in the country

Session Outcome Instructional Methodology: Lecture and focused discussions Session delivery
Distribute HO 6.1 and discuss the Historical background to the Zambia Economy 2. Distribute HO 6.2 and discuss the Social Political Trend in Zambia 3. Give a summary of the session 1.

25

Tips
Please acquaint yourself with the five year national development plans

HO 6.1 Historical background to the Zambia Economy Zambianisation: A strategy adopted by the government soon after independence in 1964 Objective of this strategy was to empower Zambian by offering them senior poison that were held by the European colonial masters Nationalisation: This was a state programme that sow the take over of key companies by the government Substitution Industrialisation Strategy: A deliberate policy to start manufacturing locally good that were being imported into the country. Examples; Livingstone Motor Assembly, Rover Zambia in Ndola Mono-culture Economy: Zambia is highly dependant on only one economic resource, copper. This is at the expense of other sectors like agriculture, manufacturing, tourism. This state of affairs did not promote the growth of other sectors later on encourage entrepreneurial activities Urbanisation: Zambia is one of the most urbanised countries in SubSahara Africa. About 60% of the Zambian population leaves in urban areas particular along the line of rail. One Party State: A political situation in which there is only one political party in the country. This was a situation in Zambia from 1973 to 1991, United National Independency Part was the only party in the country

26

Multi- Partism: A political situation where there are more than one party in the country. This was the case from 1964 to 1973 and 1991 to date Population growth rate: The average population growth rate for Zambia has been 3.6%. This is considered to be too high for a country like Zambia

27

HO6.2 Social-political Trends 1960s The first ten years of independence was marked by an outpouring optimism There were huge investments in infrastructure and human resource Huge sums of money were put into ministries, schools, hospitals, factories and roads. At this time, most of the economic activities were still concentrated in a few white settlers New measures were put in place to create jobs and self employment particularly for the indigenous Zambians. For example, the cooperative movement, establishment of at least a factory in major districts (Kapiri Grass, Kawambwa Tea, Kafue Nitrogen Chemicals etc) 1970s The country started experiencing economic slowdown, global market price for copper started becoming weaker. Prices of imports were getting higher and higher thus making operation of most of the enterprises in the country difficulty as these are highly dependant on foreign inputs Financial support from overseas was nowhere near enough to resolve the rapidly growing balance of payment position 1980s The country adopted the IMF supported economic reforms programme. However, these reforms put the country into even more stress. The strength of the local currency weakened significantly, inflation sky-rocketed, generally making the development of enterprise in the country unattainable Due to the lopsided development between the rural and urban areas, the county started experiencing huge drift of rural dweller into towns particularly along the line of rail. This trend has social consequences like high crime rates in urban areas. Not everyone was able to be absorbed in formal employment. Social amenities were not enough to go round 1990 The era saw the end of the one-party-system and the reintroduction of the multipartism. This was followed by almost full liberalisation of

28

the economy. These changes were accompanied by the change of government as well. 2000 The country started experiencing positive growth. The mining sector which was at the verge of collapse has picked up with the introduction of new ones. The era was also market with election and the new government that was formed pledged to stump out corruption. The country is still certainly facing a number of challenges like HIV/AIDS which has to take a toll on the productive sector of the society. Employment levels are still low and poverty levels are high

Reference Materials
1. 2. 3. Zambia National Development Plans I, II, III, IV Informal Sector Business Activities in Lusaka Urban Districts, Tolosi S & Nawiko M 1997 Emergence, Growth and Characteristics of the Informal Sector in Zambia, 1991

29

Unit 1.2.2 Natural Resources as They Relate to Entrepreneurship Session Duration Session Rationale
Every location in this country is endowed with national resources. However, only a few are able to harness these resources for their livelihood. This session aims at exciting the trainees to be critical to the resources around them. Entrepreneurial Attributes: Resourcefulness, creativity, innovativeness,

60 Minutes

Learning Objectives
At the end of the session, trainees will be able to List the various resources found in Zambia Identify the potential usage of these resources for entrepreneurial growth

Instructional Methodology: Lecture and focused discussions


Activities 1.

2.

Divide the trainees into small groups and let them read, discuss, and answer questions on TRI 7.1 Identification of Resources and their usefulness to entrepreneurial activities Guide the discussion by pointing out the importance of each resource identified

Tip: In the discussion emphasise on the importance of human resources and


finance as some of the critical resources for any enterprise

30

TR7.1 Individual Exercise: Resource Identification 1. 2. 3. Identify a business that you would like to venture into What are the resources required for the business you have identified? What is the importance of each resources identified?

31

8.0

Informal Sector Growth

Session Duration Session Rationale:


The session gives an appreciation of the informal sector in Zambia

Learning Objectives
At the end of the session, trainees will be able to: Explain the term, informal sector Identify factors encouraging the development of informal sector Understand the role the informal sector plays in Zambia

Instructional Methodology: Lecture and focused discussions


Activities 1. Show TR and define the term informal sector 2. Divide the trainees into small groups and let them read an exercise on HO and identify and discuss factors encouraging informal sector growth 3. Supplement the trainees discussion with a discussion of HO

Reading Material
The Informal Sector These are very small units producing and distributing goods and services and, largely of independent and self employed. They operate on very little capital, or non at all and utilise very low technology and skills. They operate on very low levels of productivity, and which generally provide very low and irregular income and, highly unstable employment for those employed by such enterprises. They are formal because for most part they are not registered with the government. They mostly not recognised and supported by government. They are, most of the time compelled by circumstance to operate outside the

32

framework of the laws. They tend to have very little or no access to organised markets and to credit systems The importance of the informal sector in Zambia can not be over emphasised. The sector employees between 40% to 60 percent of the urban labour force In Zambia, the informal sector can be traced from colonial days of mining. In Lusaka for instance, the urban district informal sector business activities started in 1930. During this time, informal sector developed because of the need to provide certain goods and services to European settlers and African settlers. Products such as firewood, charcoal, reed-baskets could not be provided in modern markets

Factors encouraging the Informal Sector


Mostly it is due to the inability by other sectors of the economy agriculture or other rural activities on the other hand, and modern industry and services on the other to provide adequate incomes or employment opportunities to a rapidly growing labour force. The steady stream of migration from the rural areas urban areas coupled with increasing population growth meant that urban modern activities have been au able to absorb more of the burgeoning urban labour force. Those excluded from the employment in the modern sector constitute a large labour surplus. Since the people concern can not afford to be employed for any length period of time, they have to creative for themselves activities which can provide them with income Other recent developments like the 1980s recession, the IMF/ World Bank adjustment programmes have further resulted in the growth of the informal sector. The restructuring of the civil service and the closing of most parastatal organisations saw a huge number of people without employment. These ended up in forms of all sorts of business activities which the majority fall in the informal sector

33

The following are the examples of the informal sector in Zambia Brick making Door, window frame and burglar bar manufacturing Soap manufacturing Tailoring Food processing Construction of private homes Stone crushing and selling Street vending Shoe repairs Motor vehicle repairs Welding Hair dressing

Reference:
1. 2. 3. 4. 5. How to Motivate Entrepreneurship in Zambia, Nanjappa K. L Min. of Commerce Small Enterprise Development Programme, Lusaka 1993 The Dilemma of the Informal Sector (ILO) 1991 Informal Sector Business Activities in Lusaka Urban Districts, Tolosi S & Nawiko M 1997 Emergence, Growth and Characteristics of the Informal Sector in Zambia, 1991

34

9.0 The Role of Enterprises in Economic Growth Session Rationale


The role of small sector has been recognised as the most powerful and vibrant sector of the Zambian economy. It has the potential to provide more employment per unit of investment and therefore, the government attaches great importance to the development of the small and the ancillary sector. The ancillary units provide the support services required to the growth of medium and large scale sector in the country. The small sector has shot in to prominence over the years through its multifaceted contribution Entrepreneurial Attributes

Session Objectives
At the end of the session, trainees will be able to: Define the terms, micro, small medium and large enterprises Define the terms economic growth and development Explain the role of enterprise in the Zambian economy

Learning Activities
Ensure that the learning activities include the following: A generic definition of micro, small, medium and large enterprises, economic growth and development Explanation of the role of enterprise in Zambian economic

Instructional Methodology: Lecture and focused discussions Session Delivery


Show TR and define the terms; micro, small, medium and large enterprises, economic growth and development 2. Sow TR and explain the role of enterprise in economic development of the country 3. Distribute HO as supplementary material Reference Material The Role of Enterprises in Economic Growth 1.

35

In Zambia, there is a challenge before the class of entrepreneurs to accelerate the tempo of industrial activities in such centre in which the traditional capital has remained shy to enter, and where without foreign collaboration and technical knowhow imported from foreign lands. The Zambian industry has no venture to progress. This is a highly unsatisfactory state of affairs and it calls for Zambian entrepreneurs accepting the challenge to take calculated risks and adventures in moving bravely into such sophisticated centres without in any way relying on foreign collaborations. Imbalances The second vital challenge for the entrepreneurs is the dangerous imbalances in the regional economy. By and large, Zambian Industries are concentrated only at Kabwe, urban district, Kafue Township, Livingstone district, Lusaka urban district, and Copperbelt province of Ndola Rural district, exception of Ndola Rural District. Nearly 60% of total population of the country are living in rural areas, and yet there are fewer industries to support them. People on the Copperbelt and Lusaka areas for instance, are earning five times more than their relatives. Thus it may be seen that vast areas of the country are starving of industries and the benefits of industrial economy. Thus entrepreneurship Zambia shall be identified with the inclination of new entrepreneurs to penetrate all the rural parts of Zambia, so that within a very short time the regional imbalances are corrected all over the country through the efforts of entrepreneurs. As already pointed out entrepreneurship involves risk and adventure through calculated and the resurgent youth of the country are most suitable. In fact the creation of Small Industry Development Organisation (SIDO) then was done with a view to take the responsibility of ways and means to create such an atmosphere where the entrepreneurs would find the appropriate assistance for the fulfilment of their image. In the context of the traditionally shy investment capital in Zambia, not only a positive entrepreneurship has to be developed but also the capital to sustain the adventure of entrepreneurship. The time has come to identify entrepreneurship as separate from industrial opportunism, and the measures mentioned above are directed towards such identification.

Reference:
6. 7. 8. How to Motivate Entrepreneurship in Zambia, Nanjappa K. L Min. of Commerce Small Enterprise Development Programme, Lusaka 1993 The Dilemma of the Informal Sector (ILO) 1991

36

10

Policy Instruments Supporting Enterprise Development 60 Minutes

Session Duration: Session Rationale Session Objectives

At the end of the session, trainees will be able to: Outline policy instruments supporting enterprise development Relate policy instruments to enterprise development

Learning activities
Ensure that the learning activities include the following An outline of the policy instruments supporting the development of enterprise in Zambia Relation of policy instruments to enterprise development

Instructional Methodology: Lecture and focused discussions Session Delivery


1. Using material provided in HO 10.1, prepare transparencies or flipchart and discuss the Government of Zambia policy on enterprise development 2. In small groups, as the trainees to discuss how these policies could lead to the promotion of enterprise development in the country. Suggestion on additional policy guidelines should be encouraged

Reading Materials
Small Enterprise Development Act 1996 As the means towards the Government of Zambias support of small scale enterprise, the Small Enterprise Development Act was enacted in 1996 This act led to the creation of the Small Enterprise Development Board The function of this Board included:

37

To promote and facilitate the development of micro and small enterprise To create a conducive environment for attaining of the purpose

Specifically that Board was to: Formulate, coordinate and implement policies and programmes to promote the development of micro and small enterprises Monitor the efficiency and performance of micro and small enterprises having regard for the purpose for which they are established Establish a data base for facilities and sources of finance, technology, raw materials, machinery, equipment and supplies Provide marketing support services to the micro and small enterprises Register, collect, research and disseminate information relating to micro and small enterprises Monitor and coordinate activities and programmes of promotional agencies engaged in micro and small scale enterprise development Assist in the development and upgrading of appropriate technologies for micro and small enterprises Initiate and develop industrial estates and common facilities for use by micro and small enterprises Establish training and processing centres to provide machinery and equipment Develop the Zambian entrepreneurship Arrange for independent training, management and consultancy services for macro and small enterprises Provide financial services Make recommendations to the Ministry on any legislative reforms which may be required for the development of the micro and small enterprises

Reference Material
1. Small Enterprise Development Act No. 26 of 1996 2. Technical Education, Vocational and Entrepreneurship Training Policy (GRZ) 1996

38

Statutory Obligation Relating to Enterprise Development Session Duration Session Objective


At the end of the session, trainees will be able to: Apply statutory obligations to enterprise development

60 Minutes

Leaning Activities
Ensure that the learning activities include the following Application of statutory obligation to enterprise development. This should include PAYE o NAPSA o Labour laws o Licensing and permits

Instructional Methodology: Focused discussions and Field visits Session Delivery


1. Divide the trainees into three small groups. Let each group identify an enterprise of their choice with the locality which they will visit and come and report on the following: a) Group one: What are the enterprises obligation as regards Payas you earn (PAYE) and National Pensions and Savings Authority (NAPSA) b) Group Two: What are the labour laws related to an enterprise and, how are these being applied in an enterprise? c) Group Three: What are the licenses and permit requirements in operating a particular enterprise? Give each group approximately two hours in which to collect this information Assemble all members for presentation In case some trainees have not acquired the exact information, trainer may guide them through a short lecture

2.

39

Activity 1.

2. 3.

What are the enterprises obligations as regards Pay-as you earn (PAYE) and National Pensions and Savings Authority (NAPSA) What are the labour laws related to an enterprise and, how are these being applied in an enterprise? What are the licenses and permit requirements in operating a particular enterprise?

40

12

Support Systems

Session Duration Session Objectives

60 minutes

At the end of the session, trainees will be able to Identify support services to enterprise development Discuss the role of support systems to enterprise development in Zambia Learning Activities Ensure that the learning activities include the following A generic discussion of the support systems to enterprise development A generic discussion on the roles of support systems to enterprise development

Instructional Methodology: Lecture and focused discussions Session Delivery


1. Show TR12.1 and discuss the financial and other incentives for enterprise development 2. Show TR12.2 and discuss exemption enterprises registered under Small Enterprise Development Act enjoy as a means toward their development

41

TR12.1 Financial Services and Incentives The government of Zambia through the Small Enterprise Development Board, does, in order to facilitate the development of enterprise, provide the following financial services and incentives: Identifies entrepreneurs, and projects which require financial assistance Provides information on the sources of finance Assists enterprises with the preparation of business plans, project proposals and other loan application documents Monitor, establish and design standards for loan administration, effective use of loan funds and repayment mechanism by enterprise so as to curb misuse of financial resources o venture capital

TR12.2 Exemptions An enterprise registered Under Zambia Development Agency is entitled to the following incentives Exemption from paying of tax on income for The first three years of operation for an enterprise operating in an urban area The first five years of operation for an enterprise in rural area Operating of a manufacturing enterprise for the first five years without manufacturing licence Exemption form payment of licensing fees Exemption from payment of rents on factory premises for the first five years Trade licensing act shall does not apply to such enterprise

Reference Material

1. Small Enterprise Development Act No. 26 of 1996

42

MODULE NO. 138-02-A MODULE TITLE: Developing Entrepreneurial Competences

MODULE: INTRODUCTION MODULE AIM


The aim of the module is to build entrepreneurial competences, attitudinal change that will lead to self motivation and generation of business ideas.

LEARNING OBJECTIVES
At the end of the module, Trainees will be able to: 1. Demonstrate self motivation; 2. Develop business ideas, 3. Identify and select business opportunities; 4. Mobilise resources, 5. Network for enterprise development; 6. Implement business decisions,

43

UNIT A2.1

Developing Self Motivation

2.1.1 Entrepreneurial Traits and Characteristics Session Duration: Two Hours Session Rationale
The reasoning behind this session on entrepreneurial traits is that it enables your learners to explain what drives the individuals that have succeeded in enterprise development. It also enables the learners assess their ability to venture into the entrepreneurial career. In the end, it will isolate their personality strengths and weaknesses to start an enterprise. The session affords them an opportunity to identify weak points that they can do something about. Entrepreneurial Attributes Entrepreneurs are not the same since they come from different background with varying interests in business types. However, the similarities about entrepreneurs are the common personality traits they share and apply to succeed in developing a successful enterprise.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Describe entrepreneurial traits and characteristics; 2. List the entrepreneurial traits and characteristics; 3. Explain the relationship between entrepreneurial characteristics and the success of the enterprise;

traits

and

44

Learning Outcomes
The learning outcomes are: 1. Entrepreneurial traits and characteristics correctly describe; 2. The entrepreneurial traits and characteristics listed 3. The relationship between entrepreneurial traits and characteristics and the success of the enterprise explained;

Learner Activities/Environment
In this session, Learners will brain storm on the meaning of entrepreneurs traits. The learners will then identify traits and attributes that make individuals succeed in business. A list of traits and attributes will be developed. The learners will identify situations that will require the application of the entrepreneurial traits to ensure success of an enterprise.

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Refer the learners to the session on entrepreneurship; Ask Learners to define the word entrepreneurship. Record the main parts of the definitions on the board Draw the attention of the Learners to the fact that an entrepreneur is a person like you and any one of them; Explain that to understand entrepreneur one needs to understand his/her personality

45

2. Main Activities Ask the learners to define the words traits. Write down the responses on the body or flip chart paper; Make a brief presentation an entrepreneur and the traits. Key points to include in your presentation are: i. There four parts to the meaning namely, person or

persons and their personality, persistent pursuing of an opportunity, the establishment of business or organisation and the achieving of benefit and growth.
ii. Traits are a mixture of an individual set of qualities, including behaviour, nature, needs, drive and main beliefs; iii. You are born with and other you get traits through informal and formal training. iv. Influencing factors of entrepreneurial traits and characteristics; v. These traits have been observed through observation and studies among successful business persons in a number of countries; vi. Give example of entrepreneurial traits and how an entrepreneur is able to draw on their traits to solve business problems. Divide the class into four groups; if the class is small divide them in such way that there are at least three people in one group but not more than five; Write down the following instructions on the board : i. List the common traits and characteristics common among successful entrepreneurs; ii. Explain how the entrepreneurs apply the trait or characteristic listed to solve problems experienced in business? iii. Complete the table below on a flip chart paper; iv. Present the results to plenary; v. Allocate time for the assignment (Time may vary from one class to another the exercise should not take more than 45 minutes)

46

Entrepreneurial Traits Application Table No. Entrepreneurial Traits Business Challenge Application the Traits of

During the presentation, ask for the feedback from the other learners; Clarify issues that may arise from the presentation and feedback from other learners; Finally, give your overall feedback; 3. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key Points to note are: i. Definition of entrepreneurial traits; ii. List of entrepreneurial traits and their meaning; iii. Success in Business and Entrepreneurial Traits

Trainer Preparation:
Review the materials on Entrepreneurial traits; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Draw the Entrepreneurial Traits Application table;

47

Prepare an example on the application of known entrepreneur in your area and their known personality that helps the individual solve difficult problems.

Trainer Tips:
Note that no one individual can have all the traits listed. However, the traits can be developed. Alternatively, one can go into business with other individual who possess the missing traits. This explain why individual team up to draw on their personality strengths to from a formidable team of investors.

Reference Materials:
1. Mathew Sartwell, Napoleon Hills Keys to Success; Piatkus, London, 1995 2. Thomas W. Zimmerer and Norman M. Scarborough, Essentials of Entrepreneurship, Pearson International,

Assessment Criteria and methodology:


Criteria
Entrepreneurial traits and characteristics correctly listed and explained; Traits and characteristics as they relate to enterprise success correctly explained;

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of Entrepreneurs Traits and characteristics to Learners career;

48

iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


What are entrepreneurial Traits? In the first module you were introduced to the meaning of an entrepreneur. You must understand that there are many meanings of the term entrepreneur. In all explanations you will come across or create yourself, you may notice that there four parts to the meaning namely, person or persons and their personality, persistent pursuing of an opportunity, the establishment of business or organisation and the achieving of benefit and growth. Traits are a mixture of an individual set of qualities, including behaviour, nature, needs, drive and main beliefs. These traits you are born with and other you get them through informal and formal training. The traits are influenced by: Characteristics they born with; Culture of the community (society); Family, work and; Education; Political and policy environment These sources of influence either encourage or discourage the growth of entrepreneurship. The Entrepreneurial Traits and Characteristics List Entrepreneurs are successful for a number of reasons. In this session we shall discuss the entrepreneurial traits and characteristics. You may ask what are traits and characteristics. These traits have been observed through observation and studies among successful business persons in a number of countries. Let us look at some of the traits and characteristics. Do you have the following traits?

49

i.

You set clear goals You road to success must begin with asking yourself where you are going. The existence of a clear and specific purpose, aim or goal is the starting point for your road to achievement.

ii. You are committed - You have belief in what you are capable of achieving; you are committed to your team and the people you work with in the business. iii. You act on opportunities identify and act on new or unusual business opportunities by looking for resources to create something valuable. iv. You have initiative you are self-reliant, and have willingness to initiate action without needing or taking direction from others and have ability to solve problems. v. You are persistent you do not tire to hunt for success despite difficulties on the road to success. If one door closes on you another is identified and opened. vi. You have strong passion - a driving passion to carry out your idea, be it in the form of a new technology, a different approach, a more thorough application of known technologies or a combination of all three. vii. You have strong self-confidence. You are willing to be lonely and make tough decisions and believing you are right despite the majority thinking you are wrong. viii. You are disciplined you have self control to plan and carry out the plan. You know where you are going and how you will get there because you have refined your goal into action and you have put in measures to check progress.

50

ix. You are a moderate risk taker - You are not a gambler who throws around money without having control over the results of your action. Many people think entrepreneurs are generally thought of as tremendous risk takers. You as an entrepreneur are advised to focus on reducing risk deliberately by planning and managing the business well. x. You are knowledgeable about business - You look for information within the business or its surroundings to help you achieve your purpose or avoid problems The list of these traits is not exhausted. You may think of other characteristics or remember certain behavior among the business persons you have come across. Success in Business and Entrepreneurial Traits Like many nice things in life, owning and managing a business successfully is tough. Business is not for the weak in body and mind. In business there are many dangers. You many lose your effort, time and money you have put in the business. Or the business many be a problem to other people who are not in any way connected to it. The entrepreneur to successfully own a business goes through the following activities: Identifies and develops a business opportunity ( to be discussed in the next sessions); Develops a business strategy (way of doing business); Mobilise resources to start the business; Start the business; Expand the business; There are many opportunities out there unless one has a trait of identifying and developing them, they remain unexploited. To develop a business strategy requires developing a clear goal, information, passion and

51

commitment. There are enough negative influences from your friends, family and community to discourage you put the idea on hold nay put the easy way out and seek employment. For a business activities to start you need resources but resources are few and those who have resources are not easy to help. This is one of the strongest tests to starting a business. I am sure you have met many people say that they are unable to go into business because of lack of resources. You need to rely on some of the traits above, namely, seeking information on resource providers, persistent in asking fro support even when you have been turned down several times and showing confidence in what you plan to do to win over others. A new business has as many needs for care as a newly born baby. In a new business almost everything is new, the owners, customers, employees and suppliers are new. In addition the business belongings are new. In this new environment mistakes are bound to be made. The entrepreneur needs to have the character to be focused and apply some of his/her traits such as being disciplined to handle temptations, having the goal in mind despite current difficulties, having personal initiative to solve problems. Some of the problems experienced by start up are as follows: Lack of experience; Low capital, poor cost control; Poor location; Too much stock; Excessive buying of fixed assets; Poor customer care; Poor planning; Poor execution of plans; Negative attitudes to work among employees A business that is expanding will need new management to take care of increased responsibilities. If the entrepreneur was owner-manager it is time to take initiative and take the opportunity of employing experienced and skilled human resource in the business.

52

Summary In this session, we described traits of an entrepreneur. We looked at the behaviour of a person that influences entrepreneurial activities. Ten entrepreneurial traits have been listed and explained. Lastly the entrepreneurial traits have been linked to the success of a business through the main activities of an entrepreneur starting from opportunity identification to expanding the business. Each of the entrepreneur traits, goal setting, commitment, opportunity seeking, personal initiative, persistent, passion, self discipline and information seeking can be applied at each stage of the entrepreneurial stage. Exercise Answer the following questions: 1. Name one successful entrepreneur you know very well. Discuss the entrepreneurial traits that have been observed displayed by the entrepreneur you have mentioned. 2. Explain how training can help develop entrepreneurial traits?

53

2.1.2: DISCOVERING YOURSELF

Session Duration: 4 Hours Session Rationale


It is important for the learners to discover their personality in order to see whether entrepreneurship is for them. The personality may assist learners chose a business that will be enjoyable rather than a punishment. What they enjoy doing has a relationship with type of personality they have. Entrepreneurial Attributes An entrepreneur needs certain personal talents, skills and experiences to establish and manage an enterprise. An entrepreneur is an individual who through socialization and formal education and training has acquired knowledge and skills that should be applied in the business. Discovery oneself also helps in understanding your strong and weak points. It assists in realizing that one needs the support of others to succeed in business.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Describe personal attributes and talents; 2. Identify personal attributes and talents; 3. Relate talents and attributes to entrepreneurial success.

Learning Outcomes
The learning outcomes are: 1. Personal attributes and talents correctly described; 2. Personal attributes and talents identified; 3. Personal talents and attributes related to entrepreneurial success.

54

Learner Activities/Environment
In this session Learners will describe the terms personal attributes. Learners will identify a business person interview him/her and identify the talents and attributes he/she may have.

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Refer the learners to the session on entrepreneurship traits; Ask Learners in groups of two to describe the terms personal attributes. Ask them to write them on paper and one every group is through collect all the description; Stick the papers on the wall; Review the definitions and identify common words, Write down a definition on the board; 2. Main Activities Explain the importance of understanding and taking note of personal attributes and talents in entrepreneurship; Key points to include in your presentation are: i. Motivation to go into business; ii. Career choice; iii. Type of business to start; iv. Size of business. Explain the attributes and talents as outlined in the Learners Manual; Form groups of four and assign them to the following: i. Identify the local business person: ii. Visit the Business person, interview him and identify the talents and attributes he/she may have: iii. The following guide may assist the Learners ask the questions:

55

Interview Check List Ask these questions. The answers to these Questions may Yes OR No . Ask for explanations to the answers. a. Why do like this type of business? b. How do you spend your free time? c. What is your attitude towards parties and people events d. What is the role of friends in business? e. Who do you find difficulties to influence in your business and why? f. What are the challenges you experience in planning and organizing? g. What is the most difficult thing to control, in business? h. What are your human resources opportunities and challenges? i. What is your view about partnerships? j. What are the advantages of owning a business alone? k. What do you find exciting marketing and selling to customers? l. Who prepares financial statements in your business and why? m. Who manages the production section of your business? What are the reasons for the answer? n. Do you always find that there is not enough time in any day? Why? Ask the Trainees to present; Ask for feed back from the class; Present the highlights of all the presentations

56

3. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key Points to note are: i. Explanation of personal attributes; ii. List of entrepreneurial attributes and talents; iii. Highlights of the short field investigation.

Trainer Preparation:
Review the materials on Self Discover; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Prepare Interview Check List; Identify business persons that may be interviewed; Organise interview logistics

Trainer Tips:
To cut on costs you may have to invite the business persons to school to be interviewed in class by the Learners. You need to emphasize that one does not need to have all the attributes to succeed in business.

Reference Materials
1. Beardwell Ian, Huaman Resources Management, Prentice Hall Essex, 1994; 2. Mathew Sartwell, Napoleon Hills Keys to Success; Piatkus, London, 1995

Assessment Criteria and methodology


Criteria
Personal attributes and talents correctly described; Personal attributes and talents identified; Personal talents and attributes related to entrepreneurial success.

57

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of Entrepreneurs discovery of oneself to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


What Are Personal Attributes and Talents? You have personal attributes and talents that can make you succeed in business. Personal attributes and talents are the right skills and abilities for the job. A successful career in business is an outlet for your personality, interests, skills and values. So what are your personality, interests, skills and values? The sum total of these qualities is called your personality. Understanding your personality can tell you such things as how much encouragement you need from other people to do anything. Or are you a person who is relaxed working on your own? Are you an organised person or otherwise. Do you approach everything caution or you one who goes through with anything without concern? It is important fro you discover if your personality in order to see whether entrepreneurship is fro you. Please you must realise though that your personality may assist you chose a business that will be enjoyable rather than a punishment. What you enjoy doing has a relationship with type of personality you have.

58

Identifying Personal Attributes and Talents It is useful to identify your personal attributes so that you will be able to decide on what type of business is suitable you. These attributes will also be useful in identifying business opportunities, establishing the business, managing the business and initiating its growth. Ask yourself the following questions: Do you like to work with machines and tools? Do you like to observe, learn, examine, analyze, and solve problems? Do you like to use your imagination or creativity to solve problems? Do you like to work with people; to inform, enlighten, help, train, develop or cure them; Do you like to work with people to influence, persuade, lead, or manage for organizational goals or economic gain? Do you like to work with data? Do you have functional skills? (Skills not necessarily associated with a specific job and are used to accomplish general tasks or functions of a job e.g. problem solving); Do you have content skills called work-content skills, specific and specialized to one job, such as preparing a financial statement, or fixing a car? Do you have adaptive skills and ability to learn quickly, teamwork, being self motivated, self-awareness, empathy, persistence, optimism, and social deftness; Applying talents and attributes to entrepreneurial success There are a number of skills you'll need to succeed as an entrepreneur. You should not worry if you do not possess them all. As an entrepreneur you can always employ people with those skills to add to your abilities. Below are skills you may need now or later to help you in business: Interpersonal Skills As an entrepreneur you should have good people skills. Your ability to freely mix with many people is a valuable asset that is worthy more than the money you may have in a bank. When people like you, its is very likely they will like your business too.

59

Networking Skills Networking can be a useful business approach to establish build partnerships and discover new business contacts. A successful entrepreneur is a net worker. You must be visible and easy to remember in gatherings. Leadership Skills Leadership is the ability to influence. Once you are an entrepreneur it means you have taken up a leadership role. You may be owner-manager worker (OMW), the skills of leadership is very important. Management Skills Management skills mean planning, organising, leading and controlling activities that cover operation, employees, customer, suppliers, and government agencies. Employee Relation Skills Employees are the most important resource your business has. It is essential that you manage this resource very carefully. It is a resource that can come in today and walk out tomorrow. A good relationship with Human resource will make your life much easier Team Building Skills You must build a team of essential professionals who you share the same vision. You do possess all the needed skills and experience assembling a team of employees, partners, accountants, your lawyers, and bakers will take your business to a higher level. Marketing and Sales Skills Marketing and selling skills are essential to bringing in revenue. Unless the customer is aware of and interested in what you are selling they will never buy. If marketing and selling are difficult employ a sales person. Financial Management skills Understanding cash flow will save you business going under faster than you can register it. The danger areas are poor working capital, cash withdraws by the owner, credit mismanagement, and misunderstanding of cash surplus and profit.

60

Time Management Skills Time cannot be stored for future use. It cannot be bought from a shop. It is not elastic. You can only use or misuse time available. Time is one of the resources whose value is underestimated until it is too late. There a number of ways that will increase the wastage of time namely: meetings, poor planning, repeated interruptions, failure to list priorities, failure to delegate, being disorganised, indiscipline and failure to say no. Do not worry if you not have these skills. Many people even those who have been running business for many years do not have all these skills. As an entrepreneur, however, you must learn some of these skills to help you run the business effectively. SUMMARY Every one has personal attributes and talents that can make one succeed in business. You need to have personal attributes and talents that are right skills and abilities for the particular career. There are a number of skills one needs to succeed as an entrepreneur. The skills are interpersonal, marketing, management, and technical skills. You should not worry if do not possess them all. As an entrepreneur is you can employ people with those skills to add to your abilities. Summary In this unit we discussed that a successful career in business is an outlet for your personality, interests, skills and values. We emphasise that it is valuable to recognize your personal attributes so that you will be able to decide on what type of business is suitable you. In addition an entrepreneur can employ people with those skills to add to ones abilities. There are interpersonal, marketing, management skills, technical and communication skills you need now or later to help you in business

61

Exercise

Answer the following questions: 1. Explain the purpose of identifying your personal attributes and talents; 2. List the personal talents and skills you possess? 3. What personal attributes and talents do you possess that you can rely on in your career as an entrepreneur? 4. What talents and skills needed in business that you do not possess? 5. How would you compensate for these weaknesses?

62

2.1.3: POSITIVE THINKING Session Duration: Two Hours Session Rationale


What one thinks about somehow transform itself into the physical reality. If one expects to fail, you will fail and if you expect to win you will win. If an individual has a positive thoughts and attitude towards success in business the mind sets you up in a position to succeed. Entrepreneurial Attributes In entrepreneurship success depends on having a positive outlook. A positive outlook emerges from positive thinking. Ones success is determined by ones limitations. In entrepreneurship career there are many challenges and risks, if one is negative mind success will be hard to achieve.

Learning Objectives:
On completion of this session, the trainees will be able to: 1. Describe positive thinking; 2. Explain the thinking process; 3. Apply the process of positive thinking to an entrepreneurial success

Learning Outcomes
The learning outcomes are: 1. Positive thinking described; 2. The thinking process explained; 3. The process of positive thinking applied to entrepreneurial success.

63

Learner Activities/Environment
Learners will define the word positive thinking. Learners will propose applications for mind setting to improve the chances of their success in business.

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask Learners to define the word positive thinking. Record the main parts of the definitions on the board Draw the attention of the Learners to the fact that entrepreneurship success depends on having a positive outlook 2. Main Activities Make a presentation of on the thinking process; Points to cover are; i. The Mind Does not Make Judgments ii. The Mind Will Attract Everything to Meet Your Goals iii. The Mind needs to know that your Goal is Possible iv. The Mind Understands only Positive Instructions v. The Mind sees No Difference between Real and Unreal vi. The Mind will answer All Your Questions Outline through a lecture the process of mind setting Major points to include in the presentation are; i. Conscious and subconscious mind; ii. Negative and positive thoughts; Ask Learners how they can apply mind setting to improve the chances of their success in business; Instruct the Learners to present their results; Review the results

64

3. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson.

Trainer Preparation:
Review the materials on Positive Thinking; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Prepare an example on the application of known entrepreneur in your area and their known personality that helps the individual solve difficult problems.

Trainer Tips:
You may give the example of the believes on their devotion to reading the bible and regularly attending church services and meetings as another way of mind setting.

Reference Materials:
1. Hill Napoleon; Positive Action Plan How to Make Every Day a Success, Piatkus, London, 1996; 2. Mathew Sartwell, Napoleon Hills Keys to Success; Piatkus, London, 1995;

Assessment Criteria and methodology:


Criteria
Positive thinking described; The thinking process explained; The process of positive thinking applied to entrepreneurial success.

Methods
Individual Assignment; Group Exercise; Tutorials;

65

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of Positive Thinking to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


Description of positive thinking If you expect to win you will win and conversely if you expect to lose you will lose. It is a matter of your attitude. What is an attitude? It is a mental make-up, usual frame of mind. Attitudes are part of the abilities. The ability to interact socially requires certain attitudes. All of our feelings, beliefs and knowledge are based on our internal thoughts, both conscious and subconscious. You are in control, whether you know it or not. We can be positive or negative, enthusiastic or dull, active or passive. The Thinking Process The mind has tremendous power that can be used to make your life better. You mind can be conditioned to think positively to bring desirable changes to your life. You as a human being you are created with enough resources to be successful in the field of your choice. The mind is the mental power that enables you and me to: Think; Make choices, Experience emotions The mind is the seat of intelligence and memory. The mind is divided into two parts of activities known as: Conscious Mind; Subconscious Mind The conscious mind enables you to:

66

Use numbers in calculations; Words in speech; Controls muscular movements; Make decisions The subconscious mind on the other hand enables: Management of internal organs workings such heartbeat, breathing, digestion and blood circulation (touch the wrist do feel the blood circulation); Imagination (close your eyes and imagine you own the biggest bank in Zambia); Reactions to emotional stimulation (do you remember the last time you laughed); Automatic reproduction of activities learnt over time (are able to write he word Entrepreneur without looking at spelling in this manual?

How Does the Mind Work? Transforming Thoughts into Reality


The mind can change thoughts into reality. You remember that one of the functions of the conscious mind is to enable you make decisions and the main function of the subconscious mind is to automatically reproduce any action repeated over time. The decision making and reproduction of repeated action combined transform thought into reality. If you think that you will fail you will indeed fail but if you think that you will succeed you will.

The Mind Does not Make Judgments


The subconscious mind works only after you have given it instructions through your decisions and thinking. Before the subconscious mind turns thoughts into reality it first has to receive instructions from your thinking. However, it does not judge your thoughts to be bad or good. It is neutral. If you were worried about something so much have you noticed that that which you were worried about does really happen. So, instead of you spending time worrying use it to create solutions.

67

The Mind sees No Difference between Real and Unreal


The subconscious mind does not tell the difference between reality and imagination. You must have observed that some people are frightened of the lion whether they see it right there or they are told of the story.

The Mind Understands only Positive Instructions


The mind only recognizes positive language. Hen a positive message in thoughts is sent to the subconscious mind it is carried out as it is. However, when a negative instructions of thoughts is sent to the mind it changes it into a positive message. If you say, I want to be a business person, the mind you carry out even when you do not have money. It will show you how to source for funds. How does the mind change the negative message to a positive one? A negative message like, I dont want to be a loafer will be turned into, I want to be a loafer. The removed word is Dont.

The Mind needs to know that your Goal is Possible


You must convince you subconscious mind that your goal is achievable. If you have convinced and committed to the goal, your mind will know that it is possible and will guide your actions, behaviour and decisions towards your goal.

The Mind Will Attract Everything to Meet Your Goals


The mind will gather everything to fulfill your goal whether constructive or destructive. Once you are focused on your goal your mind will attract to you every resource you need to meet your goal. If you want to win you will - you will think consistently on how you will achieve the goal, you belief you will achieve, and you expect to win. For the reasons above you will collect information needed and attract people who can help achieve your goals. However if you expect to lose you will attract al factors that will ensure that you fail. The Mind will answer All Your Questions The mind has the ability of answer all questions you may ask. If you ask a negative questions the answer will be negative, if your question is positive the answer will be positive.

68

The Mind Does not Make Judgements The Mind Will Attract Everything to Meet Your Goals The Mind needs to know that your Goal is Possible The Mind Understands only Positive Instructions The Mind sees No Difference between Real and Unreal
The Mind will answer All Your Questions Entrepreneurial Success and Process of Positive Thinking As an entrepreneur you must think positively and positive thinking is communicable. People you will meet and those near you pick your mental moods and are affected accordingly. On your mind play around with thoughts of happiness, good health and success, and you will cause people to like you and want to help you, because they enjoy the positive vibrations that your positive mind sends out. To harvest good results from positive thinking, you should do some inner work in the mind. Developing a positive attitude toward life will result in a successful outcome of whatever you do in business. Positive attitude will also make you take any necessary actions to ensure your entrepreneurial success. If you want to reap from positive thinking it is not enough to sparingly say few positive words and spent much of your time crowding your mind with negative thoughts. To successful apply positive thinking; your entrepreneurial goal has to be your main mental attitude. In entrepreneurship, there are befits and their challenges too. As a person intending to start your won business you have a choice to flood you mind with positive or negative thoughts. However, if you really want to succeed in business few word of advice are handy: Cover you inner dialogue with thought and feelings of happiness, strength and success Avoid negative thoughts of losses in business and swap them with constructive happy thoughts. In discussions with employees, suppliers, customers and advisors use words that suggest scenes of strength, happiness and success in their minds.

69

Visualise with concentration and belief the pleasant outcome of your plan or action before you prepare or start; Disasters in the world wee there and will always be there. If you have no power to do anything constructive do not kill yourself wit worries; Show confidence and self belief in your in your dealings with other people Engage in physical exercise it helps in developing a positive attitude. Summary We discussed that all of our feelings, beliefs and knowledge are based on our internal thoughts, both conscious and subconscious. The mind can be conditioned to think positively to bring desirable changes to life. The mind is the seat of intelligence and memory. The mind is divided into two parts of activities known as Conscious Mind and Subconscious Mind. Positive attitude can make one take any necessary actions to ensure entrepreneurial success. Exercise Answer the following questions: 1. What is positive thinking? 2. What are the differences between the conscious and subconscious mind? 3. How can positive thinking help you create a successful enterprise?

70

2.1.4: IMAGINATION, INNOVATION, CREATIVITY OF AN ENTREPRENEUR

Session Duration: Two Hours Session Rationale


Entrepreneurs apply imagination, creativity and innovation to develop new ideas that are applied to create solutions to problems and opportunities to improve the quality of life. New needs will emerge and it will require the exploitation of the entrepreneur to create new solutions. Entrepreneurial Attributes Imagination, creativity and innovation are the basis of entrepreneurship. Successful entrepreneurs dream up new ideas that are unique and in an innovative manner create value for a customer.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Describe the concepts of imagination, innovation and creativity; 2. Apply the concepts of imagination, innovation and creativity to entrepreneurship

Learning Outcomes
The learning outcomes are: 1. The concepts of imagination, innovation and creativity correctly described; 2. The concepts of imagination, innovation and creativity applied to entrepreneurship

Learner Activities/Environment
Learners will define the terms imagination, innovation, and creativity. Learners will be assigned to complete the assignments on the Triangles.

71

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask the Learners to define the terms imagination, innovation, and creativity, Record the definitions on the board; Explain and give examples of the following: i. Imagination is a mental creation in the mind of ideas and pictures of things that are not real or not heard, seen, smelt or touched ii. Creativity is the ability to develop new ideas and discover news of looking at problems; iii. Innovation is the ability to apply new solutions to problems; Present on the role of imagination, creativity and innovation in the success of the entrepreneur 2. Main Activities Ask the Learners to complete these assignments: Scene: You are 20 years older than you are. You have a wife and ten children. You have lost your job. You wife does not work. All your children are at school. The oldest is in grade 11 and the youngest is in grade One. You are staying in your four bed roomed house sold to you at low conditions by your previous employers. What would you do?

