Learners Workbook

KNOW ABOUT
BUSINESS
Entrepreneurship Education
in Schools and Technical Vocational Training Institutions
and Higher Education
LEARNERS’ WORKBOOK
Authors:
George Manu
Robert Nelson
John Thiongo
Klaus Haftendorn
Editors:
Peter Tomlinson and Klaus Haftendorn
International Labour Office, Geneva

International Training Centre of the ILO, Turin
Copyright © International Training Centre of the ILO 2008
This publication enjoys copyright under Protocol 2 of the Universal Copyright Convention. Applications for
authorization to reproduce, translate or adapt part or all of its contents should be addressed to the
International Training Centre of the ILO. The Centre welcomes such applications. Nevertheless, short
excerpts may be reproduced without authorization, on condition that the source is indicated.
Know About Business
ISBN 92-9049-396-8
First published 1996

Second edition 2000
Third edition 2002
Fourth edition 2004
Revised edition 2005
The designations employed in the publications of the International Training Centre of the ILO, which are
in conformity with United Nations practice, and the presentation of material therein do not imply the
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responsibility for opinions expressed in signed articles, studies and other contributions rests solely with
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expressed in them.
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Know About Business Learners’ Workbook
Foreword
At the end of the 1980s and beginning of the 1990s the ILO was
strongly involved in SME development and vocational education through
a number of projects implemented together with government
institutions and private sector institutions. Training of entrepreneurs in
management skills was part of those projects. Entrepreneurship
education was seen as an important element to develop entrepreneurial
attitudes for future entrepreneurs. However, no specific training
programmes were available.
To close this gap, funds were provided from ILO Geneva (SED unit in
ENT/MAN) and from the International Training Centre of the ILO in Turin
(SME unit) in 1996 to develop a training package for TVET institutions
that includes entrepreneurial education and business skills. A workshop
was organized in Turin with the participation of Mr. G. Manu from
ITCILO, Mr. J. Thiongo, a Kenyan consultant and Prof. R. Nelson from
the University of Illinois, USA to develop the Know About Business
training materials for trainers and instructors of TVET institutions. The
material was field tested in Kenya and then finalized and printed.
Entrepreneurship education stimulates young people to think about

entrepreneurship and the role of the business community in economic
and social development. Students also get an opportunity to analyse the
changes taking place in their countries and are encouraged to consider
self-employment and enterprise creation as a career choice.
The importance of education and training for an entrepreneurial society

has been underlined on several occasions through United Nations
Declarations, recommendations by the European Union and national
Governments. ILO’s Recommendation No. 189, adopted in 1998, refers
to entrepreneurship education as a way of promoting a positive
enterprise culture.
The Millennium Development Goals adopted in 2000 address the

problem of high youth unemployment and the challenge to create
employment for Youth, in particular in developing countries with a high
percentage (up to 50%) of young citizens under 25. The Youth
Employment Network (YEN) composed of the UN Secretariat, the World
Bank, and the ILO was initiated by the UN Secretary General to actively
promote Youth Employment. ILO’s Decent Work Agenda include creation
of Youth entrepreneurship as one way to create decent employment.
Between 2001 and 2004 a number of countries adopted KAB in their

National Education Programmes. The experience of using KAB and an
increasing demand for the introduction and adaptation of KAB in other
countries led to the decision to review and update KAB so that it
1
corresponds better to the needs of education programmes in a fast-

changing and globalizing world.
A one week workshop in ILO’s International Training Centre (ITCILO)

was organized by the Enterprise Development Programme Manager
Mr. Peter Tomlinson and Mr. Klaus Haftendorn, Global KAB Programme
Coordinator, with the authors and KAB practitioners in May 2004. The
outcome of this review workshop was the 2005 KAB edition with
additional topics for Modules 6 and 7, and a new Module 9, How to
Elaborate One’s Own Business Plan, written by Klaus Haftendorn to
enable students and learners to test a business idea in a real life
situation. The focus of KAB was thus extended from vocational training
to general secondary education and higher education. At the same time,
the Global KAB Programme Coordinator developed a comprehensive
KAB promotion and implementation strategy combining resources from
ILO SEED, ILO’s field structure and ITCILO.
Since then, and till 2007, ten countries have, after pilot testing,
introduced KAB in their national curriculum, ten countries are running
the one-year KAB school test, and twelve countries are preparing the
pilot phase. The KAB materials have been translated into 15 languages.
Based on this extensive experience, KAB facilitators, teachers and
students from national KAB programmes gave positive feedback and
proposed new topics to be included in the training materials. To respond
to this feedback, the Global KAB Programme Coordinator and Professor
Robert Nelson have further reviewed the KAB materials and developed
the 2007 edition with additional topics and a revised course structure.
This new edition constitutes the generic international version of Know

About Business for all further national adaptations.
Many thanks are given to all those who participated in the revision work
of KAB and contributed to the new generic version.
Klaus Haftendorn and Peter Tomlinson

Editors of KAB
2
KNOW ABOUT BUSINESS
Learners’ Workbook
Table of Contents
Page
MODULE 1 – WHAT IS ENTERPRISING? ............................. 5

Topic 1 – Worksheet 1................................................... 6
Topic 1 – Worksheet 2................................................... 8
Topic 2 – Worksheet 1................................................. 10
Topic 2 – Worksheet 2................................................. 11
Topic 2 – Worksheet 3................................................. 12
Topic 3 – Worksheet 1................................................. 13
Topic 4 – Worksheet 1................................................. 14
Topic 4 – Worksheet 2................................................. 15
Topic 4 – Worksheet 3................................................. 17
MODULE 2 – WHY ENTREPRENEURSHIP? ......................... 18

Topic 2 – Worksheet 1................................................. 19
Topic 3 – Worksheet 1................................................. 20
Topic 4 – Worksheet 1................................................. 22
Topic 4 – Worksheet 2................................................. 23
MODULE 3 – WHO ARE ENTREPRENEURS? ....................... 24

Topic 1 – Worksheet 1................................................. 25
Topic 2 – Worksheet 1................................................. 27
Topic 3 – Worksheet 1................................................. 28
Topic 4 – Worksheet 1................................................. 29
Topic 4 – Worksheet 2................................................. 31
Topic 4 – Worksheet 3................................................. 33
Topic 5 – Worksheet 1................................................. 34
Topic 5 – Worksheet 2................................................. 35
MODULE 4 – HOW DO I BECOME AN ENTREPRENEUR? ..... 36

Topic 1 – Worksheet 1................................................. 37
Topic 1 – Worksheet 2................................................. 38
Group Work Assignment .............................................. 40
Topic 2 – Worksheet 1................................................. 41
Topic 2 – Worksheet 2................................................. 42
3
Page
Topic 5 – Worksheet 1 ................................................. 43
Topic 5 – Worksheet 2 ................................................. 45
MODULE 5 – HOW DO I FIND A GOOD BUSINESS IDEA?... 47

Topic 1 – Worksheet 1 ................................................. 48
Topic 1 – Worksheet 2 ................................................. 49
Topic 1 – Worksheet 3 ................................................. 50
Topic 1 – Worksheet 4 ................................................. 51
Topic 2 – Worksheet 1 ................................................. 52
Topic 2 – Worksheet 2 ................................................. 53
MODULE 6 – HOW DO I ORGANIZE AN ENTERPRISE? ....... 54

Topic 1 – Worksheet 1 ................................................. 55
Topic 1 – Worksheet 2 ................................................. 56
Topic 2 – Worksheet 1 ................................................. 59
Topic 3 – Worksheet 1 ................................................. 60
Topic 4 – Worksheet 1 ................................................. 61
Topic 4 – Worksheet 2 ................................................. 63
Topic 5 – Worksheet 1 ................................................. 65
MODULE 7 – HOW DO I OPERATE AN ENTERPRISE? ......... 68

Topic 1 – Worksheet 1 ................................................. 69
Topic 1 – Worksheet 2 ................................................. 71
Topic 1 – Worksheet 3 ................................................. 72
Topic 2 – Worksheet 1 ................................................. 74
Topic 3 – Worksheet 1 ................................................. 76
Topic 5 – Worksheet 1 ................................................. 77
Topic 6 – Worksheet 1 ................................................. 79
Topic 6 – Worksheet 2 ................................................. 81
Topic 7 – Worksheet 1 ................................................. 82
Topic 7 – Worksheet 2 ................................................. 83
MODULE 8 – WHAT ARE THE NEXT STEPS TO

BECOMING AN ENTREPRENEUR?...................................... 85
Topic 1 – Worksheet 1 ................................................. 86
Topic 5 – Worksheet 1 ................................................. 91
Topic 5 – Worksheet 2 ................................................. 92
Topic 5 – Worksheet 3 ................................................. 93
GLOSSARY ....................................................................... 94
4
MODULE 1
What Is Enterprising?
Module objectives:
Ä To enable learners to recognize that everybody can be
enterprising in one way or another.
Ä To enable learners to appreciate that everybody’s lifestyle

is affected by their enterprising behavior.
Module coverage:
1 Enterprises in Your Community

2. Meaning and Scope of Enterprising
3. Self-Management Skills
4. Decision-Making Skills
5
MODULE 1: Topic 1
WORKSHEET 1
Local Small Businesses
List up to 15 businesses that provide goods and services in your

community that you consider efficient, smart, profitable or suitable.
Since there may be more than 15 small businesses, concentrate on
the types of businesses that most interest you as possibilities for self-
employment. Include businesses that seem appealing to you.
1. ______________________________________________________________
______________________________________________________________
2. ______________________________________________________________
______________________________________________________________
3. ______________________________________________________________
______________________________________________________________
4. ______________________________________________________________
______________________________________________________________
5. ______________________________________________________________
______________________________________________________________
6. ______________________________________________________________
______________________________________________________________
7. ______________________________________________________________
______________________________________________________________
8. ______________________________________________________________
______________________________________________________________
9. ______________________________________________________________
______________________________________________________________
6
10. ______________________________________________________________
______________________________________________________________
11. ______________________________________________________________
______________________________________________________________
12. ______________________________________________________________
______________________________________________________________
13. ______________________________________________________________
______________________________________________________________
14. ______________________________________________________________
______________________________________________________________
15. ______________________________________________________________
______________________________________________________________
7
MODULE 1: Topic 1
WORKSHEET 2
Questions for the Entrepreneurs

1. What/who motivated you to start your business?
______________________________________________________________
2. What were your objectives in starting your business?
______________________________________________________________
3. How did you identify your business idea?
______________________________________________________________
4. What product or service does your business provide?
______________________________________________________________
5. What business experience did you have before starting your business?
______________________________________________________________
6. What problems did you encounter in starting and operating your

business?
______________________________________________________________
7. How did you solve these problems?
______________________________________________________________
8. What were your sources of finance to start the business?
______________________________________________________________
9. What contributions does your business make to the well being of the
community?
______________________________________________________________
10. Do any of your family members own a business?
______________________________________________________________
8
11. Who are your primary customers and how do you promote/market your
business?
______________________________________________________________
12. Who is/was your mentor?
______________________________________________________________
13. How did your personal background influence your decision to start a
business?
______________________________________________________________
14. Have you ever failed in business?
______________________________________________________________
15. How do you use your profits?
______________________________________________________________
16. How do you compete with other similar businesses?
______________________________________________________________
17. What advice would you give to people thinking of starting their own
business?
______________________________________________________________
18. What is the best and worst part of being an entrepreneur?
______________________________________________________________
19. How much time do you spend each week on business activities?
______________________________________________________________
9
MODULE 1: Topic 2
WORKSHEET 1
Having an Enterprising Attitude
Write down examples of situations that reflect your personal values,

interests and experiences for the statements below.
1. What was the most important event in your life between birth and age fourteen?
______________________________________________________________
______________________________________________________________
2. What was the most important event in your life from age fourteen to the present?
______________________________________________________________
______________________________________________________________
3. What has been your greatest achievement in the past five years?
______________________________________________________________
______________________________________________________________
4. What would you do if you had only one year left to live?
______________________________________________________________
______________________________________________________________
5. What is something you do very well?
______________________________________________________________
______________________________________________________________
6. What are your three most important enterprising skills?
______________________________________________________________
______________________________________________________________
7. What motto (a phrase or saying) highlights your skills as an enterprising person?
______________________________________________________________
10
MODULE 1: Topic 2
WORKSHEET 2
Life Situation Questionnaire
Identify a real life problem and respond to the following questions

related to this situation
1. What is the real problem situation?
______________________________________________________________
2. What activities need to be done to resolve the situation?
______________________________________________________________
3. Who should resolve the situation?
______________________________________________________________
4. When should the activities be done?
______________________________________________________________
5. What is needed to do it?
______________________________________________________________
6. What resources are needed to resolve the problem situation?
______________________________________________________________
7. How should the activities be done?
______________________________________________________________
8. What is your responsibility in resolving the problem situation?
______________________________________________________________
11
MODULE 1: Topic 2
WORKSHEET 3
Improving Your Enterprising Skills