Give each group six sticks of matches: Ask each group to make two triangles using the six sticks

72

Now ask the groups of Learners to make four triangles using the same number of sticks of matches. There will be a number of combinations but check to see if they will come up with this combination:

Ask each group to select one simple consumer item within the room (E.g. Pen, Shoes, Book, Widow, Door, Chair) ; Ask them to do the following to he product selected; o Find new way of making it o Can it be adapted to something else? o Can you give a new look? o What would be a substitute? o Can the parts be rearranged? o What would be the opposite? o Can it be combined with something else? o Is there another use for it? o What else can be made from that? o Are there other markets for it? o Can it be reversed? o Can it be duplicated?

3. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson.

Trainer Preparation
Review the materials on imagination, innovation and creativity; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper)

73

Buy match sticks or tooth picks for the exercise; Prepare an example on the application of known entrepreneur in your area and their known personality that helps the individual solve difficult problems.

Trainer Tips
In the creation and innovation exercise, Learners will come up with all types of triangle shapes but when you observe keenly you will notice a number of triangles that exceed the required number. The exercise combines art with numbers.

Reference Materials
1. Burn Paul, Entrepreneurship and Small Business Mathew, Palgrave

Macmillan, New York, 2001;


2. Thomas W. Zimmerer and Norman M. Scarborough, Essentials of Entrepreneurship, and Small Business Management, Pearson International New Jearsey, 2005.,

Assessment Criteria and methodology


Criteria
The concepts of imagination, innovation and creativity correctly described; The concepts of imagination, innovation and creativity applied to entrepreneurship

Methods
Individual Assignment; Group Exercise; Tutorials;

74

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of imagination, innovation and creativity to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


Description of Imagination, Innovation and Creativity; Imagination Entrepreneurs use their imagination to create a picture of a successful business delivering useful products and services to customers at a profit. The term imagination comes from the latin verb imaginari meaning "to picture oneself." Imagination is a mental creation in the mind of ideas and pictures of things that are not real or not heard, seen, smelt or touched.

As an entrepreneur you can apply imagination to: Generate business ideas; Solve business problems; Create new ways of doing things Creativity is the ability of coming up with new ideas and ways of solving problems and exploiting opportunities. You and I can be creative. All of us have brains. It is the brain that is the centre of creative power. The brain has two sides, the left and the right sides. The left side of the brain has a job of processing information in a step by step fashion. The right side of the brain processes information intuitively all at once relying more on images. As an entrepreneur you can use the left side to select one business idea and use the right to generate as many ideas as possible. To be creative you need to utilise more of your right side of the brain. You can be creative by:

75

Always asking if there is a better way; Challenging custom, routine, and tradition, Being thoughtful; Thinking a lot to generate a lot of ideas knowing one of them will work; Seeing an issue from a different viewpoint; Seeing mistakes as lay by to success; Realising that there may be more than one answer to a problem, Seeing problems as a source of new ideas; Connecting unrelated ideas to a problem to generate innovative solutions; Looking at issues from a broad view

You can use your creative power to create a new market and a new customer. Innovation Innovation is defining term for entrepreneurs. Innovation can be found in business, political, social, and technological sectors. Taking up ideas, developing new solutions to solve peoples problems is innovation. Innovations can be found in the technical and socio-economic field. The creations of insurance, banking, hire purchase, micro finance, trade unions are socioeconomic innovation while the cell phone, email, and internet are technical innovations. As an entrepreneur you can bring innovation in the following areas: New products; New ways of making a product; New of packaging a product or service; New of marketing the product; New ways of selling the product; New ways of pricing the product; New ways of storing a product; New of caring customers. However, for an innovation to be successful it must be linked to the customer needs. No matter how nice the innovation is, if it does not meet the customers needs then freeze it.

76

Peter F. Drucker a well known expert on Management has suggested a five stage approach to purposeful systematic innovation is follows: Start by analysing opportunities within the enterprise, industry and the external environment, Innovate for now Look at the financial implications but also get a feedback from suppliers and customers, Be simple and focussed; Start small; Be dominant in particular field and take leadership.

Imagination is the power of the mind to create unreal images and ideas that can be a basis of creation. Every thing as somebody said is created twice; in the mind and in the hands. Creativity is the ability to generate a number of ideas. Innovation is the process of creating value for customers by coming up with better products and services Summary In this session we defined imagination as a mental creation in the mind of ideas and pictures of things that are not real or not heard, seen, smelt or touched; creativity as the ability of coming up with new ideas and ways of solving problems and exploiting opportunities and taking up ideas, developing new solutions to solve peoples problems is innovation. We examined the how the three abilities can be applied to entrepreneurial success. Exercise Answer the following questions: 1. What are the differences among imagination, innovation? 2. What can discourage ones creative power? 3. How can one improve creativity? creativity and

77

2.1.5 GOAL SETTING Session Duration: Two Hours Session Rationale


Successful entrepreneurs need to think in a long term way. Life is a long term journey. Entrepreneur need to know where they are and where they are going. Entrepreneurs need to have a destination to aim for, start small, achieve a little at a time and build on the achievement. Entrepreneurs should reflect on the achievement and challenges over the period. Entrepreneurial Attributes Entrepreneurs focus on goal setting. This enables them to focus one intention until it becomes part of them. With such a focus, entrepreneurs learn to overcome challenges and zoom on what he/she wants to achieve.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Define goals; 2. Explain the importance of goal setting; 3. Develop entrepreneurial goals;

Learning Outcomes
The learning outcomes are: 1. Goals correctly defined; 2. The importance of goal setting explained; 3. Entrepreneurial goals developed;

78

Learner Activities/Environment
Learners to set goals on Career, Family, Financial, Social, Physical, Spiritual, Learners will in addition answer questions on: aware of what you wanted to achieve in life, personal reasons for goal, specific, measurable, achievable, realistic and time bound stages towards the goal, activities, time and resources to reach each stage towards the goal.

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask Learners to define the word Goal. Explain the importance of developing a goal in business; 2. Main Activities Ask each Trainee to set goals by answering the following questions: i. Career What would you like to be in the five years time? ii. Family what type of family would you want? iii. Financial Status how much financial resources would you need? iv. Social status What type of social relations do you want? v. Physical status what physical state of your body do you need? vi. Spiritual - what spiritual needs do you want satisfied?

79

After every Trainee has completed the task, ask each one of them to answer the following: i. Were you aware of what you wanted to achieve in life? ii. What are the personal reasons for wanting to achieve goals? iii. What are the specific, measurable, achievable, realistic and time bound stages towards the goal? iv. What activities do you need to carry out over period of time and using known resources to reach each stage towards the goal? v. When do you start and when do you complete all the activities to achieve the goal? Let each Learner share with two other Learners their goals and justification; Select two individuals to present their goals and ask for feedback from the class. 3. Conclusion Ask Learners to key learning points. Ask them to state the general conclusions from the lesson. Key Points to note are: i. Definition of goal; ii. Goal setting process;

Trainer Preparation
Review the materials on goal setting; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper)

Trainer Tips
The Learners personal goals will differ wildly. You must ensure that dominant groups in class do not influence others. Encourage those Learners that are shy to develop their goals.

80

Reference Materials
1. Hill Napoleon; Positive Action Plan How to Make Every Day a Success, Piatkus, London, 1996; 2. Mathew Sartwell, Napoleon Hills Keys to Success; Piatkus, London, 1995;

Assessment Criteria and methodology:


Criteria
Goals correctly defined; The importance of goal setting explained; Entrepreneurial goals developed;

Methods
Individual Assignment; Group Exercise; Tutorials; Session Evaluation o Collect and analyse the data on the following: Effectiveness of Training Used Usefulness of goal to Learners career; Relevance of Training Material to the session Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


Definition of Goals A goal is an aim of what you want to achieve in life over a period of time. Unless you know where you are going anything you do is a waste. Setting goals and targets allows you to choose where you want to go in life. If you know what you want to achieve then you will be able to focus on that goal. Setting your goals will enable you gather information and resources to help you achieve it.

81

When you set goals it enables you to: Be aware of what you want to achieve; Add to what you already have; Improve performance and increase results in whatever you may be doing Influence others to achieve; Create a sense of pride and satisfaction yourself; Build confidence in yourself Think positively; Be imaginative, creative and innovative, . How do set Goals? To set goals you must decide what you want to be and have in you life time. You may set goals in the following areas Career Do you want to be an entrepreneur in a specific sector? Family what type of family would you want? Financial Status how much financial resources would you need? Social status What type of social relations do you want? Physical status what physical state of your body do you need? Spiritual - what spiritual needs to what satisfied?

How to Start to Achieve Your Lifetime Goals Once your goals are set. You must break them into specific, measurable, achievable, realistic and time bound stages called objectives. The objectives can further be broken into activities over a period of time and using known resources (skills, information and time). Goals, objectives, and activities are positive statements that must be written. Summary A goal is an aim of what you want to achieve in life over a period of time. We looked at advantages of goal setting. We looked at what goals can be set. We also outlined the steps to achieving the goals.

82

Exercise Answer the following questions: 1. What are the differences between a goal, objective, and activity? 2. How can goal setting facilitate your success in business?

83

UNIT A2.2

Develop Business opportunities

2.2.1 BUSINESS IDEAS Session Duration: Two Hours Session Rationale


Business ideas are the seed of the enterprise development. An entrepreneurs initial task is to scan the environment and create new business ideas. It is from the created ideas that bring about opportunity identification. Entrepreneurial Attributes Entrepreneurs have a vision. To transform a vision, an entrepreneur needs to scan the environment and identify business ideas through imagination, creativity and innovation process.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. 2. 3. 4. Describe business ideas; Explain the process of generating business ideas; Outline the techniques or business idea generation; Generate a business idea.

Learning Outcomes
The learning outcomes are: 1. 2. 3. 4. Business ideas correctly described; The process of generating business ideas explained; The techniques for business idea generation outlined Business ideas generated.

84

Learner Activities/Environment
Learners in groups to define the term business idea; generate twenty ten business ideas applying any of the techniques you presented. Learners will present the following to plenary: List of ten business ideas; Techniques used to generate each business idea; Sources of information

Instructional methodology
4. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask Learners in groups to define the term business idea; Ask the groups to present their definitions; Ask for comments on the definitions; Take note if there are similarities and differences; Present the definition of business term by displaying it on the board;
A business idea is a new, creative approach to specifically address a perceived need, want, problem or challenge of customers through a profit generation activity

Refer to the definition and draw the attention of the Learners to the similarities with your definition; Describe the process of generation of ideas: Points to note: i. The steps of generating ideas (scanning the surrounding (environment) and idea generation) ii. Scanning the environment assist you to see what is going on, the changing and the needs of people; iii. Ability to see the emerging needs of people. iv. Present the various sources of information for business ideas.

85

v. Present the various techniques to use to identify business ideas. 5. Main Activities Form groups of Learners; Ask each group to generate twenty business ideas applying any of the techniques you presented; The learners should present the following to plenary: i. List of ten business ideas; ii. Techniques used to generate each business idea; iii. Sources of information Ask the other groups to give a feed back to the group that has presented; Give highlights of the presentations; 6. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key Points to note are: i. Description of business ideas; ii. Techniques of business idea generation; Ask participants to keep the lists of the business ideas since they will be used in the next sessions.

Trainer Preparation:
Review the materials on business ideas; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper.

Trainer Tips:
Ensure that the twenty business ideas applying any of the techniques you presented are in different sectors;

86

Reference Materials:
1. Burn Paul, Entrepreneurship and Small Business Mathew, Palgrave

Macmillan, New York, 2001;


2. Entrepreneurship

Training Programme for the New Enterprise Creation - Reading Materials Module 6, 7, 8 and 9 India, Oct. 01 Nov. 09, 2001 3. Thomas W. Zimmerer and Norman M. Scarborough, Essentials of Entrepreneurship, and Small Business Management, Pearson
Development Institute, International International New Jearsey, 2005.,

Assessment Criteria and methodology:


Criteria
Business ideas correctly described; The process of generating business ideas explained; The techniques for business idea generation outlined Business ideas generated

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of business ideas to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

87

LEARNERS HAND OUT


Description of Business Ideas If You want to start a business you need a business idea. A business idea is a new, creative approach to specifically address a perceived need, want, problem or challenge of customers through a profit generation activity. It is a result of your specific thought or concept that arises in your mind. Business ideas come from various sources. The commonest source is the need of the members of the community that is not yet satisfied. Your business idea in any of the three types of business namely: retail, manufacturing and services. Sometimes the list of types of business covers farming and mining. Selling goods to other people is retail business. Making some things to sell to your customers is manufacturing. When you sell your time, skills and knowledge, then you are in the service business. Growing crops and keeping livestock fro sale is a farming business. Digging, collecting and processing minerals is mining. There are also businesses that require harvesting natural resources in water and on land such as fish, timber and non timber forest products. The Process of Generating Business Ideas The process of generating ideas involves two steps namely: scanning the surrounding (environment) and idea generation. Scanning the environment assist you to see what is going on, changing and the needs of people. By having a keen interest in what is going on you will be able to see the needs of people emerging.

88

Scanning the environment involves collecting information from various sources. These sources are: No. Category of Sources Information Sources 1. Personal and Informal Family member, Friends, Employees, Customers, Sales Persons, 2. Personal and Formal Bankers, Investment Centre, Consultants, Researchers, Councils, Business Associations, Business Registration Office, Commercial Exhibitions, Industry and Trade Contacts Magazines, Newspapers, Newsletters, 3. Written Books, Catalogues, Journals, Bill Boards, Posters 4. Oral Trade Shows, Seminars, Suppliers/Agents, Professional Organisations

The Techniques for Business Idea Generation There a number of ways you can generate ideas. There a number of methods you can use to generate business ideas. No. Technique 1. Draw on Your Skills 2. Make Use of Your Experience 3. 4. 5. 6. 7. 8. Explanation Covert your skills into a business You have been able to do something for a long time. Can you advise others in the same field at a fee? Use You Hobby Do you like music? Set up a music store. Improve services Offer a better service of the current services you pay for Improve a product Improve its appearance, function, colour, packaging and so on Modify an existing Make it look luxurious, make it simpler, or product into a new one make it smaller, change the shape. Travel Come back with something you saw or used not available in you area Listen to complaints Crate a solution to a complaint

89

9. Research

Find out special needs of certain groups of customers 10. Reproduce the idea Apply a successful idea to new settings 11. Create new value for a Use taxi vehicle for advertising product 12. Somebodys waste is Turn waste into something useful for someone. another persons Treasure 13. Brainstorm Generate as many ideas as possible without checking the usefulness one may turn out to be a gold mine 14. Commercialise Turn research ideas from research institutions research into business recommendations and inventions 15. Combine uses into one Create a pen with functions of a musical product instrument 16. Visualisation Create a picture of a business in your mind 17. Adding or Subtracting Add or subtract a few features to the product or service to make it suitable in terms of use or price. Selling cooking oil from a pump 18. Timeframing Offer the same service in a short time 19. Technology application Technological developments these days are so fast and abundant that one can come up with so many ideas of unique applications 20. Creation of opposites If a product is small make it big, if it is long make it short, if it is slow make it fast, if it is for very one make it for one person, if it is tall make it short n advice versa. The list of methods of generating ideas does not end there. You will be able to come up with other methods are you listen, see, touch and smell. The list will be determined by how much you use your imagination.

90

Generation of Business Ideas Once you start thinking you will be generate hundreds of ideas. The tradition of keeping all the ideas in your head is not useful. Buy a note book. Write all the ideas that come into your mind in the notebook. At this stage, do not worry about how good or silly the idea is: you will be surprised how good the idea was in later days or years. Before you go to the marketplace, research institution or business associations to look for business ideas, start with yourself. You should look at your strengths and weaknesses which will show the areas suitable for business ideas, the size and type of the business. Every person has strong points and weak ones. You should build on your strengths and work on your weaknesses. The business idea you choose will be influenced by your strengths, weakness, likes and dislikes. Selecting a business idea is not a matter of wishful thinking or simple fantasising. It will be helpful to you if you select a business idea in the area you are familiar with and have knowledge and skills that will either find immediate application or balance the skills of the others in the business. A look at the environment will also suggest to you whether the business idea is good or not. Make very day an exciting creative day. You may be lying on bed, washing, in class, working, at a social gathering, or travelling, or any other activity you may be doing. Let your mind zero in on the business possibilities are your senses bring in all the information. Write down quickly as the business idea come to you mind. Within a few hours or days you should produce an encouraging list of business ideas. Selecting the Business Ideas It is promising that you have a list of the business ideas. Where do you go from there? Having prepared a reasonable list of ideas you must examine each business idea so that you end up with a short list of business ideas with the highest chance of success. You can use the scoring suggested below.

91

Simple Scoring Method for Business Ideas. Score: Yes = 1 and No = 0; Allocate scores to each question. If the answers to all the questions is YES the total score is 12 and 0 if all your answers were No. You may select a business idea if it scores above 5 and review it or reject it if it scores below 5.

Business Idea Assessment Form Name of the Business Idea: No. Focus Question Yes 1. Personal The business suits your characteristics personal characteristics? 2. Knowledge skills Experience and You have knowledge and skills that will help you run this type of business? You have experience that will help you to run this business?

No Score

3.

4. 5.

6.

7. 8.

9.

Business You know about the products Knowledge and services in this business? Business Support You know where to get advice and information about this business Customers You are knowledgeable of the potential customers for this particular business? Competition This will be the only business of this kind in your area? Profitability You have reasons why you think this business will be profitable? Human You know the type of Resources, equipment, materials premises Premises, or qualified staff required for Equipment and this business? Materials

92

10. Finances

11. Resources

12. Business Growth TOTAL SCORE

You are sure you will be able to get the finances to provide what is needed in the business? You know where will you get the resources to start this type of business You know this business has potential for growth?

After the business ideas identification, listing and assessment you are now ready to go further to develop this business idea into business opportunities through spending time assessing, researching, developing and planning. Summary We defined a business idea is a new, creative approach to specifically address a perceived need, want, problem or challenge of customers through a profit generation activity. We outlined the process of generating ideas that it involves two steps namely: scanning the surrounding (environment) and idea generation. We described scanning that it involves collecting information from various sources environment. Twenty techniques or methods one can use to generate business ideas were outlined. The Business Idea Assessment Form was introduced as a screening mechanism to select ideas. Exercise Answer the following questions: 1. 2. 3. 4. What is a business idea? What is environmental scanning? Outline three methods for generating business ideas? Describe how you can select a business idea from long list of other ideas?

93

2.2.2 ENVIRONMENTAL SCANNING Session Duration: Two Hours Session Rationale


All businesses operate in an environment. There are people, natural resources and organisations in the environment. Understanding the environment will reduce the uncertainties and provides evidence for opportunities. Entrepreneurial Attributes One of he traits of an entrepreneur is information seeking. Scanning enables the entrepreneur get hold of information to understand the situation very well and systematically reach a decision.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. 2. 3. 4. 5. Describe the concept of environmental scanning; Discuss the importance environmental scanning; Explain the techniques of environmental scanning Outline the process of environmental scanning; Carry out an environmental scan

Learning Outcomes

94

The learning outcomes are: 1. 2. 3. 4. 5. The concept of environmental scanning described; The importance environmental scanning discussed; The techniques of environmental scanning explained The process of environmental scanning outlined; An environmental scan carried out.

Learner Activities/Environment
Learners will define the word environmental scanning. Each group will be assigned two scanning methods (at least the BPEST and the other method is randomly allocated) to scan the environment on the basis of two business ideas selected from their business idea lists.

Instructional methodology
7. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Refer the learners to the session on business idea generation; Ask Learners to define the word environmental scanning. Write the response on the board; Refine the definitions until it makes sense to almost everyone. In groups of two, ask the Learners to explain why scanning is important in entrepreneurship; Write their responses on the board; Identify common and differences in the groups presentations; Discuss the common areas and the different perceptions.

8. Main Activities Present and give examples of the following scanning techniques: i. BPEST Analysis; ii. Porters Five Force Model; iii. SWOT analysis; iv. Value Chain Analysis Explain the process of environmental scanning;

95

Assign each group two scanning method (at least the BPEST and the other method is randomly allocated) to scan the environment on the basis of two business ideas selected from their lists; Guide each group on the application of the scanning methods; Ask each group to present their results for review in plenary; Review the presentations 9. Conclusion Ask Learners to identify learning points that emerged from the session Ask them to state the general conclusions from the lesson. Key Points to note are: i. concept of environmental scanning; ii. importance environmental scanning; iii. process of environmental scanning.

Trainer Preparation:
Review the materials on environmental scanning; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Prepare examples on: i. BPEST Analysis; ii. Porters Five Force Model; iii. SWOT analysis; iv. Value Chain Analysis Organise logistics for learners to go in the field to collect information for scanning.

Trainer Tips:
You may be required to collect annual reports or economic bulletins for Learners references.

96

Reference Materials:
4. Mathew Sartwell, Napoleon Hills Keys to Success; Piatkus, London, 1995 5. Thomas W. Zimmerer and Norman M. Scarborough, Essentials of Entrepreneurship, Pearson International,

Assessment Criteria and methodology:

Criteria
The concept of environmental scanning described; The importance environmental scanning discussed; The techniques of environmental scanning explained The process of environmental scanning outlined; An environmental scan carried out;

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of environmental scanning to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

97

LEARNERS HAND OUT


Description of Environmental Scanning Now that you have identified one business idea you want to develop you must understand that your business will operate in an environment. The business you want to start will operate in a complex environment of business, economic, technological, social and political influences. The other term for the environment is surroundings. Scanning is checking or examining. Understanding the surroundings will reduce the uncertainties. External Influences of the Environment
Industry Government

Customers

Labour market

Suppliers

Your business
Technology

Competitors

Private individuals

National Bodies

Creditors

The Importance of Environmental Scanning; Environmental scanning is important for these reasons:

98

Spot important economic, social, cultural, environmental, health, technological, and political trends, situations, and events in the country and outside that may have an effect on your business Identify the potential opportunities and threats for the business arising from these trends, situations, and events Achieve an accurate understanding of your businesss strengths and weaknesses Present a support for study of future opportunities Techniques of Environmental Scanning There are a number of techniques you can use to carry out an environmental assessment. This module will cover the following techniques: BPEST Analysis; Porters Five Force Model; SWOT analysis; Value Chain Analysis

BPEST Analysis
BPEST analysis is concerned with the environmental influences on a business. The acronym stands for the Business Political, Economic, Social and Technological issues that could affect the strategic development of a business. Identifying BPEST influences is a useful way of summarising the external environment in which a training institution operates. However, it must be followed up by consideration of how a business should respond to these influences. The table below lists some possible factors that could indicate important environmental influences for a business under the PEST headings:

99

BPEST Business Political Legal / Economic Social Technological

Sate of - Economic growth Income Government industry Environmental (overall; by distribution spending on known or regulation industry sector) (change in research projected and distribution of protection disposable
income;

Market: Taxation - Monetary policy Government current and (corporate; (interest rates) Demographics and industry projected consumer) (age structure focus on demand, of the technological Buyer population; effort behaviour, gender; family
size and composition; changing nature of occupations)

Competition: Market International share; trade New regulation comers, New products

Government - Labour / New spending (overall social mobility discoveries and level; specific development spending priorities)

Suppliers: - Consumer - Policy towards Lifestyle Speed Reliability; protection unemployment changes (e.g. technology Alternatives (minimum wage, Home working, transfer
unemployment benefits, grants) single households)

of

100

Ban Fund Donor Funds Employment law

- Taxation (impact - Attitudes to Rates of on consumer work and technological disposable income, leisure obsolescence incentives to invest in capital equipment, corporation tax rates) - Exchange rates - Education (effects on demand by overseas customers; effect on cost of imported components) - Energy and costs use

Business Associations Government organisation / attitude

Competition regulation

- Inflation (effect - Fashions and - Changes on costs and selling fads material prices) sciences - Stage of the - Health business cycle welfare (effect on shortterm business performance)

in

& - Impact of changes in Information technology

- Economic "mood" Living consumer conditions confidence (housing, amenities, pollution) Porters Five Force Model Michael Porter's famous Five Forces of Competitive Position model provides a simple perspective for assessing and analysing the competitive strength and position of a corporation or business organization Five competitive forces influence the level of competition in an industry which finally will have a say on the level of profit in a particular industry.

101

The competitive forces are: The threat of new entrants to the industry; The threat of substitute products or services; The bargaining power of customers; The bargain power of suppliers The rivalry of current competitors The threat of new entrants to the industry a new entrant into an industry will bring extra capacity and more competition The threat of substitute products or services a substitute product or service produced by another industry satisfying the same needs of he customers; The bargaining power of customers - customers want better products at lower prices. Meeting this want may result in the lowering of profitability; The bargain power of suppliers suppliers can apply force to obtain higher prices for their products and services. The rivalry of current competitors the higher the rivalry the likely possibility of lowering prices and high investment in marketing to beat competition which may results in low profitability

102

Porter Five Forces of Competition Diagram

New Market Entrants - the threat

Suppliers bargaining power of suppliers

Industry Competitors Rivalry

Customers bargaining power of customers

Substitute Products the treat of substitute products

SWOT analysis Strengths/weaknesses of the organisation are related to the opportunities and threats of the environmental helps to identify how the current resources and capacity of the Organisation manage the situation in the environment. SWOT Analysis is a common strategic planning tool developed to compare internal strengths and weakness with the external opportunities and Threats. S- Strengths, W - Weaknesses, O - Opportunities, T- Threats

103

Sample SWOT analysis


STRENGTHS o Good traditions and image o Effective decision making o Strong leadership o Committed and caring staff o Qualified and experienced staff o Office equipment is available o Availability of transport WEAKNESSES Insufficient financial resources Lack of management systems and policies Unclear communications and linkages Too reliant on donor funding Lack own premises Lack of finances Uncommitted staff THREATS

OPPORTUNITIES
Cause related organisations are trendy Ageing population will increase clients and More opportunities for collaboration in Current era of partnership networks

Increasing competition for resources with similar organisations Government trend toward privatisation of public services law suits in courts

Simple rules for successful SWOT analysis. Be realistic about the strengths and weaknesses of your business when conducting SWOT analysis. SWOT analysis should differentiate between where your business is today, and where it could be in the future. SWOT should always be specific. Avoid vague areas. Always apply SWOT in relation to your competition i.e. better than or worse than your competition. Keep your SWOT short and simple. Avoid complications and too much analysis SWOT is subjective.

104

Value Chain Analysis Value Chain Analysis is tool for working out how you can create the greatest possible value for your customers, as well as your best route to profit maximization. In business, customer pay you to take raw inputs, and to add value to them by turning them into something of worth to other people. In manufacturing, where the manufacturer adds value by taking raw material of little use to the customer (house wife/husband) for example, maize and turning it into something that customers are prepared to pay money, for example mealie meal. This idea is also important in service industries such as training, where people use inputs of time, knowledge, equipment and systems to create services of real value to the person being served - the customer in this case the learner. The Value Chain Analysis helps you identify the ways in which you create value for your customers, and then helps you think through how you can maximize this value: whether through nice products or useful services. Michael Porter suggested that the activities of a business could be grouped under two headings: (1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and (2) Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others ("out sourced").

105

Linking Value Chain Analysis to Competitive Advantage What activities a business undertakes is directly linked to achieving competitive advantage. For example, a business which wishes to outperform its competitors through differentiating itself through higher quality will have to perform its value chain activities better than the opposition. By contrast, a strategy based on seeking cost leadership will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used. Primary Activities are as follows: Inbound logistics - - All activities dealing with receiving and storing externally obtained materials Operations - The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products) Outbound logistics - All activities connected to getting finished goods and services to buyers Marketing and sales - activities involved with informing buyers and consumers about products and services (benefits, use, price etc.) Service - All activities related to maintaining product performance after the product has been sold Support Activities are as follows: Procurement -This covers how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers) Human Resource Management - activities concerned with recruiting, developing, motivating and rewarding the workforce of a business Technology Development - activities concerned with managing information processing and the development and protection of "knowledge" in a business Infrastructure - Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management

106

Steps in Value Chain Analysis Value chain analysis can be broken down into a three orderly steps: (1) Break down a market/organisation into its key activities under each of the major headings (primary or secondary; (2) Examine the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage; (3) Develop strategies built around focusing on activities where competitive advantage can be sustained Process of Environmental Scanning; Steps to conducting the environmental scanning: Clearly state the purpose of collecting information Decide on how the information will be collected desk or field study or both; Identify who is responsible for the process. Decide who will collect information; Identify the sources of information; Identify methods of collecting information; Assemble existing information on issues and needs; Reflect on the strengths and limitations of that information including; Select data gathering techniques to fill in information or audience gaps, detect emerging issues, and verify existing information Collect scanning information from other organizations. Assemble the information; Analyse and translate the information into actionable Carrying Out an Environmental Scan Carrying out the environmental assessment will assist you identify a number of issues in the natural environment, the business scene, target market and competition, human resources, legal frame work, technologies and social issues.

107

Summary We discussed that businesses operate in a complex environment of business, economic, technological, social and political influences. We indicated that environmental scanning can assist in spotting important economic, social, cultural, environmental, health, technological, and political trends, situations, and events in the country and outside that may have an effect on your business; identify the potential opportunities and threats for the business arising from these trends, situations, and events; achieve an accurate understanding of businesss strengths and weaknesses; and present a support for study of future opportunities. Lastly we described environmental scanning techniques namely: BPEST Analysis; Porters Five Force Model; SWOT analysis; and Value Chain Analysis Exercise Answer the following questions: 1. Mention five influences in the environment that may affect business operations; 2. Describe the environmental scanning techniques namely: BPEST Analysis; Porters Five Force Model; SWOT analysis; and Value Chain Analysis

108

2.2.3 FEASIBILITY STUDY Session Duration: Two Hours Session Rationale


Feasibility study is the assessment of the market, technical, and financial situation of the proposed business to ascertain its viability and practicability. The tendency of sensing a business opportunity and immediately pour resources into it to start an enterprise without thorough investigation results in disastrous results and great waste. Entrepreneurial Attributes An entrepreneur is a risk taker. Feasibility study enables entrepreneurs reduce uncertainties and build confidence in the business opportunity.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Describe feasibility study; 2. Outline the process of feasibility study; 3. Carry out a feasibility study.

Learning Outcomes
The learning outcomes are: 1. Feasibility study as a concept described; 2. The process of feasibility study is outlined; 3. A feasibility study is carried out.

Learner Activities/Environment
Learners will describe the word feasibility study. Learners to conduct feasibility study.

109

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask Learners to describe the word feasibility study. Record the main parts of the definitions on the board Outline the steps in conducting a feasibility study; Make a presentation of the various assessment that make up a feasibility study Areas to emphasise are i. Market Assessment - Total market current demand,

ii. iii.

iv.

v.

vi. vii. viii.

ix.

target market trend, growth potential, entry barriers, Environmental Change, Product, Customers and Competition Production Assessment method of production and , production facilities, Location Assessment - location qualities, location physical requirements, space amount, building type, power and other utilities availability Legal Environment Assessment - Licensing (Permits, Health, workplace, or environmental regulations, industry special regulations, zoning or building code requirements, Insurance coverage and Trademarks, copyrights, or patents Human Resource Assessment employment numbers, skilled staff, sources of human resources, human resources development plans, procedures, and job description. Suppliers Assessment - key suppliers? Credit Policies Assessment credit sales, credit terms, and discounts Management and Organization Assessment business management, experience, competences, succession plans, organisational chart, Professional and Advisory Support Assessment - Board of directors, Management advisory board, Lawyer,

110

Accountant, Insurance agent, Banker, Consultant or consultants and key advisors. x. Investment Assessment Techniques Net Present Value, Internal Rate of Return and Break Even Point
2. Main Activities Form Enterprise Teams in class (Three or Five individuals per Enterprise Team); Assign the Enterprise Teams to answer the following questions: i. What is the size of the market? ii. How will you produce the product or service? iii. To what extent is the location suitable for you business iv. How do you do the business meets legal requirements? v. What is the size and quality of your proposed? vi. Who are your key suppliers? vii. How will you manage credit sales? credit sales, credit

terms, and discounts


viii. What is the strength of your management organization?, ix. Who will give you technical and managerial support? x. How do we know that the business is profitable? Allow each Team to present their response; Review the responses; Guide the Learner on the quality of the responses. and

3. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson.

Trainer Preparation:
Review the materials on feasibility study; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Prepare a Table for the feasibility study questions;

111

Trainer Tips
Feasibility studies can be complex assignments. Make it simple. Your focus is to assist the Learners develop a criteria for making a decision. The decision is either to go ahead with the business proposition or look around for other exciting prospects.

Reference Materials
1. Burn Paul, Entrepreneurship and Small Business Mathew, Palgrave

Macmillan, New York, 2001; 2. Cole G A, Strategic Management, Letts Educational, London, 1997.

Assessment Criteria and methodology:


Criteria
Feasibility study as a concept described; The process of feasibility study is outlined; A feasibility study is carried out.

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyze the data on the following: Effectiveness of Training Used Usefulness of feasibility study to Learners career; Relevance of Training Material to the session Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


Description of Feasibility Study Feasibility study is an examination to see whether your business idea is viable or practical. The feasibility study aims at answering your question of should I continue with the proposed business idea? All the feasibility activities are aimed at answering this question. The feasibility study outlines and analyzes several alternatives or methods of achieving business success.

112

A feasible business is one where the business will generate adequate cashflow and profits, withstand the risks it will encounter, remain viable in the long-term and meet your entrepreneurial goals. The business idea can be a new start-up business, the purchase of an existing business, an expansion of current business operations, or a new enterprise for an existing business. You conduct the feasibility study before preparing the business plan. Once you have carried out a feasibility study then you can proceed to write a business plan. Conducting a Feasibility Study You have in your hands a business idea that you like. Casual observations, discussing with other people indicate that it is a good business idea. You could good further by reading more about it but can it work? Market Assessment Find out the following: What is the total size of your market? What percent share of the market will you have? Current demand in target market. Trends in target marketgrowth trends, trends in consumer preferences, and trends in product development. Growth potential and opportunity for a business of your size. What barriers to entry do you face in entering this market with your new company? Some typical barriers are: o High capital costs o High production costs o High marketing costs o Consumer acceptance and brand recognition o Training and skills o Unique technology and patents o Unions o Transport costs How will you overcome the barriers? How could the following affect your company? o Change in technology o Change in government regulations o Change in the economy

113

o Change in your industry

Product
What are the most important features? What is special about it? What are the benefits? That is, what will the product do for the customer?

Customers
Who are your targeted customers, their characteristics, and their geographic locations, otherwise known as their demographics? o Age o Gender o Location o Income level o Social class and occupation o Education o Other (specific to your industry) o Other (specific to your industry) For business customers, the demographic factors might be: Industry (or portion of an industry) o Location o Size of firm o Quality, technology, and price preferences o Other (specific to your industry) o Other (specific to your industry)

Competition
What products and companies will compete with you? Will they compete with you across the board, or just for certain products, certain customers, or in certain locations? Will you have important indirect competitors? How will your products or services compare with the competition? Production Assessment How and where are your products or services produced? What are the methods of: o Production techniques and costs o Quality control o Customer service

114

o Inventory control o Product development Location Assessment What qualities do you need in a location? Is the location you need available? What are the physical requirements: Is the amount of space needed available? Is the type of building you need available at a reasonable cots? Is power and other utilities like water available? Legal Environment Assessment Are you able to meet the conditions fro the following: o Licensing o Permits o Health, workplace, or environmental regulations o Special regulations covering your industry or profession o Zoning or building code requirements o Insurance coverage o Trademarks, copyrights, or patents (pending, existing, or purchased) Human Resource Assessment Will you be able to engage the number of employees needed? Are the skilled staff and professional you need available? Do you know where and how will you find the right employees? Will you be able to meet the pay structure Have you developed a human resource development plan? Do you have schedules and written procedures prepared? Have you drafted job descriptions for employees? Suppliers Assessment Have you identified key suppliers? Credit Policies Assessment Do you plan to sell on credit? What terms will you offer your customers; that is, how much credit and when is payment due?

115

Will you offer prompt payment discounts? Management and Organization Assessment Who will manage the business on a day-to-day basis? What experience does that person bring to the business? What special or distinctive competencies do the individuals need to have? Is there a plan for continuation of the business if this person is lost or incapacitated? If youll have more than 10 employees, have you created an organizational chart showing the management hierarchy and who is responsible for key functions. Professional and Advisory Support Assessment Do you intend to have the following in enterprise? o Board of directors o Management advisory board o Attorney o Accountant o Insurance agent o Banker o Consultant or consultants o Mentors and key advisors Investment Assessment Techniques

Payment Period
The number of years required to recover the original cash outlay invested in a business project. If a business generates constant annual cash inflows, the payback period can be computed dividing cash outlay by the annual cash inflow. Payback period = Cash investment/annual cash inflow A business project requires an investment of K 50, 000, 000.and generates an annual cash inflow of K 12, 500, 000. The payback period is as follows: Payback period = 50,000, 000/12, 500, 000 = 4 years.

116

Net Present Value


The method is a process of calculating the present value of cash inflows and outflows of an investment proposal using the cost of capital as the suitable discounting rate and finding the net present value by subtracting the present value of cash outflow from the present value of cash inflows. A business project costs initially K 25, 000, 000 and generates year end cash inflows of 9, 000, 000; 7, 000, 000; 6, 000, 000 and 5, 000, 000 from one year to five years. The required rate of return is 10%. Net Present Value Year Cash Inflow Discounting (ZK) Factor at 10 % 1 9,000,000 .909 2 8,000,000 .826 3 7,000,000 .751 4 6,000,000 .683 5 5,000,000 .620 Total Present Value Cash Inflow Less Investment (Initial Capital Expenditure) Net Present Value

Present Value of Cash Inflow(ZK) 818 661 526 410 310 27, 250, 000 25, 000, 000

Internal Rate of Return


IRR is the rate which equates the present value of cash inflows with the present value of cash outflows of an investment. It is the rate at which the NPV is zero. Example A project costs K 16,200,000 and is expected to generate cash of K 8000000; K 7000000; and K 6000000 over a three year period. What is the IRR?

117

Cash Inflows Present Value at 20% Discount Rate Year Cash Inflows Discount factor at 20% 1 8,000,000 .833 2 7,000,000 .694 3 6,000,000 .579 Total Discounted cash inflows Less cash outlay NPV (- ) Note this is a higher rate, we try at a lower rate.

Present value 6,664,000 4,858,000 3,474,000 14,996,000 16,200,000 1,204,000

Cash Inflows Present Values at 18%, 16%, and 14% Discount Rate Discount Present DF PV DF@14% PV Year Cash Inflows Factor Value @ (18%) 16% 1 8,000,000 .847 6,776,000 .862 6896000 .877 7,016,000 2 7,000,000 .718 5,026,000 .718 5201000 .769 5,383,000 3,654,000 .609 3846000 .675 4,050,000 3 6,000,000 .609 Total PV 15,456,000 15,943,00 16,449,000 Less cash outflow 16,200,000 16,200,000 16,200,000 NPV -744,000 -257,000 +249,000 The rate we are looking for lies between 14% and 16%. So lets us try to calculate the Present value at15% Year Cash Inflow Discount Factor @ 15% Present Value 1 8000000 .870 6960000 2 7000000 .756 5292000 3 6000000 .658 3948000 Total Discounted cash inflows 16,200,000 Less cash outlay 16,200,000 NPV 0 Acceptance Rules No. Method Acceptance Rule 1 Payback Period Accept business project if the payback period is shorter than one set up by management 2 Net Present Value Accept a business project if the present value of cash inflows over a number of year is positive 3 Internal Rate of Return Accept business project if the internal rate of

118

return is higher than or equal to the cost of capital Summary Feasibility study is an examination to see whether your business idea is viable or practical. A feasible business is one where the business will generate adequate cash-flow and profits, withstand the risks it will encounter, remain viable in the long-term and meet your entrepreneurial goals. A feasibility study looks at market, technical, financial and managerial feasibility. A number of assessment tools are used. Exercise Answer the following questions: 1. Describe feasibility study? 2. Mention one area that is useful to assess market, technical, financial and managerial feasibility? 3. Describe the financial feasibility study methods

119

UNIT A2.3

Mobilising Resources for an Enterprise

2.2.4 BUSINESS OPPORTUNITIES Session Duration: Two Hours Session Rationale


An opportunity is a foundation for establishing of a business for an entrepreneur. A bruises opportunity personifies the entrepreneur and motivates the mobilization of resources to start an enterprise. Entrepreneurial Attributes One cannot call oneself an entrepreneur until they have successfully pursued, identified and selected a business opportunity. The ability to spot opportunities and innovate differentiates entrepreneurs from ordinary employees

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Define the term business opportunity; 2. Identify sources of business opportunity; 3. Develop business opportunities selection criteria; 4. Select business opportunities; 5. Relate the business opportunities to entrepreneurial activities; 6. Differentiate between a business idea and business opportunity.,

Learning Outcomes
The learning outcomes are: 1. The term business opportunity is correctly defined; 2. Sources of business opportunities are identified; 3. Business opportunity selection criteria is developed; 4. A business opportunity selected;

120

5. Business opportunities selection is related to entrepreneurial activities; 6. The business idea and business opportunity are differentiated.

Learner Activities/Environment
Learners will define the word business opportunity. Learners in groups will select one business opportunity after applying the selection criteria. Learners will present their business opportunities selections and the reasons for the decision.

Instructional methodology
4. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask Learners to define the word business opportunity. Ask the Learners to record the definitions on pieces of A4 paper and stick the definitions on the wall, Display your definition on the board;
A business opportunity is an attractive business idea which an entrepreneur has selected to invest his/her resources to create value on the basis of assumptions of favourable market need and profit.

Ask all the participants to identify one aspect of the definitions on the wall that relates to the definition given n the board; Present a lecture on the main sources of business opportunities; Introduce the business opportunity criteria; Illustrate the business selection criteria (Refer to the examples in the sessions on scanning and financial assessment in the feasibility study. 5. Main Activities Ask the Enterprise Teams to refer to their business ideas; Assign the Learners to scan the environment and conduct a feasibility study on the business ideas corresponding to the number of members in the team;

121

Ask the Learners to select one business opportunity after applying the selection criteria; Ask the Learners to present their selections and the reasons for the decision. List the differences between a business opportunity and business idea. 6. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson.

Trainer Preparation
Review the materials on Business Opportunity; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper)

Trainer Tips:
Ensure that the business opportunities selected are in different sectors.

Reference Materials:
1. Burn Paul, Entrepreneurship and Small Business Mathew, Palgrave

Macmillan, New York, 2001;


2. Entrepreneurship

Training Programme for the New Enterprise Creation - Reading Materials Module 6, 7, 8 and 9 India, Oct. 01 Nov. 09, 2001 3. Thomas W. Zimmerer and Norman M. Scarborough, Essentials of Entrepreneurship, and Small Business Management, Pearson
Development Institute, International

International New Jearsey, 2005., 4. ,Birley Sue and Muzyka Daniel, Mastering Enterprise, Pearson Professional, London, 1997

Assessment Criteria and methodology:


Criteria
The term business opportunity is correctly defined; Sources of business opportunities are identified; Business opportunity selection criteria is developed; A business opportunity selected; 122

Business opportunities selection is related to entrepreneurial activities; The business idea and business opportunity are differentiated.

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of business opportunities to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


Defining Business Opportunity; A business opportunity is an attractive business idea which an entrepreneur has selected to invest his/her resources to create value on the basis of assumptions of favourable market need and profit. Sources of Business Opportunity; You need to be focused and quite serious in you effort of identifying business opportunities. Business opportunities can be sourced from: The Environment the natural resource base of an area; Population - occupational pattern, socio economic background; Current business Situation- trading and business activities in te are and the trends for new demands of goods and services; Target market expectations of the target group in terms of their skills, knowledge, and financial resources; Resources - industries based on minerals, agriculture, marine and other natural resources Business Opportunities Selection Criteria; An entrepreneurs first task after assessing himself/herself is to identify and select an attractive business opportunity. An acceptable business opportunity is a combination of: Confirmed need in the community; Capability of an entrepreneur;

123

Availability of resources to develop the business opportunity.

The Existence of Needs in the Community


A good idea is a good seed fro a business opportunity. Growing the idea into a business opportunity requires confirming that what ever is proposed fro production must have a market need. If the need is already confirmed fro you then it cuts down on your costs. If not, you are required to carry out an environmental scan.

Entrepreneurs Capability
You as an entrepreneur have certain level of knowledge, skills, values, experience and assorted traits. It is obvious certain business opportunities will suit your personality others will not. It is obvious that you need to match given business opportunities with your personality profile.

Availability of Resources
To develop a business idea into a business opportunity you will need resources. The resources needed may be special skills, technology, raw materials, infrastructure and finance. Selection of Business Opportunities You can apply the results of the scanning and feasibility to identify to select the business that is presents the most attractive option. Focus Scanning Method BPEST Expected Results Business, political, economic and technological trends are good Porters Five Isolate competitive forces Competitive Force Model that influence the level of strength and competition in an industry position of a business in the market is favourable SWOT Identify how the current Business capacity is Application Identification of external issues that may affect the business operations

124

Value Chain

resources and capacity of the business can manage the situation in the environment Assesses how you can create the greatest possible value for your customers, as well as your best route to profit maximization

high

Developed strategies focusing on activities where competitive advantage can be sustained.

Feasibility Payment Period Study

Calculating the number of years required to recover the original cash outlay invested in a business project

Net Value

Present Finding the net present value by subtracting the present value of cash outflow from the present value of cash inflows.

Internal Rate of Finding the rate which Return equates the present value of cash inflows with the present value of cash outflows of an investment.

Selection of a project based on the number of years required to recover the original cash outlay invested in a business project being lower that the set period Net present value of the results of subtracting the present value of cash outflow from the present value of cash inflows. Rate which equates the present value of cash inflows with the present value of cash outflows of an investment.

125

Decision Making This is the most critical step in the entire business development process. In a sense it is the point of no return. Once you start to establish a business, it is difficult to turn back otherwise you waste resources. If you have doubts or fears about the business, you should not go ahead. Be open, honest and discuss this matter before you make the decision. Commitment to the business idea is another important reason to look at before you continue. Avoid underestimate the time and effort you need to start a business. A financial commitment by you at this time and others is an important sign of dedication to establishing the business. This step involves making one of the three possible decisions listed below: Decide that the business opportunity is viable and move forward with it. Do more study and or examine additional options. Decide that the business is not viable and abandon it.

126

The Business Opportunities and Entrepreneurial Activities To be an entrepreneur one must have the passion to own a business; self motivated and prepared to face risks. The reason for entrepreneurship is the ability to identify, pursue and exploit the value from a business opportunity. You cannot call yourself an entrepreneur until you identify and track at least one business opportunity. Business opportunities may be there but not every one will follow up on them. You heard people say I had the same idea when they see a business they were thinking of starting has commenced operation under the ownership of a stranger. If a business opportunity is complex leave, you will be lost in the arrangements of so many parts that have to work together smoothly. Business Idea and Business Opportunity A business idea is a seed for a business opportunity. Before business opportunities are developed one should identify business ideas. Business ideas are new, creative approaches to specifically address a perceived needs, wants, problems or challenges of customers through a profit generation activities while opportunities are business projects which an entrepreneur has selected to invest his/her resources to create value on the basis of assumptions of favourable market need and profit. The selection of business ideas involves only one step scoring method. The selection of business opportunities involves the assessment of business ideas and undertaking feasibility study.

SUMMARY
In this session we described business opportunity as an attractive business idea which an entrepreneur has selected to invest his/her resources to create value on the basis of assumptions of favourable market need and profit. It was argued in this session that an acceptable business opportunity is combinations of confirmed need in the community; capability of an entrepreneur; and availability of resources to develop the business opportunity. We discussed the application of feasibility study as a basis of selection of a business opportunity. We claimed that entrepreneurship is the ability to identify, pursue and exploit the value from a business opportunity. Lastly we differentiated a business opportunity from a business idea.

127

EXERCISE
Answer the following questions: 1. Describe a business opportunity.; 2. What can make a business opportunity acceptable? 3. Explain the process of selecting business opportunities?

128

2.2.5 Risk Taking Session Duration: Two Hours Session Rationale


All the businesses are exposed to different degrees of risk. Risk exists as a result of businesses living in an uncertain and ever changing environment. It is sensible to study so that one comes up with measures to reduce it. Owning a business without understanding eth risks the business faces will be playing a dangerous game of gambling. Entrepreneurial Attributes An entrepreneur identifies a business opportunities selected the most viable, develops a business model, and mobilizes resources to start a business whose success is not certain. All entrepreneurs are risk takers. Risk taking is the responsibility taken by entrepreneur for investing resources in an enterprise and he/she is paid part f the profit as dividend for taking the risk.

Session Learning Objectives


On completion of this session, the trainees will be able to: 1. Define the term risk; 2. Describe risk taking and risk avoidance; 3. Explain the types of risks taken by entrepreneurs; 4. Relate risk taking to entrepreneurship;

Learning Outcomes
The learning outcomes are: 1. The term risk correctly defined; 2. Risk taking and risk avoidance described; 3. The types of risks taken by entrepreneurs are explained; 4. Risk taking is related to entrepreneurship;

129

Learner Activities/Environment
Learners to define the word risk. Learners will brainstorm on the different risks. Learners in groups will identify risks faced in selected enterprise areas and measures to reduce the level of danger.

Instructional methodology
7. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask Learners to define the word risk. Ask the Learners to say other words that mean the same as risk Make a presentation on Risk Taking and Risk Avoidance; Note the reasons for risk taking and risk avoidance Ask the Learners to brainstorm on the different risks; Add to the list of the types of risk faced by enterprises. 8. Main Activities In groups, ask the groups to identify risks faced in the following areas and measures to reduce the level of danger; Risk Identification Table No. Area Risk 1. Entrepreneur 2. Marketing 3. Production 4. Management 5. Human Resources 6. Finance

Risk Management

Ask the Learners to present their findings; Review the presentations with the Learners in plenary; Ask the Learners to mention the highlights of the presentations.

130

7. Conclusion
Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key Points to note are: i. Definition of entrepreneurial traits; ii. List of entrepreneurial traits and their meaning; iii. Success in Business and Entrepreneurial Traits

Trainer Preparation
Review the materials on Risk Taking; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Draw the Risk Identification Table;

Trainer Tips:
A number of people get scared by risk. It is at this stage that potential entrepreneurs give up because of fear of loss. You the trainer should emphasize that risk is everywhere. If we were to be frighten of risk that surround us we would be frozen into inactivity and that will be the end of us.

Reference Materials:
Institute of Chartered www.icaew.co.uk Accounts,

Risk

Management

for

SMEs

Assessment Criteria and methodology:


Criteria
The term risk correctly defined; Risk taking and risk avoidance described; The types of risks taken by entrepreneurs are explained; Risk taking is related to entrepreneurship;

Methods
Individual Assignment; Group Exercise; Tutorials;

131

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of risk taking to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


Define the Term Risk All the business you have seen and those you will see in future are all exposed to different degrees of risk. Risk exists as a result of you the entrepreneur failing to forecast with certainty of future events. Risk is danger or threats to your business. Risk also offers you an opportunity to make a profit. Businesses usually look risk as the potential of loss or failure. This is to narrow, risk could also represent the opportunity to take profits. Risk Taking and Risk Avoidance Entrepreneurship demands that part of your culture is risk taking. You the entrepreneur have potential and a trait to take risks. You have experienced risk taking in social relations and career. The experience will help you judge the chances, risk what is necessary and avoid risks which have little likely incentive. Risk avoidance is the situations where individuals, are especially those that have never gone into business, are afraid of going into business. You hear them say, Business is not for me. Such individuals prefer to look for jobs. You may have observed that some individuals have skills that can assist them start a business that may even pay them more than any job but they are afraid of failure. In some of our communities, people ridicule individuals that have failed in business. Fear of failure, loss and creates risk avoidance. One way of removing this fear is training, counselling and learning by observation from those in business. The possibility of failure cannot be avoided. Failure is the first lesson to success. You business will grow; your problems and opportunities will multiply. So, you should not be afraid to make decisions that may result in failure but you can learn from you failure. Adopting a safe and failure proof life is not

132

profitable. To leave a life of a king you will work under the pressures and conditions of risk-taking. Types of Risks Taken By Entrepreneurs There are types of risks especially experienced by new entrepreneurs. These are: Environmental risk- fire, riots, weather, thefts, sudden government policy change; Entrepreneurs Risk how committed are you to won a business. Many budding entrepreneurs backslide to job seeking. Lack of experience in the business is another cause of failure. Business Management Risks - poor management of finance, poor marketing skills, poor planning skills, incorrect pricing are high risks areas for businesses especially small and medium sized businesses; Market Risks the emergence of competitors in the industry, inflationary pressures, exchange rate instability, low demand for locally produced goods, and poor distribution systems are risks areas an entrepreneur should manage. Operational risks - staff turn over, sudden change in technology, materials supply disruptions are some of the risks in the operational arena. Financial Risks- loss of cash, loss of a financial investment, high taxes and high interest rates. Risk Taking To Entrepreneurship The awareness that you can make a profit by taking a risk is one of the motivating factors. You place your money in a business, use the money to assess the market, buy at a low price inputs produce and sell is an activity awarded by the earning of a profit. To manage risk you must be aware of past events in the field, have the passion to live in the present and you take the necessary risks to harvest success in the future.

133

Risk taking is not the same as gambling. There is a big difference between gambling and risk taking. When one is taking risk it does not mean that one must be unthinking. There are millions of people unhappy with there current situation. They look out for huge rewards with the barest minimum of investment. They have very little confidence in the possibility of success. The success or failure in such efforts is placed on lucky. An entrepreneur is different from a gambler in that an entrepreneur puts an effort and other resources having assessed the high possibility of success. The risk taking ability and characteristics of entrepreneurs are linked by the ability of the entrepreneur to understand their business; self-confidence; information seeking; goal setting and determination to achieve. Summary We discussed that risk exists as a result of you the entrepreneur failing to forecast with certainty of future events. Risk was described as either a danger or threats to your business or an opportunity to make a profit. Risk taking was explained as the ability to judge the chances, risk what is necessary and avoid risks which have little likely incentive. Risk avoidance was described as adopting a safe and failure proof life though not profitable. Various types of risks especially experienced by new entrepreneurs were listed. The awareness that you can make a profit by taking a risk is one describing entrepreneurship.

Exercise
Answer the following questions: 1. What is risk and risk taking? 2. Why do individuals avoid taking risks in business? 3. Risk taking is gambling. Do you agree? Explain your answer

134

UNIT A2.3

Resource Mobilisation for an Enterprise

2.3.1 Resource Mobilisation Session Duration: Two Hours Session Rationale


Resources are inputs that go into an enterprise to ensure that activities are carried in marketing, production, and management. Without resources nothing will be produced or sold. Traditionally everyone in need for resources to go into business looked to the banks for assistance. Now, there are numerous sources of inputs which one with talent can exploit. Ask yourself, how do individuals organizing social function parties and events are able to mobilize resources. Are there lessons we can learn from social function organizers? Entrepreneurial Attributes An entrepreneur first resource mobilize effort is to recruit himself/herself to venture into business. After convincing himself/herself to venture into business, he or she mobilizes financial and non financial resources to start operations for the enterprise.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Define the concept of resources; 2. Explain the importance of resources in an enterprise; 3. Discuss the role of resource mobilization in an enterprise; 4. Outline the various resource providers; 5. Discuss methods for resource mobilization; 6. Mobilise resources fro enterprise development

Learning Outcomes
The learning outcomes are: 1. The concept of resources defined; 2. The importance of resources in an enterprise is explained; 3. The role of resource mobilization in an enterprise is discussed; 4. The various resource providers are outlined; 135

5. The methods for resource mobilization are discussed; 6. Resources for enterprise development are mobilized.

Learner Activities/Environment
Learners will define the concept of resource. Learners will give examples of the resources identified. Learners will list the resources needed. Learners will identify possible providers of the resources identified.

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Refer the learners to the session on entrepreneurship; Ask Learners to define the concept of resources. Write down the various suggested definitions; Combine by picking up aspects of the definition from the suggestions; Refine the definition; Ask the Learners to make comments on the suitability of the definition Ask the Learners to give examples of the resources identified; Make a presentation on the qualities needed to mobilize resources; Take note of the following qualities: i. Passion, Curiosity, Optimism, Prudence and Competitive; ii. Risk taking, High energy levels, Flexibility; Confident, Persistent, economical, and Self Belief. 2. Main Activities Ask the Learners to list the resources needed; Assign the Learners to identify possible providers of the resources identified; Provide a means of communication (letter, email, telephone, telefax, face to face) to the learners to ask for the resources from one of the identified resource providers; Ask the Learners to prepare a report on their assignment; Review the report;

136

Give feedback to the groups; Post the summary of the results on the wall. Review the summaries 3. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask the Learners to state the general conclusions from the lesson.

Trainer Preparation:
Review the materials on Resource mobilisation; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Organise what means of communications for Learners to use;

Trainer Tips:
Millions of individuals out there are not able to start enterprises fro one reason lack of money. You must emphasize that while money is important there other more important resources and enterprise needs such as he entrepreneur himself/herself.

Reference Materials:
1. SAIF, Resource Mobilisation and Fundraising Development, Sandon

Assessment Criteria and methodology:


Criteria
The concept of resources defined; The importance of resources in an enterprise is explained; The role of resource mobilization in an enterprise is discussed; The various resource providers are outlined; The methods for resource mobilization are discussed; Resources for enterprise development are mobilized;

Methods
Individual Assignment; Group Exercise; Tutorials; 137

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of resource mobilisation to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


Definition of Resources To start business operations you will need resources. Resources are might be financial or non financial. Resources are inputs that are needed in the business to carry out the business operations. You the entrepreneur are the most important resource in the business. There are other resources needed namely human resources to carry out work, business guidelines to assist in a consistent and quality provision of information, facilities such as machines to make work easier, materials to turn into products or services and funds to buy resources from outside the business. Qualities you need to Mobilise Resources for an Enterprise You must estimate how much resources you need to start and run the business. How much resources you will need will depend on the size of the business and the number of owners who can contribute capital. Money is usually the resource mentioned by most starting up entrepreneurs. However, the amount of funds can be reduced if ask fro resources in stead of hard cash. Borrow resources you need certain talents such as 1. Passion you must have a strong passion for business opportunity 2. Curiosity - ask many questions on who can help on the contact persons for resources 3. Optimism if you are turned down by one person or one organisation do not give up. You will need to improve your proposing skills; 4. Prudence you must be careful with money and have control on cost and the value to the business. 5. Competitive resources are limited and as an entrepreneurs you must beat competition 6. Risk taking to mobilise resources you should not fear taking calculated risks.

138

7. High energy levels Take good care of you health and eat sensibly because you will definitely be stressed at more than one occasion. 8. Flexibility you should take advantage of the changing resource environment; 9. Be Confident you must be confident you will achieve resource mobilisation goal; 10. Be Persistent - never give up in asking for resources until you receive; 11. Be economical - use all available resources on priority areas in the business; 12. Self Belief - firmly believe that success and failure lies within your personal control and influence Sources of Financial and Non Financial Resources Most of us when looking for resources for a business what comes to mind first are the banks. Banks give loans. Can you afford interest and loan repayments? Here are other sources: 1. Buy second hand from auctions or advertisements; 2. Hold a Career Change Party. It is party where you ask friends and relatives to make pledges to your career change from unemployed or employed to self employed; 3. Send a business proposal to Micro Credit Organisations; 4. Ask relatives and friends to lend or give you all or part of the resources you need; 5. Buy items you need on credit; 6. Approach an insurance company to invest in your business; 7. Ask equipment suppliers to offer equipment on hire purchase; 8. Sell personal belongings; 9. Let customers buy in advance; 10. Approach one of the government agencies to provide you with support Mobilising Resources for Enterprise Development To mobilize resources you must be well organized. The following steps can help you mobilise resources: 1. Prepare a business plan; 2. List all the type and amount of resources you need to develop your business;

139

3. Examine funding prospects including yourself, informal and formal sources; 4. Prepare a fundraising strategy (objectives and approaches); 5. Prepare an action plan; 6. Put plan into action 7. Monitor the progress of fundraising activities; 8. Evaluate the results of the resource mobilization; 9. Review the plan; 10. Repeat the process

140

Summary We explained that resources are inputs that are needed in the business to carry out the business operations. It was explained that how much resources the business need s will depend on the size of the business and the number of owners who can contribute capital. To mobilize resources certain talents are needed. Sources of inputs fro the business are outlined. The steps to mobilizing resources were outlined. Exercise Answer the following questions 1. Is information a resource? Explain your answer. 2. What is the resource that is always available to an entrepreneur? 3. List organisations that can provide you with financial support in Zambia? 4. Who can offer you non financial support?

141

UNIT A2.4

Networking for Enterprise Development

2.4.1 ENTERPRISE NETWORKING Session Duration: Two Hours Session Rationale


Networks are groups of individuals and organizations sharing resources. Networking is a skill to seek and provide resources to a grouping with similar goals. Networks support an enterprise in various areas as such market information, production techniques and management tips. Entrepreneurial Attributes To succeed in business an entrepreneur cannot live like an island. An entrepreneur needs to have wide sources of information, advice, references and support to succeed. An entrepreneur must establish social, economic, political and technical contacts to survive.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Define the terms of networks and networking; 2. State the importance of networks and networking in enterprise development; 3. Illustrate the role of networks and networking in a business environment; 4. Identify the various types of networks essential for enterprise development; 5. Explain the principles of networking; 6. Establish networks.

Learning Outcomes
The learning outcomes are: 1. Define the terms of networks and networking; 2. State the importance of networks and networking in enterprise development;

142

3. Illustrate the role of networks and networking in a business environment; 4. Identify the various types of networks essential for enterprise development; 5. Explain the principles of networking; 6. Establish networks.

Learner Activities/Environment
Learners will draw and give meaning to the symbols to represent networks. Learners will illustrate how networks can help in the identification of business ideas; selection of business ideas; mobilizing resources; reducing risks; expanding the market size; competing successfully; increasing production; and raising funds.

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask Learners to draw and give meaning to the symbols to represent networks (Sunflower, spider web, bicycle wheel, brain, roots, branches; roads.) Ask the Learners to present their definitions; Review the presentation and give feedback on the meaning of networks Present the importance of networks and networking in an enterprise in relationship to the following: i. Family and Social Contacts; ii. Marketing Contacts; iii. Production contacts; iv. Financial Contacts; v. Human Resources Contacts. 2. Main Activities Ask the Learners to illustrate how networks can help in the following cases: i. Identification of business ideas; ii. Selection of business ideas; iii. Mobilizing resources;

143

iv. Reducing risks; v. Expanding the market size; vi. Competing successfully; vii. Increasing production; viii. Raising funds. Make a presentation on the types of networks The main points to include are; i. Strong-contact ii. Casual-contact networks iii. Service organizations iv. Professional associations Social/business organizations v. Special Groups networking groups vi. Online networks: Make a presentation on principle of networking; Points to emphasise are; To successfully network you must apply the following norms: i. If you receive you must also give; ii. If you accept support you must also contribute; iii. If you request you must also offer assistance iv. If you needs are promoted you must also do the same for others v. Trust and persistence Ask the Learners to make outline steps to developing a network; Ask then Learners groups to present the results of the assignment; Review the presentations Give feedback on the presentations. Invite a member of an association to discuss the The Role of Associations in Fostering Growth of Business. Review the presentation. 3. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion.

144

Trainer Preparation
Review the materials on Networking; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Invite the member of a local business association;

Trainer Tips
Political networks have not been discussed. You may ask Learners to discuss the merits and demerits of political networks.

Reference Materials:
1. Mathew Sartwell, Napoleon Hills Keys to Success; Piatkus, London, 1995 2. Starkey Paul, Networking for Development, IFRTD, New Premium House, London, 1997;

Assessment Criteria and methodology:


Criteria
Define the terms of networks and networking; State the importance of networks and networking in enterprise development; Illustrate the role of networks and networking in a business environment; Identify the various types of networks essential for enterprise development; Explain the principles of networking; Establish networks

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used

145

ii. Usefulness of networks and networking to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


Define networks and networking Networking is when a group of entrepreneurs come together to provide to each support for the sake of their business. A network is group of entrepreneurs sharing information and supporting each to develop their businesses. If you spend a bit of time checking in your community you may find a network relevant for your needs. Networking is a must have skill for a business person most business people, but especially for entrepreneurs. It is very profitable to establish contacts with individual whose help you will need in future. Simply networking is meeting people who can be of help to you and you being a help to them. Types of networks essential for enterprise development Every individual can be associated with any of these networking types: 1. The loner likes to work alone; 2. Socialiser tries to make friends with every one. The contacts established are done randomly; 3. User regular collector of business cards. This network quickly forgets the face behind the business cards. This type of a person focuses on his/her own agenda. The need for gathering information is not important. 4. Builder Very generous individuals. The Builder is well organised net worker, good listener and learner. This type is collector of information that others can benefit from.

146

In your town there are a number of choices you cane make about joining a network. The networks can be divided into the following: Strong-contact networks: arranged in such a way that members are able to give each other references. There are good for developing strong contacts. Members see each other every week. Allow one or few members per profession. Examples are alumni. Casual-contact networks (ZANC SBA): This is a case where business persons are brought together for a common goal. It is a source of wide references. Examples are District Business Associations. Service organizations (Lions): humanitarian Associations that exist to provide and support efforts and good works in the community. They offer an opportunity for people to come together in locations that facilitate references and knowledge networking. Professional associations (knowledge networks) -- exist to exchange information and ideas among professional in particular industry. These networks bring competitors and collaborators together to share information and solutions to common problems. Social/business organizations (Jaycees, business singles clubs) -Combine social activities with business networking and can provide a variety of networking opportunities; many tend to resemble singles bars. Special Groups networking groups: This where social groups such the youth or women come to together to share experiences and opportunities. Online networks: A new opportunity of networking has been observed with the onset of increased assess to the internet and email facilities. Individuals are able to stay in touch and share information and support each other through the ICT. What is the importance of networks and networking in enterprise development? Networks are important for the following reasons: It helps you market yourself and your business at the least cost; Every person you meet has other people who also know others who can assist you? A link to a network is connection to a resource base at a low cost;

147

Creates good well and trust in the business circles; It provides you with potential opportunities

The role of networks and networking in a business environment

The role of networking in networks is mainly business development. Business networking serves many purposes: Sales promotion, general marketing, recruiting, knowledge exchange, and Business development Principles of networking To successfully network you must apply the following norms: Giving and receiving as much as you want to receive you must also be ready to give; Contributing and accept support you expected to contribute support to others as well as being ready to accept support; Offering and requesting you will be offering on regular information and you should also request for information; Promoting other needs and yours you may have received information that some one in the network needs some support and it is your responsibility to inform others of that need. You must, when needs arise; mention the needs to members of the network. Trust and persistence in a network you must develop trust because mistrust can create conflict.

148

Establish networks To establish a network start with people you know already. The starting point is to develop network map. The first thing you need to do is to write a list of people you know what they do and where. Write down useful details of people you will meet on a daily basis. Network Map

Market Contacts Public Sector Contacts Finance Contacts

You
Public Sector Contacts Social Contacts Technology Contacts Human Resources Contacts

Steps to establishing a network 1. Start with your family and friends; 2. Attend social gatherings; 3. To be prepared to communicate quick,, brief and focused information about you; 4. Get to know yourself well; 5. Prepare informative business cards; 6. Carry with you business cards to all gatherings, meetings and travels, 7. Present your skills not your job; 8. Develop a tracking systems of contacts; 9. Create relationships with the business cards; 10. Listen more and talk less; 11. Develop and use your ability to ask questions; 12. Conduct follow up actions decisively, timely and consistently; 13. Do not make empty promises;

149

14. 15. 16. 17. 18.

Look for unique opportunities; Establish long term business contacts and referrals; Develop a data bank; Conduct follow ups on contacts; Ask for who, places, how to do it, steps, recommendations, connections, contacts and timings, 19. Socialise at gatherings and be visible, 20. Listen, learn, persist, and maintain contact

Here are the Dos of Net Working Be patient nobody grew into an adult in a day; Focus on you goal unless you aware of you destination networking will a uncomfortable affair; Be sensitive to cultural differences preconceptions of people will make you unwanted element in the network; Follow on given leads; Contact people even when you do not need their help; Aim fro quality in the network relationships; Be selective on what you can do; Let your style fit your networking.

Summary Networking is when a group of entrepreneurs come together to provide to each support for the sake of their business. A network is group of entrepreneurs sharing information and supporting each to develop their businesses. Networks are important for linkages to sources of support and business. There are steps of establishing a net work among them are attend social gatherings, communicate, create relationships, look for unique opportunities and conduct follow up actions. There are principles one need to follow in a network. Exercise Answer the following questions: 1. What are networks and networking/ 2. What is the importance of networks? 3. What type of networks can one fins in the community? 4. Mention to two networks you know and what is their purpose?

150

UNIT A2.5

Effective Business Communication in an Enterprise 2.5.1 COMMUNICATION IN AN ENTERPRISE Session Duration: Two Hours Session Rationale
Every human being communicates every day. Communication in business is not same as ordinary communication. If you communicate effectively you may save or earn money. The prospect of losing money through poor communication is very high. There are now various methods for communication which a business can use. The coming of email and internet has made the world one big village. You can now communicate with people thousands of kilometers away and get a feedback in a matter of minutes at a cost less than a bottle of a soft drink. Entrepreneurial Attributes An entrepreneur to succeed must be a good communicator. He/she needs to communicate to customers, suppliers, employees, management and other stakeholders. If an entrepreneur communicates poorly the result may be conflict or waste.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. 2. 3. 4. 5. 6. 7. Define the term of communication; Explain the communication process; Explain the importance of communication in an enterprise; Relate the importance of communication in an enterprise Explain the types of communication in an enterprise; Discuss the barriers to communication; Identify ways to address the barriers to communication;

151

Learning Outcomes
The learning outcomes are: 1. The term communication is correctly defined; 2. The communication process is explained 3. The importance of communication in an enterprise is explained; 4. The importance of communication in an enterprise is related to entrepreneurship 5. The types of communication in an enterprise is explained; 6. The barriers to communication are discussed; 7. Ways to address the barriers to communication are identified;

Learner Activities/Environment
Learners will individually define communication. Each Learner will be asked to send verbally a message to the colleague seated next to them. Leaner will identify the barriers to communication. Learners will propose solutions to the barriers to communication.

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask the Learners individually to define communication; Ask the Learners to form groups of two and let them combine the two definitions into one; Combine the two member groups into four member groups; Ask each groups to write their definition on the piece of paper; Ask each group to present their definition; Review the definitions and compare the similarities and differences; Refer the Learners to the handouts for another definition. 2. Main Activities Present the communication process Major points to include are; i. Process of sending and receiving the message; ii. Sender receiver; iii. Medium selection; iv. Modes of communication; 152

Make a presentation of types of communication in an enterprise; Make a presentation on the barriers to communication; Points to consider are: i. Sender level; ii. Receiver level; iii. Medium of communication; iv. Message level; v. Feedback level; Call one of the Learners to read the message on a piece of paper to tell the Learner seated next to him/her to send verbally the message to the next and next person until the message comes back to you after going through all the Learners. The message is:
The Zambian Entrepreneurs exhibit stands at the exhibition in Entebbe in Uganda were exceptionally efficient and effective.

Ask the Leaner to identify the barriers to communication in this case; Ask the Learners to suggest solutions to the barriers to communication identified; Ask the Learners to identify way of minimizing barriers to communication. 3. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson.

Trainer Preparation
Review the materials on Entrepreneurial traits; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Draw the Entrepreneurial Traits Application table;

153

Prepare an example on the application of known entrepreneur in your area and their known personality that helps the individual solve difficult problems.

Trainer Tips:
Note that no one individual can have all the traits listed. However, the traits can be developed. Alternatively, one can go into business with other individual who possess the missing traits. This explain why individual team up to draw on their personality strengths to from a formidable team of investors.

Reference Materials
1. Griffin W. Ricky, Fundamentals of Management, Houghton, New York, 2000; 2. Taylor Shirley, Communication for Business, Pearson, Essex, 1999,

Assessment Criteria and methodology:


Criteria
The term communication is correctly defined; The communication process is explained The importance of communication in an enterprise is explained; The importance of communication in an enterprise is related to entrepreneurship The types of communication in an enterprise is explained; The barriers to communication are discussed; Ways to address the barriers to communication are identified;

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of business communication to career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners 154

Learners

LEARNERS HAND OUT


Definition of Communication Communication involves giving, receiving information, ideas, through written sound, or visual means from a sender to a receiver for particular purpose. You are communicating every day by talking, gesturing, writing, and symbols. In business communication is conducted internally and externally through various methods to achieve set goals. Communication Model

Noise
Message Message

Medium
Sender
Receiver

Feedback Noise

Feedback

The method used is usually determined by: cost, confidentiality, security, influence, urgency, distance, time, resources, written record, Receiver of message. Methods of Communication Communication Type 1. 2. 3. 4. 5. 6. 7. 8. Internal

Form

Method Telephone Intercom Meeting Presentation Face to Face Messages Telephone Report

Oral

Written

155

9. 10. 11. 12. 13. 14. 15. 16. 17. Methods of Communication No. External 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Graphs Email Fax Notice Form/Questionnaire Minutes Newsletter Memo SMS

Method of Communication Meeting Conference/seminar Conversation Telephone Presentation Written Leaflets Letter Invitation Forms/Questionnaire Press Release Customer magazine Advertisement Notice Graph/chart Report Email Fax Letter Oral

The Barriers to Communication Miscommunication is a common problem in personal or business lives. It has been a source of conflicts and waste. In miscommunication the sender means one thing the receiver of the message understands something else. Communication may break down for various reasons; Body Language the body gestures may send a wrong signal to the receiver of the message.

156

Language the words being used may have different meanings; Listening The receiver may not be attentively be listening; Prejudgment this is a case of hearing what is on our mind already; Relationships the state of the relationship between the sender and the receiver will have an influence on the effectiveness of the communication; Emotional Stress- communication will be ineffective if the person involved in sending the message or receiving it will be afraid, angry, and crying.

Barriers to communication can occur if the recipient has failed to convey the meaning or / and the importance of the message.

Sender breakdown too much information is being sent, so the recipient misses key points. Also, language can be difficult to understand, as it can be too complex. Method breakdown when information is very detailed or complicated, then written instructions are better than messages which can be misinterpreted. Recipient breakdown the recipient deliberately makes a choice to misinterpret the message because of their attitude to either the sender to the message at hand.

Other problems with communication could be:


Long chain of command. Language - complex, and hard to understand. Vague purpose not detailed enough, more explanation required Inappropriate medium (method used, e.g. written, electronically etc). Red tape message gets passed on to many different people before finally reaching the recipient making the process too long and the message changing. Also, actions can be delayed as a result of a late arrival of the message. Status of two parties can be intimidated by the other persons status because of their gender, age etc. Location distance of recipient or where message has to reach. Distraction Communication channels breaking up.

157

Strategies to minimize Barriers to Communication For communication to be effective apply the following guidelines: i. Read expand your language by reading; ii. Listen attentively before you speak listen; iii. Think and plan before you speak or write plan your communication very carefully; iv. Use appropriate language use simple and clear language; v. Be open minded do not make judgement before you hear the message; vi. Select the right media select the right method you will use to communicate; vii. Time your communication select the right time to communicate; viii. Use suitable language use the right words to send the right meaning; ix. Get feedback find out the message reached and it was understood; x. Maintain standards aim for quality language and presentation. Summary Communication involves giving, receiving information, ideas, through written sound, or visual means from a sender to a receiver for particular purposes. There are a number of communication methods. The method used is usually determined by cost, confidentiality, security, influence, urgency, distance, time, resources, written record, Receiver of message. Miscommunication is a common problem in personal or business lives. It has been a source of conflicts and waste. There are number of strategies one can apply to minimize communication break down? Exercise 1. What is communication? 2. Want is the importance of communication in an enterprise? 3. What are the barriers communications? Give examples. 4. Suggest three strategies that can reduce barriers to communication.

158

2.5.2

PLANNING FOR EFFECTIVE COMMUNICATION IN AN ENTERPRISE

BUSINESS

Session Duration: Two Hours Session Rationale


Finding out how to communicate important messages to key stakeholders of a business in the most effective way possible is not an easy task. It requires planning. Plan will show where you have come from, where you are and where you are going with your communication. The likelihood of success is high. Entrepreneurial Attributes An entrepreneur believes in systematically carrying out activities to achieve the entrepreneurial vision. This systematic approach to life applies to communication. The existence of a clear and specific purpose, aim or goal is the starting point for the road to communication achievement.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Explain planning for effective communication; 2. Plan for effective communication;

Learning Outcomes
The learning outcomes are: 1. Planning for effective communication is explained; 2. A plan for effective communication is developed;

Learner Activities/Environment
Learners will define planning randomly. Learners will develop a communication plan for their enterprise following the format provided.

Instructional methodology
Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask Learners to define planning randomly; 159

Main Activities
Ask Learners to define planning randomly; Record the definition on the board; Make a presentation on communication planning; Points you should include in you presentation are: i. Situation Analysis: Organizational Background ii. Situation Analysis: External or Public Environment iii. Campaign/Organizational Goal and Key Objectives iv. Communication Objectives v. Target Audiences vi. Key Messages vii. Strategies viii. Tactics ix. Timelines x. Spokespeople Ask the Learners to develop a communication plan for their enterprise following the format provided.

Conclusion
Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson.

Trainer Preparation
Review the materials on Planning for Communication; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper) Prepare a Communication Plan Format;

Trainer Tips
You may also introduce an assignment for Learners to list the type of communication equipment that they would provide to their enterprises.

Reference Materials
Don Hofstrand & Mary Holz-Clause, Co-Directors, Ag Marketing Resource Center, Iowa State University,Nigel Atkins, A Guide for Communications , Planning , 1997

160

Assessment Criteria and methodology:


Criteria
Planning for effective communication is explained; A plan for effective communication is developed;

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of communications plans to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


Communication Plan Planning is the practice of identifying the means, actions and resources necessary to achieve an intention. In simple terms, planning is the process of choosing who, what, how, when, and where of goal attainment Communication planning is figuring out how to communicate important messages to key stakeholders of a business in the most effective way possible. Communication planning, while often overlooked, is an important business function. Communication plans may be internal or external in focus. For example: Internal: rolling out a new benefit program to the employees of the business External: letting the shareholders know about a new stock offering; letting customers know about a new product offering

161

Elements of business communication planning include: Communication Vision Philosophy Communication and Information Goals Content and Meaning of all Business Messages Credibility Message Channel Audience Timing Effectiveness Why Develop A Communications Plan? 1. Most small business have limited resources both time and money. A strategic Communications plan will help your business focus those resources on the most important tasks and set priorities. Without a plan, businesses run the risk of reacting to external events in a knee-jerk manner, wasting valuable communication opportunities and getting pulled off-mission in the process. 2. A good plan imposes discipline and clear thinking that will help you clarify your objectives and target audiences, sharpen your message and help you better understand the environment in which you will be delivering that message. 3. Communications planning will help your business put together all of its communications work on a particular issue, including not only media activities, but government relations, networking, investment promotions, and communications with suppliers. 4. A good plan will help ensure that everyone in your business is on the same page when they communicate with the rest of the world. 5. A communications plan will help you develop better media plans, too. A well-developed media plan is important because the media is the primary

162

education force in our society; they set the public policy agenda and frame public perception on many issues. OVERVIEW OF COMMUNICATIONS PLAN A typical plan outline will looks this: 1. Situation Analysis: Organizational Background 2. Situation Analysis: External or Public Environment 3. Campaign/Organizational Goal and Key Objectives 4. Communication Objectives 5. Target Audiences 6. Key Messages 7. Strategies 8. Tactics 9. Timing 10. Timelines 11. Spokespeople Situation Analysis: External or Public Environment It is important to be aware of the external threats and opportunities to your organization, to those who may be opposed to your messages, and to have a good Sense of the communications environment in which you will be delivering your message. You may consider these questions: 1. What will the current local/national perception of your business,? 2. Will you widely be seen as small business? 3. Will you be seen as credible? 4. How do you want to be positioned? 5. How exposed will your business be? 6. How will your business be positioned within the media to date? 7. Have any special studies or surveys been carried out affecting your area? 8. Who are your supporters? 9. Who will publicly support your business role in the community? 10. Do you have competitors? 11. What are the competitors messages?

163

12. What effect will these messages have on your business? 13. What are the competitors strengths and weaknesses? Communications Objectives Objectives are concrete, measurable and specific.\ Consider these questions: 1. What are you aiming to achieve by communicating? 2. What do you want your target audience to do, exactly? What is your call to action? Do you want your audience to buy your goods? Do you want them to change a personal behaviour? How will you measure success? What will your benchmarks be? Do you want to provide your audience with new information? What do you want them to do with this information? TARGET AUDIENCE 1. Who do you ultimately want to influence? 2. How can you reach your target audiences? 3. List them in order of priority to reaching your goal or key objectives. 4. Who do you want to supports your business? 5. What is the message you want communicated? KEY MESSAGES There are many ways of communicating about you business. It is important to know which words will ring with your audiences; which words or ideas the public will embrace. Some research, such as informal focus group testing or direct mail questionnaires may be required to fully understand your audiences motivations. The results of testing may be unexpected even counter-intuitive. Message testing is an important step to ensuring you develop a successful communications campaign. Communication Strategies Consider the following questions when developing your strategies: Is your strategy proactive or reactive? Low profile or high profile? Local community or nation-wide?

164

What are the major communications opportunities? What are the major communications challenges? What communications strengths will be available in your organization? What networks will your business? Does your approach need paid advertising through print, radio and/or TV (assuming you have the resources to do so!)? Who are your competitors? What do you anticipate competitors key messages will be in response to your release? How will you respond? What are the potential weak points in your argument or story? How creative can you be? Does your strategy permit the development of a specific Media Strategy? Which kind of media coverage will result in the greatest impact on Customers and suppliers? Should your story be delivered in a media briefing with specific reporters invited? Can your story be made visual? Are there ways in which your story could be staged, presented and/or supported by visual materials? When should your release be timed? How does it fit with other current events? What are current editorial priorities?

TACTICS There are literally dozens of methods to reach an audience. In selecting and prioritising your tactics, consider these questions: How big is your budget? What personnel resources are available to you? How do you plan to deliver your key message(s) to your target audiences; Now, Use The Plan! Dont shelve your work and return to fighting fires. Use it! Refer back to your communications work plan on a regular basis. Build an evaluation process into the project timeline. The greatest benefit in having built your Strategic Communications

165

Plan, other than the fact that you were able to pull off a fantastic campaign, is that the next time you decide to mount a communications campaign, a large chunk of the work will already be done. And, if you track your successes, challenges and failures, then youll be able to adapt subsequent campaigns to accommodate what you learned the first time around. TIMING Timing refers to the natural links onto which you can hook your communications. For example, if the government will be making budget decisions that will impact your business area, be prepared to respond. Be proactive and contact media and assistants to the Minister before the decision and announcements are made. Does your business issue have natural links to stories around specific holidays? Plan out your activities well in advance of the holiday you are hooking your campaign on. SPOKES PEOPLE Determine who within your business will project the most credible voice to your key audiences. You may want to train one person to address the government and editorial boards, and another to share your message with customer. If you are dealing with a variety of issues, you may also want more than one spokesperson.