To be enterprising, you need to identify what needs to be done, take action and
benefit from the action. Column 1 indicates things you might want to improve to be
enterprising in your life. In column 2, indicate two ways to improve your ability. In
column 3, indicate the benefits you expect to gain. Add something else you want to
improve on in the space provided in space 6.
WHAT YOU WANT TO TWO WAYS EXPECTED

IMPROVE TO IMPROVE BENEFITS
1. Obtain more
business ideas
2. Acquire more
information and
communication and
technology skills
3. Make interesting
speeches
4. Design and make

things
5. Want people to like

so you can get
information from them
and also sell more
things to them
6. You want to
__________________
__________________
__________________
__________________
__________________
12
MODULE 1: Topic 3
WORKSHEET 1
Check Your Self Management Skills

Directions: Respond to each of the following question by answering: “yes” or “no.”
Do you: yes no
1. Think through what has to be done before starting the day?
2. Think through a job before starting it?
3. Stay with jobs until they are completed?
4. Do the more important (and possibly more unattractive) tasks
first?
5. Assign/ask someone to help you do chores rather than doing
most of the work yourself?
6. Use machines to do work that could be done by hand?
7. Doing things you always do and are good at doing?
8. Try to find new, better ways to do things?
9. Start projects that you have little interest in and know you may
not finish?
10. Make sure that short, easy tasks are completed first?
11. Anticipate potential problems crises?
12. Handle a few different jobs at one time?
13. Group errands together for one trip rather than making several
trips?
14. Avoid distractions (newspapers, friends, family) while working?
15. Set aside a certain time during the day to talk with
friends/neighbors?
16. Continually ask “What is the best use of my time right now?”
17. Set deadlines for yourself?
18. Focus on items that will have the most long range benefits?
19. Concentrate on one thing at a time?
20. Avoid being involved in non-productive activities?
NOTE: Rate yourself by counting the number of “yes” and “no” answers.
3 If you have six to ten “no” answers, you need to develop more effective
self-management skills.
3 If you answered “no” to more than 11 questions, you have a real

problem using your self-management skills effectively and you have a lot
of work ahead of you to manage yourself more effectively.
3 For every question that you responded “no’ to, identify ways to change
your behavior so that your self-management skills will be more effective.
13
MODULE 1: Topic 4
WORKSHEET 1
Decision-Making Chart
PROBLEM: suppose you are self-employed in a small business employing 4 people, (2

are full-time and 2 are part-time). All of your employees are dependable except 1 full-
time person who is often late and frequently asks for extra days off. This situation is
creating a morale problem with other employees.
DIRECTIONS: fill in the chart below with 3 alternative solutions along with the
advantages, disadvantages and potential consequences of each solution.
Alternative Potential Potential Potential Outcomes

Solutions Advantages Disadvantages of Solution
14
MODULE 1: Topic 4
WORKSHEET 2
Solution Evaluation Form

DIRECTIONS:
• Write a brief description of the problem at the top of the form.
• Write a brief description of the potential solution.
• In the “Factors For Solution” column, list important factors which would favour
implementing the proposed solution.
• In the “Factors Against Solution” column, list important factors for not
implementing the proposed solution
• Rate each factor according to its importance to you. Use numerical ratings of 1, 2,
3, 4, and 5. A low rating of 1 indicates that the factor affects the problem only
slightly; a high rating of 5 indicates that the factor is extremely important in
making your decision.
• Each factor in the “Factors For Solution” column and each factor in the “Factors
Against Solution” column should receive a numerical rating.
• Add up the ratings in each of the two “rating” columns. The column with the higher
total will give some indication of the potential of a particular solution. If there is a
big difference between the two totals (in favour of “Factors For Solution”), you may
feel more secure in implementing this solution. If there is little difference in the
totals for both columns, it might indicate that you need more information about the
problem.
• Use the Solution Evaluation Form for the top two solutions identified in the
Decision-Making Chart. Comparing the results should help to make your decision
easier.
15
PROBLEM DESCRIPTION:
______________________________________________________________
______________________________________________________________
______________________________________________________________
POTENTIAL SOLUTION:
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
Factors Affecting Potential Solution
Numerical Factors For Factors Against Numerical

Rating (1-5) Solution Solution Rating (1-5)
16
MODULE 1: Topic 4
WORKSHEET 3
Rating Your Decision-Making Skills
This is a quiz to help you rate your problem-solving skills. You will not
be graded. Circle either T (true) or F (false) for each of the following
statements.
T F 1 The ability to make decisions effectively is something

you are born with; you either have it or you do not.
T F 2 Every decision has one good solution.
T F 3 When making a decision, I use my first idea.
T F 4 The best approach to making a decision is to put it in
the form of a question.
T F 5 One thing that can make a decision more difficult is
not understanding the issue.
T F 6 It is usually a good idea to try to make a decision as
quickly as possible.
T F 7 Decision-making mostly involves trial and error.
T F 8 When making a decision, I try to think of all the
alternatives I can before choosing one.
T F 9 Once you choose an alternative as a solution, you are
finished making your decision.
T F 10 When I have a difficult problem to solve, I like to get
ideas from other people before making a decision.
T F 11 When I have a problem, I try to find out as much as I
can about the problem before making a decision.
T F 12 If a person stops thinking about a decision for a while,
the mind keeps on working on the decision to be
made.
T F 13 When I make a decision, I am often surprised at the
results of the solution I chose.
T F 14 When making a decision, I try to figure out what the
results of my action will be.
17
MODULE 2
Why Entrepreneurship?
Module objectives:
Ä To enable learners to recognize that being entrepreneurial
in business and non-business situations is beneficial at
individual, family, community and society levels.
Module coverage:
1. Entrepreneurship Defined
2. Reasons for Entrepreneurship in Business
3. Entrepreneurial Motivation
4. Setting Entrepreneurial Goals
5. Risk-Taking
18
MODULE 2: Topic 2
WORKSHEET 1
Principles of Entrepreneurship
It has been said “if a man/woman builds a better mousetrap, the world will beat a
path to his/her door”. In a market economy there is an opportunity for profit,
recognition and service for those with the imagination, energy and drive to do a job
better, or provide a better service than others. The essence of the free enterprise
system is competition. It is competition that makes those doing a good job try harder.
Competition provides a better standard of living for consumers by offering choices.

Consumers “shop” to get the best value and quality goods and services. When a
purchase is made, the money paid is “votes” in favor of the product or the service
chosen. Those products or stores or services which do not receive sufficient support
(sales) in the way of “dollar-votes” from customers will fail.
Entrepreneurs who want to be successful provide a little extra service or a little better
product than their competition. Many businesses fail each year, but many succeed.
Those that succeed perform services or offer merchandise in such a way to satisfy
their customers.
As the population expands, there develops a need for more businesses. Every year
several million babies are born and these “babies are big business”. When these
babies grow they become the children, the learners, the workers, the managers and
the customers of tomorrow.
An entrepreneur does not have to be the best manager, or have the biggest store, to
compete successfully. If entrepreneurs see a need for a new store in a growing
community and begin operating before others, they can get a head start on their
competition.
Anyone with imagination and a little courage to take a chance on his/her own ability
and ambition can generally be successful in business provided the individual has
progressed to the point of being a good business risk. One must have the basic
education, skills, knowledge and maturity to reduce the chances of failure. Any
business is a risk. The chances of failure can be greatly reduced by education,
experience and the exercise of good judgment.
There is an element of chance in all businesses. Some entrepreneurs are lucky, but
you must not depend on luck alone!
19
MODULE 2: Topic 3
WORKSHEET1
A Personal Assessment
1. When faced with a problem, the entrepreneur is most likely to:

a) go to a close friend for help;
b) get help from a stranger who is known to be an expert;
c) try to work through the problem alone.
2. The entrepreneur is most like the distance runner who runs mainly to:
a) work off energy and to keep in good physical condition;
b) gain the satisfaction of beating other competitors in the race;
c) try to better his previous time over the distance.
3. Entrepreneurs are motivated most by the need to:
a) achieve a goal of greater personal importance;
b) gain public attention and recognition;
c) control wealth and other people.
4. Entrepreneurs believe the success or failure of a new business venture
depends primarily on:
a) luck or fate;
b) the support and approval of others;
c) their own strengths and abilities.
5. If given the chance to earn a substantial reward, which of the following
would entrepreneurs be most likely to do:
a) roll dice with a one in three chance of winning;
b) work on a problem with a one in three chance of solving it in the time given;
c) do neither (a) nor (b) because the chances of success are so small.
6. The entrepreneur is most likely to choose a task:
a) which involves a moderate level of risk but is still challenging;
b) where the risks are high but the financial rewards are also very great;
c) which is relatively easy and the risks low.
7. Profits are important to entrepreneurs because:
a) profits provide the money which allows them to develop other ideas and take
advantage of other opportunities;
b) profits are an objective measure of how successful they have been;
c) the main reason they accepted the risks of starting a new business was to
accumulate personal wealth (make a big profit).
20
8. Which of the following do entrepreneurs value most highly:

a) the importance placed on competence and efficiency;
b) the freedom to control how they may use their time;
c) the opportunity to create and to do new things.
21
MODULE 2: Topic 4
WORKSHEET 1
Case Study
Jeanette has always loved doing things with her hands. She has studied in a variety of
crafts, but has not pursued any one craft. She enjoys learning new techniques, but
after she has perfected a technique she tends to lose the sense of challenge. Because
she has little money to spend on her crafts, she feels limited. In order to pursue a
craft further, she realizes that she will need to invest money in special equipment.
She also realizes that she will need to limit herself to one craft. Jeanette has had an
interest in wood-working for a long time. She has developed considerable skill with
hand tools, and has some experience in using power tools. She gets great enjoyment
out of designing various kinds of furniture, and would very much like to try to make
some of the unique furniture pieces she has designed.
Jeanette would like to begin acquiring enough basic hand tools and power tools to set
up a small woodworking shop. She feels fairly certain that the craft of woodworking is
broad enough to give her a continuous challenge. She is interested at present in
pursuing woodworking only as a hobby for now, but she might eventually like to go
into business for herself.
Using the guidelines discussed in class, draw up a list of goals for Jeanette. Be
realistic, and remember to include both long- and short-term goals.
22
MODULE 2: Topic 4
WORKSHEET 2
Setting Personal Goals

1. Prepare a list of four important goals you want to achieve in all areas of your
personal life over the next two years. Write down at least three goals for each
area you have identified.
2. Use the sheet “Guidelines for Setting Goals” to evaluate the goals you have
written. Rewrite any goals which need to be improved.
3. Your goals should be assigned a priority letter such as A, B, or C. “A” goals should
be of the highest priority, “C” goals being the lowest. “B” should be assigned when
a goal does not quite reach “A”, but you feel it is more important than a “C” goal.
4. After a short period of time, reassign all “B” goals to either “A” or “C”. This will
help you to determine which goals are most important to you, and which goals are
not really important to your life plan.
5. Write your reflections on this activity. Include three paragraphs about how your
goals relate to starting the business that interests you.
23
MODULE 3
Who Are Entrepreneurs?
Module objectives:
Ä To enable learners to appreciate the personal
characteristics needed to be a successful entrepreneur.
Module coverage:
1. Assessing Entrepreneurial Potential

2. Identifying Entrepreneurial Characteristics
3. Entrepreneurial Leadership
4. Principles of Negotiation
5. Listening Skills
24
MODULE 3: Topic 1
WORKSHEET 1
Testing Your Personal Tendencies
The purpose of this assessment is to identify your strengths and

weaknesses. Please respond to each question with a mark (x) for
either RARELY OR NO, or MOSTLY OR YES.
RARELY MOSTLY
OR NO OR YES
1. Do you worry about what others think of you?
2. Do you read books?
3. Do you take risks for the thrill of it?
4. Do you find it easy to get others to do something for
you?
5. Has someone in your family discussed the experience of
starting a business with you?
6. Do you believe in organizing your tasks before getting
started?
7. Do you get sick often?
8. Do you find enjoyment in something just to prove you
can?
9. Have you ever been fired from a job?
10. Are you constantly thinking up new ideas?
11. Do you let friends decide your social activities?
12. Do you like school?
13. Were you a very good student?
14. Were you member of a group in high school?
15. Do you participate in school activities or sports?
16. Do you like to take care of details?
17. Do you believe there should be security in a job?
18. Will you deliberately seek a direct confrontation to get
needed results?
19. Were you the firstborn child in your family?
20. Was your father mostly present during your early life at
home?
21. Were you expected to do odd jobs at home before 10
years of age?
22. Do you get bored easily?
23. Do you sometimes boast about your accomplishments?
24. Can you concentrate for extended periods of time on
one subject?
25. On occasion, do you need pep talks from others to keep
you going?
25
RARELY MOSTLY
OR NO OR YES
26. Do you find unexpected energy resources as you tackle
things you like?
27. Does personal satisfaction mean more than having
money to spend on your self?
28. Have you ever deliberately exceeded your authority at
work or in school?
29. Do you enjoy socializing regularly?
30. Do you try to find the benefits of a bad situation?
31. Do you blame others when something goes wrong?
32. Do you enjoy tackling a task without knowing all the
potential problems?
33. Do you take rejection personally?
34. Do you believe that you generally have a lot of good
luck that explains your successes?
35. Are you likely to work long hours to accomplish a goal?
36. Do you enjoy being able to make your own decisions on
the job?
37. Do you wake up happy most of your life?
38. Can you accept failure without admitting defeat?
39. Do you have a savings account and other personal
investments?
40. Do you believe that entrepreneurs take huge risks?
41. Do you feel that successful entrepreneurs must have
college degrees?
42. Do you use past mistakes as a learning experience?
43. Are you more people-oriented than goal-oriented?
44. Do you find answers to problems come to you out of
nowhere?
45. Do you enjoy an answer to a frustrating problem?
46. Do you prefer to make decisions by yourself?
47. In your conversations, do you discuss people more than
events or ideas?
48. Do you feel good about yourself in spite of criticism of
others?
49. Do you sleep as little as possible?
50. Do you persist when others tell you it can't be done?
26
MODULE 3: Topic 2
WORKSHEET 1
Entrepreneurial Characteristics
Each of the following entrepreneurs has provided interesting and

valuable information relating to their success in business. Read the
nine interviews in HANDOUT 3 and circle the words and phrases which
indicate the personal characteristics you believe would be most
important in owning and operating a business. Write this information
in the appropriate spaces below.
ENTREPRENEUR CHARACTERISTICS OF ENTREPRENEURS
A. John Gitau
B. Doris Smith
C. Mary Stathos
D. Pat O'Bryan
E. Andrew Smith
F. Stephen Boudreau
G. Manuel Lopez
H. Hamed Al-Bitar
I. Kim Nelson
27
MODULE 3: Topic 3
WORKSHEET 1
For each of the four steps to enhance your entrepreneurial personality

indicated in HANDOUT 3, develop an implementation plan by filling in
the spaces provided below.
No. Title Actions for When this will

implementation occur
1. Self-analysis
2. Developing
a personal
Plan of Action
3. Putting the plan into

operation
4. Checking yourself
periodically
28
MODULE 3: Topic 4
WORKSHEET 1
Ways to Correct Problems in Negotiating

1. If the work load is increasing:
a. Look for tasks to eliminate.
b. Review work you could handle yourself.
c. Review ways to combine similar jobs.
d. Consider the use of temporary or part-time help.
2. If there are problems of turnover:
a. Help new employees identify with their group.
b. Develop stable work groups with which members can identify.
c. Review status implications in jobs. Are some jobs “higher” or “lower” rated?
3. If the work load is declining:
a. Work on improving unit efficiency.
b. Do housekeeping that has been postponed.
c. Start projects that could generate new work.
4. If a group of employees are controlling production:
a. Remove misunderstandings, if there are any.
b. Find out if it’s to the group’s advantage to slow down.
c. Find out and deal with the real problem.
5. If employees are dissatisfied with their pay:
a. Review benchmark jobs—those used for comparison among different
enterprises.
b. Compare pay with comparable jobs in the area.
c. Adjust inequities, if there are any.
d. Adjust assignments.
e. Communicate on the broad pay issue.
6. If workers are spending too much time on any one job:
a. Review management’s objectives and standards for this job.
b. Clarify the degree of perfection needed and why.
c. Ask the group for ideas on cost reduction and work simplification.
d. Set specific targets and follow up on them.
e. Reassure the group members on the quality of their work.
29
7. If you go over the budget:

a. Identify the sources of increased cost or expense.
b. Ask for suggestions on cost reduction.
c. Get explanations of increased cost.
d. Curtail or freeze some activities.
e. Ask for suggestions on controlling waste.
f. Review the results expected from this activity.
30
MODULE 3: Topic 4
WORKSHEET 2
Bank Manager and the Entrepreneur

ENT: Good Morning Mr. Manager
MAN: Good morning, Welcome. Have a seat.
ENT: I am Hank I have come to enquire about the loan to start a small production
plant for extracting starch from cassava.
MAN: Are you the representative of Mr. Lassen
ENT: No, I am the manager and proprietor
MAN: A manager in jeans and uncombed hair
ENT: This is my style of living and I have been your customer for the past seven
years
MAN: My customer!!! How?
ENT: Yes, I have an account here!
MAN: I am sorry for the comment. I wanted to know who you are. Well did you
bring the documents I enquired about in the letter of appointment?
ENT: Yes, Here they are? (He hands a scrambled envelop). Inside there you find
the cash flow statement, feasibility study and a project proposal prepared by
my friend, John.
MAN: Alright, all the documents are there. But poorly written. You should write in
the proposed format. Contact my Small Scale Enterprises promotion officer.
He will tell you what to do.
ENT: You mean I have to start a fresh!
ENT: Mr. Manager, my friend John is an expert in such things and more educated
than your officer. Apart from that, it is very expensive to prepare such
documents, you are delaying the time for the loan and the cassava season is
due. I need money.
MAN: What are your expectations from the project? That is, do you know your
customers, the markets and the source or raw materials?
ENT: Mr. John says, there is plenty of cassava in this region. Starch will perhaps
be bought by the army and the police. Other customers will come when the
products are on sale.
MAN: Thank you. Go and do what I have told you to get the loan. Goodbye!!
ENT: Oh, My time wasted! (Laments the entrepreneur). I’ll come again?
31
Questions:
1. Is there anything wrong with the behavior of the entrepreneur?
2. Is the entrepreneur conversant with his project? Explain
3. What should the entrepreneur do to convince the bank manager?
4. Write ten things that show the entrepreneur is not a good negotiator.
5. What should the entrepreneur do to improve his negotiating skills?
32
MODULE 3: Topic 4
WORKSHEET 3
Individual Score Sheet — Big Apple

Circle one: Buyer Seller NAME____________________________________________
Directions: For each transaction, when you get a card enter the price
in Column II. After you make a transaction, record the price in column
III of the same row. Tally the gains, losses, and totals at the end of
the game. Tally your losses and gains by taking the difference
between you transaction price and the price on your card for each
transaction. For example, a seller who sells at a price higher than the
price on the card, makes a gain; a lower price means a loss. A buyer
who buys at a lower price than the card price, make a gain; a higher
price means a loss. Ignore the break-evens. Total up your gains and
losses and mark them in the appropriate place at the bottom. Your net
gain or loss is the difference between the sum of the gains and the
sum of the losses. Indicate where rounds 1, 2, 3 ends by a mark.
Transaction Price on Transaction Gains Losses

Number Your Card Price
(I) (II) (III) (IV) (V)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
33
MODULE 3: Topic 5
WORKSHEET 1
Listening Skills Self Assessment
Introduction: Read each statement and indicate the extent that you
agree with the statement: FULLY AGREE, SOMEWHAT AGREE, AGREE,
SOMEWHAT DISAGREE or FULLY DISAGREE. Put your responses on a
separate sheet of paper.
A. Ability to define the purpose for listening

1. I think about why I am listening
2. I understand the important of listening
B. Ability to attend fully to the speaker
3. When I hear extraneous sounds, I don’t allow myself to be distracted by them
4. I concentrate on the speaker’s message rather than on how he or she looks or
sound
5. I listen to the speaker without judging or criticizing
6. I let the speaker finish and do not interrupt
7. I give verbal and/ or nonverbal indications throughout the interaction that the
speaker has my fully attention
8. I take notes when necessary to help me understand and remember
C. Ability to process the message
9. I try to listen for cues that tell me what the speaker may be feeling (e.g.,
uncertain, worried, angry, etc.).
10. I think about what the speaker means and what additional information I need
to know
11. I try to put myself in the speaker’s place
D. Ability to formulate a response
12. I restate (or paraphrase) messages to confirm my understanding
13. I probe to get additional information.
14. I evaluate how well I am listening based on how the other person reacts to my
responses. (For example, does the other person get upset because you miss
the point?)
E. Ability to attend fully to the speaker
15. I give verbal and/ or nonverbal indications throughout the interaction that the
speaker has my fully attention
16. I take notes when necessary to help me understand and remember
34
MODULE 3: Topic 5
WORKSHEET 2
Attending Skills Worksheet

Instruction: Use this worksheet to record your observation of attending skills.
Did The Listener Exhibit

This Behavior? Comments
Main Eye Contact
Yes No
Face the speaker squarely
Yes No
Lean slightly toward the speaker
Yes No
Use verbal and nonverbal

attending behaviors
Yes No
Avoid distracting behaviors
Yes No
Rate how many of the important facts were accurately recalled by the listener.
• Accurately recalled very few of the facts.