Summary Communication planning is figuring out how to communicate important messages to key stakeholders of a business in the most effective way possible. Without a plan, businesses run the risk of reacting to external events in a knee-jerk manner. A typical plan outline will looks this: Situation Analysis: Organizational Background; Situation Analysis: External or Public Environment; Campaign/Organizational Goal and Key Objectives; Communication Objectives; Target Audiences; Key Messages; Strategies; Tactics; Timelines and Spokespeople

166

Exercise Answer the following questions: 1. What is a communication plan? 2. What is the importance of a communication plan for an enterprise? 3. What the major components of a communication plan?

167

2.5.3

APPLICATION OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) IN AN ENTERPRISE Session Duration: Two Hours Session Rationale

This is era of ICT. In business, the introduction of ICT offers an opportunity to reduce costs and communicate effectively. ICT enhances information management and communication thereby simplifying decision making. Entrepreneurial Attributes ICT avails an entrepreneur opportunities to increase revenue, expand the target market, improve customer service, increase business hours and reduce costs of doing business. All these opportunities are a means of increasing profitability of an enterprise.

Session Learning Objectives


On completion of this session, the trainee will be able to: 1. Explain ICT in an enterprise; 2. Describe the importance of ICT in an enterprise; 3. Apply ICT in an enterprise.

Learning Outcomes
The learning outcomes are: 1. ICT in an enterprise explained; 2. the importance of ICT in an enterprise described; 3. ICT is applied in an enterprise.

Learner Activities/Environment
Learners will define ICT. Learners will in groups identify two important elements of ICT in an enterprise. Learners will visit an internet caf and ask the managers to explain the importance and applications of ICT for an enterprise.

168

Instructional methodology
1. Introduction
Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask Learners to define ICT; Post the definitions on the board Ask the Learners in groups to identify two important elements of ICT in an enterprise; Instruct the Learners to record their response on pieces of papers; Ask the Leaner to present the response; Review the response and give highlights of the importance of ICT 2. Main Activities Make a presentation of the ICT application in an enterprise; Ensure that the following aspects are covered: i. Uses of ICT ii. Categories of ICT Take the Learners to an internet caf and ask the owners to explain the importance and applications of ICT for an enterprise. Review the Internet Caf visit by asking the lessons learnt. 3. Conclusion Ask Learners to identify key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key Points to note are:

Trainer Preparation
Review the materials on Entrepreneurial traits; Organise all the materials needed for the session (Hand outs, markers, Flip Chart paper; Prepare for the visit to an internet caf and meeting with the manager.

169

Trainer Tips
Encourage any individual without computer skills to make an effort to be trained in basic computer skills.

Reference Materials
1. Kubre Milan, Management Consulting, ILO, Geneva, 1996; 2. Mdaan Anil, Illustrated World of Internet and E- Commerce, Dreamland, New Delhi, 2001; 3. Maude J. Timothy, the Internet Investors, CIB, Kent, 1999.

Assessment Criteria and methodology:


Criteria
ICT in an enterprise explained; the importance of ICT in an enterprise described; ICT is application identified in an enterprise;

Methods
Individual Assignment; Group Exercise; Tutorials;

Session Evaluation
Collect and analyse the data on the following: i. Effectiveness of Training Used ii. Usefulness of ICT to Learners career; iii. Relevance of Training Material to the session iv. Mastery of Skills or Subject by Learners

LEARNERS HAND OUT


You have come across the word ICT in various situations, at school, college, hospital, vehicles, machines and telephones. ICT stands for Information Communications Technology. You may also come up with your own definition after reading this unit. ICT is a rapidly changing field. We can only understand it by looking back at what has happened so far.

170

Uses of ICT ICT uses digital technology to help you and me, businesses, civil organisations, government, and communities to have products that will store, retrieve, manipulate or receive information electronically in a digital form; the examples of the products are personal computers, digital television, email, robots and cell phones. ICT is also concerned with the way these different uses can work with each other. Categories of ICT ICT is normally grouped into: Traditional computer-based technologies (things one can do on a personal computer or using computers at home or at work); Digital communication technologies (which allow people and organisations to communicate and share information digitally) Traditional Computer Based Technologies Information applications include: 1. Standard Office Applications Word processing E.g. Microsoft Word: Write letters, reports etc Spreadsheets E.g. Microsoft Excel; Analyse financial information; calculations; create forecasting models etc Database software E.g. Oracle, Microsoft SQL Server, Access; Managing data in many forms, from basic lists (e.g. customer contacts through to complex material (e.g. catalogue) Presentation software E.g. Microsoft PowerPoint; make presentations, either directly using a computer screen or data projector. Publish in digital format via email or over the Internet Desktop publishing E.g. Quark Express, Microsoft Publisher; produce newsletters, magazines and other complex documents. Graphics software E.g Adobe Photoshop and Illustrator; Macromedia Freehand and Fireworks; create and edit images such as logos, drawings or pictures for use in DTP, web sites or other publications

171

2. Specialist Applications - Examples (there are many!) Accounting package E.g. Sage, Oracle; manage an organisation's accounts including revenues/sales, purchases, bank accounts etc. A wide range of systems is available ranging from basic packages suitable for small businesses through to sophisticated ones aimed at multinational companies. Computer Aided Design Computer Aided Design (CAD) is the use of computers to assist the design process. Specialised CAD programs exist for many types of design: architectural, engineering, electronics, roadways Customer Relations Management (CRM) Software that allows businesses to better understand their customers by collecting and analysing data on them such as their product preferences, buying habits etc. Often linked to software applications that run call centres and loyalty cards for example. Communication applications include: The C part of ICT refers to the communication of data by electronic means, usually over some distance. This is often achieved via networks of sending and receiving equipment, wires and satellite links. The technologies involved in communication tend to be complex. However, there are aspects of digital communications that you needs to be aware of. These relate primarily to the types of network and the ways of connecting to the Internet. Internal networks These are normally called local area network (LAN). The LAN involves linking a number of hardware items (input and output devices plus computer processing) together within an office or building. The aim of a LAN is to be able to share hardware facilities such as printers or scanners, software applications and data. This can cut down on costs of hardware purchases and printing materials in the business. This type of network is valuable in a business office where there is need to have access to common data or programmes by all working in the office.

172

External networks Often you need to communicate with someone outside your internal network, in this case you will need to be part of a Wide Area Network (WAN). The Internet is the ultimate WAN - it is a vast network of networks. E-Commerce E- Commerce is electronic commerce. This is business taking place over the electronic network. It covers buying and selling using communication technology. It uses the email and internet to conduct business.

Internet The internet is a global (world wide) network of high powered computers connected by cables, telephone lines, microwave dishes, satellites and other digital equipment to store, retrieve, manipulate or receive various types of information electronically in a digital form. Email It is a communication method of sending and receiving messages using computers on the network. A computer, network connection and email address are necessary to use it.
E commerce eliminates the barrier of time and distance in buying and selling. You can shop from you office. You do not need to travel to the shop. The shop comes to you through computer. You can also sell your goods to the whole world through the computer. Uses of the Internet in Business You can use the internet to: Advertise your goods and services; Facilitate communication or provide information about your business and its services; Sell good and services; The commonest businesses on the e-commerce are: Retailing selling goods and services directly to a consumer;

173

Services Airlines, banks and insurance companies are selling their services on the internet; Supply chain providing services to develop products through the stages of production from raw materials to final products or services Summary ICT stands for Information Communications Technology. ICT uses digital technology to help you and me, businesses, civil organisations, government, and communities to have products that will store, retrieve, manipulate or receive information electronically in a digital form; the examples of the products are personal computers, digital television, email, robots and cell phones. Now ICT is now changing the way businesses are run? E-commerce is the new addition to ICT. E- Commerce is buying and selling using communication technology. Activity 1. What is ICT? 2. What are the uses of ICT? 3. Suggest what can be sold using communication technology?

REFERENCES
1. Armstrong Peter, Critique of Entrepreneurship People and Policies, Palgrave Macmillan, New York, 2005; 2. Birley Sue and Muzyka Daniel, Mastering Enterprise, Pearson Professional, London, 1997; 3. Calvin Robert J. , Entrepreneurial Management, McGraw-Hill, New York, 2002; 4. Kelly Kevin, New Rules for the New Economy, Fourth Estate, London, 1998; 5. Livesay Harold C. Entrepreneurship and the Growth of Firms, Edward Elgar, Aldershot, UK, 1995; 6. Perry Martin, Samll Firms and Network Economies, Routlegde, New York, 1999; 7. Warner Jon, Networking, Management Pocketbooks, Hants, 2000.

174

MODULE NO. 138-03-A MODULE TITLE: UNIT A3.1 Developing Enterprise Management Skills Managerial and leadership skills in an enterprise

3.1.1

Duties and Responsibility of Management 60 Minutes

Session Duration Session Rationale

In order to run a successful, growing enterprise, an entrepreneur needs to possess not only entrepreneurial attributes but managerial skills as well

Learning Objectives:
At the end of the session, trainees will be able to State the duties and functions of management Relate the functions of a manager to entrepreneurship

Learning outcomes
Duties and functions of management explained Functions of management related to entrepreneurship

Learning Activities
Ensure that the learning activities include; A definition of a manager and management

Session Delivery
Go through the reading materials provided together with the provided reference material and prepare flipchart or transparence and discuss the following:

175

1. An explanation of functions of management which should include planning, organizing, directing, motivation and control. This should be followed by 2. A discussion on the duties of a manger as arising from the function 3. Follow up with a discussion on the responsibility of a manger to the enterprise and to the employee; 4. In this discussion, bring out the issue of sources of authority 5. End the discussion on some of the tips as why manager fails

Methodology: Lecture and Discussions Reading Materials


What is Management?

The art of achieving the objectives of a business / organization in the most efficient way Functions of Management As a process management can be described in terms of several major functions often performed simultaneously or as part of continuum The Functions are: Planning Organizing Staffing Directing Controlling 1. Planning

Getting things done through the efforts of others Making things happen and produce results

The determination of course of action in order to achieve desired result It is the process of anticipating the future and discovering alternatives course of action a process by which specific objectives are established and details ways of achieving them are established Planning is a sub function of forecasting what is to be done How when 176

where and, Who will do it It involves selection of programmes and procedures 2. Organizing

objectives,

strategies,

policies,

Organisation a group of people working together to achieve a common goal Organizing division of work, allocation of duties, authority and responsibility it includes span of control, numbers of levels of management and delegation It is bringing together human, financial, material resources, plant and machinery to objective

3.

Staffing manning and keeping manned the position provided in the org. structure a process in which managers select, train, promote and retain and retire subordinates Directing

4.

Guiding and leading subordinates a process by which actual performance of the subordinates is guided towards common goal Inculcating in subordinates a keen appreciation of the org. orientates them continuously, clarifying their assignments etc Directing involves delegating Motivating Communication Coordinating

5.

Control

Continually monitoring of activities Its about measuring and correcting activities Types of Control

177

production and operation control inventory control quality control financial control
The Individual Aspects of Control

Establishing reporting systems developing performance standards measuring performance standards taking corrective action rewarding

Responsibilities of a Manager Responsibility to the Department Knowledge of managerial techniques good leadership qualities economy in operations planning & coordination of work establishment of targets and standards proper care and use of equipment, materials etc Knowledge of department, interpretation of laws rules, regulations and policies

Responsibilities to the Employee

Indoctrination of new employee Knowledge of HR adequate instruction in performance of assignments accurate, definite and reasonable assignments recognition, respect and praise when due fair evaluation of performance good working conditions

Authority

of Managers Authority - emphasized power over a situation or an individual the right to command and power to make oneself obeyed Two Types of Authority 178

statutory authority - belongs to the position personal authority - as a result of intelligence, knowledge, moral
qualities and the gift to command people

to be effective both types of authority should be available

Why Managers Fail Lack of managerial skills knowledge and attitudes promoting levels of incompetence lack of authority lack of leadership drive poor relationship with the boss lack of commitment membership in trade union fear of victimization organization climate Is my relationship with senior management satisfactory? Am I doing too much routine or administrative clerical work? Have I have enough time to think? Do any of my staff need further training?

Reference Material

1. Busines Environment P. Diwan, Excel 1996 2. A Manual of Business Opportunity Identification, J.B Patel 1995

179

3.1.2

Leadership Skills

Session Rationale
Leadership is the ability to inspire others to seek defined goals and objectives enthusiastically. It is the human factor which binds a group together and motivates it towards goals. It is the quality of behaviour in individuals by which others are drawn to accept their guidance the more reason it is so crucial in entrepreneurship.

Session Objective
At the end of the session, trainees will be able to Define the term leadership Identify types of leadership Demonstrate good leadership qualities

Session Outcome
Leadership defined Types of leadership identified Trainees demonstrating good leadership qualities

Learning activities
Ensure that the learning activities centers on the following: A generic definition of the term leadership to include styles, traits, characteristics, roles and responsibilities. Identify the types of leadership (autocratic, participatory and consultative). In addition, a demonstration of good leadership qualities

Methodology: Lecture and Discussions Session Delivery


1. Show TR 3.1 and: define the term leadership and a leader discuss the differences between a leader and a manager discuss the functions of a leader Divide the trainees into small groups and let them identify and discuss leaders they consider to be good in their communities. 180

2.

3.

4. TR 3.1 Defining Leadership Ability to inspire others to seek defined goals and objectives enthusiastically A human factor that binds people together and motivates it towards a goal

Let the trainees identify traits and characteristics of such leaders Rap up the session with a short lecture on leadership styles and source of their power as on HO 3.2 Distribute HO 3.1 as supplementary material

A leader one who exercises influence over others

Quality of Good Leaders Commitment: Self dedication to a cause Courage:

ability to stand difficult and dangerous situations


Foresight:

Ability to see things before they happen


Human Relations:

Empathy putting oneself in position of others


Credibility:

Having a good track record


Intelligent Ability to think quickly and correctly Decisiveness Ability to stand by own decision Emotional Stable Ability to control ones temper Visionary Ability to create picture of what the future should be Self-confident Being sure Capacity to admit error Honest

181

Characteristics of Principle - Centered Leaders They are continually learning They are service oriented They radiate positive energy - cheerful. Pleasant, happy, optimistic They believe in other people They lead balanced lives

read best literature Keep up with current affairs they are not extremists

they can feel their own worth They exercise for self renewal

they regularly exercise the four dimension of human personality physical mental emotional spiritual
They see life as an adventure They are synergistic Source of Powers for Leaders Coercive Power Power dependant on fear Reward Power Opposite of coercive power Legitimate Power Derived from organization structure i.e. as a result of position Expert Power Special skills, knowledge Referent Power When people want to identify themselves with a person they consider desirable Leadership Styles Autocratic-Leader Centered Consultative-Team Centered Participative-Individual Centered

182

L E A D E R S H I P Definition Leadership is the ability to inspire others to seek defined goals and objectives enthusiastically. It is the human factor which binds a group together and motivates it towards goals. It is the quality of behaviour in individuals by which others are drawn to accept their guidance. A leader is one who exercises influence over others. He or she is a person with the ability to influence the behaviour of others in a given situation. Leadership and Management Managers by definition are expected to lead by virtue of the positions they hold in the organisation. Thus term manager and leader are sometimes used synonymously. Organisation depend to a larger extent on the leadership quality provided by managers: they are expected to motivate or inspire people to put in their best. In addition it involves getting people committed to the organisations mission or vision. Functions of Leaders in Organisations Crafting path for the organisation; giving direction to the organisation Communicating information and giving advice Monitoring performance and giving feedback Establishing basic values for the organisation Clarifying and solving problems Administering rewards and sanctions Making decisions Representing the group to others Thus there is an overlap between management and leadership. Qualities of Good Leaders Commitment: self dedication to a cause, enthusiasm, determination and serving as role model Courage: ability to stand difficult and dangerous situations Foresight: ability to see things before they happen Human Relations: empathy; putting oneself in position of the other.

183

Credibility: having a good track record Integrity: having good moral standing Intelligence: ability to think quickly and correctly; reasoning power Decisiveness: ability to stand by his or her decision Emotional stability: able to control ones temper Visionary: ability to create picture of what the organisation should be in future Self-confidence: being sure of what one is doing Capacity to admit error Honesty: being trustworthy Sources of Power for Leaders Power is the ability of an individual to control or influence others. A person has power over you only if he or she controls something you value. Coercive Power This is power dependent on fear. One reacts to this power out of fear of the negative results that might occur if one failed to comply. It rests on the application or threat of application of physical sanctions such as infliction of pain; generation of frustration through restriction of movement etc. For example a person goes into the bank, holds a gun to the tellers head and asks for money; the teller will comply out of fear of losing what his or her values most - life. In the organisational context, one has coercive power over the other if they can dismiss, suspend or demote someone assuming that the other person values their job. Reward Power This is the opposite of coercive power. People comply with the wishes or directives of another because it produces positive benefits. The reward can be anything that one values - money, promotion, favourable appraisal etc. Legitimate Power In the organisation this power is derived from ones structural position. This is the power one has as a result of his or her position in the formal organisational hierarchy. It embraces acceptance by members of the organisation of the authority of a position.

184

Expert Power This is the influence wielded as a result of expertise, special skill or knowledge. Physicians, lawyer, engineers etc have expert power. So we follow their advice. Referent Power This is power exercised as a result of one wanting to identified with a person who they consider to have desirable or unique person traits. If I admire and identify with you, you can exercise power over me because I want to please and be like you. It develops out of admiration of another and a desire to be like that person because of the unique characteristics they possess, e.g. oratory etc. It is much like charisma. If you admire someone to a point of modelling your behaviour after them, then they possess referent power over you. Referent power explains why celebrities are paid millions to endorse products in commercials. When you possess something that others require, but you alone control, you make them dependent on you and gain power over them. If something is plentiful, possession of it will not increase your power. HO 3.2 Leadership Styles There are basically three types of leadership styles reflected by way of making decisions. 1. Autocratic Style: Leader-centered

The leader or manager makes decisions and imposes them on subordinates. All the power is centralised in one person who enjoys issuing order and directives. There very little teamwork and association with subordinates. This is the militaristic type of leadership. Here people simply do what they are told to do. Consequently there is no room for subordinates to use their creativity. People will be working in fear and in the process may be making a lot of mistakes. This style of leadership is appropriate in emergency and crisis situations.

185

2. Democratic Style:

Team-Centered Here decision making is shared between the leader and the subordinates, but the leader has the final say. The leader uses subordinates ideas and opinions constructively. Criticism and praise are giving objectively. When however the leader is forced to make a decision without consulting subordinates, he or she explains to the group. Because decision making is shared, it is owned by all. In addition, because of the participatory nature of the democratic style, there is a feeling of belongingness.

3.

Laissez-faire: Individual-centered This is a free for all style of leadership. The leader allows group members to do as they please. Decisions are made by whoever is willing in the group. The leader only provides information, but does not take responsibility.

Reference Material
1. Busines Environment P. Diwan, Excel 1996 2. A Manual of Business Opportunity Identification, J.B Patel 1995

186

3.1.3

Team Building

Session rationale
The importance of team work in any undertaking is well understood and yet how effective this collection of individuals work, how it feels about its accomplishments and about itself is often left largely to chance

Learning objectives
At the need of the session, trainees will be able to: Define a team Outline the process of team building Relate team building to entrepreneurial process

Learning outcome
The term team defined Team building process outlined Team building related to entrepreneurial process

Activities
Ensure that the learning activities include the following: A generic explanation of a team - A collection of individuals who have come together for a specific common purpose Outline the team building process forming, storming, norming and performing Outline the characteristics of an effective team to include, gate keeping skills, having a common goal, equal participation in problem and decision making process

Methodology: Lecture and Focused Discussions Tips


1. Divide trainees into small groups and let them discuss the difference between a team and a group of people working together Show TR3.1 and discuss i. the term team; ii. the differences between a team and a group;

2.

187

3.

iii. characteristics of a winning team Show TR 3.2 and discuss the stages of team development

TR3.1 Team Work What is a Team? A collection of individuals who have come together for a specific common purpose. Their continued effort are supposed to produce a given product/service A Team is a group of people who feel energized by 1. ability to work together 2. fully committed to high level of output 3. care about how each member feels during work process The Difference between a Team and a Group Membership The members of a team are identified as such Goals The team knows what its objectives and goals are in terms of work it has to do, and in terms of the sort of team it wants to be Interdependence Individuals alone would not be able to achieve the goals Collaboration Members continuously help and support one another Identification Team members think in terms of weinstead of I Teams as Synergy Concept Synergy is the force that makes the whole greater than the sum of its individual parts Through effective team work, a group can generate solutions to problems that are a far superior to those that are developed individually by its members Characteristics of a winning Team Strong commitment to the achievement of organisation goals Open and frank communication

188

Actively listen to each other a climate of trust and understanding is developed All members of the team participate in problem solving and decision making process Member have gate keeping skills to ensure involvement of the whole team Team members confront each others assumption in ways that do not close further discussion they are wary of reaching agreements premature conflict is regarded as healthy and a necessary part of the problem solving process conflicts resolved through negotiation and collaboration A cohesive bond exists between individual team members and a team as a whole TR3.2

Stages of Team Development Forming in the early stages, the team leaders and members need to get used to each other, exploring their strengths and weakness Common failing - the desire to make an immediate impact, by imposing their authority inappropriately What the team leaders should do get to know the balance of skills in the team examine the teams objectives and targets work to establish trust and openness within the group Storming Temperamental and attitudinal differences begin to appear - at times translated into open conflicts. Team leader should encourage people to open, but not confrontational about their differences help them see differences positively ensure high level of discussion and debate around contentious issues Norming Stage Team members begin to work out ways of working effectively together

189

The

role of team leader is to: help the team develop ground rules about team behavior instigate regular progress review consolidate his / her own relationships with the groups in terms of accessibility, support, decision making process etc

Performing High levels of performance are achieved What should be done provide the support the team needs maintain open communication, joint problem solving manage the boundaries between the team and the rest of the organisation

Reference Material
1. Small Business Management II, The Open Learning Programme in Entrepreneurship EDI

190

UNIT A3.2

Marketing

3.2.1 Marketing Concepts Session Rationale


Marketing is the performance by an enterprise of all the activities required in order to create, promote, and distribute products in accordance with the present or potential customers demand, need and want and, the firms ability to produce. Marketing is a nerve centre of any enterprise that can not be ignored

Learning Objectives
At the end of the session, trainees will be able to: Explain the term marketing Explain the five marketing concepts Discuss the importance of marketing to an enterprise

Learning outcome
The term marketing explained The five marketing concepts explained The importance of marketing to an enterprise explained

Activities
Ensure that the learning activities include the following: A generic definition and explanation of marketing. This should include; needs ,wants, customer satisfaction A generic explanation of the marketing concepts. These are, production concept, product concept, selling concept, marketing concept and, societal marketing concept A general discussion on the importance of marketing on the operation of an enterprise. Emphasis should be on the need to identify the needs and wants of a customer and meeting these profitably

191

Methodology: Lecture and Discussions

Session Delivery
1. Using a flip chart or transparencies discusses the meaning of marketing, and the five concepts under which organisations operate i.e. the production concept, the product concept, the selling concept, marketing concept and the marketing societal concept as shown in HO 4.1. 2. This should be followed by a discussion on the marketing activities (TR4.1) 3. Give a summary of your presentation Reading Materials TR 4.1 Five Marketing Concepts Product Concept L Consumers will favour those products that the most quality, performance of innovative features L Managers in these organizations focus their energy on making superior products and improve them over time they are cough up in a love affair with their product and fail to appreciate the market The Production Concept L Consumes will favour those products that are widely available and low in cost. concentration is on achieving high production efficiency and wide distribution coverage L Assumption: Consumers are primarily interested in product availability and low price The Selling Concept L the consumers, if left alone, will ordinarily not buy enough of the organization's products

192

the way forward- aggressive selling and promotion effort L Assumption: The company has available a battery of effective selling and promotional tools to stimulate buying Marketing Concept L The key to achieving the org. goals consist in determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than competitors The Societal Marketing L Organisations task is to determine the needs, wants, and interest of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves the consumers and the societys well-being HO 4.2 MARKETING ACTIVITIES Marketing is the performance by an enterprise of all the activities required in order to create, promote, and distribute products in accordance with the present or potential customers demand and the firms ability to produce. This definition is dealt under the following headings:

Marketing activities
Market Research activities concerned with obtaining marketing information. It is necessary to find out the facts about the market so that decisions can be based on factual information and not on guesswork. Product Planning activities concerned with developing a product so that it satisfies the customer and enables the enterprise to use its productive capacity fully. Pricing activities concerned with determining the price of the product on the basis of costs as well as market factors such as distribution channels used, discount structure applicable, level 193

of prices of competitors products, ability or willingness of customers to pay, and so on. Advertising activities concerned with making the product known to the customers and creating demand for it. Advertising brings the customer to the product. Sales Promotion activities covering all aids to sales other than advertising. Sales promotion stimulates demand and increases sales. Usually sales promotion moves the product towards the customer. Distribution activities concerned with distributing the product from the manufacturer to the customer, making the product available and easy to buy.

Principles of marketing management


Active attitude enterprise must have an active attitude towards the market. It cannot expect customers to buy a product simply because it is produced. Management must actively study the market, persuade customers, promote the produce and organize distribution. Importance second principles is that the management of an enterprise must recognize that marketing should be given at least as much importance as other basic managerial functions such as administration, production and finance.

Marketing Techniques
The management is required to control the application of a range of skills and techniques in marketing generally derived from practical industrial experience and from modern social services such as economics, statistics and applied psychology.

Marketing Strategy
Marketing Strategy is the art of selecting the appropriate market techniques.

194

Choice of techniques depends on: type of product size of the firm market resources of the firm

Creating a market
The proper and active use of marketing techniques provides the possibility of creating a market for example: 1. A market can be created by increasing the present volume of sales 2. Creating a market can mean waking up a sleeping market 3. Creating a market can involve creating a demand that did not exist at all.

Reference Material Marketing Management, Phillip Kotler, Prentice Hall India, 1997

195

3.2.2

Marketing Plan for an Enterprise : 60 Minutes

Session Duration Session Rationale

A marketing plan is a central instrument for directing and controlling marketing effort in an enterprise. Enterprises that want to improve their marketing effectiveness and efficiency must learn how o create and implement sound marketing plans. Therefore, this session will seek to address how an effective plan can be developed

Learning objectives
At the end of the session, trainees will be able to: Outline the process of marketing plan Apply a marketing plan to an entrepreneurial process

Activities
Ensure that the learning activities include the following: An outline of the marketing planning process which should include an analysis of market opportunities selection of a target designing of marketing strategies and programmes and the implementation Lecture and Discussions

Methodology:

Session Delivery
1. Show TR 5.1 and distribute HO5.1 and discuss the Marketing Plan process 2. Show TR5.1 and discuss the content of a Marketing Plan 3. Administer HO 5.2 (individual exercise) and let each trainee come up with a marketing plan for their projects

196

Reading Materials TR 5.1 The Marketing Plan Process

Analysing Market Opportunities Researching and selecting target markets: Designing the marketing strategies: Planning marketing programmes Organising, implementing, and controlling the market effort:

HO 5.1 The Marketing Plan Process

Analysing Market Opportunities: The first task to marketing plan is


to identify and analyse the long term market opportunities. In order to do so there is need to operate a reliable marketing information system. Market research is an indispensable marketing tool in this regard.

Researching and selecting target markets: The second stage is to


research and select target markets. There is need to know how to measure and forecast the attractiveness of nay given market. This requires estimating the markets overall size, growth, profitability and risks

Designing the marketing strategies: The third stage is the adoption


of appropriate marketing strategies. These include product positioning and differentiating. For example, an enterprise could decide to offer high quality, high price for a particular market target

Planning marketing programmes: Marketing strategies should be


transformed in to marketing programmes. This is accomplished by making basic decisions on marketing expenditure, marketing mix (price, place, product, promotion) and market allocation

197

Organising, implementing, and controlling the market effort: The


final stage in the marketing process is the organising market resources and implementing and controlling the market plan. An entrepreneur must build a marketing organisation or effort that is capable of implementing the marketing plan. In small enterprises, one person can carry out all the marketing tasks. This might not be the case with large enterprises were a team of marketers could be required TR5.1 Content of a marketing plan 1. Executive summary: present a brief overview of the proposed plan 2. Current marketing situations: presents relevant background data on the market, products, competition etc 3. Opportunity & issues analysis: identifies opportunities/threats, weakness, strengths, and issues facing the product 4. Objectives: defines the goals the plan wants to reach 5. Marketing strategies: present broad marketing approaches to be used 6. Action programmes: Answers; what will be done, by whom, when and where 7. Project profit and loss statement: forecasts the expected financial outcomes 8. Controls: indicates how the plan will be monitored HO 5.2

Individual Exercise
Develop a realistic marketing plan for your project

Reference Material
Marketing Management, Phillip Kotler, Prentice Hall India, 1997

198

3.2.3

Buying

Session Duration Session Rationale


This session will provide an opportunity to understand the influences that goes on when a customer decides to buy a product or service

Session Objectives
On completion of the session, trainees will be able to: Define the term buying Outline the buying problem Discuss factors influencing the buying process

Session Outcome
The term buying defined The buying process outlined Factors influential to the buying process discussed

Activities
1. 2. 3. 4. Ensure that the learning activities included the following: A generic explanation of the term buying Outline the buying process at given below Discuss the factors influencing buying behaviour as given below Lecture and Discussions

Methodology;

Session Delivery
1. Show TR 6.1 and discuss the model of buying behaviour 2. Show TR 6.2 and discuss the Factors Influencing Behaviour. This should be followed by 3. A discussion on the Buying Roles (HO 6.1) 4. End the presentation with a discussion on the five Stages of Buying Behaviour Process (as shown on TR 6.3)

199

TR 6.1 Model of Buying Behaviour Marketing Stimuli Product Price Promotion Place Other Stimuli Economic Technological Political social

Buyers characteristics Cultural Social Personal Psychological

Buyers decision process Problem recognition Information search Evaluation decision Post-purchase behaviour

Buyers Decision Product choice Brand choice Dealer choice Purchase timing Purchase amount

200

TR 6.2 Detail Model of Factors Influencing Behaviour Cultural Cultural Social Reference groups Personal Age & life cycle stage Occupation Learning Social Clas s Roles & Statuses Economic circumstance Personality HO 6.1 Buying Role For many products it is easy to identify a buyer. Men usually chose their shaving equipment, and women chose their dishes. Other products involve a decision- making unit consisting of more than one person. For instance, in buying a car, a son might suggest a new car. A family might suggest on the car to buy, A husband might decide on a make. The wife might have different thoughts on the type of the car Thus, we can distinguish five role people can play in a buying decision 1. Initiator: A person who first suggest the idea of buying a particular product 2. Influencer: A person whose view or advice influences the decision 3. Decider: A person who decides on any component of a buying decision; whether to buy, what to buy, how to and when 4. Buyer: the person who makes the actual purchase 5. User: The person who consumes or uses the product Beliefs & attitude Psychological Motivation Perception Subculture Family Buyer

201

TR6.3 Five Stage Model of the Buying Process Need Information purchase recognition search behaviour Evaluation alternatives Purchase decision Post

Reference Material
Marketing Management, Phillip Kotler, Prentice Hall India, 1997

202

3.7 Session Duration Session Rationale

PRICING 60 Minutes

For any entrepreneur to have a return on his or her business, they have to make a profit. One of the factors in the profit equation is the price. Therefore, right pricing is a prerequisite to a success of any enterprise

Session Objective
At the end of the session, trainees will be able to: Define pricing and price Explain the importance of pricing in an enterprise Set price for a given product/service

Learning Activities
Ensure that the learning activities include a generic definition and explanation of the terms, price and pricing A generic explanation of the importance of pricing to an enterprise Activities required to set price for products or services Lecture and Discussions

Methodology;

Session delivery
1. Using a flipchart or transparency, define price as attaching of monetary value to a product or service 2. Proceed to explain the importance of pricing as outlined in HO7.1

203

HO 7.0 Pricing Businesses make a profit by selling goods and services at a price that is higher than their costs. Profit is a result of the interaction between cost, volume and price. For instance, the volume of goods sold affects the cost per unit. If the volume increases, the fixed overheads are spread over more units and so, the cost per unit decreases. Cost is also influenced by price. Pricing is very important because it has a major effect on the volume sold and as a consequence on profit generated One of the major considerations of a pricing decision is the effect a change in price will have on volume sold. If price is reduced, by how much will demand increase? If price is increased will a large or small decrease in demand occur? A complete answer to these questions, if such an answer does indeed exist, will involve a number of different factors in the total marketing mix, but the basic microeconomic analysis of demand is the fundamental starting point. There are two extremes of the price/demand trade-off represented graphically below:

Price

Demand

Pricing Strategies Based on Costs


1 Total cost Pricing There are many different pricing strategies. Cost is one of the many methods and is certainly not universary used as a key method for pricing Cost plus pricing involves adding a mark-up to the total cost of the product in order to arrive at the selling price. Un fortunately, because

204

of fixed costs, the full cost of a product will be a function of the number of units produced, which in turn will be a function of the number of units sold. Yet sales quantity will be a function of the price charged for the product and so the argument is circular 2. Marginal Cost- Plus Pricing To an accountant marginal cost is the same as variable cost. Some of the reasons for using it in preference to total cost are as follows: It is just as accurate as total cost-plus pricing. A large mark-up percentage is added because both fixed costs and profit must be covered, but the uncertainty over the fixed cost per unit remains in both pricing methods Knowledge of marginal cost allows the possibility of pricing below total cost when times are bad, in order to fill capacity It can be used very successfully to price specific contracts because it can be used to recognise relevant costs and opportunity costs as well as sunk costs. It also recognises the existence of scarce or limited resources, the use of which by competing products and services need to be reflected in selling prices if profit is to be maximised.

Reference
1. Fundamental of Financial Management, J. H Horn, PHI, 1996 2. Management Accounting, CIMA, Cashmore C. & I Balachandra, 2001

205

3.2.5

Market Research in an enterprise

Duration 60 minutes Session Rationale


The ability to scan the environment for business opportunities, ability to analyse the markets and offer a desirable package to the customer is very crucial to the success of any enterprise and, this can be achieved through a market research

Session Objectives
At the end of the session, trainees will be able to Define market research Outline the process of market research Conduct a market research

Session Outcome
Market research defined Market research process outlined Trainers able to conduct a research

Activities
Ensure that the learning activities include the following: Generic explanation of market research as a systematic way of capturing and analyzing data An outline of the research process from problem identification, research design, data collection and analysis and, report writing

Methodology: Lecture and Discussions Session Delivery


1. Through the use of flip cart or transparencies, define market research and explain the various uses of market research 2. Discuss the various types of research (census and inferential, pure and applied research) 206

3. Discuss the main stages of the research as given below. 4. A detailed discussion on the sources of data and data collection techniques should follow 5. Divide the trainees into small groups and let them identify a research topic and outline how they would proceed to conduct a market research

Reading Material
HO 8.0 Market Research Marketing Research: Many management decisions are made under the condition of uncertainty and risk, but the use of marketing research is one of the few highly developed areas where management research is scientific quality. This is so because markets re dynamic and competitive. Success often depends on control over markets Important decisions have to be taken frequently, and in order to make decisions with confidence, managers of enterprises need relevant and comprehensive information. It is the task of marketing research to provide this information Marketing research can be defined as, the objective gathering, recording and analysis of all facts about a problem relating to the transfer and sale of goods/services from producers to consumers / users. Market Research: is a concentration of one part of marketing research. It concentrates on quantifying information about potential sales. It is a study of markets. This may be carried out by the enterprises own staff or by an outside firm or specialists to find out the possibility of creating or expanding a market for a particular product/service Main Areas of Study What is the potential market what are the customers needs and wants what is the enterprise's expected share of the market what is the probable volume of future shares

207

what is the geographical distribution of the market will consumers accept the product / service what features of the product do they want what is the appropriate packaging why do customers buy the product

In short, the market research will be used to discover: Size of the potential market the enterprise share of the potential market date for the annual sales etc Product / Service Planning When planning for a new product or service, the market research will assist in: providing data on whether the product is likely to sell and the most desirable features carrying out an internal assessment as to the enterprise's capacity and capabilities I.e. technical and marketing skills required considering the need for product improvement or development considering the kind of packaging

TR

Steps in Market Research


1. Problem Identification and definition 2. Research Design: Establish the type and amount of information, Decide on type of data (primary or secondary), Determining data collection methods, sample size and techniques 3. Data Collection 4. Data Analysis 5. Report Writing Activity

Individual Exercise
Identify a market research topic and, outline how you would go about conducting the same market research

208

Reference Material
Marketing Management, Phillip Kotler, Prentice Hall India, 1997

UNIT A3.3 3.3.1 Costing Session Duration Session Rationale

Cost and Price of Product/Service

90 Minutes

Determining what it costs you to produce a commodity is important because it acts as a basis upon which entrepreneurial decision could be made, for instance fixing of price, what wages and salaries to give and what profits to make. etc.

Learning Objectives
By the end of this module, students should be able to: 1. 2. 3. 4. describe the concepts of cost and costing place costs and costing into their correct classes apply to your business the various methods of costing a product fix the price of a product using the principles of costing

Learning outcomes
The term cost defined Importance of costing explained Cost for given product calculated Lecture and Discussions

Methodology: Activities

Ensure that the learning activities include the following: A generic definition of cost and costing A generic explanation of the importance of costing to an enterprise Techniques for calculations of various costs

209

Session Delivery
1. Divide the trainees into small groups to discuss questions on TR 9.1 2. Follow the group discussion with a presentation of HO 9.1 to consolidate answers given by trainees 3. Let the participant answer and discuss question on HO 9.2 - an individual exercise 4. Give HO 9.3 as a supplementary material

Reading Materials
TR. 9.1 Group Exercise 1 1. 2. 3. What is costing? What is a cost? Your business has bought a number of things to use. List the cost of all these and add them together. How much money does your business have? Now that you know what your business has, what are you going to do to make it grow? Do these figures you have, show that your business has problems? If they, do what are you going to do about it?

4. 5.

HO 9.1 Costing Introduction Costing: Determining what it costs you to produce a commodity is important because you want to fix the price at which you sell that commodity. It also helps you in deciding: how much of the commodity you should produce.

210

What aspects of cost you should control in order to reduce cost and increase the profits, and by how much you can change the price, costs and the amount you can produce if you are to get the profit you want.

There are a number of methods that you can use to decide the cost of a commodity. We discuss three of these methods in this module. These are: absorption costing standard costing marginal costing Under marginal costing, we discuss the idea of breaking-even. This idea helps you in making important production and pricing decisions, and gives value of the stock (goods) in the organisation.

Cost Accounting is how you break into parts what you spend on the business.
You separate costs for each product or service which your business supplies to the customers. Management Accounting is a term that we use to describe the reports that we prepare for management from time to time. We base these reports on cost accounting. Costing is the classification, recording and appropriate allocation of expenditure for the determination of the costs of products or services. Why do we do costing? We do costing because we want to: Provide information which we can use to make good decisions Have basic information which we can use to do pricing, budgeting and tendering. Monitor and control expenditure in the organisation. Give value of the stock (goods) in the organisation.

211

TR. 9.2 Individual Exercise 2 1. Using your business as an example, list all the costs that you manicure per month. Use the heading given above. 2. What are your highest costs? 3. What are your lowest costs? 4. How much money do you get per month after selling your products? 5. Subtract the total cost of expenses from the total amount that you make from your business. 6. Are you making a profit? 7. Which costs can you control easily? 8. Which costs can you not control? Why?

HO 9.2 Parts of a cost Costs of a product have four main parts. These parts are: Direct material costs Direct labour costs Direct expenses Overheads We are now going to discuss each in some detail. Direct material costs Direct material costs are associated with those materials which we use to produce a product. For example, in making bread, we use grain flour, milk,

212

sugar, yeast and oil as raw materials. The costs of these materials are our direct material costs.

Direct labour costs Direct labour cost is what we spend directly on the workers who produce the product. In case of bread, direct labour costs include the wages paid to the bakers making the bread and all the support staff directly involved in the baking.

Direct expenses Direct expenses are directly associated with the product but we do not classify them under direct materials or direct labour. Examples are the electricity and the water that we use in making bread. Overheads Costs that we cannot trace directly to the product come under another group called overheads. These costs include rent, administrative expenses, and maintaining the service departments. Maintaining the service departments covers seeing that the boiler is working, there is enough security and the buildings and machines are kept in working order. Prime costs This is the total of direct labour, direct materials and direct expenses. They are the most important costs [prime] in an organisation. In the short run, production can only continue if the organisation can meet these basic costs. Factory overheads These are the overhead expenses that come about as a result of the work that goes on in the factory. We get these costs for the benefit of the factory alone. In the case of a bakery, this relates to the salary of the supervisor, depreciation and maintenance of the bakery building and its security.

213

The total of prime costs and factory overheads come under production costs. The production cost is the total cost of producing the commodity in the factory. For producing bread, this is all the cost that we get for producing the bread and leave it on the bakery floor.

Selling and distribution overheads The cost that we get in the process of taking the product to the customer comes under selling and distribution overheads. It includes the salaries of the sales personnel, cost of maintaining selling and distribution vehicles, advertising, among other things. Administrative overheads Every organisation spends money so that it can run efficiently. carrying out the running or administration of an organisation administrative overheads. Administrative overheads include running the chief executive office and the salaries of departments such as accounts, personnel and security.