• Accurately recalled some of the facts.
• Accurately recalled many of the facts.
• Accurately recalled almost all of the facts.
Comments:
35
MODULE 4
How Do I Become An
Entrepreneur?
Module Objective:
Ä To provide an understanding of the key competencies and
determining factors for success in entrepreneurship and
small business management.
Module Coverage:
1. Importance of Entrepreneurship in Society

2. Self-Employment
3. Small Enterprises
4. Factors in Setting up a Small Business
5. Decision to become an Entrepreneur
36
MODULE 4: Topic 1
WORKSHEET 1
The Role of Business

Entrepreneurship in Society
BUSINESS VENTURE ESTABLISHED

BY ENTREPRENEUR
PRODUCTS, SERVICES,
EMPLOYMENT AND INCOME
PRIVATE SECTOR BUSINESS
Taxes Taxes
Taxes
NATIONAL WELL-BEING
37
MODULE 4: Topic 1
WORKSHEET 2
John’s business
John is forty years old. He currently lives in Thika. John came to Thika when he was
young. His father worked as a cook in a restaurant. He attended secondary school.
After graduating, he did not qualify for college, but he was admitted at a technical
institute where he enrolled in a two-year course in tailoring. On completion of his
course, he was employed by a tailoring company in the industrial area of Thika.
He worked for this company for two years. Then he decided to start his own business.
He obtained a loan from a commercial bank as capital for the business. From his
savings, he contributed additional capital.
John then rented a room in the shopping centre nearest his house so that he could
walk to work. He bought 4 sewing machines. He bought cloth and then employed 4
skilled tailors to cut and sew the clothes. At first he made dresses, trousers and shirts.
He displayed the products in his shop for customers to come and buy them. Later
John visited several shops in the city square where uniforms were produced in
quantities. Two businesses placed orders with him to supply uniforms. To be able to
meet these orders he needed to employ 5 skilled employees full time and 2 employees
on a part-time basis. He also needed to buy 3 more sewing machines. John was able
to meet his orders and his customers were satisfied with the products.
As John’s business expanded, he needed additional space. He rented a bigger room in

a popular place in town. He was also nearer to his prospective customers as well as
his existing customers. He continued supplying uniforms to the two companies, and at
the same time made clothes to sell to other customers. At this juncture, he needed to
38
employ an accounting clerk to deal with the records and handle cash for the business,
and a messenger to do errands. John was the overall manager.
John organized exhibitions in the capital to advertise his products both to local
customers and to customers in foreign markets. Soon after the first two exhibitions,
he started exporting some of his products to neighbouring countries. His net income
rose quickly.
John is friendly to his customers. They like him because of the quality of his products
and his honesty. His employees also like him and are loyal and committed to their
work. Five of his employees have worked in the business for over ten years. The
employees and the customers have nicknamed him “fashion”. He likes the name and
has accepted it. John pays his employees reasonably well. He has also organized an
insurance scheme for them. He pays them a travel allowance in addition to their
monthly salaries. John believes in providing job quality for his employees.
39
MODULE 4: Topic 1
GROUP WORK ASSIGNMENT
Each learner joins any of the four groups (A, B, C, D), and each
group answers the two questions assigned to it below on how John
(as an entrepreneur) has contributed to the national economic
development of the society he lives in.
A person from each group will present a report of the group’s responses.
GROUP A:
1. How has John created employment for young people?
2. How has John raised the standard of living of his employees?
GROUP B:
1. How has John contributed to increased competition in the textile industry?
2. How has he assisted the government in earning foreign exchange?
GROUP C:
1. How has John assisted the country in increasing the Gross National Product
(GNP)?
2. How has he contributed to the development of entrepreneurial spirit and culture?
GROUP D:
1. How has John utilized the local resources and how has this contributed to the
welfare of the nation?
2. How has John provided cheap skills in terms of learning on the job?
After individual group discussions, a person from each group will give a report on their
discussion. The class can then add their ideas after each report.
40
MODULE 4: Topic 2
WORKSHEET 1
Working for Yourself or

Someone Else
REASONS FOR WORKING FOR SOMEONE ELSE:
1.
2.
3.
4.
5.
REASONS FOR WORKING FOR ONESELF:
1.
2.
3.
4.
41
MODULE 4: Topic 2
WORKSHEET 2
Self-Employment Opportunities
After graduation, you may have an opportunity to get employment in a job carrying
any of the titles listed below. Identify two jobs from the following list. For each job
title identify a corresponding self-employment opportunity and its title.
Policeperson Receptionist Library clerk

Carrier (mail) Sales clerk Cattle raiser
Assembly line worker Nursery school helper Dairy person
Railway car loader Baby sitter Golf course handyman/
Auto repair person Nurse's aide handywoman
Car washer Guard & watchperson Laundry route person
Carpenter's helper Street department worker Custodian/janitor
Carpenter Forklift operator Custodian's helper
Small motor repair- Driver's helper Motion picture projectionist
person's helper Petrol station attendant Waiter or waitress
Appliance service person Plumber & pipe fitter Cook
Typist Sheet metal worker Hospital dietician's helper
Telephone operator Cement mason Practical nurse
Farm labourer Painter's helper Baker's helper
Playground assistant Painter Dishwasher
Helper in bowling alley Taxicab driver Food store checker
Army soldier Household worker Gas meter person
Beautician Auto or truck mechanic Forest ranger
Shoe repair person Butcher Window display person
Motel maid Chef Dental assistant
Cook's helper Social worker Occupational therapist
Diesel mechanic Machinist Carpet layer's helper
Barber Storeroom attendant Tree trimmer
Roofer Spray painter Florist's helper
Bricklayer's helper Crater Welder
Nursery helper Electrical assembler Floor covering installer
Cashier Bookkeeper Garbage collector
Fountain clerk Secretary
Hospital orderly
Pest control operator
Shipping clerk
Delivery person
42
MODULE 4: Topic 5
WORKSHEET 1
Self-Assessment on Personal Traits
For each question, please tick the answer that shows what you
feel or comes closest to it. Be honest with yourself. There are no
right or wrong answers as such.
1a. I do things on my own. Nobody has to tell me to get going.

1b. If someone gets me started. I keep going all right.
1c. Easy does it. I don’t put myself out until I have to.
2a. I like people. I can get along with just about anybody.
2b. I have plenty of friends – I don’t need anyone else.
2c. I find most people a bother.
3a. I can get most people to go along with me when I start something.
3b. I can give orders if someone tells me what we should do.
3c. I let someone else get things moving. Then I go along if I feel like it.
4a. I like to take charge of things and see them through.

4b. I’ll take over if I have to, but I’d rather let someone else be responsible.
4c. There’s always someone around eagerly wanting to show how smart they are. I
say let them.
5a. I like to have a plan before I start. I’m usually the one to get things lined up
when my mates want to do something.
5b. I do all right unless things get too difficult. Then I give up.
5c. You get all set and then something comes along and blows the whole thing up.
So I just take things as they come.
43
6a. I can keep going as long as I need to. I don’t mind working hard for something
I want.
6b. I’ll work hard for a while, but when I’ve had enough, that’s it.
6c. I can’t see that hard work gets you anywhere.
7a. I can make up my mind in a hurry if I have to. It usually turns out okay too.
7b. I can make up my mind if I have plenty of time. If I have to make up my mind
fast, I think later I should have decided the other way.
7c. I don’t like to be the one who has to decide things. I would probably make a
mistake.
8a. People can trust what I say. I don’t say things I don’t mean.
8b. I try to be on the level most of the time, but sometimes I just say what’s
easiest.
8c. Why should I speak the truth if the other person doesn’t know the difference?
9a. If I make up my mind to do something, I don’t let anything stop me.

9b. I usually finish what I start – if it doesn’t go wrong.
9c. If something I start does not work right away, I turn off or give up. Why worry?
10a. I am in perfect health. I never run down!

10b. I have enough energy for most things I want to do.
10c. I run out of energy sooner than most of my friends seem to.
Adapted from Olm K. W. and G. G. Eddy. 1985. Entrepreneurship and Venture Management:
Text and Cases. Charles E Merrill Publishing Co., Columbus, Ohio.
44
MODULE 4: Topic 5
WORKSHEET 2
Background Quiz
For each question below, please write the answer (on a separate
sheet of paper) that best corresponds to your views. Please be
objective and honest with yourself: there is no right or wrong
answer for this exercise.
1. How or where do you see yourself in 10 years’ time, in terms of career or

occupation (please state your response clearly):
2. List the names and occupations of 3 people whom you consider to be particularly
good examples of who/what you would like to be in life:
(a)
(b)
(c)
3. Do you have any close friends or relatives who are running their own businesses
(or are self-employed)?
(a) Yes
(b) No
4. Are you an immigrant, or were your parents immigrants?
(a) Yes, I was born outside this country
(b) Yes, one or both of my parents were born outside this country
(c) No
5. Are you a member of a minority group in this country?
(a) Yes
(b) No
6. Have either or both of your parents ever been self-employed (or operated their
own businesses)?
(a) Yes, for most of their working life
(b) Yes, for a limited period of time
(c) No
45
7. All things being equal, would you prefer to be self-employed or to be employed by

a firm?
(a) I would prefer to be employed by a firm
(b) I would prefer to be self-employed
8. Would you say it was impossible, difficult or easy for you to start your own
business at the present time?
(a) Impossible
(b) Difficult
(c) Easy
9. Do you think there is presently support in this country (e.g. help with finance,
premises, infrastructure such as roads and electricity) for you to start your own
business?
(a) Yes
(b) No
10. Which of these corresponds to your position in your family?
(a) Youngest child
(b) Middle child
(c) Oldest child
(d) Other
11. Do you think men and women have equal access to business opportunities and
support services in this country?
(a) Yes
(b) No
12. What is your sex?
(a) Male
(b) Female
13. Have you ever started a micro business in you free time?
(a) Yes
(b) No
46
MODULE 5
How Do I Find a Good

Business Idea?
Module objectives:
Ä To provide techniques for generating business ideas
as well as for identifying and assessing business
opportunities.
Module coverage:
1. Creativity and Innovation

2. Generating Ideas
3. Identifying and Assessing Business Opportunities
47
MODULE 5: Topic 1
WORKSHEET 1
Your Creative Potential
Respond to each of the following statements by checking one of the boxes to the left of the
statement. This is not a test. Think carefully about each statement before responding.
TRUE FALSE UNCERTAIN

A My ideas are not always easy to explain to
others.
B I would rather work at discovering new facts
than teaching others.
C I don’t like to waste time and energy on
ideas that may not work out.
D I find it easier to express ideas than to think
of new ideas.
E I prefer quick solutions to problems rather
than dealing with uncertainty.
F My way of thinking is often considered
different or unusual.
G I find it easy to interrupt a project when
friends call or visit.
H I feel more comfortable with facts than with
theories.
I I would rather be good at making up stories
than good at telling them.
J I have difficulty giving up my ideas just to
please others.
K I would rather design clothes than model
clothes.
L I prefer to work on ideas by myself rather
than with others.
M Unusual things appeal to me more than
ordinary things.
N When I get an idea, I work on it, even when
others think it is “far out” and impractical.
O I would follow up on my ideas even if it
means being alone a lot.
48
MODULE 5: Topic 1
WORKSHEET 2
Three Descriptions
Below are descriptions of three different types of people. Read all three descriptions
carefully. Mark an “X” beside the description you believe most closely describes you.
Description I
You are not bound by ordinary ways of thinking. You can develop and recognize ways
to combine ideas in new ways. You are willing to experiment even when you are not
sure your work will be rewarded. Because you seldom depend on others, you can
provide yourself with the time, energy and isolation that are necessary for creative
activities. You are not likely to be distracted or discouraged by others once you
become interested in a challenging task.
Description II
You can recognize and appreciate a creative idea, although you usually do not produce
these ideas by yourself. You probably engage in creative activities which involve using
your hands or which involve objects you can see and touch. You start creative projects
sometimes, but you may lose patience and interest when a project requires you to
work for a long time by yourself.
Description III
You are usually more interested in practical down-to-earth matters than in chasing
dreams. Since you tend to be very realistic in your thinking, you may not be aware of
unusual ideas that are necessary for creative problem solving. Because you prefer to
work with other people, you rarely set aside time to work by yourself on your ideas.
You are more likely to engage in activities which give you immediate results and
which may be shared with others.
49
MODULE 5: Topic 1
WORKSHEET 3
New Ideas from Old
Make it bigger or add new parts. Two examples are “giant economy sizes” of
products and increasing the size of a business to include more products or to serve a
larger area.
Make it smaller or eliminate parts. Examples are transistor radios, pocket calculators.
Modify parts or ideas. Examples are changing colors, tastes, odors and styles. Soaps
are often changed in their color and odor. Automobile styles are changed yearly.
Rearrange parts. Examples: rearranging parts for designing buildings, parks, and
machines.
Reverse parts. One example of reversing parts is in automobiles in which the trunk
and the engine are reversed in location. Another example is reversing roles of
persons, such as a husband assuming homemaking responsibilities while a wife
assumes the role of breadwinner.
Substitute different materials, parts, or methods. A common example is the

substitution of plastic for wood and metal. Another example is the substitution of an
electric motor for an internal combustion engine in a car.
Combine parts or ideas. One example is the “home entertainment unit,” which
combines a television, radio, tape player, and record player. Another example is the
motor home, which combines a home with a vehicle.
Practical Application
1. Think of an object used or produced in a work situation. Write the name of the
object;
2. Name the basic parts of the object.
3. How could the object or part of the object: be made bigger, be made smaller, be
modified?
4. How could the parts of the object: be rearranged, be reversed, be substituted or
made of a different material?
5. How could your ideas be combined and be useful in making a new product?
50
MODULE 5: Topic 1
WORKSHEET 4
Taking Innovative Action
Entrepreneurship is about taking innovative actions whenever one finds

himself/herself in different situations of change
Fill in an innovative action an entrepreneur could take to respond to

the identified change.
POSSIBLE
CHANGE ENTREPRENEURIAL
RESPONSE
Structure of population changes
Values and lifestyles change
Incomes and purchasing power decrease
Government policies on gender reviewed
Natural resources getting exhausted
Ownership of factors of production changing hands
Banks advertise availability of loans
Use of computers increases
Use of mobile phones increases
Use of computers and internet facilities in homes

increase
New advanced equipment bought by business
competitor
New strategies for accommodating people living
with HIV
51
MODULE 5: Topic 2
WORKSHEET 1
Identifying Business Ideas
Introduction
1. A business idea is a prerequisite for a successful business venture. Good business
ideas, however, do not usually just occur to an entrepreneur. Rather, they are the
result of effort and often creativity on the part of the entrepreneur.
2. Finding a good idea is the first step in transforming the entrepreneur’s desire and
creativity into a business opportunity.
3. There are numerous sources of good ideas. To be successful in generating or
finding one, however, the entrepreneur needs to keep his/her mind and eyes open
and be alert to opportunities.
4. An idea, however good, is only a tool. The idea needs to be developed and
transformed into a viable business opportunity.
Activity 1
Each learner should write down the skills, experience, training and background that
they have to start a business. Examples could include: catering, welding, computer
programming, secretarial experience, etc.
Activity 2
Divide the class into small groups based on the common hobbies/interests listed by
the group members. Each group of learners must now choose one idea they wish to
develop into a business. Group members are to negotiate this themselves. On a
separate sheet of paper, the group should describe their best business idea, including
the product or service in detail as well as who the likely customers might be. Each
group would have 15 minutes for this task, after which each group will be given 5
minutes to present their idea to the entire class.
52
MODULE 5: Topic 2
WORKSHEET 2
Mass Media: Newspapers/Magazines
Your group should identify 7 business ideas from the articles as well
as the commercial opportunities section of a newspaper or magazine.
The commercial section may contain advertisements for businesses or
machines on sale whilst articles may describe new types of businesses
or announce changes in fashion or consumer needs. Then, for each
idea chosen, give reasons as to why you are interested in it. You have
20 minutes for this task.
Business idea Reason(s) for interest

1.
2.
3.
4.
5.
6.
7.
53
MODULE 6
How Do I Organize an
Enterprise?
Module objective:
Ä To enable learners to appreciate the procedures required
for organizing an enterprise.
Module coverage:
1. Selecting a Suitable Market

2. Selecting a Business Location
3. Legal Forms of Business Ownership
4. Money Needed to Start an Enterprise
5. Obtaining Money to Start an Enterprise
6. Ways of Getting into Business
54
MODULE 6: Topic 1
WORKSHEET 1
White’s Hardware Store

Mr. White was a young school teacher in a small town. After moving to the
community, Mr. White made many friends, was apparently well-liked and took part in
many community activities. Mr. White wanted to make more money so he thought he
would start a business. He was encouraged by his wife to try a way of life that would
bring more income than teaching.
Mr. White heard through a friend that a stock of hardware was for sale in a town. The
owner of the store had died. For 2,000 cash, Mr. White could buy an inventory of
hardware items. Investigating the possibilities in his town, he could rent a vacant store
between two retail businesses. One of these businesses was a feed store, and the other
was a long established hardware store owned by a smart middle-aged businessman.
Although a local banker told Mr. White not to leave his job as a school teacher, he quit
his teaching job, took his savings of 5,000 and entered the hardware business.
Other businessmen in the town didn’t think the new hardware dealer’s chances of
success were very good. One of the local retailers said there wasn’t room in the town
for two hardware stores.
Upon opening his store, Mr. White placed a sign in the window stating: “Open for
business – Hours are six a.m. to ten p.m. The owner will also do business outside of
regular business hours.” Mr. White thought that in this way he could compete with the
established hardware store next door.
During weekdays, Mr. White’s hardware store was the only place of business in town
to stay open after six p.m. During the long hours the hardware store was kept open,
Mr White didn’t make too many sales.
The only customers Mr. White attracted were a few poor credit risks, who purchased
small items from the new hardware store on credit rather than paying cash in the
other hardware store. Mr. White soon discovered that his stock was down, that he had
no cash with which to purchase new stock, and he couldn’t borrow more money to
keep the business going.
With competition from the established hardware next door, Mr. White’s business lasted
only eighteen months. There had never really been much of a chance for success. The
market for hardware items in the town was too small to support two hardware stores.
Even the best manager could not have made a success of White’s Hardware. Mr. White
wished he had checked things more carefully before he started the business. Mr. White
thought that “maybe the pay for teaching wasn’t so bad after all.”
Questions for discussion:

1. Why did White’s Hardware fail?
2. What should Mr. White have done before he started the business?
55
MODULE 6: Topic 1
WORKSHEET 2
Developing a Sales Plan

Tom has recently graduated from a technical training institution, where he has been
trained as a tailor. His friend Emily is working as a sales person in a boutique.
Because of Emily’s selling abilities, her business experience and Tom’s technical skills,
they are of the opinion that they would make a good team for a tailor’s shop. Both of
them are considering self-employment as a career option, not only because they have
taken an entrepreneurship training class during their training, but also because they
see an exciting opportunity: a new school is going to be opened in a fast-growing
suburb of a medium-sized town, which is located at a distance of 70 km/40 miles from
the capital. As both of them were living in the town before their training, they know
the local businesses and circumstances quite well and have realized that there are
currently no shops for school uniforms in the area. School uniforms are obligatory in
all schools in the country.
Because of this opportunity, they are extremely interested in checking whether there
is a suitable market for the opening of a new tailoring shop.
Their business idea is to buy uniforms that are mass produced by a factory in the
capital, to adapt these uniforms to the requirements of the school and to sell them in
their own shop. They want to sell these uniforms as a package containing everything
that is needed: a jacket, trousers/skirts, shirts/blouses, socks, shoes, ties, etc. Taking
the prices of their competitors into account, they have calculated that the price of one
uniform package should be 60 (for both boys and girls).
In addition, all items of the uniform package and other clothes will be available singly.
As Tom is a qualified tailor, they are planning to offer additional services to their
customers, such as alterations, or repair of clothes. They expect that their main
business will be the sale of school uniform packages and alterations.
The school has recently published its requirements for uniforms. Emily and Tom have
already tried to produce them according to these requirements and have shown their
products to the school official responsible for the uniforms. The official was quite
satisfied with their results and promised to include Emily and Tom’s business in a list
of recommended shops the school provides to the parents.
Although these circumstances seem to be promising, Emily and Tom decided to carry
out a market study with the help of a business consultant to see whether there is
suitable market to start up a business. Their research has provided them with the
following information.
There are three other shops in the town that offer school uniforms and could be
included in the school’s list of suitable shops.
56
In comparison to these other shops, Emily and Tom see the following competitive
advantages for their business:
• Location: They expect that their main advantage is location. No other shop is
located within the immediate area and a 3 km (2 mile) radius from the school.
• One stop-shop: No other shop offers the required uniforms and shoes for the new
school as a complete package. However, when Tom and Emily’s shop and the new
school open, the other shops will probably quickly adapt to the new situation.
• Prices and competition: Emily and Tom think that they would be able to
undersell their competitors with the price of 60. But they have to consider that their
competitors might be able to decrease prices due to the increased competition.
Hence, Tom and Emily researched where and at what prices their competitors buy
their raw materials. Competition in the school uniform/alteration business is not
very intense because customers seem to prefer shops located close to the school or
their homes. Tom and Emily assume that the other shop owners in town are quite
satisfied with their market shares, because they are doing little marketing and
advertisement. All the shops have been in business several years, offer similar
prices, and serve different schools. However, as their research showed, one
competitor might be able to offer lower prices because he buys his raw materials
cheaper than Tom and Emily, but he is located quite far from the school, a distance
of 7 km (4 miles) and uses low quality cloth. So far, no other business seems to
have realized the opportunity.
The new primary school in the town will start with 250 pupils. The official estimates of
the government predict that during the first four years of its existence the school will
gradually increase the number of pupils to 1,000 and then will remain on this level.
Each pupil entering the school will have to buy a new school uniform.
Through a questionnaire based survey, Emily and Tom were able to gather some more
information about their potential customers. They conducted a survey among the
parents of the 250 children in the town who are going to start in the new school. The
results showed that 70% of the parents of these children liked the idea of a uniform
package at a competitive price of 60 in a shop close by and would consider buying it.
20% stated that they had not thought about buying a school uniform yet. About 10%
answered that they would look for the cheapest price and would even travel long
distances in order to save money.
Furthermore, through interviews with shop owners in other towns selling uniform
packages and using statistical data, Tom and Emily were able to calculate when and
how many school uniforms are usually bought. At least one new uniform package per
year is needed as children of this age quickly grow out of them. Approximately half
the shop owners interviewed said that they calculate one uniform per child per year,
whereas the other half were more optimistic and stated that they usually calculate an
average of 1.5 uniform packages per primary school child. Through statistical data
Tom and Emily were able to estimate the distribution of uniform package sales during
the year (see table 1).
In addition, they received interesting figures from the tailor’s association of the
country, which have been recently published. The association estimates that for each
100 inhabitants there is an annual average demand of 8 alterations to clothes. The
average alteration price the association uses is 8.
57
The population for which Tom and Emily’s shop would be the nearest tailor’s is
approximately 8,000 inhabitants. The association also provided figures on the average
distribution of sales of alteration services during a year. These are included in Table 1.
NOTE: As the survey was conducted from a representative sample and statistical data
does not reflect all possible variations, an overall failure rate of 10% for all figures
provided should be presumed.
Table 1: Average sales of uniforms/alterations to clothes services

during the year
Month Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Uniforms 2% 5% 9% 2% 2% 3% 13% 40% 10% 2% 2% 10%
Alteration 9% 8% 9% 8% 9% 8% 8% 6% 8% 8% 9% 10%
business
Develop a sales forecast for the business of Emily and Tom (sales of uniform packages
and alterations to clothes) with the given figures.
Are you able to develop an optimistic and a more pessimistic sales plan for the first
year of business?
Think also about the following questions: What is a main difficulty for their line of
business?
What other circumstances might influence their sales, cannot be calculated and
remain a risk?
How is the turnover expected to develop during their initial four years of business?
58
MODULE 6: Topic 2
WORKSHEET 1
Choosing a Business Location

Jim and Susan were each planning to go into business for themselves. They were
talking about how they had made their decisions to become self-employed.
Jim had decided to start his business in his home town because he had lived there all
his life, knew most of the people, and they all liked him. There was a Co-op store and
a Hudson’s Bay store there already, but Jim still thought he could do good business.
Both the Co-op and the Bay stores had been in business for some time. They both did
a lot of business.
Jim’s home town wasn’t very big. Many of the people who lived there were in the
fishing and hunting trade. Some of the people worked part time with the government.
Some had jobs out of town, mainly on construction sites and in the mines. These
people only came back home for a week or two four or five times a year.
Transportation into Jim’s home town was by boat or plane. The Bay and the Co-op
stores had their supplies transported into the town by barge in the summer. A few
supplies were flown in during the winter, but not too much could be brought in this
way.
Jim thought there were enough people in the town to support three stores.
Susan had decided to set up her business in a town some distance away from where
she lived. Susan didn’t know too many people in the town, but she still thought that a
well-run business would be a success there.
The town where Susan had decided to build her store already had one general store.
It was the only store in town. The people in this town did some trapping and fishing
but they also had some tourist camps. There was a mine situated in a community a
few miles away, and many persons in the town worked and lived at the mine all week
and came home to their families on weekends. There was also some logging in the
area around the town. Many persons worked on the cutting crews. The cut timber was
trucked out to the mill on a road which ran past the town. Susan was of the opinion
that because people had jobs all year round there was a better chance of making a
business succeed in this town. She estimated that there were enough people to keep
two stores busy all year. Susan thought that by offering the right kind of merchandise,
she would achieve success if she established her store in this town.
Question for Discussion