The cost of comes under the cost of the support

If the product sells at such a price that all these costs can be covered, we can then deduct the total cost of the goods sold from the sales. The difference that we get is the net profit. Below is how to calculate the net profit. Direct Labour + Direct Materials + Direct Expenses = Prime Cost Prime Costs + Factory Overheads = Production Cost Production costs + selling & Distribution Overheads + Administrative Overheads = Cost of Sales Selling Price Cost of Sales = Net Profit Activity 1. List the various classes of costs 2. How can the knowledge of a product cost benefit the entrepreneur? 3. In your planned business what are your: Primary costs? Overheads? Selling and distribution overheads?

214

UNIT A3.10

Business Ethics and Values in managing an Enterprise

3.10.1

Culture, Values and Business Ethics

Session Duration Session Rational


The session will help the trainees decide on the values and culture of their enterprises at the same time recognising that there are business ethics to be followed. It covers the approach that one should adopt to establish the value system of your business unit.

Session Objectives: At the end of the session, trainees will be able


to: Define the terms culture, values and business ethics Explain the influence of cultural values and ethics on an enterprise Discuss the role of cross cutting issues in business

Activities
Ensure that the learning activities include the following: A generic explanation of the terms, cultural values and business ethics Explanation of the influence of cultural values, business ethics and family on the operation of an enterprise

Session Delivery
1. Divide the trainees into small groups and let them define the terms culture, values and ethics 2. Use a flipchart and collect all the answers given by group 3. Follow up with a discussion on how the three terms affect the operation of an enterprise

215

4. Administer HO 10.1 as a Supplement to your discussion with handout 5. Give the trainees to go through self-assessment instrument HO 10.2

Methodology:

Lecture and focused discussions

Reading Material
HO 10.1 Culture What is organisation culture? The importance of organisation culture: An organisation culture will influence its strategy, its way of doing business and the way it responds to change. A key factor in determining how effective an organisation is will be the appropriateness of its culture for its stakeholders, and particularly its customers. A strong culture will be beneficial if it focuses on these elements and highlight the need to change proactively The main effects and characteristics of a strong culture is as follows; It will strengthen behavioural regularities and norms amongst its members of the organisation It will minimise some of the perceptual differences among people within the organisation It will reflect the philosophy and values of the organisations founder or dominant group Some aspects of culture will be visible while many others will be invisible and more significant Ethics The term ethics refers to the code of behaviour considered correctly by a particular group, profession or individuals. Managers usually face a lot of situations that require ethical judgements and, the question of what criteria these judgements will be based on is one that requires attention, particularly so that there are no universally agreed codes of behaviour. However, these could be some of the considerations:

216

Decisions should be evaluated according to their practical consequences in bringing about the greatest good for the greatest number of people People have basic rights, such as the freedom of speech and the right to a fair trial Decision makers should be guided by the principle of fairness and equity, as well as impartiality

What are Basic Values? Suppose that you have deputed your marketing manager to a foreign country for scouting business for your firm. He contacts a customer who wants to place an order with your firm, provided you supply him sub-standard goods at low prices. The sub-standard goods are likely to harm the health of the population in that country even though the value of order and the profit margin offered may be high. What is your marketing manager likely to do? He could do two things: ask you for guidance in the matter or may straight away tell the party that it will not be possible to accept an order for sub-standard goods even if the volume of sales is high and the profit margin is good. Your marketing manager, may also emphasise that to your firm the health and welfare of people is of prime concern and therefore it would not even dream of doing anything that could affect the health of people anywhere in the world. When he asks for your guidance in the matter, it means that your firm does not have clear idea of the values that it cherishes. If he rejects the offer for an order without talking to you first, that would mean that not only your company has a clear idea of the values, but that you have taken care to convey these values to all the persons in the company. Thus, basic values of a company are like lighthouses on sea shores. These lighthouses with their powerful revolving search lights help ships to sea and find their way towards the shore even in darkness. Similarly, values give direction to a companys personnel and help them to take decisions that maintain and increase the companys reputation in the marketplace.

217

Values touch every aspect of business Though we have given an example of marketing decisions based on values, you must remember that values of a company encourage all vital aspects of a companys functions. For instance, let us talk about relations with people within the company. Some companies treat people as disposable assets who can be hired and fired at will. Other companies look at people as valuable resource, a storehouse of ideas, and generators of innovations and treat them accordingly. Similarly, a company could have a set of values when dealing with the government, with competitors, with customers, with nongovernment organizations, etc. HO 10.2

Self Assessment Instrument


The following multiple choice questionnaire will help you to discover your own set of values. Consider the following situation:-

1.

A senior and loyal employee of your company who is also an expert in his field suddenly approaches you with a letter of resignation. How would you handle the incident? a) b) c) d) Find out where he wants to join. Increase his pay and ask him to continue Scold him and tear off the resignation letter Any other approach

What does your response indicate about your value systems for employees? 2. An export consignment has been found to be defective by your foreign Customer. How would you react? a) Make effort to see that the customer accepts the goods even at a discount.

218

b) Contact the customer, apologise for the inconvenience and assure him that a replacement will be sent immediately. c) Take legal action to force the customer to accept goods. d) Any other approach. What does your response tell you about your value systems for customer? 3. A competitor is in trouble. dispose off his unit. You have heard that he wants to

How would you go about this matter? a) Send feelers for a buyout. b) Spread word in the market about imminent closure of the unit c) Keep quiet till someone acquires the unit. d) Any other approach 4. The party which markets your products is showing signs of slowdown; he is not marketing your products as vigorously as they had done earlier. What would you do? a) Blame him for slow movement of your goods. b) Meet him to find out what his problems are. c) Begin to identify an alternative party for marketing your products. d) Any other approach. What does your response tell you about your value system for dealers and distributors?

References
1. Encarta 98 Encyclopaedia, Microsoft, 1998 2. Organisational Management, Ritson N & Marsden A, CIMA, 2001

219

UNIT A3.8 Formulate Strategic plans 3.8.1 Strategic Planning Process Duration 60 Minutes

Session Rationale
Todays business environment puts pressure on entrepreneurs to complete urgent tasks, meet day-to-day objectives, and overcome short-term problems. This is operational or short-term planning and it often tends to take precedence over long term planning which is what strategic planning is all about

Learning Objectives
At the end of the session, trainees will be able to Define strategic planning Outline steps in strategic planning Carry out a strategic plan

Learning Outcome
Strategic planning defined Steps in strategic planning outlined Importance of strategic planning in an enterprise discussed

Activities
Ensure that the learning activities include the following A generic definition of strategic plan ie a management process of

developing and establishing a viable fit between the organisations objectives, skills and resources and its changing market environment
Outline the strategic planning process as give below Discussion of the importance of strategic plan to an enterprise

Outcome
220

Definition of strategic planning given Process outlined Importance of strategic plan to an enterprise discussed Lecture and Discussions

Methodology:

Session delivery
1. Through a short lecture, define the strategic planning and highlight the main items the plan vision, mission statement, strategic objectives strategies and activities ( HO 11.2) 2. Through a short presentation discuss the strategic planning process as given in HO 11.1 3. Divide the trainees into small groups to discuss the role of strategic planning in entrepreneurial growth

Tips: It will be important to include in your discussion the stakeholders


analysis in strategic planning HO 11.1

Reading Material
Strategic Planning Process Vision Mission Statement

External environment analysis

External environment environment Analysis

Goal Formulation

221

Strategy formulation

Programme / Action Formulation

Implementation

Feedback HO 11.2 The Importance of Strategic Planning Strategy concerns itself with what is ahead, looking at where the organization is going, and how to get there. Even if the organization already knows which products or service is taking to which market, there is still need for a strategy to make it happen Having a strategy enables an organization to ensure that day-today decisions fit in with long-term interest of an organization. Without a strategy, decision made could have a negative impact on future results. A strategy also encourages everyone to work together to achieve common aims. Most organizations have strategic plans at highest levels but some do not communicate it all the way down. A strategy is important whether you serve external customers (those outside your organization) or internal customers (those in departments or sections within the organization) An effective strategy should consist of the following: Must be consistent with the organizations skills and capabilities Must exploit external trends and influences Must be flexible enough to respond to rapid changes in the environment Must incorporate carefully developed objectives

222

Must be based on care on carefully evaluated policies and plans

THE PROCESS 1. Stakeholder Analysis Identify Stakeholders Stakeholder interests /expectations, of Stakeholder major resources Stakeholder sanction power Stakeholder linkages with, and dependencies on, other entities 2. Problem Agenda The problem agenda is a list of problem themes that provides focus for investigation into the external and internal environments of an organisation. i) What problems has the organisation inherited from the past that has a huge impact on its performance? ii) What important questions or issues lie ahead for the organisation? iii) If you were clairvoyant, what would you like to know about the future of organisation? iv) What things make you uncertain about the future of the organisation? v) If you were given the opportunity, what changes would you make to the organisation? 3. Internal Analysis i) Analyse organisation structure in terms of Conduciveness to achieving the mission, and objectives of the organisation Departmentalization Number of levels International Aids Alliance how tall the structure is? Centralization/Decentralization Staffing levels of jobs

223

ii) iii)

iv)

Analyse the culture of the organisation e.g. management style, work ethic, internal practices/politics etc Analyse the organizations Resources Human Numbers, qualifications, personnel/HR management systems Financial sources, reliability, accounting/financial planning systems Material vehicles, classrooms, equipment etc, and their distribution and management Analyzed management systems marketing, capacity management, transport, management, strategic planning etc.

4. External Analysis Keeping your problem agenda in mind, identify important i) political/legal, economic, social-cultural, technological/infrastructure and environmental factors and trends that impact on organisations performance. Expressing these as variables wherever possible, e.g. falling disposable incomes or rising inflation. Identify trends and possible future outcomes. See attached extra information sheet. ii) Separate these factors, after processing them, into Opportunities those that the organisation can capitalise on to enhance performance, and Threats those that hamper the organisations performance or growth Identify 10 critical success factors (Generic characteristics of an organisation that can succeed in an environment with the threats and opportunities identified above), e.g. lean, flat organisation structure

iii)

5. Strategic Options Generation These are actions that would Eliminate or reduce internal weaknesses Use strengths to limit external threats Use strengths to take advantage of external threats

224

Create critical success factors

Reference Material
1. Marketing Management, Phillip Kotler, Prentice Hall India, 1997 2. Organisational Management, Ratson N & Marsden A, CIMA, 2001

225

UNIT A3.5 3.5.2

Business Records Use of Business Records 60 Minutes

Session Duration Session Rationale

Records form a crucial aspect of any enterprise which should kept and used as and when require

Session Objective
At the end of the session, trainees will be able to: Define business records List business records Prepare business records for a given organisation Keep records

Session Activities
Ensure that the learning activities include: A generic explanation of business records Listing of business records to include financial, marketing, production, sales inventory etc

Methodology:

Lecture and focused discussions

Session Delivery
1. Using reading material HO 12.1 prepare transparencies or flipchart and discuss the definition of records. This should be followed by a list of business records 2. Discuss the importance of classifying records in record identification as well as need for indexing 3. End the session by discussing active and inactive records as the basis for keeping business records

226

Reading Material
HO12.1 Records defined as written down statements of facts, event Importance of Records For future reference and use Provide necessary input for decision making An up-to-date record stores in a manner or form that provide speed retrieval there by promoting some levels of efficiency in an enterprise Registry is the nerve-centre of any business It is responsible for classification, indexing, filling and supply of all records In small organisations, the owner takes full responsibility of the registry Some of the business record include the following: Personal confidential files usually kept by personnel department Marketing files pertaining to all marketing activities of the enterprise Sales file Financial files Purchasing files Stores files Operation files Importance of classification of records It eradicates the misfiling of documents It reduces the chances for loss of documents Quick retrieval of records Record Identification Records that are brought under one subject can be identified by: The use of reference numbers indexing system NB. Whatever the system being used, it should be simple and easy to use Indexing / Referencing This can be done by arranging records or files : By alphabet

227

By grade, post or rank By departments By numerical sequence with cross reference where necessary

Active / Inactive Records Management The management of these two types of records depend on: How frequently these records are called for and as such, they have to be kept where they can be easily reached

Reference
1. Records Management, ZAMIM

228

UNIT A3.6

Buying and Stock Control

3.6.1 Importance of Stock Control Session Duration Session rationale


It is always important ensure that an enterprise has the right stocks at the right time all the time to meet demand as it rises an at the some time, maintaining a balance in terms of costs of keeping such stock

60 minutes

Session Objective
At the end of the session, trainees will be able to Define stock control Explain the importance of stock control in an enterprise Explain the relationship between buying and stock control Manage stock in an enterprise

Session outcome
The term stock control defined The importance of stock control in an enterprise explained Relationship between buying and stock control explained Trainees able to manage stock

Activities
Ensure that learning activities include the following A generic explanation of stock and stock control A generic explanation of the importance of stock control in an enterprise A generic explanation of the relationship between buying and stock control Trainees are capable of managing stock

Delivery Methodology:

Lecture and Discussions

229

Session Delivery
1. Using flipchart, define and discuss the terms stock and stock control as presented in the reference materials (HO 13.1) 2. Divide the trainees into small group to discuss and identify factors that influence stock control in an enterprise. The answers from this exercise should be along the lines given in the reference material 3. Let the trainees discuss and answer the question on HO 13.2

Reading Materials
HO13.1 Stock Control Meaning Stock control is the means by which materials of correct quantities and quality are made available as and when required with due regard to economy in storage ordering costs and working capital This is generally done through the process of determining in advance Requirement of materials taking into account existing stock, delivery time and consumption so that the amount of stock on hand at any time will be sufficient to meet operational requirements and in accordance with stock control policy Stock control is influenced by:1. Operational requirement or needs of an enterprise 2. Delivery lead time: The time it takes to place an order until materials are received 3. Availability of capital 4. Cost of storage and ordering Objective of inventory control 1. The major objective can be summarised into three main questions: 2. What to order? This is the assessment of the range of items to be held in stock individually and collectively 3. When to order? This is governed by lead time between placing and order and receiving it

230

4. How much to order? This is a system of determining the order quantities each time an order is paced. This requires a balancing act between ordering cost and stockholding costs 5. Managing Stock in an Enterprise Stock taking and Stock checking This is the process of verifying the quantities balances of the items held in stock. This is done by accounting, weighing and measuring all items in stock and recording the results Reasons for stock taking To verify the values in the stock record To reveal the possibility of fraud or loss To reveal any weakness in the system for custody and control of stock To determine the efficiency stock keeping method To verify the accuracy of stock records To facilitate preparation of the final accounts Types of stock taking Periodical stock taking Continuous stock taking Rules for Stock Taking Appoint one person to control the whole process While stock taking is in progress do not have the store house open to business Have stock-taking sheets under the control of the controller of operations Damaged, deteriorated or used items should be recorded separately Items should be recorded in terms of normal unit of issues The method of pricing should be shown on the stock taking sheet Goods still under inspection should be recorded separately Arrangements must be made to include in the total list of stock all items belonging to the business which are not in the premises

231

HO 13.2 Q. your friend has set up a business to manufacture wooden chairs and beds recently, he has been asked by the bank to manage or reduce the levels of inventory in his business. He has come to seek your advice about the ways and means to achieve this. Describe how you will help him

Reference
1. Stores Records, National Grains Management Course ISTT, SADC

232

3.4.1

The Role of Finance in an Enterprise 60 Minutes

Session Duration Session Rationale

In many small enterprises, financial management takes a low priority and financial planning and monitoring systems are often inadequate. But enterprises operate in a changing and competitive world. If these enterprises were to survive in the continuous changing environment, entrepreneurs need to develop necessary understanding and confidence to make full use of financial information

Session Objective
At the end of the session, trainees will be able to Define the term finance Discuss the role of finance in an enterprise; Discuss the importance of good financial management

Session outcome
The term finance defined The role of finance in an enterprise discussed The importance of good financial management discussed

Activities
Ensure that the training activities include the following: A generic explanation of finance A generic discussion of the role of finance in an enterprise as given in the reference materials

Methodology:

Lecture and discussion

233

Session Delivery
1. Show TR 14.1 and define Finance and Financial Management discuss the role of financial management to an enterprise 2. Divide the trainees into small groups to discuss the importance of good financial management to a business. Capture their contributions of a flipchart paper

TR 14.1 Reference material


FINANCIAL MANAGEMENT What is Financial Management?
Finance is part of management as a whole. Financial management involves: planning, organising, financing, controlling and reporting on organisations resources to achieve set goals. Financial management is the lifeblood of an enterprise. When lifeblood has the correct mix of nutrients it nourishes and sustains the various parts of the body providing energy to achieve its mission In the some way, sound financial management enriches the operation of an enterprise and helps run efficiently and effectively Financial management is about good use of resources available to an enterprise. In practice it involves managing risks, both internal and external, in an organised and considered way by establishing systems and procedures to bring about financial control

Why is financial management important for an enterprise


It assist in efficient management of resources such as cash, equipment, human and time It contributes to efficient allocation of resources It enhances accountability and transparency of enterprises affaires It guides entrepreneurs (mangers) to achieve objectives

234

Some key concepts 1. Financial control: At the heart of financial management is the
concept of financial control. This is defined as a state of affairs which ensures that finances of an enterprise are being properly handled. To achieve this, policies and procedure have to be introduced. Without proper financial control an enterprise is at risk of Loss through theft, fraud or incompetence Deviation from objectives Waste of resources Under-utilisation of resources Accounting Records: Every organisation must keep accurate record of all financial transactions that take place so that, as a minimum, it can show how funds have been used. Accounting records can also provide valuable information about how the organisation is being managed

3.

Financial Planning: The budget forms the basis for an organisations


financial plan a summary of all expected income and expenditure for a stated purpose and time frame

4.

Financial Monitoring: Providing the organisation has set a budget and


as kept and reconciled its accounting records in a clear and timely manner, it is then a simple matter to produce financial reports which allows manager to access the progress of the organisation

5.

Internal Controls: Controls, checks and balances collectively reefed


to internal controls are put in place to safeguard the organisations assets. There purpose is to deter opportunistic theft or fraud, and to deter errors and omissions in the accounting records, to aid accuracy

Reference:
2. Contemporary Financial Management, Moyer Krettowe W.J 1996 3. Financial Accounting, Basley, Nikoli & Gowe R.C,

235

3.4.2 Session Duration Session Objective

Sources of Finance : 60 Minutes

At the end of the session, trainees will be able to: State the source of finance Explain the conditions for accessing formal sources of finance

Session Outcome
Sources of funds stated Condition for accessing formal finances explained

Learning Activities
Ensure that the learning activities include the following: Statement of the sources of finance, which should include formal as well as informal A generic explanation of the conditions for accessing formal sources of finances.

Session Delivery
1. Show TR15.1 and disuses the financial requirement of an enterprise 2. Show TR15.2 and discuss the traditional sources of finance 3. In small groups ask trainee to carry out a field visit to the local financial institutions of their choice to identify obtain information on the conditionality of obtaining finances from them. This should be half a days event. The fining from the field visit should be as presented in

4. HO 15.1

236

Reading Material
TR15.1 Financial Needs for an Enterprise 3. Start up capital. These are funds required to start up a business 4. Capital for expansion. This is requires particularly for the purpose of acquiring fixed asset such as buildings, machinery, equipment and land 5. Working Capital. This is for purchase of row materials, financing of credit sales, paying wages and meeting unexpected emergencies. Working capital may include cash in hand or at the bank TR15.2 Traditional Sources of Finance 3. Personal savings. Most of the time this is not adequate 4. Loans from friends and relatives. This ranks second in importance as a sour of finance. Usually no interest is paid on these finances 5. organised capital markets such as discount houses, leasing companies, saving institutions such as insurance companies and commercial banks 6. Trade credits- These are usually offered by the suppliers of inventory which in the case of small enterprises manufacturing units means row materials. Trade credit is a form of working capital and is short term in nature 7. Unorganised capital- These are money lenders, sometimes referred to as local capitalists (Kaloba) 8. Retained earnings- If the business is doing fine, part of the finance generated by the business can be ploughed back

237

HO15.1 Conditions for accessing formal finances 4. 5. 6. 7. 8. Need for collateral and securities prohibitive interest rates stringent pay back periods stringent process with a lot of decimations At times loans can only be given to a group as opposed to an individual

Reference
1. 2. Informal Sector Business Activities in Lusaka Urban District, Tolosi M.S & Nawiko M, 1997 Financial Assistance to Small Scale Industries, Kani F 1985

238

3.4.3

Financial Statements

Session Rationale
Learning objectives: At the end of the session, trainees will be able to Define the term financial statement List the various financial statements in an enterprise Explain the importance of financial statements Interpret financial statements

Learning Outcome: The term, financial statement defined


Various financial statements listed Importance of financial statements explained Various financial statements interpreted

Learning Activities
Introduce the session by defining financial statement using flip chart paper List the three main financial statements and explain the components of each statement Highlight the importance of each financial statement Supplement your discussion with the distribution of HO

Training Methodology: Lecture and Discussions Session Delivery


1. Show TR and define the term financial management and discuss the main financial statement (income and expenditure account, balance sheet and cash flow statement 2. Distribute HO and discuss the importance of financial statement to an enterprise 3. Take the trainees through exercise A and B and let them tackle exercise c an individual exercise

239

Reading Material
HO Financial Statements In business language, the accounts imply a set of reports or financial statements which show the financial standing of an enterprise. Specifically, three are three major reports: income and expenditure account (or profit and loss account) balance sheet cash flow statement

1.

Income and Expenditure Account


It is produced from either the trail balance or on receipts and payment accounts. It records as a summary All categories of income and expenditure which belong to that year; All income not yet received but belong to that financial year All payments not yet paid but belong to that financial year

2.

The balance Sheet


This is the listing of all the assets and liabilities on one particular date and provides a snap short of the financial position or net worth of an enterprise. It is prepared on the fundamental relationship in accounting, that is, every addition to an organisations asset is financed by either outside parties or by the owners

3.

The Cash Flow Statement


The Cash Flow Statement explains where the funds came from and how they were applied during the reporting period. This report is of much greater relevance to a profit motivated enterprise where cash flows and investments are crucial to the enterprises performance and survival Accuracy of Financial Statements The financial statement s of a company are examined by various parties, including shareholders, bondholders, banks, government agencies, employees, suppliers, and financial analysts. These parties are concerned that the statements present a fair and accurate picture of a companys financial position (i.e. assets, liabilities,

240

earnings and cash flows). Most companies hire external independent auditors to attest that the financial statements reflect the financial position of the company

Reference:
9. Contemporary Financial Management, Moyer Krettowe W.J 1996 10. Financial Accounting, Basley, Nikoli & Gowe R.C,

241

3.2.4

Selling 60 Minutes

Session Duration Rationale

The ability to use personal communication kills effectively to persuade someone to act by buying something and, the ability to communicate something of value to someone is a key to succeed in business

Session Objectives
At the end of the session, the trainees will be able to: Define the term, sales Prepare a sales plan Sell good and services

Learning activities
Ensure that the learning activities include the following: A generic explanation of the term, sales Outline of the selling techniques

Methodology: Session Delivery

Lecture and focused group discussions

1. Show TR 17.1 and define selling 2. Show TR17.2 and discuss the ten steps in sales process. This should be flowed up with a discussion of TR 17.3 To buy or Not to Buy 3. Show TR 17.4 and discuss the Role of Sales Force in an Enterprise Promotional Efforts. 4. Divide the trainees into small groups to prepare sales plan for their project. The plan should include; sales volume, cost of sales and types of sales

Reading Materials
TR17.1 242

Selling: Personal communication of information to prospective customer to buy something Involves a person helping another person Involves communicating between buyer and seller

persuade

TR17.2 10 Steps in the Sales Process Prospecting Pre-approach

Approach

Presentation

Trail close

Determine objectives

Meet objectives

Trail close

Close

243

Follow-up

TR 17.3 To Buy or Not to Buy Sales persons should consider the flowing questions before developing a sales presentation What type of product is desired? What type of buying situation is it? How will the product be used? Who is involved in the buying decision? What practical factor will influence the buying decision? What are the buyers important buying needs

TR 17.4 The Role of the Sales Force in the Enterprise Promotional Efforts A major marketing issue for an enterprise is to determine the sale forces role. Enterprise use salespeople in many ways. However, there are four basic questions used as a guide in defining the roles of the sales force: 1. How much selling effort is needed to gain and hold a customer? 2. Is the sales force the best marketing tool, compared to advertising and other sales promotion? 3. What type of sales activities for example, technical assistance, frequent or infrequent sales calls will be necessary? 4. Can the enterprise gain strength relative to its competition with its sales force?

244

Reference:
1.

2.

Business Environment, Diwan P, Excel 1997 Marketing Management, Kotler P. 1991

245

3.4.4 Duration Rationale

Budgeting

60 Minutes

In every business there is need for planning of the various activities, process and procedures. One such tool that is used fro planning purposes is a budget

Session Objective
At the end of the session, trainees will be able to: Define budgeting Explain the importance of budgeting List the various types of budgets Outline steps in preparing a budget Prepare a budget

Learning Activities
Ensure that the learning activities include the following A generic explanation of budgeting A generic explanation of the importance of budgeting List of different types of budgets An outline of the steps in budget preparation

Training Methodology: Lecture and Discussions Session Delivery


1. Introduce the session by defining a budget as given on HO 17.1. this should be followed with an explanation on the functions and benefits of a good budget 2. List the three main types of budget, Income and expenditure budget, Capital budget and Cash flow budget and explain the relevance of each to an enterprise 3. Show TR17.1 and discuss the budgeting cycle with a view to identify the steps in budgeting 4. Give the trainees TR 17.2 as individual exercise 246

HO 17.1

Reading Materials
What is a Budget? A budget is a plan, usually for one year, which shows how an organisation intends to acquire and use resources to achieve a set of objectives. It is describes an amount of money that an organisation plans to raise and spend for a set purpose over a given period of time Functions of a budget Financial planning - it is a financial planning tool which quantifies the activities of an enterprise in a given period Financial statement to demonstrate an enterprises viability and credibility for a given period of time Fund-raising aid provides important information for grant application Financial control sets limit of authority in committing the enterprise resources Financial monitoring it allows comparison of actual income and expenditures Benefits of Budgeting Planning Enhance managerial perspective i.e. increases awareness of the environment in which the enterprise operate in Advance warning of problems Coordination of activities Performance evaluation Promote ownership and motivation

247

Types of budget 1. Income and expenditure budget 2. Capital budget 3. Cash flow budget TR 17.1 The budget Cycle Preparation: This involves giving thought to the targets and associated resourcing requirements for the next year Collation: This ensures that activities of the budget are consistent with the enterprises needs Authorisation: this involves actual allocation of resources to each item of the budget Implementation TR 17.2 Individual Exercise 1. What are the benefits to be gained from budgeting? 2. How does the budgetary process assist in communication? 3. Describe the major steps in the budget process? 4. What is the principle budget factor?

Reference
1. Management Accounting Decision Making, CIMA, Cashmore & Balachandra I,2001

248

UNIT A3.7

Managing Human Resources

3.7.1 ROLE OF HUMAN RESOURCES IN AN ENTERPRISE Session Duration Session Rationale


Any enterprise, big or small needs to have clear objective both in the long term or short term. All activities in an enterprise are then expected to be organised in such a manner as to achieve the set objectives. Functions, duties and responsibilities that are relevant for the objectives must be specified. The functions of staff management which the human resources management, has the overall objective of ensuring that the enterprise attains its objectives by properly utilising its human resources

60 Minutes

Objectives
At the end of the session, trainees will be able to Define the term, human resources Explain human resources practice in an enterprise

Activities
Ensure that the learning activities include the following: A generic explanation of the term, human resources A generic explanation of human resource practice in an enterprise to include, staff recruitment, staff selection, motivation, promotion and the like

Session Delivery
1. Show TR18.1 and define and discuss Human Resources Management 2. Show TR18.2 and discuss the functions of human resources management

249

3. Divide the trainees into small groups to answer and discuss question on TR 18.3. 4. During the discussion, distribute TR18.4 as the possible answers to the question 5. Distribute HO 18.1 as supplementary reading material

Reading Materials
HO 18.1 Human Resources Management What is Human Resources Management (HRM)? There are many different versions of the meaning of HRM, but taken together, a picture of the main characteristics of this approach to employment management emerges. The summary is as follows: It is a top management driven and management-orientation activity It can take either a hard form or a soft form. The hard form is the one where employees are considered just as another resource like capital or land while the soft form regard employee as the most crucial resource in the business It is a performance oriented, emphasising the need for ever high levels of achievement to meet new challenges The list above is best regarded as prescription how people management should be conducted

The Human Resource Plan: This is a strategy for acquisition, , utilisation


improvements and retention of an enterprise human resources. The plan is based on the following questions: What has to be done to attain the objectives of the business? Who is responsible for the various stages of the plan? When will thee stages have to be completed? How will they be accomplished? The determinants and contents of human resources plan: Organisational growth rate Technological and productivity changes Skills requirements Training requirements Recruitment

250

Development, promotion and succession planning Natural wastage Strategic objectives of the enterprise TR18.1 What is Human Resources Management (HRM)? It is a top management driven and management-orientation activity It can take either a hard form or a soft form. The hard form is the one where employees are considered just as another resource like capital or land while the soft form regard employee as the most crucial resource in the business It is a performance oriented, emphasising the need for ever high levels of achievement to meet new challenges

TR18.2 Functions of Human Resources Management Planning manpower requirements. I.e. anticipate vacancies, recruit Organising the manpower resources. I.e. determine the organisations structure and manpower needs to effectively meet the enterprises requirements C) Staffing: To ensure that new recruits are provided with appropriate training and information to enable them perform their duties effectively. Also concerned with promotions and transfers D) Motivating: to set Kwacha values on job positions that are fair and equitable when compared with other positions Provide facilities for employees enjoyment, provided the need exchange of information throughout the enterprise Develop effective work regulations and harmonious working relationships Develop effective performance evaluation systems A) B)

251

TR18.3

Exercise
What are employees expectations from an enterprise?

HO18.4

Possible answers of the question


Employees want to be treated courteously To be welcomed to their new jobs Simple and intelligent instructions Recognition of their importance Realistic recognition of a job well-done Prefer working for an organisation where confidence prevails in the ability and fairness of top management

Reference:
1. Organisational Management, Ritson I & Marsden A, CIMA, 2001 2. Small Business Management II, Open Learning Programme in Entrepreneurship, EDI, FNSt 3. Managing Staff, ISTT, SADC, GRZ

252

UNIT A3.2

Enterprise and technology

3.9.2

Invention and Technical Innovations

Session Duration Rationale

60 minutes

Competition is both a necessary and sufficient conditions for achieving competitiveness. The creation of competitive condition will create both the pressure and the incentives to make enterprises competitive. And one way in which this could be achieved is by being steps ahead in product / process innovation and inventions Session Objectives On completion of the session, trainees will be able to: Define invention and technical innovation Explain the importance of invention and technical innovation to national development Outline the patent process Discuss the barriers to commercialisation of inventions and technological innovations Tips Make sure you are familiar with the patent process in Zambia Methodology : Lecture and focused group discussions

Session Delivery 1. Using flipchart of transparencies define invention and technical innovation as given on HO 19.1. The discussion should lead into the discussion of the importance of technological innovation national development 253

2. Using a flit chart or transparency, discus the patent process 3. Divide the trainees into small groups to read and discuss questions on TR 18.1, Barriers to Commercialisation of inventions / innovations. The response from the trainees should include: none supporting government policy; bureaucracy, costly and; lengthy patenting process Piracy

Reading Materials HO 19.1 Technical Innovations / Invention Innovation: the introduction of process or product that is new to a particular situation, regardless of whether it has been used before elsewhere All modifications or adaptations of a process or products that are new to the economy however minor they may be Innovation could be said to be coming up with new ideas upon which inventions could be done The difference between invention and innovation is: o Invention - is the creation of new products, processes, and technologies not previously known to exist. o Innovation - is the transformation of creative ideas into useful applications by combining resources in new or unusual ways to provide value to society for or improved products, technology, or services.

Innovation activities include: Search activities to determine the range of available process and product variants and selection for the range Minor or major adaptation of production techniques and products Development of techniques and products

254

The Process of Innovation Possible basic scientific discovery Applied research Experimental development Initial commercial application Improvements Problems of Innovation in Development Countries There is a tendency to focus on market forces alone as a basis for innovation activity Planning horizons for individual enterprise is shorter, thereby not allowing for more time for innovation activities Too much emphasis on minor product change at the expense of fundamental technological innovations Innovation Specialisation and Initial Endowments Development of skills required for innovation usually require formal education and training Accumulated experience or learning by-doing is by far the most effective way Invention Invention- creation of new devices, objects, ideas, or procedures useful in accomplishing human objectives. The process of invention is invariably preceded by one or more discoveries that help the inventor solve the problem at hand. A discovery may be accidental, such as the discovery of x rays by Wilhelm Conrad Roentgen while he was experimenting with cathode rays, or induced, such as the invention of the lightning rod by Benjamin Franklin after he proved that lightning is an electrical phenomenon. In common usage the term invention is applied only to the production of new materials or operable devices, and the term inventor is applied to a person who has produced a new device or material. Less frequently, the term invention is applied to a new procedure; thus a person may be said to have invented a new game or a new system of accounting. Under strict definition, however, anything produced by humans that is new and unique is an invention; this definition was recognized by Johann Sebastian Bach, who gave the title Inventions to a series of his short keyboard compositions.

255

In most countries, certain classes of inventions are legally recognized, and their use is temporarily restricted to the control of the inventor. In the United States and indeed Zambia, any new and useful art, machine, manufacture, or material, or any new and useful improvement of these, may be protected by patent; written material, music, paintings, sculpture, and photographs may be protected by copyright. The protection afforded by this legal recognition is limited; in many cases, if a person alters an invention and thereby improves or changes it, that person may be eligible for a new patent or copyright. Patent and copyright laws do not provide coverage for all inventions. Many processes and ideas lacking clear-cut characteristics, such as psychological concepts useful in advertising, cannot be legally protected.

Early Inventions The earliest artifacts show evidence of human inventiveness. The names of the great archaeological agesthe Stone Age, the Bronze Age, and the Iron Ageare derived from the inventive use of stone and metal implements (see Archaeology). Early stone implements were crude, but the purposes they servedprotection and food gatheringwere instrumental in humans' growing domination of the earth. Many of the most significant inventions and inventive developments occurred before the period covered by written history. These include the invention of crude tools, the development of speech, the cultivation of plants and domestication of animals, the development of building techniques, the ability to produce and control fire, the ability to make pottery, the development of simple political systems, and the invention of the wheel. The period of recorded history began with the invention of writing, and writing as a means of mass communication became important with the invention of movable type in the 15th century. Invention proceeded steadily throughout the period of written history, but since the advent of printed books, people all over the world have been able to obtain records of the discoveries of the past for use as a basis for further discoveries and inventions.

256

TR 19.1 Barriers to Commercialisation of inventions / innovations Identify and discuss commercial barriers to invention / innovations in Zambia?

Reference:

Encarta 98 Encyclopaedia , Microsoft 1998

257

3.9.1

Technology in an Enterprise 60 Minutes

Session Duration ; Session Rationale

Technology has become an increasingly important dimension of economic growth. The extremely rapid development in this are in the last few decades is unprecedented in their speed in and impact on production structures of an enterprise with consequence effect on economic growth and income distribution Technology in the development of small sector industry has become issue. A significant connection exist between scale of industry and technology Session Objective At the end of the session, trainees will be able to: Define technology Identify sources of technology Select suitable technology for an enterprise Relate technology to an enterprise Learning Activities Ensure that the learning activities include the following: A generic explanation of the term, technology Identification of sources of technology Criteria for selecting suitable technology for an enterprise Instructional Methodology: Learners Preparations Session Delivery Show TR 20.1 and define the term technology Divide the trainees into small groups to read, identify and discuss sources of technology for their projects (HO 20.1) Lecturette and focused Group Discussions

258

Shoe TR 20.2 and discuss the criteria for selecting appropriate technology

TR 20.2

Criteria for Selecting Appropriate Technology The appropriateness of a technology should be considered in relation to goals of the enterprise, the products, process, cultures and environment. The questions to be asked are: Does the technology support the goals of the enterprise? Are the products / services o be produced affordable by, and useful an acceptable to, intended users? Does production process make economic use of the inputs? Are the products, the processes and related arrangements compatible with the local environment and culture?

HO 20.1 Individual Exercise What are the sources of technology for your business?

Reference

1. Appropriate Technology, Bardwell, 2. Productions and Operational Management, Everrette A, PHI, 1997 3. The Distorted Growth of Import Substitution Industrialisation, The Zambian Case, Seidman A. 1997

259

UNIT A3.10

Business Ethics and values in managing an Enterprise

3.10.2

Gender in an Enterprise

Session Duration 60 Minutes Session Rational In realizing the glaring gender imbalances that exist between women and men, Gender has become a cross-cutting issue attracting a lot of attention from various sectors of the society. Government all over the world have passed legislation that promote equality and protect womens rights. Therefore, an appreciation of this cross-cutting is crucial to the promotion and success of entrepreneurship in the country Session Objective At the end of the session, participants will be able to: Define the term, gender Integrate gender in the operation of an enterprise Learning activities Ensure that the learning activates include: A generic explanation of the term gender How to integrate gender into the operation of an enterprise Methodology: Lecturette and focused discussions

Session Delivery 1. Show TR 21.1 and define gender. The definition should include an explanation on what gender is not 2. Show TR 21.2 and explain how gender can be integrated in an enterprise 3. Distribute Table 21.1and let each participant identify tasks performed by women and those performed by men 4. Distribute HO 21.1 as additional reading material

260

Reference Material TR21.1 GENDER IS Social, Relationship between Men and women These relationship are Socially Constructed and Institutionalised Roles have been Shaped Historically and are due to Ideological Economical Religious Cultural Factors Gender Gender Gender Gender Gender is thus not Biological difference is a Social concept is different from sex Biologic Concept is not a static concept can thus evolve and change according to Time Situation/Circumstance Culture

HO21.1 GENDER ROLES Gender roles Gender roles are learned behaviours in a given society/community or other social group that condition which activities, tasks and responsibilities are perceived as male or female. Gender roles vary considerably across settings and also change over time. The following factors can shape and change gender roles: Age Class Race Ethnicity

261

Religion and other ideologies Geographical environment Economic environment Political environment

Types of gender roles Concept of gender roles developed by Caroline Moser Gender planning recognises women triple role: women reproductive, productive, and community managing activities, Men primarily undertake productive and community politics activities Reproductive Role These activities are usually unpaid They are excluded from national employment and income statistics They are viewed as activities with non-measurable economic value Refers to child-bearing Activities carried out in caring for the household members Productive Role Work undertaken to produce goods and services for marketing Includes processing of primary products Can be performed at workplace and at home They can be formally or informally organized Community managing role Activities undertaken at the community level This role is often an extension of their reproductive role It is doe to ensure the provision and maintenance function of scare consumption resources e.g. water, fuel, wood This is voluntary unpaid work, undertaken in free time Primarily performed by women Community politics role Activities performed at community level, e.g. organizing formal meeting/informal gathering etc. Usually paid work, either directly or indirectly Benefit it terms of power, position, knowledge Undertaken mostly by men

262

Who does what? Preparation of separate profiles if significant differences exist can be between men and women, between women belonging to different class and caste groups etc. Gender patterns of labour vary according to sectors, age and hierarchy Age differences affect status of men and women in society Existing hierarchical differences between men and women at the workplace result in unequal working conditions.

Table 21.1 Time Tasks done women 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 TR21.2

Tasks done by men

HOW TO INTEGRATE GENDER IN OPERATIONS OF ENTERPRISES


THIS CAN BE DONE BY GIVING ANSWERS TO THE FOLLOWING QUESTIONS: DOES THE ENTERPRISE CHALLENGE THE EXISTING DIVISION OF LABOUR, TASKS, RESPONSIBILITIES AND OPPORTUNITIES? WHERE DOES THE OPPORTUNITY FOR CHANGE OR ENTRY POINT EXIST AND HOW BEST CAN THEY BE USED? WHAT SPECIFIC WAYS CAN BE PROPOSED FOR ENCOURAGING AND ENABLING WOMEN TO PARTICIPATE DESPITE THEIR TRADITIONALLY MORE DOMESTIC LOCATION AND SUBORDINATE POSITION?

263

WHAT IS THE LONG TERM IMPACT IN TERMS OF WOMENS INCREASE ABILITY TO TAKE CHARGE OF THEIR OWN LIVES AND TO TAKE COLLECTIVE ACTION TO SOLVE PROBLEMS?

Reference

1. Gender /Population Issues in Project Design and Management (Paper Presentation), N. Nyangu 1997 2. Gender Issues in Project Design (Paper Presentation) Kambobe T.C 1999

HIV/AIDS AWARENESS NOT INCLUDED

264

MODULE NO.

138-04-A

MODULE TITLE: ESTABILISHING AN ENTERPRISE UNIT A4.1 Business Plan

4.1.1 Importance of a Business Plan SESSION DURATION: 2 HOURS SESSION RATIONALE This session will enable learners to explain the different uses to which a business plan may be put in the process of establishing an enterprise. The session will also afford the learners an opportunity to reflect upon their own situation and how useful a business plan could be in establishing their enterprises. In this way the learners may perceive the need to prepare a business plan as the first step in establishing their enterprises. ENTREPRENEURIAL ATTRIBUTES The most relevant are motivation, goal setting, desire to create, and knowledge of business principles. LEARNING OBEJCTIVES On completion of this session, the learner should be able to: 1. 2. Describe a business plan. Explain the importance of a business plan in establishing an enterprise.

Learning Outcomes 1. Business plan correctly described. 2. Importance of a business plan in establishing an enterprise correctly explained.

265

Leaner Activities / Environment Learners will brainstorm the meaning of business plan and come up to with a common description. Learners will then again brainstorm the importance of a business plan in establishing an enterprise. From this activity will result a list of the uses to which a business plan can be put. Learners will identify specific situations in which a business plan is very useful, if not indispensable. Instructional Methodology 1. Introduction It may be helpful to start with an introduction to the entire module by reviewing the introduction in the Learners Work book, focusing on: (i) The other five modules in Curriculum Chart No. 138, and the prior knowledge required to successfully complete this module. The structure of the Learners Workbook and how it is to be used. The overall learning objectives and outcomes of the module.

(ii) (iii)

Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Ask learners to define the word plan and record the key parts on flip chart or board. Now ask learners to extend this definition to business plan. Record the key parts on flip chart or board. Highlight the fact that most of the actions we take are preceded by planning of some sort or other written or unwritten. Emphasise that it is vital for the entrepreneur to put his/her business plans on paper.

266

2.

Main Activities Ask learners why a business plan is important. Record the responses on flip chart or chalk board. Make a brief presentation on what a business plan is and its importance. The presentation should highlight the following: (i) The description of a business plan has three key elements namely: it is a document i.e. written down; it sates the business idea, goals and objectives; it states how the objectives will be achieved i.e. the required resources, including time. (ii) The business plan is important in that it plays critical roles in the establishing of an enterprise. (iii) It has been observed that enterprises which are based on written plans tend to succeed more than those without written plans. (iv) Give an example of one use or role of a business plan in establishing an enterprise. If the Learners Workbook is available, you may ask one of the learners to read to the rest of the class the narrative under unit 1.1. head the discussion as each important point is read. Divide the class into groups of no less than three and no more than five. If the learners have workbooks, ask them to do Exercises 1a and 1b, otherwise write down the following instructions on flip chart or chalk board: In your own words write down a description of a business plan. List as many uses as you can of a business plan in establishing an enterprise. List them in order of importance. Write down your results on flip chart paper and present to plenary.

(i) (ii) (iii)

Time allocation for the exercise will of course vary from class to class but should be no more than 45 minutes.

267

3.

During Learners presentations ask for feedback (questions, comments) from the other learners. Clarify issues arising from the presentation and from the other learners feedback. Give your final overall feedback

Conclusion Ask Learners to identify the Key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key points to note are: (i) Definition of business plan List of uses of a business plan in establishing an (ii) enterprise. Remind Learners that in the succeeding session on the business plan, they will be required to draw upon their prior knowledge of entrepreneurial competencies and enterprise management skills.

Trainer Preparation Review materials on the importance of a business plan i.e. the section on importance of a business plan in the Learners Work book, and any other literature. Organise all materials needed for the session (markers, flip chart with stand, chalk board accessories, handouts). Prepare model answers for the definition of a business plan, and the uses of a business plan in establishing an enterprise.

Trainer Tips Understanding the subject of the business plan requires prior knowledge business opportunity identification and idea generation; market research and planning; costing; and other enterprise management skills. Learners who may not have formally studied Modules 138 01 A , 138 02 A and 138 03 A should have at least covered similar content through other trainings. Such Learners may require extra tuition.

268

Reference Materials 1. Burns, P. (2001). Entrepreneurship and Hampshire. New York. Palgrave Macmillan. Assessment Criteria and Methodology Criteria Business Plan Correctly described. The importance of a business plan in an enterprise correctly explained. Small Business.

Methods Individual assignment Group exercise Tutorials

Session Evaluation Evaluation indicators you can evaluate by collecting information on the following: (i) Effectiveness of training method (lecture, brainstorming and group/individual assignment) used. (ii) Usefulness of business plan to Learners careers. (iii) Relevance of training material to the session (iv) Mastery of subject by the Learners. (i) (ii) Evaluation Methods You may apply the following methods: Interview the Learners as a group or individually. Administer a questionnaire.

269

4.1.2

Contents of a Business Plan


3 hours

Session Duration: Session Rationale

This session will enable Learners to list and explain the contents of a business plan. Learners will also be shown the usual format in which a business plan is presented. The session therefore lays the foundation for the Leaner to be able to prepare a business plan. Entrepreneurial Attributes The most relevant are motivation, goal setting, desire to create, and knowledge of business principles. Learning Objectives On completion of this session, the Learner should be able to: 1. Outline the contents of a business plan. 2. Explain the contents of a business plan. Learning Outcomes 1. Contents of a business plan correctly outlined. 2. Contents of a business plan correctly explained Learner Activities / Environment Learners will brainstorm the contents of a business plan and also their explanation. The result of this activity will be a list and description of the contents of a business plan. Learners will therefore as well brainstorm and decide on the format (presentation) of the business plan.

270

Instructional Methodology 1. Introduction Introduce the session by reviewing the session objectives, learning outcomes and earning activities. Ask Learners to explain what they understand by the phrase contents of a business plan. Record the responses on flip chart or chalk board. Draw the Learners attention to the fact that while the business plan may not be said to have a standard format and contents, it does have to have some bare minimum of contents in order for it to make sense. Explain to the Learners that depending on the nature of business and the target audience, a business plan may be brief or with very expanded contents, it does have to have some bare minimum of contents in order for it to make sense. Explain to the Learners that depending on the nature of business and the target audience, a business plan may be brief or with very expanded content. Explain that, therefore, each business has to decide on the detail to be included in its business plan as well as the relative arrangement of individual elements within the format of the plan.

2.

Main Activities Ask the Learners to mention the contents or elements of a business plan. Write down the responses on flip chart or chalk board. Ask the Learners what the best order of contents in the list could be. Write down the re-arranged list on flip chart or chalk board. Make a short presentation on the contents of a business plan. The key points to include are:

271

Although there is no standard layout of a business plan, logic must apply in the arrangement of contents. (ii) The length of the business plan varies according to the primary purpose. For internal use it may be 10 pages or less; for external use it may be 20 pages or more. (iii) Numbering of contents is essential for clarity and cross- referencing. Ask the Learners to open their Workbooks to the section on the outline of Business Plan. If the Learners Workbook is not available to the Learners, give them a handout of the same. Inform the Learners that you will as a group read through and discuss each of the contents. After each reading, ensure that you do the following: (i) Ask Learners to give their understanding of the section read out. (ii) Amplify on the important points and clarify any issues that may arise. Upon completion of the readings and discussions, divide the class into groups of no less than three and no more than five. If Learners Work books are available, ask the class to do Exercise 2, otherwise write down the following instructions on flip chart or chalk board: (i) Assume you wish to prepare a business plan only for internal use, meaning that the short version would suffice. (ii) Working from the comprehensive business plan just considered, draw up a list of contents for a basic business plan. (iii) The total number of contents should not be more than nine (9) including the executive summary. (iv) Write down your results on flip chart and present to plenary. Time allocation for the exercise may vary from class to class but should not exceed 30 minutes. During the Learners presentations ask for feedback (questions, comments) from the rest of the class. Give your overall feedback, stressing the following:

(i)

272

(i)

(ii)

A basic business plan for internal use may be prepared in a less formal manner. However, this does not in any way suggest that the information on which it is based may be scanty. The critical parts are the business idea/concept, the marketing plan and the financial plan. These aspects must be well articulated.

3.

Conclusion Ask the Learners to identify the Key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key points to note are: (i) List of contents of a business plan (ii) recognition that it takes a lot of information to prepare a business plan. (iii) A recognition that it requires as much information to prepare a basic business plan as it does a comprehensive one. Remind the Learners to prepare for the next lesson by revisiting topics on market research, business opportunity identification and idea generation, and business environment scanning.

Trainer Preparation Review materials on contents of a business plan. i.e. the section on contents of a Business Plan in the Learners Workbook, and any other literature. Organise all materials required for the session (markers, flip chart with stand, chalkboard and accessories, handouts). Prepare model answer for the outline of contents of a basic business plan (Exercise 2).

273

Trainer Tips This is a lengthy topic. You may have to split it into two or three sessions. You will certainly have to intersperse it with a number of energizers. Reference Materials 1. 2. Burns, P. (2001). Entrepreneurship and Small Business. Hampshire. New York. Palgrave Macmillan. Jarskog, H and Stevenson, D. (1996). SYB Manual. International Labour Organisation.

Assessment Criteria and Methodology Criteria Contents of business plan correctly outlined. Contents of a business plan correctly explained.

Methods Individual exercises Group exercise Tutorials Summary examination

Session Evaluation Evaluation indicators You can evaluate by collecting information on the following: Effectiveness of training method (lecture, brainstorming (i) and group/ individual assignment) used. (ii) Usefulness of business plan to Learners careers. (iii) Relevance of training material to the session. (iv) Mastery of subject by the Learners. Evaluation methods : - You may apply the following methods: (i) Interview the Learners as a group or individually. (ii) Administer a questionnaire.

274

4.1.3

Factors to Consider In Preparing A Business Plan

Session Duration: 3 hours Session Rationale: The business plan needs to be based on the realities of the environment in which the business will operate. This session enables the Learner to understand the factors which must be taken into account when preparing a business plan. Thus the key sources of information are identified. The process of writing the business plan is also outlined. This session therefore introduces the Learners to the actual process of preparing a business plan. Entrepreneurial Attributes. The most relevant are motivation, goal setting, desire to create, and knowledge of business principles. Learning Objectives On completion of this session, the Learners should be able to: 1. 2. Identify the factors to be considered when preparing a business plan. Explain the factors to be considered in preparing a business plan.

Learning Outcomes 1. Factors to be considered in preparing a business plan correctly identified. 2. Factors to be considered in preparing a business plan correctly explained.

275

Learner Activities / Environments In this session, Learners will brainstorm on factors to consider in preparing a business plan. A list of the factors will be developed. The Learners will then discuss these factors to come up with their explanations.

Instructional Methodology 1. Introduction Introduce the session by reviewing the session objectives, learning outcomes and learning activities. Refer the Learners to the sessions on business idea, business opportunity, market research and environmental scanning. Refer the learners to the sessions on business idea, business opportunity, market research and environmental scanning. Ask the Learners to define the terms business idea, business opportunity, market research and environmental scanning. Record the key parts of the definitions on the flip chart or chalk board. Draw the Learners attention to the fact that the fundamental information required in preparing a business plan is derived from the business opportunity and idea, the market research and the environmental scan.

2.

Main Activities Ask the Learners to identify the factors to consider in preparing a business plan. Write the responses on flip chart or chalk board. Make a brief presentation on the factors to consider in preparing a business plan, including the following key points: (i) Besides the business opportunity, idea, market research and environmental scan, the other main

276

factors are how to collect and record information, how to prepare the main body, and the presentation (format) to adopt. (ii) The business plan is only as good as the information on which it is based. The Learners therefore need to pay serious attention as to how they address the first four factors mentioned above. Divide the class into groups of no less than three and no more than five. Write down the following instructions: (i) For each of the factors to be considered in preparing a business plan, write down the information to be collected. (ii) In the entire process of preparing a business, write down the main steps you would follow. (iii) Record answers for (i) and (ii) above on flip chart and present to plenary. Time allocation will vary from class to class but should be no more than 1 hour. During Learners presentations, ask for feedback (questions, comments) from the class. Clarify issues arising from the presentation and from the Learners feedback. As part of your overall feedback, ask the Learners to open their Workbooks to the section on Factors to Consider in Preparing a Business Plan, and present it as a model approach. Invite some Learners to read aloud successive parts of this section. Give explanatory comments, relating to the presentations made by the Learners.

3.

CONCLUSION Ask the Learners to identify the key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key points to note are:

277

List of the factors to consider when preparing a business plan. (ii) Explanation of the factors to consider when preparing a business plan. (iii) A recognition that the proposed systematic approach to preparing a business plan will give the best result. Remind the Learners to continue revisiting the topics on business opportunity and idea, market research and environmental scanning.

(i)

Trainer Preparation Review materials on factors to consider in preparing a business plan i.e. the section on Factors to Consider in Preparing a Business Plan in the Learners Workbook, and any other literature. Organize all materials required for the session (markers, flip chart with stand, chalk board and accessories, handouts) Prepare model answers for the group exercises: (i) Information to be collected under each of the factors to consider in preparing a business plan. The main steps in preparing a business plan. (ii)

Trainer Tips Some trainees may find it hard to distinguish between this session and the earlier one on contents of a Business Plan. You may need to make some finer clarification that the Contents of a Business Plan is about what is contained in a business plan. While this session is more about where to get information from and how to put it together. This topic too may have to be split into two or three sessions, and does require a number of energizers.

Reference Materials 1. Burns, P (2001). Entrepreneurship Hampshire, New York. Palgrave Macmillan. 2.

and

Small

Business.

Jarskog, H and Stevenson, D (1996) SYB Manual. International Labour Organisation.

278

Assessment Criteria and Methodology Criteria Factors to be considered when preparing a business plan identified. Factors to be considered when preparing a business plan explained.

Methods Individual exercises Group exercise Tutorials Summary examination

Session Evaluation Evaluation Indicators You can evaluate by collecting information on the following: (i) (ii) (iii) (iv) Effectiveness of training method (Lecture, brainstorming and group/individual assignment) used. Usefulness of business plan to the Learners careers. Relevance of training material to the session. Mastery of subject by Learners.

(i) (ii)

Evaluation method You may apply the following methods: Interview the Learners as a group or individually. Administer a questionnaire.

279

4.1.4

Preparation of a Business Plan

Session Duration: 20 hours Session Rationale: This session will enable the Learners to collect information, process it and arrange it into a business plan. Entrepreneurial Attributes Most relevant are motivation, goal setting, desire to create, knowledge of business principles, and commitment. Learning Objectives On completion of this session, the Learner should be able to: 1. Learning Outcomes 1. Business plan prepared Prepare a business plan.

Learner Activities / Environment Working in groups, Learners will successively read through and discuss the worked examples given in the Learners Workbook, after which they will do the exercises given after each section of the worked examples. Learners will concurrently develop their own business plans as individual assignments.

280

Instructional Methodology 1. Introduction Introduce the session by reviewing the session objectives, learning outcomes and learning activities. Refer the Learners to the sessions on contents of a Business Plan and Factors to Consider in Preparing a Business Plan. Inform the Learners that they are how going to learn hands on how to prepare a business plan. Explain to the Learners that they will work in groups on the worked examples on how to collect and record information in work sheets, and also on exercises on the same; after which each Learner will individually compile information in his/her own worksheets and ultimately prepare an individual business plan.

2.

Main Activities Give a brief presentation on the process of collecting and recording information required for preparing a business plan. The key points to bring out are: 1. The primary sources of information are the business opportunity identification and the business idea; the market research; and the environmental scan. If you have your feasibility study and /or strategic plan, it does make the job even easier Information to be recorded in the worksheets under the following headings and in the order: (i) The business idea/ concept (ii) Business goals (iii) Description of the industry (iv) Description of business venture (v) Marketing strategy / plan (vi) Sales forecast (vii) Production strategy and plan

2. 3.

281

(viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) 4.

Management / Corporate structure Risk assessment Implementation / Action Plan Financial Statements Financial Forecasts Financing requirements Referees Appendices

Information from worksheets may then be compiled into either a basic business plan or a comprehensive one as per outline in the session on contents of a Business Plan. Divide the class into groups of no less than three and no more than five. Write down the following instructions: (i) Open the Learners Work book to the section on Preparing a Business Plan. Read the beginning of the section and discuss among (ii) yourselves. Seek clarification where necessary. (iii) Decide on a group business idea for the group exercises, and on business ideas for each group members individual assignment. (iv) Starting with The Business Idea, and for each of the subsequent worksheets, go through the following procedure: (a) Go through the worked examples and discuss them. (b) Discuss the group idea and record the necessary information in the group worksheet. (c) Present the worksheet contents to plenary. (d) Work on the individual business ideas and record the necessary information in the individual worksheet. (e) When all the worksheets have been duly completed, compile the individual business plans in readiness for assessment. Be guided by steps 16 to 21 under the section Steps Involved in Writing a Business Plan as well as the two model business plans in the Learners Workbook.

282

Time allocation per worksheet will vary from worksheet to worksheet but the longest should not exceed 3 hours. During Learners presentation of group worksheets, ask for feedback (questions, comments) from the class. Clarify issues arising from the presentation and from the Learners feedback. At the very end after you have read and assessed the Learners individual business plans, give your overall feed back taking special note of the key weaknesses you observed in them.

3.

Conclusion Ask the Learners to point out the key points that emerged from the learning experience. Ask them to state the general conclusions from the lesson. Key points to note are:(i) Primary sources of information are the business opportunity / idea, the market research and the market scan. It is very helpful to be systematic by first capturing (ii) information in worksheets before compiling it into the business plan. (iii) It may be necessary re work the draft several times before a satisfactory business plan emerges.

Trainer Preparation Review materials on preparation of a business plan i.e. the section on Preparing a Business Plan in the Learners Workbook, and any other literature. Organise all materials required for the session (markers, flip chart with stand, chalk board and accessories, handouts)

283

Trainer Tips This is very lengthy topic will require to be spread over several days. It will also cal for after hours input by the Learners. Take care to have continuity from one sub-session to the next. Reference Materials 1. Burns, P (2001). Entrepreneurship and Small Business Hampshire. New York. Palgrave Macmillan. Jarskog, H and Stevenson, D. International Labour Organisation. (1996). SYB Manual

2.

Assessment Criteria and Methodology Criteria Business Plan Correctly prepared Methods Individual exercises Group exercises Tutorials Summary examination

Session Evaluation Evaluation Indicators You can evaluate by collecting information on the following: (i) Effectiveness of training method (lecture, discussion, group/individual assignment) used. (ii) Usefulness of business plan to Learners careers. (iii) Relevance of training material to the session. (iv) Mastery of the subject by the Learners. Evaluation Methods you may apply the following methods: (i) (ii) Interview the Learners as a group or individually. Administer a questionnaire.

284

4.1.5 Presentation of a Business Plan Session Duration: 5 hours Session Rationale This session enables the Learners to understand why Stakeholders would require a business plan to be presented to them. The session thereby enables the Learners to prepare for and make an effective or convincing business plan presentation to stakeholders. Entrepreneurial Attributes The most relevant are motivation, goal setting, desire to create, knowledge of business principles, and self confidence. Learning Objectives On completion of this session, the Learners should be able to: 1. 2. 3. Define the terms presentation and presentation skills. Explain the importance of presenting a business plan to stakeholders. Present a business plan

Learning Outcomes 1. 2. 3. The terms presentation and presentation skills correctly defined. Importance of presenting or business plan to stakeholders explained. Business plan presented.

285

Learner Activities / Environment In this session, Learners will brainstorm on the meaning of business plan presentation and also on the importance of presenting a business plan to stakeholders. The Learners will then identify the skills needed by an individual to make a successful business plan presentation. A list of presentation skills will be developed. Finally, the Learners will individually present their business plans to plenary. Instructional Methodology 1. Introduction Introduce the session by reviewing the session objectives, learning outcomes and the learning activities. Refer the Learners to the session on the importance of a business plan. Ask the Learners to mention the uses of a business plan. Record the answers on flip chart or chalk board. Draw the Learners attention to the use of a business plan as a means for communicating the business goals and objectives to stakeholders. Explain that it is usual for stakeholders to require the author of the business plan to present it before them.

2.

Main Activities Ask the Learners to define the words presentation and presentation skills Write the responses on flip chart or chalk board. Make a brief presentation on business plan presentation. The key points to include in your presentation are:

(i)

There are two parts to the meaning of presentation namely an oral report of a written document and intended

to win support or favour of target audience.

286

(ii)

A presentation is not merely a reading of the written document and therefore demands appropriate and sufficient preparation by the speaker in terms of the subject matter and the audio visual aids. Successful presentation demands the use of techniques or skills for capturing and holding the attention of the audience: voice control, gestures and body posture. While such skills may be in born in some, they can be developed in most people through constant practice. Give an example a presentation technique and how a speaker is able to use it to enhance the effectiveness of his/her presentation.

(iii)

(iv)

(v)

Divide the class into groups of no less than three and no more than five. Write down the following instructions on flip chart or chalk board. (i) (ii) (iii) Explain how a speaker would prepare the subject matter for presentation of a business plan, focusing on the content. List the skills needed to successfully present a business plan and explain how they are employed. Present the results to plenary.

Time allocated should not exceed 1 hour. Clarify issues that may arise from the presentation and feedback from the Learners. Finally, give your overall feedback, ensuring that the following have clearly emerged: (a) The areas to focus on when presenting a business plan. (b) A comprehensive list of presentation skills.

287

Write down the following instructions on flip chart or chalk board: (i) Read through your individual business plan so that you understand all aspects of it. Prepare notes for a 10 minute presentation. Present to plenary

(ii) (iii)

After each presentation, let the peers make an assessment in terms of content of the presentation, credibility of the business plan, and the effectiveness of the speaker in applying the presentation skill/techniques. You may use a simple table with a rating scale of 1 to 10. Ask a number of Learners to read out their assessments. Let each Learner collect and keep his/her assessment sheets. Total time allocated for each Learner should not exceed 30 minutes. Give your overall feedback

3.

Conclusion Ask the Learners to identify the key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key points to note are: (i) (ii) (iii) Definition of presentation and presentation skills. Importance of presenting a business plan to stakeholders. List and description of areas of focus when preparing material for presentation of a business plan.

288

(iv)

List of presentation techniques/ skills.

Trainer Preparation Review materials on presenting a business plan. Organise all materials needed for the session (markers, flip chart with sand, chalk board and accessories, handouts). Prepare model answers for the following: (a) Definition of presentation and presentation skills. (b) Material content for presentation of a business plan. (c) List of presentation techniques / skills. Draw the business plan presentation assessment table with a comprehensive list of assessment criteria.

Trainer Tips

Note that while an individual may not have complete competence in all the presentation techniques / skills listed, they can never less be developed with practice. In the case of a partnership, the most able partner should be elected to make the presentation, as the ultimate goal is often to sell the business plan. Reference Materials 1. Burns, P. (2001). Entrepreneurship and Small Business. Hampshire. New York. Palgrave Macmillan.

2.

Winfrey, R (1962). Technical and Business Report Preparation. AMES, IOWA. The IOWA State University Press.

289

Assessment Criteria and Methodology Criteria The terms presentation and presentation skills correctly defined. The importance of presenting a business plan to stakeholders correctly explained. A business plan correctly presented.

Methods Individual exercises Group exercises Tutorials Summary examination

Session Evaluation Evaluation indicators You can evaluate by collecting information on the following: (i) Effectiveness of the training method used. (ii) Usefulness of business plan presentation to Learners Career. Relevance of training material to the session Mastery of skills or subject by Learners.

(iii) (iv)

Evaluation methods You may apply the following methods: (i) (ii) Interview the Learners as a group or individually. Administer a questionnaire.

290

4.2.1

Business Documentation

Session Duration: Session Rationale

4 hours

This session enables the Learner to know which documents are required in registering a business; and also where to collect them from, how to fill them in and where to submit the Learner to formalize a business an important step in establishing an enterprise. Entrepreneurial Attributes The most relevant are motivation, goal setting, desire to create and commitment. Learning Objectives. On completion of this session, the Learner should be able to: 1. Explain the documents required for formalizing an enterprise. 2. Prepare all documents and papers for formalizing an enterprise. Learning Outcomes 1. 2. Documents required for formalizing an enterprise correctly explained. All documents and papers for formalizing an enterprise correctly prepared.

Learner Activities/ environment In this session, Learners will identify and discuss the different forms used in registering different forms of business. The discussion will

291

include where the forms may be obtained, how they should be completed, where to submit them, and conditions for submission if any. Instructional Methodology 1. Introduction Introduce the session by reviewing objectives, Learning outcomes and learning activities.

the

session

Refer the Learners to the session on forms of business.

Ask the Learners to mention the different forms of business . Record the answers on flip chart or chalk board. Explain to the Learners that different forms of business require different documentation.

2.

Main Activities Ask the Learners to identify the documents required for registering different forms of business. Record the responses on flip chart or chalk board. Ask Learners to mention where the documents may be obtained from. Record the responses on flip chart or chalk board. Ask Learners what conditions apply, when and where they are submitted. Record the responses on flip chart or chalk board.

292

Make a brief presentation on the documents required when registering a business. Key points to include are: (i) There are three types of documentation catering respectively for sole proprietorship/ partnership, limited, liability company, and cooperative. Documentation for sole proprietorship / partnership and limited liability company are obtainable from the parents and copy rights registration office. They are also submitted to the same upon due completion. Cooperatives are registered with the Registrar of Cooperatives under the Ministry of Agriculture and Cooperatives. (iii) The proposed business name has to be cleared for uniqueness before registration can be effected. The application for registration attracts a fee which differs between different types and from time to time.

(ii)

(iv)

Divide the class into groups, preferably the same as when they worked on preparation of a business plan. Write down the following instructions on flip chart or chalk board; (i) Turn to the section on Business Documentation in the Learners Workbook. Read, discuss and understand the narration and examples. Seek clarification when necessary.

(ii)

293

(iii)

Do Exercise 6, Exercise 7, and the Assignment at the end of the section. Present the results to plenary.

(iv)

Time allocated should not exceed 1 hour 30 minutes. During the presentation ask for feedback from the Learners. Clarify issues that may arise form the presentation and feedback from Learners. Finally give your overall feedback.

3.

Conclusion Ask Learners to identify key points that emerged from the learning experience. Ask them to state the general conclusions from the lesson. Key points to note are: (i) Explanation of documents and papers required in formalizing a business. Identification of relevant responsible offices.

(ii)

Trainer Preparation Review materials on business documentation. Organise all the materials needed for the session (markers, flip chart and stand, chalk board and accessories, handouts). Prepare a model answer for Exercise 6.

294

Prepare a model answer for Exercise 7. Prepare a model answer for the Assignment.

Trainer Tips Application forms can be confusing to complete. Be sure that you know how to fill in each and very part of every form; even those parts that may be non-applicable have to be explained. The story included in the section brings out the importance of formalizing a business. Draw the Learners attention to it.

Reference Materials 1. Factories Act 2. Food and Drugs Act 3. Environmental Protection and Pollution Control Act. 4. NAPSA Employers Guide 5. Brochure: Facts about Workers Compensation Fund Control Board. Assessment Criteria and Methodology Criteria The documents required for formalizing a business correctly explained. All documents and papers for formalizing an enterprise correctly prepared.

295

Methods Individual exercise Group exercise Tutorials Summary examination

Session Evaluation Evaluation Indicators You information on the following: (i) can evaluate by collecting

Effectiveness of training method (lecture, individual/ group work) used. Usefulness of business documentation to Learners Careers. Relevance of training material to the session. Mastery of subject by Learners.

(ii)

(iii) (iv)

Evaluation methods You may apply the following methods: (i) (ii) Interview the Learners as a group or individually. Administer a questionnaire.

296

4.2.2

Physical Set Up of An Enterprise

Session Duration: 4 hours Session Rationale This session on the physical set up of an enterprise enables the Learner to understand and appreciate the physical requirements in terms of the site, buildings, furniture, machinery and equipment, essential facilities and accessibility. The session allows the Learner to reflect on the statutory regulations with regard to different types of business premises. The Learner therefore will acquire knowledge required for setting up their business premises. Entrepreneurial Attributes The most relevant are motivation, goal setting, desire to create, commitment and risk taking. Learning Objectives On completion of this session, the Learner should be able to: (i) Describe the physical set up of an enterprise.

Learning Outcomes 1. The physical set up of an enterprise correctly described.

Learner Activities / Environment In this session, Learners will brain storm on the material requirements for setting up business premises, and also the factors to take into consideration. Lists of the physical / material requirements and the relevant factors will then be developed.

297

Instructional Methodology 1. Introduction Introduce the session by reviewing the session objective, learning outcomes and learning activities. Refer the Learners to the session on enterprise types.

Ask the Learners to mention the different types of enterprise. Record the answers on flip chart or chalk board. Explain to the Learners that different types of enterprise have different requirements in terms of physical set up and regulatory issues

2.

Main Activities Ask the Learners to identify the physical requirements for setting up an enterprise. Record the answers on a flip chart or chalk board. Ask the Learners to identify the regulatory issues which arise when setting up an enterprise. Record the answers on flip chart or chalk board. Make a brief presentation on the physical requirements and regulatory issues in setting up an enterprise. Key points to include are: (i) Different enterprise types require different designs of buildings and different types of furniture, machinery and equipment.

298

(ii) (iii) (iv)

Different enterprise types are subject to different regulations. For some enterprise types the location is critical. It is essential that each business owner takes a critical look at their physical and regulatory requirements when setting up their enterprise.

Divide the class into groups of no less than three and no more than five, preferable the same groups as they were in for the business plan. Write down the following instructions: (i) Turn to the section on physical set up of an enterprise in the Learners Workbook. Read, discuss and understand the narration and examples. Seek clarification when necessary. Do Exercise 8 and the Assignment immediately following. Present the results to plenary.

(ii)

(iii) (iv)

Time allocated should not exceed 2 hours 30 minutes. During the presentation ask for feedback from the Learners. Clarify issues that may arise from the presentation and feed back from the Learners. Finally, give your overall feed back.

3.

Conclusion Ask the Learners to identify the key points that emerged from the learning experience and discussion.

299

Ask them to state the general conclusions from the lesson. Key points to note are: (i) Identification of the physical and regulatory requirements in setting up an enterprise.

Trainer Preparation Review materials on physical set up of an enterprise. Organise all the materials needed for the session (markers, flip chart and stand, chalk board and accessories, handouts). Prepare a model answer for Exercise 8.

Trainer Tips The Laws of Zambia provide the basic specifications for physical set up of business. You will do well to familiarize yourself with the various relevant Law.

Reference Material 1. 2. 3. Factories Act. Food and Drug Act Environmental Protection and Pollution Control Act.

Assessment Criteria and Methodology Criteria The physical set up of an enterprise correctly described.

300

Methods Individual exercise Group exercise Tutorials Summary examination

Session Evaluation Evaluation indicators You can evaluate by collecting information on the following: (i) Effectiveness of training method (Lecture, individual/ group work) used. Usefulness of session content to Learners career. Relevance of training material to the session. Mastery of subject by the Learners.

(ii) (iii) (iv)

Evaluation Methods You may apply the following methods: (i) (ii) Interview the Learners as a group or individually. Administer a questionnaire.

301

4.2.3

Production / Service Process

Session Duration: 4 hours Session Rationale This session on production / Service process deals with the final step in establishing an enterprise the designing and setting up of the process by which goods will be produced or services delivered. The session enables the Learners to understand the relevant factors in setting up a production / service process. The session therefore enables them to identify the factors they will need to consider when setting up their own production / Service process. Entrepreneurial Attributes The most relevant are motivation, goal setting, desire to create, knowledge of business principles, commitment, and risk taking. Learning Objectives On completion of this session, the Learners should be able to: 1. Set up a production / Service process for an enterprise.

Learning Outcomes 1. Production / Service process correctly set up

Learner Activities / Environment In this session, Learners will brain storm on the meaning of the term production / service process. They will identify the factors to consider in setting up a production / service process. A list of these factors will be

302

developed. The Learners will then develop a production / service process for an enterprise. Instructional Methodology 1. Introduction Refer the Learners to the session on the business idea / concept. Explain that to set up an effective production / service process one needs, first and foremost, to define and understand his / her business idea very well the product to be offered and the customer needs to be satisfied.

2.

Main Activities Ask the Learners to explain the term production / service process. Record the responses on flip chart or chalk board. Make a short presentation on production / service process. Key points to include in your presentation are:

(i)

The meaning has two parts sequence of activities and

transformation of raw materials into the product.


(ii) Some production process are simple, others are simple and highly technical. Some production processes are highly regulated and require special clearance to commence, and close external monitoring as they continued

(iii)

Divide the class into groups of no less than three and no more than five, preferably the same groups as they were in for the business plan.

303

Write down the following instructions: (i) Turn to the section on production / service process in the Learners Workbook. Read, discuss and understand the narration and examples given. Seek clarification when necessary. Do Exercise 9 and the Assignment at the end of the section Present the results to plenary.

(ii)

(iii) (iv)

Time allocated should not be more than 2 hours 30 minutes. During the presentation ask for feedback from the Learners. Clarify issues that may arise from the presentation and feedback from the Learners.

3.

Finally, give your overall feedback.

Conclusion Ask the Learners to identify the key points that emerged from the learning experience and discussion. Ask them to state the general conclusions from the lesson. Key points to note are; (i) Identification of factors to consider in setting up a production / service process.

Trainer Preparation Review materials on production / Service process

304

Organise all the materials needed for the session (markers, flip chart and stand, chalk board and accessories, handouts). Prepare a model answer for definition of production / service process. Prepare model answer for Exercise 9.

Trainer Tips Here too you will do well to familiarize yourself with the various relevant Laws.

Reference Material 1. 2. 3. Factories Act Food and Drugs Act Environmental and Pollution Control Act

Assessment Criteria and Methodology Criteria Methods Individual exercises Group exercise Tutorials Summary examination A production / Service process correctly set up

Session Evaluation Evaluation indicators You can evaluate by collecting information on the following: (i) Effectiveness of training method individual / group work) used. (lecture,

305

(ii) (iii) (iv)

Usefulness of session content to Learners Career Relevance of training material to the session. Mastery of subject by the Learners.

Evaluation methods You may apply the following methods : (i) (ii) Interview the Learners as a group or individually. Administer a questionnaire.

306

MODULE TITLE:

Sustaining an Enterprise

INTRODUCTION Contained in this document is an Entrepreneurship Trainers Manual for module 5 of the TEVETA Curriculum Chart No. 138 (Sustaining an Enterprise). The manual contains three key units namely: Appraising ones enterprise Productivity and management Managing survival and growth

The manual seeks to document appropriate methodologies for planning, delivery, and evaluation of the subject areas in module 5 in order to assist you the trainer to effectively and efficiently deliver the said module. The presentation of the manual is such that it gives tips on how you the trainer can design and develop appropriate explanations, demonstrations and learner practical exercises, all of which should be meant for a very enabling learning environment. This manual has been prepared in such a way that it attempts to give a foundation to Trainers of Entrepreneurs and/or potential entrepreneurs in Entrepreneurship Development and its related subjects. It must be noted that entrepreneurs are normally very practical people and want to have very little to do with theories. This manual is, therefore, based on the belief that entrepreneurs, whether existing or would-be, have a lot of contributions to make during Entrepreneurship Training programs. The trainers major job is, therefore, to stimulate ideas and discussions within the structure of the training program bearing in mind that s/he should not be regarded as an expert but a facilitator. The value of the training workshop will normally come from a combination of experiences and thoughts of the participants as well as the trainers guidance.

307

MODULE 5: SUSTAINING AN ENTERPRISE ________________________________________________ The aim of the module The aim of this module (Sustaining an Enterprise) is to impart skills that will enable the trainees to sustain their enterprises and manage their growth. The term, Sustain means to maintain, continue, carry on, keep going or prolong. It is therefore, important that you as an entrepreneurship trainer understand this term thoroughly so that you may be able to offer elaborate and accurate explanations to your trainees when delivering this module.

You will note that the modules in TEVETA Curriculum Chart no. 138 are inter-related and progressive in nature, in the sense that module 1 seeks to introduce the trainee to Entrepreneurship followed by module 2, which explains how to Develop Entrepreneurial competences. Next, there is module 3, which explains how to develop Enterprise Management skills. Module 4 then gives the trainees tips on how to establish an Enterprise, whilst module 5 attempts to give tips to the trainees on how to sustain the enterprise that has been established in module 4.

Sustaining an enterprise refers to the process of managing an enterprise in such as way that it is able to maintain effective, efficient and viable operations over a very long period of time. This process involves so many aspects that revolve around constant appraisals of an enterprise, productivity management and managing survival and growth.

Learning objectives of the module At the end of the module, trainees will be able to: Appraise ones enterprise Improve productivity and management Manage survival and growth

308

Recommended further reading and References The contents in this manual are not conclusive. The manual seeks to provide a foundation on which a resourceful trainer should keep building in terms Knowledge and material development. Trainers are therefore, encouraged to read widely in order to supplement the information contained in this manual. Recommended further reading and references includes-

i) Text books include:-

Burns, Paul (2001). Entrepreneurship and Small Business. Macmillan. New York.

Palgrave

Thompson, Arthur; Strickland A. j.; Gamble, John (2005). Crafting and Executing Strategy, Concepts & Cases Chapter 6. 14th Edition. McgrawHill Companies, Inc.: New York

ii) Websites:
Lecture materials: www.palgrave.com/business/burns

Entrepreneur magazine: (US): www.entrepreneurmag.com

Small Business Services: www.businessadviceonline.gov.uk

Barclays Bank: www.smallbusiness.barclays.co.uk

309

UNIT A5.1

Appraising Ones Enterprise

UNIT 5.1 .1 Enterprise Performance ____________________________________________ 1. Session Duration (8 hours) The session on enterprise performance can be delivered in eight hours as follows: 2 hours: Theoretical explanations 4 hours: Practical demonstrations 2 hours: Learners practical exercises

2. Session Rationale The rationale for a Session on Enterprise Performance is most of the times entrepreneurs embark on running an enterprise without any knowledge of how to determine how the business is performing. As a result, they are unable to take correct measures at the right time causing the enterprise to fail. This session will enable trainees to evaluate the performance of their enterprises using basic methods.

3. Entrepreneurial Attributes for the Session The Entrepreneurial Attribute for this session is the ability to make informed decisions based on objective business performance assessments. This is the ability necessary for dealing with in real life business situations and is an attribute that every entrepreneur must possess.

4. Session Learning Objectives The learning objectives for this session are that by the end of this unit, trainees will be able to: Identify the basic performance indicators in an enterprise Use simple tools to assess enterprise performance

5. Learning Outcomes The expected learning outcomes for trainees are as follows: -

310

Basic enterprise performance indicators correctly identified The tools for measuring enterprise performance correctly described.

6. Learner Activities The trainer must bear in mind that the learner activities will largely depend on the instructional methodology employed. During this session, learners will be in a classroom set up and the session may be delivered as indicated below: 7. Instructional methodology i) Introduction Introduce the session and state objectives, expected learning outcomes. Invite participants to given there own understanding of enterprise performance. Present key concepts of topic to create theoretical understanding among learners Allow for a Question-and-Answer session for clarifications and corrections Refer learners to the relevant section of the workbook. ii) Practical activities and demonstrations

a)Group Exercises
Put trainees into 4 or 5 groups and give them an exercise to conduct an external appraisal for a well known small enterprise in the locality (the Trainer should identify the enterprise before hand). Encourage learners to exchange their views and ideas in the groups. Guide learners on how to apply the knowledge they learnt to conduct this external assessment. (The group exercise should take about 40 minutes)

b) Open discussions
Invite each group to present their answers to who group and facilitate an open discussion on the answers given. Give your comments on the presentations and clarify any issues that may have risen during discussions. After this demonstration exercise, arrange with other existing enterprises, where the groups go into groups to practically undertake

311

their own, Enterprise Performance assessment exercise should cover: Market performance, Internal and external situation Finance performance

Exercise

independently.

The

iii) Summary
Summarize the session by asking participants to highlight what they learned from the topic. Write down the key points on the Board/Flip chart and check level of assimilation of knowledge by asking learners to identify or describe key points from the session in line with the learning outcomes. 8. Trainers preparation In order to effectively and efficiently deliver the session on Enterprise Performance the trainer should: -

Read through the session content on Enterprise Performance and related referral materials and understand the topic thoroughly. Organise all training materials needed for the session (e.g. Handouts, performance Flip chart paper, markers cards, etc) ) Prepare the exercise and suggested answers in advance.

9. The Trainers Tips on the Session The whole session on Enterprise Performance should be based on the theoretical concepts presented in the text below which is also found in the Learners workbook. Learners must be made aware that an all round appraisal involving market performance, internal and external situation and finance performance is what can give the true picture of the status of an enterprise.

10. Assessment criteria The assessment criteria for this unit is that-

312

i) The key indicators in enterprise appraisal are correctly stated by trainees ii) The performance of the enterprise correctly described

11. Assessment Method The methods of assessment are aimed at achieving the above criteria and should include the following activities by trainees i) Individual exercises ii) Group exercises iii) Summary examinations

12. Session Evaluation The Trainer should lead trainees in a participatory session evaluation session exercise at the end of each session. This will be augmented by a written end of unit evaluation exercise. Areas to be evaluated include: Effectiveness of training methods used Relevance of training content 13. Reference Materials an Websites Burns, Paul (2001). Entrepreneurship and Small Business. Macmillan. New York.

Palgrave

Thompson, Arthur; Strickland A. j.; Gamble, John (2005). Crafting and Executing Strategy, Concepts & Cases Chapter 3. 14th Edition. McgrawHill Companies, Inc.: New York

Small Business Services: www.businessadviceonline.gov.uk

313

Sub Unit 5.1.1: Enterprise Performance (Unit Content)

In very simple terms, appraising an enterprise takes the form of doing a very detailed assessment of the operations of an enterprise. In order to survive and continue to grow, the management of an enterprise must ensure that the enterprise has a favourable position in relation to the industry in which it operates. The industry position of an enterprise can be determined using some basic performance indicators which include:-

i) Market performance The performance of an enterprise depends first and foremost on its ability to secure a sufficiently large customer base to enable it produce at a profitable level.

One of the ways of determining how well an enterprise is performing is therefore to assess its position on the market in relations to its competitors. This can be done by assessing what percentage of the market share the enterprise holds. The Boston Matrix is one way an enterprise can use to assess its market position. The diagram below summaries the different positions that enterprises can hold on the market in relation to their market performance.