Which location do you think is best from a business point of view, Jim’s or Susan’s?
Why?
59
MODULE 6: Topic 3
WORKSHEET 1
Organizing a Business
Ted has lived in a small community for the past ten years. The town, which has a
population of 275 people, is on the edge of a large lake. Hunting and fishing are
excellent in the area. The old road that served the community is narrow and rough.
Spring and summer rains sometimes make the road impassable in some spots. A new
road is being built into the area and should be completed in about four months time.
Ted thought about starting a tourist outfitting shop now that the new road is nearing
completion. Tourists will easily be able to drive into the area. They will be eager to
take advantage of the good fishing and hunting.
Ted has considered the advantages and disadvantages of the ways he could legally
organize his business. He considered being a sole proprietor because he likes to be his
own boss. He has saved 4,200 and he could borrow additional money to start a small
business.
A partnership is also appealing. One or two partners could provide the extra money
needed to start a larger business. Another possibility would be start a limited
company and sell shares. The amount of money available would be much greater and
he wouldn’t have a loan to repay. He would also have money to advertise. Ted has
talked to a number of people in the community to see if they would be interested in
starting a limited company. The amount of money available to start the business
would be greater than for a proprietorship or partnership. Furthermore, a much
greater number of people in the community would benefit.
Questions
1. Which form of business ownership would you choose if you were Ted?
2. What additional information does Ted need to make an informed decision
regarding the best form of legal ownership for his business?
60
MODULE 6: Topic 4
WORKSHEET 1
Payments to be Covered by Start-Up Capital
Pre- Initial Other

Payments
operation operation payments
Business registration
Staff salary 1st month
Architect’s fees for

workshop planning
Purchase of machines
Purchase of raw materials
Electrical connection of
machines
Purchase of finished goods
Advertising for business

opening
Acquisition of land in an
industrial estate
Construction of a villa
Owner’s salary 1st month
Office supplies for

2 months
Power connection
Purchase of a second-hand
truck
Consultant for investment
study
Rent of business premises
61
MODULE 6: Topic 4
WORKSHEET 1 (cont.)
Payments to be Covered by Start-Up Capital

Pre- Initial Other
Payments
operation operation payments
Purchase of stock
Insurance against fire
Health insurance for staff
Private car for the owner’s

spouse
Sales promotion
Computer equipment
Construction material for

workshop
School fees for staff’s
children
Telephone installation
1st telephone bill
Replacement of stock of
goods
Travel to supplier of
machines
Car insurance 1st year
Maintenance cost for a

truck
Interests for credit
Repayment of money
borrowed from friends
62
MODULE 6: Topic 4
WORKSHEET 2
Starting a Pastry Shop

Ms Brownie has been working for several years in a pastry shop that produces its own
pastries and cakes for clients that live and work in the neighborhood. The shop also
delivers cakes and other delicious sweets and pastries for weddings, birthday
celebrations and other social events to the customer at home.
Ms Brownie has already learned everything about making pastries starting from the
raw materials and ingredients for the different products, the preparation and baking
processes as well as the work in the shop and relations with customers. She had a
good salary of 10. Ms Brownie has always wanted to have her own pastry shop, so
she puts as much money as she could afford into a savings account.
She had also made a list of machines and equipment she would need to start her own
shop. She had also researched the prices. The most costly item would be an electric
oven (3,500); then she would need a kneading machine (500), some weighing scales
(100), bowls, dishes, containers, boxes, hand tools (95), furniture for the pastry shop
such as tables and shelves (110) and a big refrigerator (350) that would allow her to
store the finished cakes of three day’s production. She would also need to equip the
sales room with a display case, various shelves and a cash register (250). For herself
she has foreseen a little office and for the staff a little rest room. Second-hand
furniture for these two rooms would cost around 100.
After a market assessment she has decided to start her own business. It was a very
busy time for Ms Brownie as she had to finalize her business plan, estimate the
investment and working capital, and get money from her bank. She finished the
business plan in one month: The plan showed that the business is feasible and that
she could cover 30% of the total investment. At that time she had the possibility to
rent a shop suitable for her business in an area of the town with middle-income
families that constitutes a good client base. The shop became vacant in 2 months time
and the rent for the shop amounted to 80 a month. It took her one-month to
negotiate her business plan with some banks and to get a loan.
Then she had to register her business (10) and order the machines and equipment
that could be delivered within three months. Water, power and telephone connections
have had to be registered in her name and she had to pay 15 for them. Also,
insurance on the shop was compulsory and she had to pay 10 for one year. Ms
Brownie had given up her job when the machines and equipment had been delivered.
She had planned to open her shop one month after the delivery of the machines; its
installation had been taken two weeks. The cost of installation amounted to 20.
She had selected her staff – two women for the workshop and one young apprentice –
and had hired them when the machines had been installed.
The monthly salaries for all the staff summed up to 15. She trained the staff during
the period before the opening of the shop.
63
The opening of the shop took place two weeks after all the equipment has been
installed. During these two weeks Ms Brownie produced a range of cakes and pastries
as training for the staff under production conditions. The raw materials for one week’s
production are calculated at 25, while other costs such as water, electricity,
telephone, petrol for the car, etc. are estimated at 15. To be on the safe side Ms
Brownie will start with a stock for two weeks production.
Before starting her business Ms Brownie planned to use some publicity and
advertisements, and she could manage to get a proposal for the whole publicity
operation from an agency for 18.
Ms Brownie planned also to run a catering service. For this purpose she had to buy a
second-hand car for 800 and to hire a driver at a monthly salary of 6. The car
insurance for one year amounted to 25.
Ms Brownie’s sales plan estimated that 60% of sales would be at the shop and that
40% of the sales would be through the catering service. These customers would pay
within two weeks. She estimates that the catering service will begin one month after
the shop’s opening.
Questions:
Draw up a timeline (with a monthly scale) starting with Ms. Brownie’s decision to go in
business and the milestones for the different events during the start-up phase to find
out the duration of the pre-operation phase and the initial operation phase.
Draw up a table for the pre-operation phase and a table for the initial operation phase
by using Worksheets 3 and 4 as model and calculate the investment capital and the
working capital.
How much investment capital did Ms. Brownie need to cover her pre-operation
payments and how much working capital did she need to cover her initial operating
payments?
What was Ms Brownie’s own start-up capital and how much was provided by the bank.
Did Ms. Brownie have to increase the working capital in the second month? If yes,
why and how much?
64
MODULE 6: Topic 5
WORKSHEET 1
Questions on Obtaining Capital

1. Can all of the capital needed be borrowed?
A. Almost any lending institution will require an entrepreneur to provide a
substantial amount of the total amount of money needed to initiate a
business. This depends to a great extent on market and economic
conditions. Few lending institutions or individuals will risk money on a
venture if the owners have none of their own money invested in the firm.
B. Money the owner puts into the business is called equity capital. It is the
owner’s investment in the business. Borrowing needed capital is called
credit or debt financing.
C. The lender must sense that the business owner has a personal
commitment and involvement in the business. This personal commitment
includes the time, energy and money the owner is willing to contribute to
the business.
2. Where can equity capital be obtained?

A. Personal savings
B. Friends and relatives
C. Partners. The owner may form a partnership with one or more individuals
to obtain equity capital to initiate the business
D. Corporation. It is possible to incorporate the business (as a company or a
corporation) and sell stock to raise equity capital
3. Where can credit or debt financing be obtained?

A. Banks
B. Finance companies
C. Governments agencies (with loan schemes)
D. Trade credit. Suppliers extending credit terms for equipment, inventory,
etc. allow the business to begin generating sales before payment is due
E. Microfinance institutions
4. How can the chances of obtaining a loan be increased,

especially for female entrepreneurs who may face
gender-based barriers when accessing credit?
A. Entrepreneurs cannot be sure of obtaining a loan, but if they are well
prepared when going to a lending institution, their chances of obtaining a
loan are much greater.
65
5. What are the four C’s of credit?

A. A banker or loan officer will take into consideration the four C’s of credit
when evaluating a loan applicant:
• Character: the applicant’s attitude toward credit will be examined,
including his or her past record for meeting financial obligations.
• Capacity: the applicant’s income will be examined to determine his or
her ability to pay back the loan.
• Capital: the applicant’s personal worth will be examined, including
savings and any other personal or real property (land, buildings, etc.).
• Conditions: the economic conditions of the community, state and region
will have an effect on the availability of a loan.
B. Prospective business owners should demonstrate to potential lenders that
they have a business strategy or plan of action which will lead to success.
C. The lender will want to be sure that the prospective business owner has
sufficient experience or knowledge in the area of the proposed business.
D. Whether attempting to raise equity capital or obtain credit financing, a
well-researched and realistic business plan is essential.
E. Women entrepreneurs should be provided with necessary information,
contacts and tools to facilitate their access to credit.
6. How will the capital be used?

In financing a new business, first determine your specific needs for money. To
help to determine your money needs, three groups of costs and expenses are
examined: start-up costs, operating expenses and personal expenses.
A. Start-up costs: expenses that occur once only when starting the
business. Once your business is started, you may never have these
expenses again. Some examples of start-up costs include:
• fixtures and equipment
• initial inventory
• deposits for rent and utilities
• business licences and permits
• certain legal fees and
• advertising for the grand opening
For example, when opening a restaurant you would have many start-up
costs such as tables and chairs; ovens and fryers; all the ingredients to
make the items on the menu; dishes, cutlery, etc. You would also have to
buy or rent a building, pay for a business licence and a restaurant permit,
and print your menu.
B. Operating expenses: until there is enough profit to keep the business
running, money will be needed for operating expenses. Examples of
operating expenses include inventory, supplies, advertising, payroll, taxes,
wages, repairs and equipment, insurance, monthly rent and utilities.
66
Once your restaurant is open you will have regular operating expenses.
You will continually have to buy food, pay cooks and waiters/waitresses,
pay sales tax, make monthly rental payments and much more. It is
important to determine how much money is needed each month to
operate the business.
C. Personal expenses: these include costs that are necessary for you to
live. You need money for personal expenses such as rent or mortgage
payment, food, transportation, insurance, clothing, utilities, medical bills
and entertainment.
Many new businesses will not immediately be profitable; it may take from
one to three years for a business to become stable and profitable. You
must plan for all your expenses. People may start a new business while
working at another job, or they may have a spouse who earns money from
paid employment. This helps to limit the money needed to finance the
business.
Case Study
A recent graduate of a technical institute is quite skilled in the use and application of
computer technology. She wants to start a cyber café close to the institute where
students can meet, socialize and use the five computers she hopes to purchase for the
café. She will probably need to borrow capital to start her business. If you were her,
how would you respond to the following questions regarding obtaining capital:
1. How much will five computers for the cyber café cost?
2. Will she be able to obtain credit from the store where she purchases the
computers?
3. Where can she go to borrow:
(a) equity capital?
(b) debt financing?
4. If she has to go to a bank for a loan, how can she increase her chances of
obtaining a loan?
5. How much capital will she need to finance a cyber café?
67
MODULE 7
How Do I Operate an
Enterprise?
Module objective:
Ä To enable learners to appreciate the various techniques
that will affect the management of an enterprise.
Module coverage:
1. Hiring and Managing People

2. Managing Time
3 Managing Sales
4. Selecting Suppliers
5. Using Technology in Small Business
6. Knowing the Costs of an Enterprise
7. Managing Money
8. Using Financial Statements
68
MODULE 7: Topic 1
WORKSHEET 1
Hiring a New Employee

Joe Krol had been operating his service station for twenty years. He did everything
himself: pumped fuel, repaired engines, kept books, fixed tires, drove the tow truck
and swept floors. Joe was a very friendly fellow. He was a hard worker and always
treated his customers well. His business had grown over the years. In fact, business
was so good Joe felt he couldn’t do everything himself any more. He decided he had
to hire a helper. It wasn’t an easy decision for him to make. He had been used to
working alone all these years. He knew about all the troubles other small businesses
in the area had experienced in trying to get and keep good workers. But Joe thought
that if he went about the hiring process in the right way, he shouldn’t have all the
problems the other businesses had had. Here is how Joe reasoned.
“I really have two problems. One is finding the right person, and the other is
keeping that person once trained. It’s easy to lose a good worker. Other
entrepreneurs may try to take my helper away from me once he or she has
been trained. To make sure I get the right person, I’ll do these things:
1. Figure out what jobs I want my helper to do and what jobs I want to keep
doing myself.
2. Write down all the jobs the new employee will have to do. I’ll describe the
job in detail so the helper will know exactly what he or she is expected to
do.
3. Write down what type of person I want. I don’t want everybody to think
they can qualify for the job. My business is important. I want someone
who knows the service station business and who will know how to serve
customers so they are kept satisfied.
4. After I’ve done these things I’ll write a job advertisement and get the word
out that I need a helper. I can put ads around the village and I’ll put it in
the paper over in the next town. The more people that apply, the better
chance I have of finding the kind of person I need for the job.”
Here is Joe's job advertisement:
WANTED: Helper For Service Station
Good opportunity for neat, honest and reliable worker

between 20 and 45 years.
Must have previous service station experience.
Apply in writing or call Joe’s Service, East Hill
69
5. I’ll handle the people who apply like this:

a. I’ll look at the letter I get. If the letter looks good, I’ll ask the person to see
me.
b. I’ll interview those that come to the service station. I’ve been in this business
a long time and I think I know a good service station worker when I see one.
Just to be sure, I’ll ask a lot of questions.
c. If I like the person, I’ll ask the person to serve a few customers, grease a car,
change oil, drive the tow truck, etc. A lot of people will tell you they can do a
thing, but when they try they’re no good. This will also give me a chance to
see how much training the person will need. I don’t mind training someone,
but I can’t afford to spend a year at it.
6. Then I’ll take the applicants I like best in terms of how well their qualifications and
competence match the job description, and check up on them. They’ll have to tell
me where they’ve worked before, where they come from and who knows them
well. I’ve seen business owners get fooled before. Those who looked really good at
first sight were hired. But later they found out the employee was trouble. I’ll check
first to see if any of the people who know the applicant (especially the last boss)
has anything bad to say. I’ll visit past bosses in person, because a lot of business
owners don’t want to talk about personal matters on the phone or in a letter.
7. Then I’ll pick the best person for the job. I wouldn’t exclude a disabled person
from being considered for the job, as long as the disability doesn’t interfere with
job performance. I only need one employee, so I’ll offer the job to the person I
think will be able to do the job best. I’ll offer a good hourly wage. If the applicant
wants more, I may pay more. Some operators pay their helpers a bonus for every
car they grease or oil. But that’s no good because the employee just tries to force
customers to have their cars done even if they don’t need to. Some employees
lose a lot of customers that way.
8. If I get a really good helper, I want to be sure to keep that person happy. I think
that if I’m a good boss, the employee will stay. My idea of a good boss is someone
who:
a. understands people
b. doesn’t closely follow the workers around
c. gives the worker some responsibility
d. sits down and talks things over with workers now and then
e. is a good listener
f. is fair with the worker when a good job has been done
I am sure that if I do these things, I’ll get a good helper that I will be able to
keep.
Questions for Discussion:

1. What are the steps Joe went through in hiring a worker? List them. Discuss them.
2. Do you agree with Joe’s idea of a good boss?
3. Do you think the ability to manage people is an important skill for an entrepreneur
to have?
4. What is meant by the term ‘personnel management’?
70
MODULE 7: Topic 1
WORKSHEET 2
Identifying Managerial Strengths

of Entrepreneurs
Place an X by the number which indicates the importance of the

strength to the management ability of an entrepreneur.
5 = Primarily a strength; 4 = Somewhat a strength; 3 = Neither a strength nor a

weakness; 2 = Somewhat a weakness; 1 = Primarily a weakness
Primarily Primarily
a strength a weakness
5 4 3 2 1
1. Enjoys working with other people
2. Considered to be an enthusiastic, positive person
3. Likes to help employees accomplish their goals
4. Isn’t defeated by mistakes and job-related
problems
5. Well organized and completes assignments on
schedule
6. Has a clear understanding of entrepreneurial goals
7. Is willing to exert the necessary effort to learn new
skills
8. Can get the point across orally to others
9. Can confidently express himself or herself in
writing
10. Likes job challenges and enjoys resolving problems
11. Motivated to accomplish job objectives
12. Listens for key points and comments made by
employees
13. Can handle a reasonable amount of stress and
frustration
14. Adaptable and can adjust position as evidence and
circumstances change
15. Can accept criticism without becoming defensive
16. Can criticize without developing an attitude of
resentment in employees
17. Before making decisions, considers potential
impacts of actions
Bases appraisals of employees on their job
18.
performance rather than on his or her personal
feeling towards them
19. Recognizes the importance of planning
71
MODULE 7: Topic 1
WORKSHEET 3
Fill in the list of titles of workers needed for each type of

enterprise given below. For each title indicate “U” for unskilled,
“SS” for semi-skilled and “S” for skilled.
TYPE OF ENTERPRISE NATURE OF SKILLS
Hospital
1. _______________________________ U UNSKILLED – little or no

preparation or use of equipment.
2. _______________________________
SS SEMI-SKILLED – some on-the-
3. _______________________________ job training and use of some
special equipment is needed.
4. _______________________________
S SKILLED – well trained and uses
5. _______________________________ highly complex equipment
72
Schools

2. _______________________________
4. _______________________________
Supermarket

2. _______________________________
4. _______________________________
Restaurant

2. _______________________________
4. _______________________________
73
MODULE 7: Topic 2
WORKSHEET 1
Analysing Your Use of Time

Developing a time chart to write down specific activities is one way of determining
whether your activities are essential or not. An example of such a time chart is given
in the table on the next page. There is space for 16 hours of activities (the average
number of hours most people are awake). The time chart is divided into 30-minute
segments; it is the learners’ responsibility to indicate the hours in the “time” column,
since people begin their daily activities at different times.
The time chart has space to record the time, activity, goal and outcome. Each activity
performed should have a definite goal, with the result recorded in the “outcome”
column. The length of “time” and “outcome” in relation to “goal” will give some
evidence of the effectiveness of spending time on any given activity. At the end of
each day, tick those activities which were not essential and try to avoid them in the
future.
Have the learners fill in a time chart for one week to show exactly how they spent
their time in relation to goals. In some instances, learners may be doing things that
are in no way related to their main goals. Only by being aware of the importance of
time can learners make their activities purposeful. The box at the top of the time
chart has enough space to indicate the main task for the day and the date.
Concentrating on achieving the main task will help the learners to accomplish positive
results by the end of each day.
If it is possible for learners to use a daily time chart for three or four weeks, they
should be able to determine how much time they spend on various activities, the
types of objectives they believe are important, and the outcome of their various
activities. Weekends can be included.
There are many things that can be accomplished during the week. The results given
on the time chart for a period of one week or longer can assist in reviewing past
activities and provide guidelines for future activities so that time is used more
efficiently.
The ways entrepreneurs can waste time include:

• talking with people about personal matters unconnected with work;
• unnecessary or extra-long group meetings;
• allowing too many interruptions;
• disorganization;
• little or no delegating;
• being indecisive; and
• being late or absent
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MODULE 7: Topic 2
WORKSHEET 1 (cont.)
How Do You Spend Your Time?

TIME CHART
Main task: .................................................................... Date: .................
Day: ..................
Time Goal Activity Outcome

:00
:30
:00
:30
:00
:30
:00
:30
:00
:30
:00
:30
:00
:30
:00
:30
:00
:30
:00
:30
:00
:30
:00
:30
:00
:30
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MODULE 7: Topic 3
WORKSHEET 1
Planning Promotional Activities

Incident 1: Variety Store
You are in a slow selling season after the holidays and you still have a fairly large
inventory left over from the previous season. Although you realize that this situation
is the result of over-ordering specific items, you are not yet willing to admit defeat.
You plan to hold a special promotion of the unsold goods over the next five weeks.
How are you going to design a sales promotion campaign to increase sales?
Incident 2: Drug Store

Your small drug store is doing fairly well, but you have noticed that the number of
customers is not growing. You suspect that a large part of your potential market is, in
fact, shopping at another drug store located two blocks away from your store. You
recognize that your store really needs more customers to increase profits. How are
you going to design a sales promotion campaign to increase the number of customers
who buy at your store on a regular basis?
Incident 3: Bookstore:
Your small bookstore, formerly your late uncle’s business, has increased its business
somewhat since you took it over. However, there are still some problems:
1. You have a very large inventory of your uncle’s left over stock, which is selling
slowly, and
2. You still need to attract new customers if the business is going to grow. In three
weeks a large new clothing store located in the area is to have its grand opening
and you feel that this might prove a good time to get people to also come into
your bookstore. How can you go about advertising or promoting your store
beforehand, to make sure that the grand opening customers come to your store
too? What special incentives can you offer them during the week of the grand
opening?
Incident 4: Small Appliance Repair Shop

You have succeeded in attracting business from the surrounding neighbourhood for
small appliance repairs (e.g., irons, toasters, radios, etc.), but you feel that you are
not really getting the business that you could from the residents of a nearby small
town. There is no appliance repair shop in the other town, so competition can’t be the
explanation. You have just bought a used van so that you can deliver repaired goods
and take some of your tools out for repairs which need to be done on the spot in
people’s homes. You have hired a part-time employee to mind the store while you are
out in the van. If you are going to be able to afford to keep both the van and your
employee, however, you are going to have to expand your business quite a bit. How
are you going to design a promotion scheme to attract more customers?
76
MODULE 7: Topic 5
WORKSHEET 1
Characteristics of Appropriate Technologies

The appropriateness of technology for use in a small business is determined by a
number of characteristics. For the following seven characteristics, explain how the
purchase of a cell phone will increase the efficiency and effectiveness of an accounting
firm that serves 60 local businesses.
1. SIMPLE: For technology to be considered appropriate, it must be simple to

operate. The user of such technology must be able to apply it without
encountering problems.
2. EFFECTIVENESS: Effectiveness of technology is judged by how well it fits in with

the objectives of the user.
3. AVAILABILITY: Some technology may be appropriate for certain purposes but

not available locally. Information technology, for example, may be the most
appropriate for certain tasks, but it may not be readily available locally.
77
4. FLEXIBILITY: As time changes so do the requirements of technology.