314

Market Share 10x M A R K E T 15% 20% STAR Attractive market High market share High growth rate 1.x PROBLEM CHILD Attractive Market Low Market share High growth rate .1x

(market Leaders/Challengers) (starters, average performers)

G R O W T H 5% R A T E 1% Attractive market Large Market share Low growth rate (Market stability) leaders Unattractive market Low market share Low/no Market growth (Poorly performing with growth potential) with no 10% CASH COW DOG

In addition, appraising an enterprises performance includes identification of its Strengths, Weaknesses, Opportunities and Threats, such an appraisal should include an internal and external assessment as follows:Step 1: Internal appraisal An enterprises internal operations require what are referred to as the four (4) Ms of operations namely:

315

Manpower (human resource)


Critically analyse the available human resources to determine areas of strengths and weaknesses (motivational staff, skills amongst staff, areas of conflict, emoluments, staff development programs)

Machinery (technology in use)


Critically analyse the available type of production and operations technology to determine areas of strengths and weaknesses (machine breakdowns, operational levels, materials wastage, availability of spares, etc)

Materials (the raw materials and other inputs)


Critically analyse the types of raw materials and other inputs to determine their suitability for the target market

Method (the pattern of operations)


Critically analyse the manner in which operations are conducted to determine areas of strengths and weaknesses Step 2: External appraisal Under the external appraisal, an enterprise should analyse its opportunities and threats from the point of view of the following critical stakeholders:

Competition:

What is the enterprises competitive position? Does the enterprise have any competitive advantage? What can be done to improve the enterprises competitive position?

Suppliers: Who are the enterprises current suppliers? How reliable are they? What has been the relationship like? Is there any need for changes?

Government Regulations:

What is the enterprises position regarding government requirements and demands? How compliant has the enterprise been? Is there any room for possible penalties? What can be done to enhance compliance?

Financial Institutions: Does the enterprise require any external funding?


Is external funding readily available and if it is, at what cost and conditions can the enterprise afford the terms?

316

Family Situations:

How do family members and the owner treat the enterprise? Are there any areas requiring serious attention? Has there been any serious conflict between the owner/family members and the enterprise?

General Economic Conditions:

What are the general economic trends as they relate to the enterprises performance? How are factors like interest rates, inflation rates, foreign exchange rates and average household disposable income affecting the enterprise?

ii) Financial performance Financial assessments are the most common ways of determining the performance of an enterprise. Different method can be used in this regard. This unit we will discuss just two basic ones, namely:

Gross Profit margin: This is used to assess profitably by assessing how


much profit an enterprise has made in relation to the sales.

Gross Profit margin =

Gross profit Sales

x 100

= x %

Acid Test ratio: this is ratio measures the actual liquidity of an


enterprise. It is expressed as a factor. It is suggested that the ideal acid test ratio must be 1:1, meaning that the amount of money expected in the short term is able to pay off outstanding short term debts.

Acid Test ratio = Current assets stocks Current liabilities

317

UNIT 5.1 .2 Life Cycle of the Enterprise ______________________________________________

1. Session Duration This session should be delivered in at least 8 hours over a period of three days as indicated below:Two (2) hours: topic. Two (2) hours: that Four (4) hours: in the Introduction of theoretical concepts that underpin the Demonstrations, clarifications and other enhance the knowledge gained. exercises

Practical exercises by participants including exercises Learners Workbook

2. Session Rationale The justification for this session is that it will enable learners examine the various stages of the Life Cycle of an Enterprise so that they (trainees) may learn to develop different and appropriate strategies for each stage to ensure the enterprises sustainability. 3. Entrepreneurial Attributes for the session The Entrepreneurial Attributes for the session is that it teaches analytical skills that will help trainees to correctly and accurately identify and interpret the enterprises changing circumstances and stages. 4. Session Learning Objectives The session learning objectives are that by the end of this session, trainees will be able to: Describe the stages of an Enterprise Life Cycle Identify strategies to be applied at stages of the life cycle of an enterprise 5. Session Learning Outcomes The life cycle of an enterprise correctly described Stages of an enterprise life cycle correctly explained Stages of an enterprise and enterprise performance correctly related 318

6. Learner Activities and environment Learners will be in a class room situation and should ideally sit in a semi circle or u shape to encourage openness and participation. There must be space for movement and group work and sufficient Wall/Board space to stick cards on. Enterprises with sufficient room and willing entrepreneurs should be identified. 7. Instructional Methodology It is recommended that the trainer uses learner centred and highly participatory instructional methods. i) Introduction Introduce the session by linking it to the previous session, state session objectives, expected learning outcomes and the learning activities that trainees will be involved in. Give participants cards and invite them to brain storm on stages of the life cycle of an enterprise. Invite participants to come forward to stick their ideas on the Wall/Board. Collectively with the trainees cluster the cards to see if they constitute all the stages of the life cycle of an enterprise ii) Presentation of theoretical concept Present key concepts of topic to create theoretical understanding among learners. Relate these to what has already been presented by trainees Allow for a Question-and-Answer session for clarifications and corrections Refer learners to the relevant section of the workbook. iii) Practical activities and demonstrations

a)Group Exercises
For purposes of demonstrations, the Trainer should draw an illustration of the enterprise life cycle showing the different stages of Launch, Growth, Maturity, Decline, and Exit.

319

Arrange with four existing enterprises that can willingly allow trainees to come to their businesses. The four enterprises should be at different stages of the enterprise life cycle namely: -

Launch Stage Growth Stage Maturity Stage Decline Stage

Divide the trainees into four groups and assign each group a different enterprise at a different stage of a life cycle and task them with the responsibility of undertaking a field trip to note down the different problems, difficulties and challenges that the enterprises they visit are facing in their operations.

b) Open discussions
After the field exercise, the groups should present their finding to the class. Guide the trainees in reconciling what was taught in class with what obtained in the field. Trainer should facilitate an open discussion on the presentations. Give your comments on the presentations and clarify any issues that may have risen during presentations.

iii) Summary
Summarize the session by asking participants to highlight what they learned from the exercise and from the whole topic. Write down the key points on the Board/Flip chart and check level of assimilation of knowledge by asking trainees to identify or describe key points from the session in line with the learning outcomes. 8. Trainers Preparation In order to effectively and efficiently deliver this session the trainer should: -

320

Read through the session content on the Life Cycle of an Enterprise and related referral materials and understand the topic thoroughly. Organise all training materials needed for the session (e.g Handouts, performance Flip chart paper, markers, cards, Stick stuff etc) ) Prepare the exercise and suggested answers in advance. Make necessary arrangements with the Enterprises in the neighbourhood. 9. Trainers Tips The session on the Life Cycle of an Enterprise should be delivered based on the theoretical content in this section. Ideally enterprises at launch stage are those that have been in business for less than a year; enterprises at growth stage are those that have been in business for a period between one and five years; enterprises at maturity stage are those that have been in business for a period between six and ten years and those that have been in business for over ten years may be considered to be in the decline stage. 10. Assessment criteria The assessment criteria for this unit should include the following: The life cycle of an enterprise clearly defined by the trainee The stages of the enterprise life cycle correctly explained The stages and performance of the enterprise correctly related 11. Assessment Method The assessment methods should include:i) Individual exercises ii) Group exercises iii) Summary examinations 12. Session Evaluation The Trainer should lead trainees in a participatory session evaluation session exercise at the end of each session. This will be augmented by a written end of unit evaluation exercise. Areas to be evaluated include: Effectiveness of training methods used Relevance of training content

321

13. Reference Materials and Websites Burns, Paul (2001). Entrepreneurship and Small Business. Macmillan. New York.

Palgrave

Lecture materials: www.palgrave.com/business/burns

Entrepreneur magazine: (US): www.entrepreneurmag.com

Small Business Services: www.businessadviceonline.gov.uk

Barclays Bank: www.smallbusiness.barclays.co.uk

322

Unit 1.2: The Life Cycle of an Enterprise (Content)

An enterprise, like a human being or a product, has a life cycle. A human being ordinarily is born and then he goes through various growth stages such as childhood, teenage, adolescence, adulthood, and finally death. A product is introduced on the market, and then it goes through the growth stage, then the maturity stage and finally the decline stage where it eventually phases out. In the same way, an enterprise goes through a life cycle, which involves the following stages:

Ideas generation: this is when the business idea is conceived and subjected to an environmental scan, market research, feasibility study and finally the preparation of the Business Plan Business launch: this is the commissioning of the enterprise to commence operations Business growth and expansion: this reflects the growth of the enterprise through increased sales volume, increased number of employees, expansion in terms of capital investments and increase in profitability levels Business maturity: this where business operations appear to have gotten to the highest capacity levels and begin to stagnate meaning that no further growth is recorded Business decline: at this stage, the business begins to show a downward trend in terms of sales and operational capacity Phase out or re-launch: with a continued downward trend, the business may eventually phase out. Where the entrepreneur has fresh ideas a re-launch may occur, meaning the business may take a different form or nature. 323

Some tips on the Enterprise Life Cycle The critical things to take note of during the different stages of an enterprise are the issues that have been discussed through out this training manual. At every stage of an enterprises life cycle, there is need for systematic, efficient and effective planning and execution in order to lengthen the life span of that enterprise.

Just like a vehicles life span can be lengthened through appropriate repairs, maintenance services and use of appropriate and recommended spares, an enterprises life span can be lengthened through the use of appropriate and recommended entrepreneurial and business management skills. An enterprises life cycle is in the hands of the entrepreneur who owns it. The entrepreneur is like a driver who must steer the vehicle in the right direction. It is up to each entrepreneur to utilise the best entrepreneurial skills and competencies based on a sound understanding of the following key business stakeholders:

God (the creator and giver of all knowledge, skills and wisdom) The Customer (the king and queen of any business) The employees (the people with whom the entrepreneur runs the enterprise The Suppliers (the people who make it possible for an entrepreneur to produce) The Competitors (the people from whom an entrepreneur may borrow various entrepreneurial ideas and help him measure his performance)

324

The Government (the people who facilitate and create an enabling environment for enterprises to flourish) The Owner and family (the people on whom the survival of the enterprise largely depends)

Different stages of an enterprises Life Cycle present different challenges and difficulties to the managers of those enterprises. These stages are as follows: -

Launch stage is associated with slow sales, low or no profits and low
consumer acceptability. Demonstrate that this is a period of heavy expenses incurred with enterprise development and introduction. Marketing activities in this stage are focussed on persuading early adopters to buy, promotional pricing, limited distribution channels, and promotions aimed at educating potential customers about the new enterprise.

Growth Stage is a period of rapid market acceptance and substantial


profit improvement. Demonstrate to trainees that in this stage, consumers accept the enterprise and its products/services and begin to adopt it in greater numbers. The enterprise activities revolve around building sales and market share, increasing distribution channels and heavy promotion.

Maturity Stage is a period of a slow down in sales growth coupled with


increased competition. The enterprise activities largely involve luring the customers from competitors, adding other product ranges, lowering prices and promotion focusing on product differentiation and heavy sales promotion.

Decline Stage is a period where customers are looking for new


products particularly from new enterprises. Sales at this stage show a downward drift and profits begin to erode. Activities in the enterprise at this stage mainly involve limiting as much as possible,

325

costs and seeking ways to make the enterprise much more appealing again.

Exit Stage is a period where it makes more economic sense to exit


from the business than to continue operating. At this stage it may be advisable to either relocate, sale the business or close the enterprise all together

326

UNIT A5.2

Productivity and Management

UNIT 5.2 .1 Total Quality Management _______________________________________________________ 1. Session Duration (8 hours) The session on enterprise performance should be delivered in 8 hours as follows:Two (2) hours: discussions. Introduction and theoretical presentation and

Two (2) hours: Practical exercise and demonstrations and examples and Four (4) hours: Supervised Learners practical exercises. 2. Session Rationale The rationale behind this session is that given the competitive nature of business today there is need to move the focus of quality away from being a purely Operations Departments activity into a major concern for the entire enterprise. Total Quality Management is way of thinking and working that is concerned with continuously meeting the needs and expectations of customers. 3. Entrepreneurial Attributes for the Session This session seeks to inculcate in trainees attributes of reliability, customer responsiveness, concern for high levels of competence and quality4. Learning Objectives The session learning objectives that by the end of the session, trainees will be able to: Define Total Quality management Identify the key concepts in Total Quality Management

5. Learning Outcomes Total Quality Management correctly defined Key concepts Total Quality Management properly identified 327

6. Learner Activities and environment A class room environment large enough for trainees to freely move around doing exercises. There must be sufficient teaching aids to enhance learning. A sitting arrangement that encourages active participation and free exchange of ideas is necessary; e.g. group sitting.

7. Instructional Methodologies A Progressive training approach in which trainees are actively involved in the learning process must be used. The trainer must use learner centred and highly participatory instructional methods. The outline below is just a guide that can be enhance by a trainer. i) Introduction Introduce the session by linking it to the previous session, state session objectives, expected learning outcomes and the learning activities that trainees will be involved in. Invite trainees to discuss within the groups in which they are sitting, the topic Total Quality Management and how it can be applied in an enterprise set. Invite representatives of groups to presents their discussions to the whole class and initiate and facilitate a discussion on the presentations. Give your views on the presentations as away of introducing the theoretical concepts underpinning the topic ii) Presentation of theoretical concept Present key concepts of topic to create theoretical understanding among learners. Relate these to what has already been presented by trainees Allow for a Question-and-Answer session for clarifications and corrections Refer learners to the relevant section of the workbook.

328

iii) Practical activities and demonstrations

a) Presentation/field visit
Arrange for a presentation by a TQM expert from an Company the process Total Quality Management in the Company. Ensure that the trainees are actively following the demonstrations, asking questions and taking down notes.

After the presentation, conduct a facilitated discussion on the lessons learned from the presentation.

Using the lessons learnt during the presentations, give trainees into groups and ask them to visit selected small enterprises in order to examine to what extent these enterprises practice TQM. Group presentations and discussions Allow the groups to represents their findings in plenary Guide the groups in identifying major differences between the two scenarios of TQM by experts and TQM among micro and small enterprises.

iv) Session Summary


Summarize the session by asking participants to highlight what they learned from the exercise and from the whole topic. Write down the key points on the Board/Flip chart and check level of assimilation of knowledge by asking trainees to identify or describe key points from the session in line with the learning outcomes. 8. Trainers Preparation This is a very technical topic, the trainer should: -

Read through the session content on Total Quality Management and related referral materials. It is important for the Trainer to read widely and understand the topic thoroughly. Organise the presentation by the TQM expert well in advance

329

Organise all training materials needed for the session (e.g Handouts, performance Flip chart paper, markers, cards, Stick stuff etc) ) Arrange for the field exercise by trainees to the small enterprises Secure a sample Total Quality Management Manual for distribution to trainees. 9. Trainers Tips The session on the Life Cycle of an Enterprise should be delivered based on the theoretical content presented in this section.

The topic on Total Quality Management is very technical and therefore, requires a very practical approach. One suggested approach that the trainer takes trainees to an enterprise/Company where the concepts of total quality management are seriously and effectively employed in its operations.

The trainer can also try to secure a quality manual from an established company or a sample from the Zambian Bureau of Standards to use as reference Material.

10. Assessment criteria The key assessment criteria for this unit should be that:Trainees correctly define the Total quality Management Trainees correctly define the process of Total Quality Management in an enterprise.

11. Assessment method The methods of assessment will to achieve the above criteria will include the following activities by trainees i) Individual exercises ii) Group exercises iii) Summary examinations

330

12. Session evaluation The Trainer should lead trainees in a participatory session evaluation exercise at the end of each session. This will be augmented by a written end of unit evaluation exercise. 13. Reference Materials and Websites Burns, Paul (2001). Entrepreneurship and Small Business. Macmillan. New York. Palgrave

Lecture materials: www.palgrave.com/business/burns

Entrepreneur magazine: (US): www.entrepreneurmag.com

Small Business Services: www.businessadviceonline.gov.uk

Barclays Bank: www.smallbusiness.barclays.co.uk

331

Unit 2.1 Total Quality Management ________________________________________________________

Total Quality Management (TQM) is defined as a way of thinking and working that is concerned with meeting the needs and expectations of customers. TQM tries to move the focus of quality away from being just an Operations Department activity into a major concern for the entire organization.

In short through TQM, issues of quality become the responsibility of all employees in all the departments of an enterprise.

The process of Total Quality Management is best achieved through the following key concepts:

Continuous improvement:

TQM requires a never-ending process of continuous improvements that embraces people, suppliers, materials, equipment, and procedures. In TQM, the end objective is perfection.

Employee empowerment: the concept of TQM believes in the involvement


of the workforce in every step of the production process. believes in continuous employee training and development. It also

Benchmarking:

TQM believes in benchmarking, which is an approach where an enterprise compares its operations with those of other enterprises preferably the best enterprise available

Just in time concept:

TQM believes in systems that are designed to produce or deliver just and when the products and services are needed.

332

COSTS ASSOCIATED WITH QUALITY The cost of quality is the price you pay for doing things wrong the first time around. This means all costs attributable to producing a product that is not 100% perfect. At least four major categories of costs associated with quality can be identified; namely,

i) Prevention costs
These are costs associated with activities involved in reducing the potential of producing defective products. They include the cost of training workers to improve capabilities and the cost of managing quality improvement programs. A skill upgrading course for workers to enhance their ability to make products that comply with set standards is an example.

ii) Appraisal cost


These are all costs related to monitoring and evaluation of production processes to ensure that the production system is operating within set standards and include the cost of testing and payment of inspectors. Appraisal costs also include the cost of independent verification to get certification from National Standards Bureaus.

iii) Internal failure


These are costs that result from actual production of defective products. Internal failure costs can include the cost of scrap resulting from defective pieces and the actual cost of rework and cost of down time when the next operation cannot take place because the inputs are defective.

Example When producing protective overalls, if the sleeves have been cut too short, then that material becomes scrap as it cannot be used on the same overalls and production of overalls has to be halted become there is no sleeve inputs. iv) External costs
These are costs relating to delivering poor quality to the customer. External costs are the most expensive costs to a company. They include cost of redoing the job, e.g. reinstalling a kitchen unit because the first job was

333

wrongly done, scrap and overtime; the cost of transporting goods that have been recalled. PRODUCTIVITY Productivity is defined using a ratio as output over input. This means that productivity is measured by what comes out (output) as a result of what goes in (in put).

Productivity = Output Input

The higher the productivity.

output

given

constant

input,

the

higher

the

For instance, if two (2) days of work produces five (5) bags of maize and another two (2) days of work produces seven (7) bags of maize under similar circumstances, then, the two days that produces seven bags of maize is more productive.

Factors that affect productivity


The methods used: the more efficient the method is, the more productive the result is bound to be.

Capital:

the more available and efficient use of capital, the more productive the result is bound to be

Technology in use:

the more updated and appropriate the technology in use is, the more productive the result is bound to be

Human resources in use: the more skilled, experienced and knowledgeable


the human resources are, the more productive the result is bound to be

334

How to improve productivity Productivity in an enterprise may be improved by taking the following actions: Develop productivity measures for all operations and all departments Develop methods for achieving productivity improvements such as getting ideas from workers, studying how other enterprises have improved productivity and re-examining the way work is done Establish reasonable goals for improvement Ensure that there is a culture of teamwork Measure improvements and publicize them Offer incentives and rewards for productive work

Link between TQM and Productivity By using TQM techniques such as statistical process control, Pareto charts, and fish-bone diagrams, a company can locate waste, identify its cause, and eliminate it and facilitate production of a quality service or product.

Total Quality Management therefore makes an enterprise more efficient and productive because productivity is the ratio of output over input. The link between TQM and productivity is very tight because a good TQM system leads to higher level of productivity in an enterprise.

335

UNIT A5.3

Manage Survival and Growth

UNIT 5.3 .1 Managing Change _______________________________________________________ UNIT 3: MANAGING SURVIVAL AND GROWTH Sub-Unit 3.1 Managing change ________________________________________________ 1. Session duration (8 hours) The session on enterprise performance can be delivered in eight (8) hours as follows:Two (2) hours: topic. Two (2) hours: Four (4) hours: Introducing theoretical concepts underpinning the

Practical demonstrations. Learner application of knowledge through practical exercises.

2. Session rationale The reasoning behind this session is that change is inevitable and that every enterprise no matter the size operates in an ever changing business environment. The dynamic business environment can cause changes in an enterprise which could impact on enterprise operations and entrepreneurs need to be well prepared so that change does not negatively affect their businesses.

3. Entrepreneurial attributes for the session The entrepreneurial attributes to be inculcated during this session include problem solving and environment analysis abilities. 4. Session learning objectives The learning objectives for this course are that by the end of this unit, trainees will be able to:-

336

Define change Outline the strategies for change management in an enterprise

5. Session learning outcomes The following are the expected session outcomes: The terms change and change management correctly defined Strategies for managing change clearly described 6. Learner activities and environment This session can be conducted in a classroom with sufficient space for learner exercises. There should be group work to encourage active participation by trainees.

7. Instructional methodologies The session on Managing Change should be delivered based on the content in this section. The outline below is a guide and can be adjusted by the trainers if necessary. i) Introduction Introduce the session by linking it to the previous session, state session objectives, expected learning outcomes and the learning activities that trainees will be involved in. Invite participants to brain storm on first, what change is and second how change can affect enterprises. Facilitate a discussion on the ideas presented and draw conclusions on the effects of change on business. ii) Presentation of theoretical concept Present key concepts of topic to create theoretical understanding among learners. Relate these to what has already been presented by trainees Allow for a Question-and-Answer session for clarifications and corrections Refer learners to the relevant section of the workbook. iii) Practical activities and demonstrations

a) Role play

337

Prepare a (5 minute) role play on how a company can lose business due to changing customer tastes or changing technology. Facilitate a discussion the role play, on the lessons drawn from the role play and the implications for small enterprises.

b) Learners practical exercises


Arrange for trainees to go in groups of four and conduct a field visit where they should interview owners of small enterprises to discuss what changes have had:a) A positive impact of their enterprise b) A negative impact on their business After the field exercise, the groups should present their finding to the class. Guide the trainees in reconciling what was taught in class with what obtained in the field. Trainer should facilitate an open discussion on the presentations. Give your comments on the presentations and clarify any issues that may have risen during presentations.

iii) Summary
Summarize the session by asking participants to highlight what they learned from the exercise and from the whole topic. Write down the key points on the Board/Flip chart and check level of assimilation of knowledge by asking trainees to identify or describe key points from the session in line with the learning outcomes. 7. Trainers Preparation In preparing for this session, the trainer should: -

Read through the session content in this session and related referral materials. It is important for the Trainer to read widely and understand the topic thoroughly. Prepare the role play well in advance and identify the lesson that must be drawn from the role play. 338

Organise all training materials needed for the session (e. g Handouts, performance Flip chart paper, markers, cards, Stick stuff etc) )

9. Trainers tips Note that change can have either a positive or negative impact on business and that change can be initiated but it can also be arrive abruptly. The session must highlight the importance of managing change to the benefit of the enterprise. 10. Assessment criteria The assessment criteria for this unit are based on the ability of trainees to: Correctly define change Correctly explain the nature of change Be able to employ change management strategies

11. Assessment method The assessment methods should include:i) Individual exercises ii) Group exercises iii) Field exercises vi) Summary examinations 12. Session evaluation The Trainer should lead trainees in a participatory session evaluation session exercise at the end of each session. This will be augmented by a written end of unit evaluation exercise. Areas to be evaluated include: Effectiveness of training methods used Relevance of training content

339

13. Reference Materials and Websites Burns, Paul (2001). Entrepreneurship and Small Business. Macmillan. New York. Palgrave

Thompson, Arthur; Strickland A. j.; Gamble, John (2005). Crafting and Executing Strategy, Concepts & Cases Chapter 6. 14th Edition. McgrawHill Companies, Inc.: New York

Lecture materials: www.palgrave.com/business/burns

Entrepreneur magazine: (US): www.entrepreneurmag.com

Small Business Services: www.businessadviceonline.gov.uk

Barclays Bank: www.smallbusiness.barclays.co.uk

340

Sub-unit 3.1: Managing Change (Content) WHAT IS CHANGE? Change can be defined as an alteration or difference in the way things are done as a result of some developments. Every enterprise no matter the size operates in an ever changing business environment. Different factors in the business environment can cause change in an enterprise. Such factors include: Changing Changing Changing Changing Changing Changing customer tastes workers demands regarding work patterns skill requirements technology levels of competition government regulations on commerce and trade

As a result of this constantly changing environment, an entrepreneur must ensure that the enterprise has the flexibility to adapt to such changes. This means that the entrepreneur must keep his eyes and ears open to be able to identify and understand the changes that are taking place and how they relate to his enterprises operations. Change if left unmanaged can cause the down fall of an organisation. The success of an enterprise depends in part on the entrepreneurs ability to manage change. It therefore, means that the entrepreneur must keep his eyes and ears open to be able to identify and understand the changes that are taking place and how they relate to his enterprises operations. This calls for the ability to manage change. WHAT IS MANAGING CHANGE? In very simple terms, managing change refers to an enterprises ability to respond favourably and appropriately to new problems, challenges and difficulties it encounters.

341

CHANGE MANAGEMENT AS A PROCESS The process of change can be analysed and explained in terms of the dynamics at work between the four major elements of the change process. These four elements are:-

i) The present state of the enterprise


As was discussed earlier, a SWOT analysis maybe used to measure essential aspects of the enterprise such as its substructures and systems, its culture and climate, its leadership and management and its performance and profitability in order to gauge the enterprises all round effectiveness and efficiency.

ii) The desired future state of the enterprise


Again as was examined earlier on, the Strategic Planning Process, is one of the most common approaches to achieving the desired future state of the enterprise, which equally entails change management.

iii) Change through (planned) interventions


Sometimes change occurs through some interventions in the course of running an enterprise. Some of these changes can be planned whilst others may not necessarily occur due to planning. For instance, the abrupt resignation or even death of an employee may result in certain interventions, which can bring about changes. STRATEGIES FOR MANAGING CHANGE Defining the vision as a reference point for the change sought Sensitising enterprise members about the eminent change Catalysing to fight resistance, overcome inertia, create support and reaffirm the validity of the proposed changes Steering in order to focus on the system that will guide the process of change and keep it on track

342

Delivering to effect the vision and actual transition from the current situation to the planned state Obtaining participation and active involvement of all enterprise members as an essential element to the success of the change process Handling the emotional dimensions which come in form of typical reactions to change Handling power issues because change frequently upsets the balance of power within an enterprise Training and coaching in order to introduce new ways of thinking and behaving as a result of change Communicating actively and effectively as an essential to successful change

343

UNIT 5.3.2 Strategies for Growth _______________________________________________________ 1. Session duration This session should be delivered in 10 hours as follows:Two (2) hours: topic. Four (3) Hours: application of Four (3) hours Introduction of theoretical concepts underpinning the Illustrations and practical concepts. demonstrations of

Learners guided practical exercises using the learners Workbook

2. Session rationale The rationale behind this session is that an enterprise is life a human being in that it goes through different stages of development and that through all the growth stages it needs proper guidance and input for it to continue to survive. The session will help trainees to appreciate that an enterprise can only develop into a more established entity if deliberate efforts are put in place.

3. Entrepreneurial attributes for the session This session will inculcate in the trainees the ability to be success oriented by focusing on the future and growth of the enterprise.

4. Session learning objectives By the end of this session, participants should be able to: Describe the role of strategy in enterprise growth Identify the basic indicators for business growth

5. Session learning outcomes The following are the expected outcomes of this session:-

344

The term strategy and business growth correctly defined Basic indicators of business growth correctly identified Enterprise growth strategies correctly described

6. Learner activities and environment The learning environment for this session consists of a classroom set up and a field visit. Emphasis in the classroom set up should be on participatory training approaches to ensure involvement of all participants 7. Instructional methodology This session on Strategies for Growth should be delivered using the content given in this section as a basis using centred instructional approaches. The framework of session delivery can follow the guideline below.

i) Introduction State session objectives, expected learning outcomes and the learning activities that trainees will be involved in, and then link the session to the previous one. Open a class discussion on enterprise growth and how it can be achieved Note down on the board the key issues coming from the discussion and cluster ideas which are similar. ii) Presentation of theoretical concepts Present key concepts of topic to create theoretical understanding among learners. Relate these to what has already been presented by trainees Allow for a Question-and-Answer session for clarifications and corrections Refer learners to the relevant section of the workbook and point out the key elements of the session. iii) Practical activities and demonstrations

a) Group exercises
Divide the class into three groups and ask them to discuss how they can embark on enterprise growth the strategies below and to identify the advantages and disadvantages of these strategies:-

345

Subcontracting for a Clothing manufacturing enterprise Acquisitions for a Food Service Enterprise Joint venture for a Building Construction Company.

b) Open discussions
Allow the groups to their present work in a plenary session. Guide the trainees in reconciling what was taught in class with application of theory to particular situations. Let trainees discuss and comment on each others presentations. Give your comments on the presentations and clarify any issues that may have risen during presentations.

iii) Summary
Summarize the session by asking participants to highlight what they learned from the exercise and from the whole topic. Write down the key points on the Board/Flip chart and check level of assimilation of knowledge by asking trainees to identify or describe key points from the session in line with the learning outcomes.

8. Trainers Preparation In preparing for this session, the trainer should: -

Read through the session content in this session and related referral materials. It is important for the Trainer to read widely and understand the topic thoroughly. Prepare the role play well in advance and identify the lesson that must be drawn from the role play. Organise all training materials needed for the session (e. g Handouts, performance Flip chart paper, markers, cards, Stick stuff etc) )

346

9. Trainers Tips Note that for any strategy to be successful there must be a strategic fit between objectives of the enterprise and the business opportunities in the environment. Strategies must always be crafted to suit the specific situation facing an enterprise and must be based on the critical success factors. 10. Assessment criteria The terms strategy and business growth correctly defined Indicators for business growth clearly outlined Strategies for enterprise growth correctly described

11. Assessment method The assessment methods should include:i) Individual exercises ii) Group exercises vi) Summary examinations 12. Session Evaluation The Trainer should lead trainees in a participatory session evaluation session exercise at the end of each session. This will be augmented by a written end of unit evaluation exercise. Areas to be evaluated include: Effectiveness of training methods used Relevance of training content 13. Reference Materials and Websites Burns, Paul (2001). Entrepreneurship and Small Business. Macmillan. New York.

Palgrave

Thompson, Arthur; Strickland A. j.; Gamble, John (2005). Crafting and Executing Strategy, Concepts & Cases Chapter 6. 14th Edition. McgrawHill Companies, Inc.: New York

Lecture materials: www.palgrave.com/business/burns

347

Entrepreneur magazine: (US): www.entrepreneurmag.com

Small Business Services: www.businessadviceonline.gov.uk

Barclays Bank: www.smallbusiness.barclays.co.uk

348

Sub Unit 3.2: Strategies for growth (Content) _______________CONTENT________________________ 1. From Enterprise establishment to survival At the time of establishment and some time thereafter, an enterprise is preoccupied with finding customers, delivering products/services. The organisational structure of the business is simple and planning is usually minimal. At this stage, the entrepreneur who is usually the owner manager is actively involved in every aspect of the business. At this stage, the business aims to establish sufficient customer base and a reputable product/service portfolio to ensure viable business operations. Control of revenues and expenses is critical at this stage in order to maintain a positive cash flow. This is the make or break stage of the business. However, once the enterprise has established itself with sufficient customer base and has employed people in critical areas such as marketing, accounting and technical operations, then the enterprise is set to embark on a growth park should the entrepreneur so desire. 2. Enterprise growth For an enterprise to embark on a growth path, the entrepreneur must first clarify the long vision of the enterprise and be able to mobilise necessary resources. The Enterprise requires a clear strategy of how the vision will be achieved. At this stage, what is critical to the success of the enterprise is:a) The owners goals for the business b) The owner/managers strategic planning, and execution abilities c) The operating systems that are in place i) Indicators of Business growth Growth in an enterprise can come in many forms and there are many indicators of enterprise growth. They include sales levels, capital levels, and enterprise profitability.

349

Sales volume as an indicator of enterprise growth


A growing customer base that results in increased sales volume can be a very good indicates of the performance of an enterprise. Generally, consistent growth in sales volume is an indication that the business is growing.

Profitability as an indicator of business growth


An enterprise can compare its profits over a period of time to determine if the enterprise is growing stagnant or decline profits can be an indication that the business is not growing.

Capital levels
The amount of capital available to an enterprise will determine to certain extent the level of operation that an enterprise can undertake. Therefore, if the capital level in a business in growing, it could be an indication that the business in growing, hence the need for increased capital injection.

ii) Strategies for enterprise growth There are many growth strategies that an entrepreneur can embark on in order to grow the business. It is up to the owner/manager of the business to assess the business circumstances and decide on which growth path best suits the enterprise and a particular point in time. Below are some of the strategies that an enterprise can use to grow:

Growth through subcontracting


A growth strategy through subcontracting entails giving out extra business to outsiders when an enterprises capacities accommodate it. For instance, a carpenter is requested to supply one thousand (1,000) desks and his capacity can only supply five hundred (500) desks; such a carpenter can subcontract another carpenter to produce the extra 500 desks.

Growth through mergers and acquisitions


A merger means two different enterprises, A and B coming together to form enterprise C. While an acquisition is where a Company A, acquires company B and maintains the name Company A and meanwhile Company B

350

ceases to exist forthwith. The objective in both cases to increase operating capacity, efficiency, and enterprise competitiveness.

v) Growth Strategies through Joint ventures


Sometimes growth may be achieved through a Joint Venture strategy, where Company A and Company B go into a joint venture arrangement where Company C is created but both Companies A and B continue existing in their own right.

For any strategy to be successful there must be a fit between the objectives of an enterprise and the opportunity in the business environment. Strategies for growth should therefore be crafted based on the growth areas identified as critical to the success of the enterprise.

351

MODULE NO. MODULE TITLE: UNIT A1.1

138-06-A INTEGRATED LEARNING PROJECT The Concepts of Entrepreneurship, SelfEmployment and Enterprise

UNIT 1.1

.1

INTEGRATED PROJECT ENTREPRENEURSHIP

MODULE AIM The aim of the module is to apply entrepreneurial competences, establish an enterprise and develop enterprise growth strategies. LEARNING OBJECTIVES MODULE I: INTRODUCTION TO ENTREPRENEURSHIP TRAINERS AND LEARNERS ACTIVITIES These are the steps for your Learners to establishing an Enterprise Project; You are required to: Coach, Guide; Assess; and Supervise the development of the project.

Developing entrepreneurial competences i. Assign Learners to assess themselves and find out the supporting and hindering attributes they have in starting a business. ii. Find a way of strengthening eth good attributes and limit Identifying a Business Idea i. Ask learner to identify something they love doing.

352

ii. Ask them check in their community for something that is missing or something bringing unhappiness in the community such as social, cultural or economic problems. iii. Ask the Learners to observe if the idea is something new or an improvement on the current solution. iv. Is the solution provided legal? v. Ask the Learners to screen and select a business opportunity. Select a business opportunity i. Ask the learners to assess the viability of the business opportunity selected; Conducting Market Research i. Ask the learner to conduct a market research is gathering as much information as you can about the market, potential customers and your competition is market research.. Developing the Business System i. Ask the learners to carry out the following assignment: describe your customers and their needs now and in future; develop a business goal; decide the form of your business; name to the business. Write down what value you will deliver to customers. Indicate how the customers will be informed of your products or services. Outline the process of delivering the product or services. Describe how you will produce, how and who will be employed, what machines and materials will be needed, where will the production be located, and the timing

353

1. MEANING OF ENTREPRENEURSHIP, ENTREPRENEUR

INTRAPRENEURSHIP

AND

Explain the meaning Entrepreneur; Entrepreneurship

of

Entrepreneurship,

Intrapreneurship

and

It is a way of life and process of creating new value through a new business in an environment of risk to earn a profit and growth through mobilising resources to exploit opportunities.

Explain entrepreneurship from the point of: Starting your own business Inventing something new A spirit of creative thinking and innovation that embraces an entire organization
Intrapreneurship Intrapreneurship is the organizational culture of a business that allows employees to be creative and innovative in solving problem and exploiting opportunities within the limits of the available resources.

Suggest way that can create an atmosphere of entrepreneurship in your business.

Entrepreneur An Entrepreneur is a person who creates new value through a new business in an environment of risk to earn a profit and growth through mobilising resources to exploit opportunities.

Give an example from the community you leave.

354

2. ROLE OF ENTREPRENEURSHIP IN NATIONAL DEVELOPMENT Outline the role of entrepreneurship in national development; Entrepreneurship is one of the most critical ingredients necessary to secure economic prosperity for Zambia. Zambias poverty levels at more than 60% are rendering most Zambians without access to social services and minimum income for livelihoods. You have an opportunity to enter the career of entrepreneurship, what is the importance of entrepreneurship to Zambia:

Explain in terms of the following: Variety of goods and services, Improved Income, Job opportunities. Expanding tax base Rural urban migration

355

3. TYPES OF ENTREPRENEURS There are different types of entrepreneurs. The list given is indicative. You may come up with a list. No. Type Student entrepreneurs Community entrepreneurs High-growth entrepreneurs Hobby entrepreneurs Lifestyle entrepreneurs Social entrepreneurs Women entrepreneurs Select your preferred type of an entrepreneur. Description Distinguishing Feature Your preference

356

4. FORMS OF BUSINESSES Outline the forms of businesses; There are the five main forms of business. These are sole proprietorship, partnership, limited company, cooperative, public limited company Describe the type of the business from. Explain the advantages and disadvantages in terms of: o Liability; o Tax; o Management of the business; o Business Entity Select one business form. Business Form No. Type Advantages 1. sole proprietorship 2. partnership 3. limited company 4. cooperative 5. public limited company

Disadvantages

Selection

Select one type of business and give reasons for your choice.

357

5. TYPES OF BUSINESSES There various type of business. The type of business is influenced by the sector it belongs to and the operations it is involved in. Steps o o o o

Identify the types of businesses; Describe the form of operations they are involved in; Give example of their products or service; Select the type of business you prefer and give reasons for your choice.

Business Type No. Type Operations Product/service Selection

358

6. EMPLOYEE OR AN ENTREPRENEUR Discuss the merits and demerits of being an employee or an entrepreneur; Steps Explain who employees and entrepreneurs are ; List the merits and demerits of each career; No. Focus Employee In what position can Merit Demerit you Create own destiny Position: Make a Difference in life Position: Earn High Income Position: Have Fun Position: Risk Loss Position: Long Hours Position: Hard Work Position: Responsibility of Decision making Position: Require high level of Discipline Position: Have security of career Position: Entrepreneur

Merit

Demerit

1. 2.

3. 4. 5. 6. 7. 8.

9.

10.

Total

359

Career selected in the space of position indicate merit for the career and a demerit for the other.

360

7. SELF EMPLOYMENT There is encouragement from the government for people to become selfemployed. Self employment is attractive with the high levels of unemployment in this country. There exist disadvantages. The critical decisions to make are what you are going to do in view of the advantages and disadvantages. Steps o List the benefits of self employment; o List the challenges; o Explain how you will deal with the challenges No. Factor Benefits Challenges Strategies to Deal with Challenges

Ownership Independence Risk Income Age Gender Security

361

8. HISTORIC BACKGROUND TO THE ZAMBIAN ECONOMY Discuss the historical background to the Zambian economy and its impact on the entrepreneurial growth;

Zambia got independence from the UK in 1964. It experimented with two decades of one party rule. The multiparty democracy was reintroduced 1991. In the last four to five years, there has been growth in the mining, manufacturing, tourism and construction sectors. Zambias economic performance has improved and the economy is enjoying modest growth of around 5% per annum. Zambia has received extensive debt relief under the Multilateral Debt Relief Initiative (MDRI). The external debt burden has been reduced from around $7.1 billion to $0.5 billion. Zambia is ranked 165 on the United Nations human development index (2004). Over two-thirds of the population in Zambia live on less than $1 a day that is around 7.5 million people. Child mortality rates are high, maternal mortality has increased and deaths from AIDs and child hunger are rising. However, overall poverty levels have improved in recent years. The poverty rate has fallen from 73% in 1998 to 68% in 2004. Net enrolment rates for primary education are improving, school literacy is rising, immunisation coverage is increasing and child death rates are falling (DFID). Steps to this section: o Discuss the historical background: o Identify the political and economic trends; o Identify opportunities and challenges for entrepreneurship

362

9. NATURAL RESOURCES IN ZAMBIA Zambia is endowed with a good stock of natural resources. The commonest natural resources are: people, copper, cobalt, zinc, lead, coal, emeralds, gold, silver, uranium, hydropower, water bodies, forestry resources and animals and cultural resources. The exploitation of these natural resources is low.

Steps identify the natural resources; Assign potential uses of the natural resources in an enterprise; Zambia Natural Resources Potential Natural Resource Potential Use

363

10.

INFORMAL SECTOR Identify the factors influencing the growth of the informal sector in Zambia.

The informal sector is an arena of income generation activities for both the unemployed and employees, found in rural and urban areas, producing selling products and services to limited markets in commercially and an authorised places. The earnings vary from product to product. It is a relief sector for individuals who either want to supplement their income or those unemployed youth and adults in all parts of the country. Informal sector operators are unregistered income activities, use adapted technology, unregulated and highly competitive. Complete the table below: No. Focal Area Characteristics Growth Informal Sector Factors of

Type of Business Structure Location No. of Employees Quality of Goods Skills

364

11. ROLE OF ENTERPRISES IN ECONOMIC GROWTH Identify the role of enterprises in the growth of the economy; Zambias gross domestic product by sector is agriculture (22%), industry (29%), and services (49%). The gross domestic product growth is 5%. Zambia has micro; small, medium and large enterprises are various sectors of agriculture, construction, manufacturing, mining, trading, service delivery. There are local and foreign owned enterprises. Zambias agricultural products are: corn, sorghum, rice, peanuts, sunflower seed, vegetables, flowers, tobacco, cotton, sugarcane, cassava (tapioca), coffee; cattle, goats, pigs, poultry, milk, eggs, and hide. The industry is represented by copper mining and processing, construction, foodstuffs, beverages, chemicals, textiles, fertilizer, horticulture. Complete the table below: Role of Enterprise in an Economy No. Growth Factor

Contribution

365

12. POLICY INSTRUMENTS THAT AFFECT ENTERPRISE DEVELOPMENT Outline Zambias legislation supporting enterprise development;

There are various policy instruments that have a positive or negative effect on enterprise development in Zambia. These policies are housed in various Ministries and public agencies. The policies have various roles. Steps o Identify the enterprise areas that can be affected by the policies: o Identify the policy the regulates the enterprise area; o Mention the Government agency responsible for that policy. Policy Instruments and Enterprise Development No. Public Agency Policy Enterprise Instrum areas ent 1. Entrepreneur 2. Business Opportunity 3. Marketing 4. Operations 5. Employees 6. Finance 7. Customers 8. Competition 9. Mergers 10. Ethics

Effect on Enterprise Development

366

13. STATUTORY OBLIGATIONS AND ENTERPRISE MANAGEMENT Outline statutory instruments relating to enterprise management; Enterprise operating in Zambia are regulated through statutory obligations. There various type of taxes to be paid. There are a host of licenses to be applied and other fees. Steps o Identify the statutory obligations; o State the enterprise obligation; o Identify the impact on enterprise growth; Statutory Obligations and Enterprise Management Statutory Obligations Enterprise Obligation Impact on Enterprise Growth

367

14. SUPPORT INSTITUTIONS Identify support organizations for enterprise development There are public, private and civil societies supporting enterprise development. The supporting institutions have different role they play. There are multifunctional organizations and there are single functions ones. The organizations offer human resources development, training, counselling , marketing support, financial support and networking support Steps o Identify support organizations; o Describe the role they play in enterprise development; No. 1. 2. 3. 4. 5. 6. 7. Area Entrepreneurship Development Marketing Training Technical support Financial Credit Information Infrastructure Supporting Organisations Services

368

Module

II: ENTREPRENEURIAL GUIDELINES OF

COMPETENCES

AND

ATTITUDE

15. SELF ASSESSMENT CHARACTERISTICS;

ENTREPRENEURIAL

TRAITS

AND

Assess entrepreneurial traits and characteristics; Please complete the questionnaire to assess your traits and characteristics? No Yes 1. You set clear goals to know where you are going 2. You are committed to your team and the people you work with in the business 3. You identify and act on new or unusual business opportunities by looking for resources to create something valuable. 4. You are self-reliant, and have willingness to initiate action without needing or taking direction from others and have ability to solve problems. 5. You do not tire to hunt for success despite difficulties on the road to success 6. You have passion to carry out your idea, be it in the form of a new technology, a different approach, a more thorough application of known technologies or a combination of all three. 7. You are willing to be lonely and make tough decisions and believing you are right despite the majority thinking you are wrong. 8. You know where you are going and how you will get there because you have refined your goal into action and you have put in measures to check progress 9. You are not gambler who throws around money without

369

having control over the results of your action 10. You look for information within the business or its surroundings to help you achieve your purpose or avoid problems Total Percentage

370

16. ENTREPRENEURIAL GOAL Develop an entrepreneurial goal; Entrepreneurs need to have a destination to aim for, start small, achieve a little at a time and build on the achievement. Entrepreneurs should reflect on the achievement and challenges over the period. Element Why What do you want to achieve How would you want to achieve your goal What would you do to achieve your goal Who will assist you to achieve your goal When will you achieve the goal Indicator

1. Generate a business idea; The process of generating ideas involves two steps namely: scanning the surrounding (environment) and idea generation. Scanning the environment assist you to see what is going on, changing and the needs of people. By having a keen interest in what is going on you will be able to see the needs of people emerging. Scanning the environment involves collecting information from various sources. These sources are: of Sources No. Category Information Sources 5. Personal and Informal Family member, Friends, Employees, Customers, Sales Persons, 6. Personal and Formal Bankers, Investment Centre, Consultants, Researchers, Councils, Business Associations, Business Registration Office, Commercial Exhibitions,

371

7. Written

8. Oral

Industry and Trade Contacts Magazines, Newspapers, Newsletters, Books, Catalogues, Journals, Bill Boards, Posters Trade Shows, Seminars, Suppliers/Agents, Professional Organisations

The Techniques for Business Idea Generation There a number of ways you can generate ideas. There a number of methods you can use to generate business ideas. Explanation No. Technique 21. Draw on Your Skills Covert your skills into a business 22. Make Use of Your You have been able to do something fro a Experience long time. Can you advise others in the same field at a fee? 23. Use You Hobby Do you like music? Set up a music store. 24. Improve services Offer a better service of the current services you pay for 25. Improve a product Improve its appearance, function, colour, packaging and so on 26. Modify an existing Make it look luxurious, make it simpler, or product into a new make it smaller, change the shape. one 27. Travel Come back with something you saw or used not available in you area 28. Listen to complaints Create a solution to a complaint 29. Research Find out special needs of certain groups of customers 30. Reproduce the idea Apply a successful idea to new settings 31. Create new value for a Use taxi vehicle for advertising product 32. Somebodys waste is Turn waste into something useful for another persons someone. Treasure 33. Brainstorm Generate as many ideas as possible without

372

34. Commercialise research recommendations and inventions 35. Combine uses into one product 36. Visualisation 37. Adding or Subtracting

checking the usefulness one may turn out to be a gold mine Turn research ideas from research institutions into business Create a pen with functions of a musical instrument Create a picture of a business in your mind Add or subtract a few features to the product or service to make it suitable in terms of use or price. Selling cooking oil from a pump Offer the same service in a short time Technological developments these days are so fast and abundant that one can come up with so many ideas of unique applications If a product is small make it big, if it is long make it short, if it is slow make it fast, if it is for very one make it for one person, if it is tall make it short n advice versa.

38. Time framing 39. Technology application

40. Creation of opposites

The list of methods of generating ideas does not end there. You will be able to come up with other methods are you listen, see, touch and smell. The list will be determined by how much you use your imagination. Generation of Business Ideas Once you start thinking you will be generate hundreds of ideas. The tradition of keeping all the ideas in your head is not useful. Buy a note book. Write all the ideas that come into you mind in the notebook. At this stage, do not worry about how good or silly the idea is: you will be surprised how good the idea was in later days or years.

373

Selecting the Business Ideas It is promising that you have a list of the business ideas. Where do you go from there? Having prepared a reasonable list of ideas you must examine each business idea so that you end up with a short list of business ideas with the highest chance of success. You can use the scoring suggested below.

Simple Scoring Method for Business Ideas. Score: Yes = 1 and No = 0; Allocate scores to each question. If the answers to all the questions is YES the total score is 12 and 0 if all your answers were No. You may select a business idea if it scores above 5 nad review it or reject it if it scores below 5.
Business Idea Assessment Form Name of the Business Idea: No. Focus Question 13. Personal The business suits characteri personal stics characteristics? 14. Knowledge skills 15. Experience and

Yes your

No Score

You have knowledge and skills that will help you run this type of business? You have experience that will help you to run this business?

You know about the products and services in this business? 17. Business Support You know where to get advice and information about this business 18. Customers You are knowledgeable of the potential customers for this particular business?

16. Business Knowledge

374

19. Competition

20.

21.

22.

23.

24.

This will be the only business of this kind in your area? Profitability You have reasons why you think this business will be profitable? Human You know the type of Resources, equipment, materials Premises, premises or qualified Equipment staff required for this and business? Materials Finances You are sure you will be able to get the finances to provide what is needed in the business? resources You know where will you get the resources to start this type of business Business Growth You know this business has potential for growth?

TOTAL SCORE After the business ideas identification, listing and assessment you are now ready to go further to develop this business idea into business opportunities through spending time assessing, researching, developing and planning.

375

17. PROCESS OF ENVIRONMENTAL SCANNING Conduct an environment assessment; Steps to conducting the environmental scanning: Clearly state the purpose of collecting information Decide on how the information will be collected desk or field study or both; Identify who is responsible for the process. Decide who will collect information; Identify the sources of information; Identify methods of collecting information; Assemble existing information on issues and needs; Reflect on the strengths and limitations of that information including; Select data gathering techniques to fill in information or audience gaps, detect emerging issues, and verify existing information Collect scanning information from other organizations. Assemble the information; Analyse and translate the information into actionable Carrying Out an Environmental Scan Carrying out the environmental assessment will assist you identify a number of issues in the natural environment, the business scene, target market and competition, human resources, legal frame work, technologies and social issues.

376

18. FEASIBILITY STUDY Conduct a feasibility Study; Description of Feasibility Study Feasibility study is an examination to see whether your business idea is viable or practical. The feasibility study aims at answering your question of should I continue with the proposed business idea? All the feasibility activities are aimed at answering this question. The feasibility study outlines and analyzes several alternatives or methods of achieving business success. A feasible business is one where the business will generate adequate cashflow and profits, withstand the risks it will encounter, remain viable in the long-term and meet your entrepreneurial goals. The business idea can be a new start-up business, the purchase of an existing business, an expansion of current business operations, or a new enterprise for an existing business. You conduct the feasibility study before preparing the business plan. Once you have carried out a feasibility study then you can proceed to write a business plan. Conducting a Feasibility Study You have in your hands a business idea that you like. Casual observations, discussing with other people indicate that it is a good business idea. You have good further by reading more about it but can it work? Market Assessment Find out the following: What is the total size of your market? What percent share of the market will you have? Current demand in target market. Trends in target marketgrowth trends, trends in consumer preferences, and trends in product development. Growth potential and opportunity for a business of your size. What barriers to entry do you face in entering this market with your new company? Some typical barriers are: o High capital costs

377

o o o o o o o

High production costs High marketing costs Consumer acceptance and brand recognition Training and skills Unique technology and patents Unions Transport costs

How will you overcome the barriers? How could the following affect your company? o Change in technology o Change in government regulations o Change in the economy o Change in your industry

Product
What are the most important features? What is special about it? What are the benefits. That is, what will the product do for the customer?

Customers
Who are your targeted customers, their characteristics, and their geographic locations, otherwise known as their demographics. o Age o Gender o Location o Income level o Social class and occupation o Education o Other (specific to your industry) o Other (specific to your industry) For business customers, the demographic factors might be: Industry (or portion of an industry) o Location o Size of firm o Quality, technology, and price preferences o Other (specific to your industry) o Other (specific to your industry) o

378

Competition
What products and companies will compete with you? Will they compete with you across the board, or just for certain products, certain customers, or in certain locations? Will you have important indirect competitors? How will your products or services compare with the competition? Production Assessment How and where are your products or services produced? What are the methods of: o Production techniques and costs o Quality control o Customer service o Inventory control o Product development

Location Assessment What qualities do you need in a location? Is the location you need available? What are the physical requirements: Is the amount of amount of space needed available? Is the type of building you need available at a reasonable cots? Is power and other utilities like water available?

Legal Environment Assessment Are you able to meet the conditions fro the following: o Licensing o Permits o Health, workplace, or environmental regulations o Special regulations covering your industry or profession o Zoning or building code requirements o Insurance coverage

379

o Trademarks, copyrights, or patents (pending, existing, or purchased)

Human Resource Assessment Will you be able to engage the number of employees needed? Are the skilled staff and professional you need available? Do you know where and how will you find the right employees? Will you be able to meet the pay structure Have you developed a human resource development plan? Do you have schedules and written procedures prepared? Have you drafted job descriptions for employees?

Suppliers Assessment Have you identified key suppliers?

Credit Policies Assessment Do you plan to sell on credit? What terms will you offer your customers; that is, how much credit and when is payment due? Will you offer prompt payment discounts? Management and Organization Assessment Who will manage the business on a day-to-day basis? What experience does that person bring to the business? What special or distinctive competencies do the individuals need to have? Is there a plan for continuation of the business if this person is lost or incapacitated? If youll have more than 10 employees, have you created an organizational chart showing the management hierarchy and who is responsible for key functions.

380

Professional and Advisory Support Assessment Do you intend to have the following in enterprise? o o o o o o o o Board of directors Management advisory board Attorney Accountant Insurance agent Banker Consultant or consultants Mentors and key advisors

Investment Assessment Techniques

Payment Period
The number of years required to recover the original cash outlay invested in a business project. If a business generates constant annual cash inflows, the payback period can be computed dividing cash outlay by the annual cash inflow. Payback period = Cash investment/annual cash inflow A business project requires an investment of K 50, 000, 000. and generates an annual cash inflow of K 12, 500, 000. The payback period is as follows: Payback period = 50,000, 000/12, 500, 000 = 4 years.

Net Present Value


Calculate the present value of cash inflows and outflows of your investment proposal using the cost of capital as the suitable discounting rate and finding the net present value by subtracting the present value of cash outflow from the present value of cash inflows.

Internal Rate of Return

381

IRR is the rate which equates the present value of cash inflows with the present value of cash outflows of an investment. Calculate the rate at which the NPV is zero. 2. Select a business opportunity; Sources of Business Opportunity; You need to be focused and quite serious in you effort of identifying business opportunities. Business opportunities can be sourced from: The Environment the natural resource base of an area; Population - occupational pattern, socio economic background; Current business Situation- trading and business activities in the are and the trends for new demands of goods and services; Target market expectations of the target group in terms of their skills, knowledge, and financial resources; Resources - industries based on minerals, agriculture, marine and other natural resources

Business Opportunities Selection Criteria; An entrepreneurs first task after assessing himself/herself is to identify and select an attractive business opportunity. An acceptable business opportunity is a combination of: Confirmed need in the community; Capability of an entrepreneur; Availability of resources to develop the business opportunity. Selection of Business Opportunities You can apply the results of the scanning and feasibility to identify to select the business that is presents the most attractive option. Focus Scanning Method BPEST Application Identify external issues that may affect the business operations Expected Results

382

Porters Five Force Model

Isolate competitive forces that influence the level of competition in an industry Identify how the current resources and capacity of the business can manage the situation in the environment Assess how you can create the greatest possible value for your customers, as well as your best route to profit maximization Calculate the number of years required to recover the original cash outlay invested in a business project Find the net present value by subtracting the present value of cash outflow from the present value of cash inflows. Find the rate which equates the present value of cash inflows with the present value of cash outflows of an investment.

SWOT

Value Chain

Feasibility Payment Period Stu dy

Net

Present Value

Internal Rate of Return

383

Decision Making This step involves making one of the three possible decisions listed below: Decide that the business opportunity is viable and move forward with it. Do more study and or examine additional options. Decide that the business is not viable and abandon it.

384

19. MEASURES TO MANAGE RISKS Propose measures to manage risks Identify risks Risk management allows you to examine your business plan and identify the risks of not achieving your business' objectives. A risk management process involves: o methodically identifying the risks surrounding your business activities o assessing the likelihood of an event occurring o understanding how to respond to these events o putting in place systems to deal with the consequences o monitoring the effectiveness of your risk management approaches and controls There are four ways of dealing with, or managing, each risk that you have identified. You can: o Accept it Observe it o Transfer it You can insure o Reduce it put in internal measures o Eliminate it Introduce new technology, ways of doing it. Apply these strategies to risks you can identify under marketing, management, operational and financial risks.

385

20. ENTERPRISE RESOURCES MOBILISATION Mobilise enterprise resources; Resources are inputs that go into an enterprise to ensure that activities are carried in marketing, production, and management. Without resources nothing will be produced or sold. To mobilize resources you must be well organized. The following steps can help you mobilise resources: 1. Prepare a business plan; 2. List all the types and amount of resources you need to develop your business; 3. Examine funding prospects including yourself, informal and formal sources; 4. Prepare a fundraising strategy (objectives and approaches); 5. Prepare an action plan; 6. Put plan into action 7. Monitor the progress of fundraising activities; 8. Evaluate the results of the resource mobilization; 9. Review the plan; 10. Repeat the process

386

21. ENTERPRISE NETWORK Networks are groups of individuals and organizations sharing resources. Networking is a skill to seek and provide resources to a grouping with similar goals Develop an enterprise network; Steps to establishing a network 1. Start with your family and friends; 2. Attend social gatherings; 3. To be prepared to communicate quick,, brief and focused information about you; 4. Get to know yourself well; 5. Prepare informative business cards; 6. Carry with you business cards to all gatherings, meetings and travels, 7. Present your skills not your job; 8. Develop a tracking systems of contacts; 9. Create relationships with the business cards; 10. Listen more and talk less; 11. Develop and use your ability to ask questions; 12. Conduct follow up actions decisively, timely and consistently; 13. Do not make empty promises; 14. Look for unique opportunities; 15. Establish long term business contacts and referrals; 16. Develop a data bank; 17. Conduct follow ups on contacts; 18. Ask for who, places, how to do it, steps, recommendations, connections, contacts and timings, 19. Socialise at gatherings and be visible, 20. Listen, learn, persist, and maintain contact

387

22. COMMUNICATION PLAN Finding out how to communicate important messages to key stakeholders of a business in the most effective way possible is not an easy task. It requires planning. Plan will show where you have come from, where you are and where you are going with your communication. Prepare communication strategies. A typical communication plan outline will looks this: 1. Situation Analysis: Organizational Background 2. Situation Analysis: External or Public Environment 3. Campaign/Organizational Goal and Key Objectives 4. Communication Objectives 5. Target Audiences 6. Key Messages 7. Strategies 8. Tactics 9. Timing 10. Timelines 11. Spokespeople

Prepare your enterprise communication plan.

388

23. APPLICATION OF INFORMATION AND TECHNOLOGY (ICT) IN AN ENTERPRISE

COMMUNICATION

You have come across the word ICT in various situations, at school, college, hospital, vehicles, machines and telephones. ICT stands for Information Communications Technology. Select the ICT application for you enterprise. Give reason for your selections. 3. Standard Office Applications Word processing Spreadsheets Database software Presentation software Desktop publishing Graphics software Email Internet 4. Specialist Applications - Examples (there are many!) Accounting package Computer Aided Design Customer Relations Management (CRM) 5. E- Commerce

389

24. BUSINESS MANAGEMENT FUNCTION Develop a business management function check list; Management is the process that includes strategic and business planning, setting goals and objectives, managing resources, deploying the human and financial assets needed to achieve objectives, and measuring results. Management also covers recording and storing facts and information for later use or for others within the organization. Management functions are not limited to managers and supervisors. Every member of the business has some management and reporting functions as part of their job Apply this Management Function Check List 1. Planning - Have you decided what you what to achieve in the future (today, next week, next month, next year, next five years, etc.) and to generate plans for action. 2. Organizing -To what extent are you making optimum use of the resources required to enable plans to be put into action successfully. 3. Leading/Motivating - how are you going to use skills in these key areas to get others to play an effective part in achieving plans? 4. Controlling how will you check the progress against plans which may need to be modified upon feedback?

390

25. LEADERSHIP Leadership is the ability of an individual or groups of individuals to influence, motivate, and enable employees to contribute toward the effectiveness and success of the business. Propose application of leadership principles; Propose ways in which you can: Assess your strengths and weakness; Communicate regularly, openly and receptively; Show people that you trust, respect and care about them; Express genuine interest in others; Look at things from the point of view of the other person,; Listen intently with a an interested look; Create a self motivated, cooperative teams with shared vision; Make others feel important; Recognize, praise, and (non financially) reward those you work with; Admit mistakes, and think before you criticize; Set clear goals; Do not lose your focus by being distracted; Crowd your mind with good thoughts; Learn not to worry; Be enthusiastic; Practice with energy and real desire to be a good leader.

391

26. TEAM BUILDING Team building is a planned effort to improve communications and working relationships by way of any planned and managed change involving a group of people with shared goals and principles. Team building is essential as a part of a strategy management for business development. Develop team building strategies; Complete the table Stage Name I II III IV Forming Storming Norming Performing

Characteristics Entrepreneurial strategy

392

27. MARKETING PLAN Assemble a marketing plan; A Marketing Plan is a written document that outlines the actions necessary to achieve a specified marketing objective, purpose and goal. It can be developed for a product or service. It can prepared fro a year or for five years. A marketing plan may be component of your business plan. You may use this guide to develop the marketing plan: Assess the Market Situation Type of Industry; Target market; Customer Profile; Level and type of competition; Type of competitors; Market Trends; Marketing Strategies Marketing Goal; Marketing Purpose; Marketing Objectives; o Product (Characteristics and benefits); o Place (Distribution and places); o Promotion (Advertising, Selling, Sales promotion and publicity); o Price (Level, flexibility, discounts)

393

28. BUYING Outline the buying process; Buying is procurement. It is the acquisition of goods or services at the best possible price, in the right quantity and quality, at the right time, in the right place for the direct benefit or use of the business. Procurement or buying usually consists of seven steps: Information Gathering: search for suppliers who can satisfy the requirements. Supplier Contact: Identity one or more suitable suppliers have been identified, Background Review: consulted references for product/service quality. Negotiation: Undertaken negotiations on price, availability, quantities deliveries, guaranties and return of damages. Fulfillment: Ensure that supplier preparation, shipment, delivery, installation, testing, training and payment are completed according to agreement. Service support evaluate the performance of the goods or services and ensure that service support is provided; Renewal: After the experience would you like to continue with the same supplier or change.

394

29. SALES PLAN Prepare a sales plan; A sales plan is tactical plan for achieving marketing objectives. It is a stepby-step process that will show how you will acquire new customers; and how you will increase business from existing customer base. The key feature of sales plans is its use of unit projections and sales values. Sales plans are about targets and numbers. Steps Segment your target market; Find out what is happening in your industry; Develop sales strategies o What are you going to sell? o How much do you want to sell? o How are you going to interest the customers? o Who and how many people will be selling? o How are you going to improve their sales skills? o When you are you going to sell? Measure the perform of your sales effort; Suggest areas of improvement

395

30. MARKET RESEARCH Conduct a market research; Market research I s finding out the customer needs. Many businesses and individuals starting enterprises assume that they know how their customers look at their products and services. Many times their ideas about what the customer wants are simply guess work. In a market research there are many questions asking about the customers characteristics, product specifications, other suppliers, communication, pricing, distribution, and other marketing issues. Conduct a simple market research by following these steps: Define the market problem Analyse the market situation Collect data that is specific to the problem through reading documents and going to the field to ask individuals and organizations familiar with the target market Analyse and interpreting the data to get the meaning of the target market Propose solutions to the market problem; Design a marketing plan

396

31. COSTING AND PRICING Cost and price a product or service; Costing will provide information to make decisions, assist pricing, budgeting, tendering, monitor expenditure and give value to stock, Steps o Identify the four main parts of costs direct material, direct labour, direct expenses and overheads; o Add all costs that go into a product that go into making a product; o Add a predetermined percentage of cost as profit to the cost o Compare your prices with other products in the market o Make adjustments; o Settle on the price.

397

32. FINANCE MANAGEMENT Outline the roles of financial management; Financial management is a managerial responsibility and activities concerned with planning, organizing and controlling an enterprises financial resources. Roles of Financial management Raising funds; Using funds properly; Outline how you will: Raise funds; Utilise funds properly.

398

33. SOURCES OF FINANCE State source of finance for your enterprise; To start business operations you will need financial resources. Financial resources may be needed to procure machinery, equipment, materials and pay workers. There are formal and informal sources of finance. Source of Finance Formal Source of Finance No. Source

Amount of Funds

Conditions

Non Formal Source of Finance No. Source

Amount of Funds

Conditions

399

34. FINANCIAL STATEMENTS Interpret financial statements; The journal and general ledger are the main companys financial records. These constitute the central books of your system, and every transaction flows through the general ledger. These records remain as a permanent track of the history of all financial transactions since day one of the life of your company. The information from the records is the basis for financial statements. The Statements are: Balance Sheet communicates information about the assets, liabilities and owners equity at a particular date; Profit and Loss Statements presents the summary of revenue, expenses and net income of the firm over a period of time; Cash Statements outlines the cash inflows, cash outflows and net cash balances over a period of time Steps to Interpreting Financial Statements Prepare the projected financial statements, namely, Balance sheet, Income Statement and Cash Flow Statement; Interpret the financial statements using the ratios below: Liquidity Ratios: Current Ratio= current assets/current liabilities; Quick ratio= cash and book debts/current liabilities; Leverage ratio: Debt equity ratio= long term debt/equity Activity Ratio: Inventory Turn Over = cost of goods sold/average inventory;

400

Inventory turn over= sales/inventory; Debtors Turnover and Collection period Debtors Turnover= credit sales/average debtors; Average collection period = Days in a Year/Debtors Turn over; = Debtors x Days in a Year/Sales Total Assets Turn Over Total assets Turnover= sales/total sales Profitability ratio Gross Profit margin = sales- cost of goods sold/sales; =Gross profit/ sales Net profit margin = net profit after taxes/sales 35. BUDGETING It is a managerial process of developing plan expressed in financial terms for the enterprises operations and resources over a period of time. It is prepared for the purpose of expressing expectations, communication, coordination and control of financial resources. Budget you should prepare are: Operating Budgets planning of activities of the enterprises among them are production, sales and purchases; Capital Budgets planning to acquire such things like buildings, machinery and vehicles; Other budgets you mat prepare are: Sales Budget; Cash Budget; Recruitment, Deployment and Training Budget

401

36. BUSINESS RECORDS Prepare business records Records are important in a running of a business. In future you may need to make a decision on the direction of business or the use of resources. If there no records you decision will be an exercise of guess work or intuition. There are sections of the business that need records Financial Records - the cash book, the sales ledger, the purchase ledger and the wages book; Marketing customer records, sales force; Production machinery and equipment register, list of employees and inventory; Management and administration staff, building, support organisations, and licences and certificates. Prepare the main records listed above and assign some people to manage the records. STOCK CONTROL Develop stock control measures; Stocks are the products of an enterprise produced for sale and the components that make up the products to be used later in production. To make stocks properly you should answer the following questions: How much should we order? When should we order it? Steps o Determine ordering costs (costs of acquiring the say materials including storing;

402

o Carrying costs costs incurred for holding a given level of stocks;; o Calculate the economic order quantity order size at which costs of ordering and holding stock are at the minimum;

403

37. HUMAN RESOURCES IN AN ENTERPRISE Human resources are the individuals employed in an enterprise and to that deals with the hiring, firing, training, and other personnel issues. Steps to meeting human resources of the enterprise; Set an organizational structure of the enterprise; Link the human resources needs to the business strategies of the enterprises; Assess the human resource needs of the enterprise; Develop a human resource plan; o Recruit and select employees; o Training and development the employees; o Establish condition so f service; o Develop work environment relationships; o Develop employee records and administration;

404

38. STRATEGIC PLANNING PROCESS Develop a strategic plan; A strategic planning process implies a business having a clearer idea of what it is, what it does, and what challenges it faces, and its response to its environment. Steps Develop a Vision, mission and values; Assess the external and internal environment; Develop strategic goals and objectives; Prepare an operational plan; Formulate a performance assessment measures; Prepare an operational budget.

TECHNOLOGY IN AN ENTERPRISE The narrow definition of technology is a piece of equipment and the technique for performing a particular production, marketing or managerial activity. Select suitable technology for an enterprise; No. Technology Type Costs Efficiency Size Durability After S a l e s S e r v i c e Training

405

1. 2. 3. 4.

A B C D

Grading: 1 (Lowest); 5 (Highest)

406

39. PROTECTING INVENTIONS AND TECHNICAL INNOVATIONS Identity ways of protecting your ideas; Get Assistance for a Lawyer Its best if your lawyer is familiar with each category of intellectual property, so he or she can help you select the appropriate type. Trade secrets are perhaps the most straightforward: they cover information used in trade that provide a commercial advantage and are not known to the general public. They include things like a manufacturing process, the formula for making a product or compound or a business customer lists. Copyrights protect the tangible expression of ideas. Common uses include protecting the contents of books, movie plots, paintings and sound recordings. Copyright protection attaches when the creator puts pen to paper and creates a tangible expression of the idea. This basic protection may be registered by filing an application for copyright registration, which requires a simple form, a modest fee, and a copy of the work you want to protect. Trademarks protect the product identifiers the names, logos and general visual attributes that distinguish a business from its competitors. The primary purpose of trade marking is to prevent consumer confusion over the origin of the products Patents are by far the most technically demanding branch of intellectual property. In basic terms, a patent is given to an inventor of some novel machine, process, or product that has utility to the public. In exchange for disclosing this new invention to the public, the government gives back to the inventor an exclusionary right (the patent) to prevent anyone else from making, using or selling the invented device or process

407

40. BUSINESS ETHICS AND VALUES Identify the way in which you business can be affected positively negative by cultural values and ethics; Steps o List cultural values and social factors (e.g. family, Gender, HIV/AIDS); o List business ethics ( Corruption, Nepotism, Racism and Tribalism); o Outline the positive effects on the enterprise; o State possible negative influences on the operations of he business; Identify ways in which you can mainstream gender in your enterprise; Develop measures to prevent and manage HIV/AIDS in the enterprise.

408

41. BUSINESS PLAN PREPARATIONS Prepare and present a business plan; A business plan is a planning document that summarizes the activities of a business for a given period of time. The plan communicates the business elements to lenders and others, provides the basis for managing the business, and provides a yardstick by which progress may be measured and changes evaluated. Developing the Business Plan o o o o o o o o o o o o o o o Get organised and the energy to write the business plan; Start with some of the easy steps first. Describe your business and your product or services;. Explain the market you are targeting, the industry, customers and competitors. Make a first draft fast without concern for perfection; Keep in mind your intended audience and why you are writing the plan. Disclose the risks and uncertainties in your business, ; Show that the loan will be repaid if you intent to get a loan; Evaluate the strengths and weaknesses of each competing firm; Look for opportunities in the marketplace. Create a strategy for your business; Outline how you will execute the strategy; Link your products and services, your marketing and your operations to your strategy; Find a particular market niche to focus on and a unique strategy? Avoid overestimating sales projections and underestimate costs.

A business plan can be seen as a collection of sub-plans including a marketing plan, financial plan, production plan, and human resource plan. The business plan has many forms. There is however a format that is common:

409

FORMAT Business Plan Executive summary o Explains the basic business model o Gives rationale for the strategy Background o Gives short history of company (unless it is a new company) o provides background details such as: age of company number of employees annual sales figures location of facilities form of ownership including o background of key personnel including owners senior managers Marketing o the macro-environment o the competitive environment o the industry o the customers priorities o product strategy o pricing strategy o promotion strategy o distribution strategy Production and manufacturing o describe all processes o production facility requirements - size, layout, capacity, location o inventory requirements - raw materials inventory, finished goods inventory, warehouse space requirements o equipment requirements o supply chain requirements o fixed cost allocation Finance o source of funds o expected return

410

o break even analysis o monthly pro-forma cash flow statement o existing loans and liabilities Human resources o assign responsibilities o training required o skills required o union issues o compensation o skills availability o new hiring Attachments o Brochures and advertising materials o Industry studies o Maps and photos of location o Magazine or other articles o Detailed lists of equipment owned or to be purchased o Copies of leases and contracts o Letters of support from future customers Presenting the Plan; Will involve: o Prepare well; o Make eye contact wit audience; o Give a smile; o Avoid distracting movements; o Pause to catch a breath; o Use a wide range of voice tones; o Speak clearly; o Answer questions briefly, honestly and accurately; o After the presentation, review your performance.

411

42. BUSINESS DOCUMENTATIONS Prepare enterprise documents; There are regulations the enterprise will need to abide by. Legal requirements vary from one type business to another. The responsible Government Ministries and associations can provide you with details. The commonest documents you need to obtain will deal with issues of: o Registration; o Inspections; o Tax, o Pension funds; o Workmans compensation; o Trading

412

43.

PHYSICAL SET UP OF THE ENTERPRISE Set up the business office;

Setting up your office takes a lot of thought. Take the time to plan the whole set up. Do you need to rent office space or can you start your business from home? The area in which you set up depends on the type of business you have. o o o o o o Where will you operate from, home, rented place or owned place? What are the cost and interruptions implications Make a list of the essential equipment needed to run your business; Keep the features of the equipment to a minimum. Will you lease or buy furniture; Are certain regulations for the physical setup?

413

44. PRODUCTION PROCESS Outline the production process; A well organised production process saves time and costs. You must ensure that products are designed for marketing and production in a concurrent process to reduce costs and time to market. Production process o Select the right flow of work and layout (fixed position, in-line or functional arrangements); o Keep raw materials, work-in-progress and finished products as inventory to the minimum but safe levels; o Reduce materials handling costs; o Reduce materials waste; o Relate production planning to sales forecasting to avoid bottleneck; o Set and improve performance standards; o Prepare maintenance and repair schedule; o Identify potentials areas to save energy; o Reduce adverse conditions of temperature, dust and radiation exposure to avoid occupational dangers;

414

45. ENTERPRISE PERFORMANCE State the key indicators Enterprise performance control is the process whereby an a business ensures that it is pursuing strategies and actions which will enable it to achieve its goals. The measurement and evaluation of performance are central to control and mean asking four basic questions: o o o o What has happened? Why has it happened? Is it going to continue? What are we going to do about it?

Manufacturing and Production Indicators


Ability to produce against the marketing plan

Indicators concerned with controlling production quality


o o o o o o measurement of scrap "most likely reasons" for product failures actual failure rates against target failure rates complaints received against the quality assurance testing programme annualised failures as a % of sales value failures as a % of units shipped

Indicators concerned with the purchasing department's external relationships with its suppliers
o o o o o o o o o o o inventory levels and timing of deliveries stock turnover ratio suppliers delivery performance analysis of stock-outs parts delivery service record % of total requests supplied in time % supplied with faults Indicators of sales delivery and service shipments vs. first request date average no. of days shipments late response time between enquiry and first visit

415

Sales and Marketing


o o o o o o o o o o o o measurements based on "staying close to the customer" customer satisfaction analysis price of products comparisons check on unsuccessful visit reports monitoring repeated lost sales by individual salesmen sales per 100 customers analysis of sales by product line backlog of orders analysis share of the market against competitors share of new projects in the industry time to turn round repairs delays in delivering to customers (customer goodwill)

Human Resources
o o o o o o o o o o o o o skilled vs. non skilled management numbers vs. operations staff labour / outside contractor analysis workload activity analysis vacancies existing and expected labour turnover % of overtime worked to total hours worked absence from work cost of recruitment number of applicants per advert number of employees per advertising campaign staff evaluation techniques pay and conditions vs. competition

Environment
o o o o o work place environment yardsticks cleanliness tidiness catering facilities vs. competition other facilities vs. competition

416

46. LIFE CYCLE OF AN ENTERPRISE State the strategies needed at each stage of an enterprise cycle; Enterprise passes through a life cycle. Life cycles are development stages from start through growth and maturity to a stability stage. This is followed by business decline as a result of management succession difficulties. Within the cycle seven key crises are identified:

Starting crises; Cash Crisis; Delegation crisis; Leadership crisis; Finance crisis; Prosperity crisis; Management crisis.
Propose measures to reduce the level of crisis.

417

47. TOTAL QUALITY MANAGEMENT State TQM for the enterprise The concern for quality by enterprises cannot be left to large enterprises. One of the major complaints about small enterprises is the low level of quality of their products and services. A small enterprise that introduces total quality management has made a strategic decision that will establish it as a unique enterprise and generate the trust and confidence of customers. The essential requirement of quality is to look at it from the customers point of view. Introducing TQM requires: Incorporate quality into all processes; Build teams among the various departments; Procurement should not rely on price alone; Training managers and employees in quality management; Motivate employees at all levels to propose quality improvements; Ensure that management is committed to the values of quality improvements; Improve the way products and services are delivered to customers; Recognise, praise and reward employees for quality work; Develop way of regularly and wide product and service quality improvements; Propose quality improvements to your enterprise.

418

48. MANAGING CHANGE Employ strategies fro managing change Change will come invited or uninvited to your enterprise. Change means that there is a noticeable difference between a situation, person, team members, relationship or enterprise between points in time (A and B). When change occurs whether planned or unplanned, beneficial or dangerous is normally resisted. It is advisable to manage change so that disruptions to enterprise operations are avoided. The reasons for resistance to change are many Not convinced change is necessary; Imposed changes; Changes come as a surprise; Fear of the unknown; Reluctance to deal with unpopular issues; Fear of failure; Disturbing familiar relationships and practices; Mistrust of the person proposing change; Propose strategies to manage change smoothly.

419

49. STRATEGIES FOR ENTERPRISE GROWTH Select strategies for growth of the business All entrepreneurs dream of growing their enterprises to large corporations one day. Growing a business is possible but one needs to go beyond dreams. The starting point is developing enterprise growth strategies. The strategies may vary from one enterprise to another. Finance Strategies Propose ways to: o Explore and taking advantage of every conceivable source of finance to make our business grow. o Improve accuracy and timeliness of accounting so that information on performance is available as soon as possible after the day, week, the month, or the job is over. o Utilize financial information as a positive instrument for tracking and monitoring performance on key activities. o Key areas in which the company can save money by improving performance. o Generate a more positive attitude in our company regarding the way money is used to motivate employees and vendors? o Keep expenditure within or below budgeted levels. Human Resource Strategies Propose ways to o Employ people with a high level of energy and good health. o Link compensation directly with performance for every job. o Introduce profit-sharing to make our people feel ownership of the enterprise. o Develop the physical and technical skills of our people through formal training programs. o Recruit people with the right type of personality to work well in our enterprise and implement its values. o Recruit people with the highest possible level of education and experience.

420

o Develop the managerial and psychological skills of our people through formal training and personal guidance; o Actively involve and encourage our people to propose increases in efficiency, improve communications, encourage cooperation and promote harmony within the enterprise. Organizational Strategies Propose ways to: o Establish clear job descriptions for every position o Evaluate the jobs of managers and supervisors to identify tasks that can be delegated to lower levels; o increase speed, reduce cost, eliminate unnecessary steps, and improve quality; o Asses the effectiveness of important procedures in the enterprise in terms of their speed, their personnel requirements, quality of work, cost of operations, and whether fully being utilized. o coordinate and integrate operational procedures; o Apply organizational values; Product and Service Strategies Propose ways to: o Adjust products/services to meet a psychological need of the client/customer, o Improve organization (structure, activities, systems, job positions, procedures, rules, regulations) that will improve the development and operation of our technology (including product/services). o Introduce new or improved technologies internally that will improve the functioning of the enterprise;. o Become fully knowledgeable about all new emerging technologies that are directly or indirectly related to the business. o Identify and adapt new technologies to better meet the needs of our customers. o Continuously expand and upgrade the product/service knowledge and technical expertise of our people. o Selling the products or services to a wider market; o Advertise and sell on the internet;

421

o Increase sales outlets and sales personnel; o Encourage sales through a market expansion pricing policy. With these examples propose, enterprise growth strategies for your business.

422

50 REFERENCES 8. Armstrong Peter, Critique of Entrepreneurship People and Policies, Palgrave Macmillan, New York, 2005; 9. Birley Sue and Muzyka Daniel, Mastering Enterprise, Pearson Professional, London, 1997; 10. Burn Paul, Entrepreneurship and Small Business Mathew, Palgrave

Macmillan, New York, 2001;


11. Calvin Robert J. , Entrepreneurial Management, McGraw-Hill, New York, 2002; 12. Cole G A, Strategic Management, Letts Educational, London, 1997 13. Don Hofstrand & Mary Holz-Clause, Co-Directors, Ag Marketing Resource Center, Iowa State University,Nigel Atkins, A Guide for Communications , Planning , 1997 14. Entrepreneurship Development Institute, International Training

Programme for the New Enterprise Creation - Reading Materials Module 6, 7, 8 and 9 India, Oct. 01 Nov. 09, 2001
15. Griffin W. Ricky, Fundamentals of Management, Houghton, New York, 2000 16. Institute of Chartered Accounts, Risk Management for SMEs www.icaew.co.uk 17. Kelly Kevin, New Rules for the New Economy, Fourth Estate, London, 1998; 18. Kubre Milan, Management Consulting, ILO, Geneva, 1996; 19. Livesay Harold C. Entrepreneurship and the Growth of Firms, Edward Elgar, Aldershot, UK, 1995; 20. Mathew Sartwell, Napoleon Hills Keys to Success; Piatkus, London, 1995 21. Mdaan Anil, Illustrated World of Internet and E- Commerce, Dreamland, New Delhi, 2001; 22. Maude J. Timothy, the Internet Investors, CIB, Kent, 1999; 23. Hill Napoleon; Positive Action Plan How to Make Every Day a Success, Piatkus, London, 1996; 24. Perry Martin, Small Firms and Network Economies, Routlegde, New York, 1999; 25. Starkey Paul, Networking for Development, IFRTD, New Premier House, London, 1997;

423

26. Taylor Shirley, Communication for Business, Pearson, Essex, 1999; 27. Thomas W. Zimmerer and Norman M. Scarborough, Essentials of Entrepreneurship, and Small Business Management, Pearson International New Jearsey, 2005.,

424

Registering the Business i. Ask the Learner to register their enterprises the registration offices; ii. Instruct the Learners to consult the Tax authorities on their tax obligation. iii. Ask the Learner to insure the enterprise against fire, theft or loss of stock. Preparing a Business Plan Ask the Learners to carry out the following assignment: i. State what you intend to achieve. ii. Outline a what, how and when you are going to do in the enterprise. iii. Describe the customers, owners, employees, and supporters and how their needs will be satisfied. Obtaining Financing i. Ask Learners to source financial and materials support from outsiders; Preparing to Launch the Ask the Learners to carry out the following assignment: i. Hire, train and give tasks employees ii. Establish a management team; iii. Build the business name; iv. Communicate with customers and supporters; v. Encourage customers to buy; vi. Inform, buy, produce, sell and follow up. Enterprise

Assess Enterprise Performance i. Ask Learners to compare what you planned and the actual results; ii. Advise the learners to rework the business plan; iii. Counsel the Learners to improve the relationship with customers, owners, employees and supporters; Facilitating Enterprise Growth i. Ask the Learners to increase the size of the business, opening another branch or selling to other areas.

425

Handling Management Succession i. Ask the Learner to develop a succession plan to indicate persons who will take over and when.

426

You might also like