Appropriate technology must be flexible enough to adapt to changing times in the
future.
5. DURABLE: Technology that is durable requires less maintenance and repairs.
6. EFFICIENT: Technology should be efficient in its utilization of local resources.
7. COST EFFECTIVE: The cost of technology should be justified by the benefits

achieved. The overall benefits should be greater than the cost of the technology.
78
MODULE 7: Topic 6
WORKSHEET 1
Direct Costs or Indirect Costs?
Put a D for direct costs and an I for indirect costs for each
example below in column 1
1) Type of 2) Category of
Example
cost cost
Worker’s salary
Purchase of hand tools
Raw materials
Advertising for the shop
Repair of machines
Purchase of finished goods
Owner’s salary
Office supplies
Maintenance for a truck
Consultant’s fees for market study
Interest payments for a credit
Bricks and cement for construction
Petrol for a taxi business
Aluminium profiles for a metal workshop
Electrodes and gas for a welding workshop
Salary for a seller in a fashion shop
Leather for a footwear factory
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MODULE 7: Topic 6
WORKSHEET 1 (contd.)
1) Type of 2) Category of
Example
cost cost
Buttons for a tailor’s shop
Rent of business premises
Shampoo used in a hairdresser’s shop
Insurance against fire
Health insurance for office staff
Sales promotion for one product
Computer software
Nails for furniture production
School fees for children of staff
Reduction of machine value
Replacement of stock of goods
Travel to customers in a foreign

country
Car insurance
Spare parts in a car repair business
Electrical appliances in a construction

business
Social security for machine workers
Fertiliser in an agriculture exploitation
Electricity bill
Training handbooks in a training course
Water bills
Drinks in a restaurant or bar
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MODULE 7: Topic 6
WORKSHEET 2
Classification by Cost Categories

Learners are requested to use WORKSHEET 1 again and mark the cost items in the
column “Category of cost” with:
• S for Staff Costs
• M for Material costs
• O for Other costs
• C for Capital costs
Learners should calculate the depreciation rate and the annual loss of value for:
• a special machine that costs 25,000 CU
• a computer that costs 1,500 CU
• a mini van for delivery of goods that costs 18,000 CU
and draw up a depreciation form for each example and fill it in accordingly.
81
MODULE 7: Topic 7
WORKSHEET 1
Simple Cash Book

John has been in business for the past three years. He wants to expand his business
and obtained a bank loan on January 23. Below is a list of transactions for his
business between January 23 and February 4. If John had 3,500 cash in the business
on January 23, how much cash will he have on February 4?
(Debit) (Credit)
Current
Date TRANSACTION Money Money
Balance
in (+) out (-)
23 Balance as of Jan 23 3,500

23 Receives cash loan 20,500.00
24 Paid R.J. Smith cash for
building and land 8,000.00
24 Purchased equipment 2,875.00
24 Purchased fixtures 895.00
25 Purchased supplies 175.00
25 Purchased merchandise 4,275.00
28 Sold merchandise 125.00
28 Purchased merchandise 150.00
28 Withdrew cash for personal use 175.00
31 Sold merchandise 3,101.00
31 Paid power bill 1,500.00
2 Paid part time help 86.00
3 Paid for repairs 65.00
4 Purchased merchandise 203.00
4 Paid freight charges 13.00
4 Ending Balance
Make the entries: What is the written balance on February 4?
Question: Why are written financial records important?
82
MODULE 7: Topic 7
WORKSHEET 2
Cash Flow Projection

Frank wants to start a construction business. The following cash flow projection tell us
about Frank’s business. First, it tells us how much money he will need to run his
business. Here is a list of the equipment Frank’s company will need:
COST
• Truck (4-wheel drive) 3,700
• Earth moving attachment 1,000
• Fuel tank for extra fuel 50
• Shovels (3) 230
• Axe 75
• Tools 300
• Rakes (2) 50
• Hoses 70
TOTAL 5,475
In addition to the 5,475 for equipment, Frank needs 800 for construction supplies,
1,000 for office equipment and 200 for office supplies. Thus, his total start-up
expenditures will be 7,475.
By preparing a Cash Flow Projection, Frank can see just when he gets his income and
at what levels. It also indicates his use of cash. Notice that in the following cash
projection, Frank’s cash flow has dramatic seasonal fluctuations. From November to
March he is taking in a lot of cash. However, there are a few months between seasons
when he isn’t making much money. During these months, he is making very little
income and must live off what he has already earned.
APR MAY JUNE JUL AUG SEP OCT NOV DEC JAN FEB MAR
Source of
cash: sales 2500 3000 3500 500 500 1000 1000 6000 6000 12000 6000 6000
Use of cash:
● cost of
goods sold 1175 1350 1575 275 275 450 450 900 900 1800 900 900
● operating
expenses 1443 1555 1668 893 893 1055 1455 2380 2380 3530 2180 2330
Total 2618 2905 3243 1168 1168 1505 1905 3280 3280 5330 3080 3230
Total uses
(increase or
decrease) (118) 95 257 (668) (668) (505) (905) 2720 2720 6670 2920 2770
Cumulative
cash flow (118) (23) 234 (434) (1102) (1607) (2512) 208 2928 9598 12518 15288
83
How much money does Frank need to start with? He needs enough to pay his start-up
costs plus an extra amount he needs to get himself through the slow months of low
income.
The lowest point of Frank’s one-year cash flow projection is in the seventh month
(October) when he is “down” 2,512. At this point, he has paid all his bills, but still has
more money going out as expenses than coming in as sales. If this situation kept up,
Frank would soon be out of business. However, Frank knows that it will take this long
to establish himself in the market and build up his accounts.
Most entrepreneurs would say, “It looks like I need about 10,000 to start my business
– 7,500 for start-up costs and 2,500 to cover expenses that exceed my income
through October.” But Frank is smarter than that. He knows that money from some of
his contracts may not be paid on time.
Instead of getting “just enough” to get started, Frank uses a good rule of thumb he
learned from his banker; he is going to set up his company with enough money to
purchase his initial equipment and supplies (7,500), plus one and one-half times the
amount he thinks he’ll need to cover his expenses in the early months. One-half of
2,500 is 1,250; 1,250 plus 2,500 brings the total up to 3,750 for operating expenses.
Rather than getting “just enough”, which was probably just enough to get himself into
trouble, he is getting enough money to ensure success. He has planned extra money
for any unexpected problems that may come up. By so doing, if he needs to make
repairs on his truck, or if the price of fuel goes up, or if some of his contracts are
delayed, he will still be able to remain in business.
You must do this for your business, too. Before you start looking for ways to cut
corners or think of starting operating on less than you should, find out how much it
would realistically cost to run your business the right way. Remember, multiply the
lowest point in your cash flow by 150% or even 200% and you will be very near the
actual amount you will end up spending. This is the ACTUAL amount of money you
need to get your business started. If you follow this rule and you have carefully
thought through all the expenses to include on your cash flow projection, you will not
suffer from undercapitalization.
Frank’s goal now is to raise the 7,500 he thinks he will need to start his business, plus
the 3,750 he needs for operations (a total of 11,250).
After discussion with several banks, Frank could get a credit for three years at 11,250
to be paid back in six half-year installments with 5% interest.
What will Frank’s new cash flow projection look like, taking into account this loan?
84
MODULE 8
What Are the Next Steps

to Becoming an
Entrepreneur?
Module objective:
Ä To enable learners to pursue plans to start an enterprise.
Module coverage:
1. Preparing a Business Plan

2. How to Interpret the Findings of a Business Plan
3. Evaluating Factors in Starting an Enterprise
4. Sources of Information and Assistance
5. Maintaining an Entrepreneurial Outlook
85
MODULE 8: Topic 1
WORKSHEET 1
Progressive Café
Janet is 25 years old. Her mother runs a successful construction equipment rental
business and her father a private music school. At High School, Janet was a member
of the school’s Nature Club. Janet was also secretary of the Enterprise Dynamics Club,
which facilitated the Junior Achievement activities in the school. Through the club she
was attached to the Millennium Café, a very successful franchised health food outlet in
town. There, she experienced and practiced well-tested approaches for running a café
business through working in all the sectors and discussing the business with
employees and the owner manager. She was given a certificate of proficiency upon
completion of her assignment.
As part of her diploma course in college several years later, in which she was an
Information and Communication Technology (ICT) major and a minor in Small Hotel
Management, Janet designed and implemented an ICT system for small hotels during
the mandatory three months practical assignment. This project won first prize in the
Hotels and Hospitality category during the National Exhibition for Innovative Young
Entrepreneurs of the Future. Upon graduation and after briefly working in a Four Star
Hotel, Janet competitively applied for and obtained a lease to manage the Progressive
Café, whose entrance door is directly opposite the main gate of the private institution
she had attended. The café occupies the ground floor and lawns of a building owned
by her previous institution as a commercial development to generate income for it.
Janet has provided the following profile and information from the records she has
been reading about the café and discussions held with the men and women around
the café. The Progressive Café was previously run for about 10 years under licence
from the City Authority by another woman, who later set up a firm for processing
foods to supply to local supermarkets, and who recently emigrated to a foreign
country where she has relocated and expanded her business.
The very spacious Progressive Café targets the institution’s community comprising
about 3,000 men and women (staff, workers and trainees) as well as another 3,000
city residents, some of whom are passers-by while others work in the various offices
and businesses near the institution. The café opens at 7.00 a.m. and closes at 8.00
p.m., serving a total of 900 men and women each day. The café offers direct delivery
to nearby customers, take away services and direct service within the premises (self-
service and waiter service). There are four other cafés in the vicinity of this very busy
part of the city. The first café tends to be very crowded, as it does not have adequate
space. The second one is an international franchise and has very high prices. The third
one is located on the third floor of the next building, and the fourth one is located in a
back street and has no seating arrangements.
The Progressive Café has been generating a net income of 1.2 million per year. The
average net income per month is 100,000 after deducting 23% for income tax from
the gross profit. All the sales are on a cash basis only. The cost of items and
foodstuffs sold and other direct expenses per month account for 50% of sales, all
operating expenses/overheads account for 28%, sales tax is 5% and net profit is
86
17%. Sales per month total 600,000 and the cost of items/foodstuffs sold is 300,000.
The other operating expenses include 20,000 for rent, 4,500 for water, 6,000 for the
telephone, 7,000 for electricity, 5,000 for transport, 2,000 for stationery, 8,000 for
maintenance and cleaning, 4,500 for loan interest and 13,000 for other expenditure.
These figures are fairly constant for all the months of the year. The café is normally
run by eleven workers, including the owner manager. There are two cooks (additional
ones can be added depending on requirements), a cashier, a store keeper/purchaser,
four attendants and two cleaners, all to be supervised by Janet. All the employees are
competent as they have been with the café since it opened, and they all having hotel
and catering certificates in their respective areas. Their salaries and wages amount to
100,000. Before the café reopens, it needs two million to be used as follows: 300,000
for stock, 550,000 for a van, 250,000 for storage, 180,000 for cutlery, 300,000 for
cookers, 230,000 for furniture, 50,000 to cover pre-operational preparations and
140,000 in cash. Janet has half this amount from her savings. Her mother will lend
her half the balance with no interest, while the bank could lend her the other half of
the balance at an interest rate of 10% per annum.
In addition, the café is housed on the same premises as a telephone centre and a
cyber café, which are run by the institution’s Entrepreneurship Club. The Progressive
Café serves hot non-alcoholic beverages, hot and cold snacks, fruit and vegetable
salads, ice creams, as well as healthy light foods. The prices charged are acceptable
and within the range of the targeted clientele, which has sustained the café for all the
years it has been in existence. Janet intends to continue operating the Progressive
Café as it is. However, to attract more customers she plans to undertake the
following: develop beautiful promotional brochures, install an electronic notice board
with catchy and entertaining messages, play high quality music, introduce delivery to
outside customers, use quality cutlery and comfortable furniture, improve the general
layout and enhance employee courtesy and speed of service, maintain high standards
of hygiene and cleanliness throughout, improve the interior decor and avoid
congestion by having separate positions for the different types of service. She also
plans to undertake the following additional activities: sponsor the education of ten
children from the local home for Children Living With HIV/AIDS, donate to the
Foundation for Aged Men and Women, serve as a mentor for women and men
planning to go into business, as well as attend and participate in the meetings of the
City Environment Enhancement Committee.
From the above information on the proposed Janet’s Progressive Café, answer the
following questions within the space provided under each question.
1. What personal data on Janet can you get from the case study?
2. How has Janet researched information to assist her decision to start the café
business?
3. Why is it a good idea for Janet to go into self-employment by starting the café
business?
4. Can you describe the nature and structure of the Progressive Café from the
information given?
87
5. Why does Janet prefer the location or site of the Progressive Café and consider it
an advantage compared to other sites?
6. What skills, traits and experiences indicate that Janet is able to run the business
successfully?
7. What products and services are sold in the café?
8. To what extent can you say there is a demand for the products and services sold
in the café?
9. Who are the potential customers of the Progressive Café?
10. How is Janet planning to attract the initial customers for her café?
11. How many customers will be served in the café per day?
12. What is the market share or size for the Progressive Café?
13. Where do the customers come from?
14. What are the indicators that the Progressive Café has opportunities for growth?
15. What are the positive features that would enable the Progressive Café to have
more success than its competitors?
16. What promotional strategies does Janet intend to use to attract more customers
to her café?
17. How many employees will be required in order to run the café efficiently?
18. What duties will specific employees be required to carry out in the café for it to
function properly?
19. What qualifications do employees have that indicate that they are able to
perform their duties efficiently?
88
20. What does the personnel organizational chart of the Progressive Café look like?
21. What outside or professional services will Janet utilize to support the running of
her café?
22. What equipment and facilities does the Progressive Café have that can facilitate
it in offering quality products and services to its customers?
23. What are the compliance requirements for the Progressive Café to operate within
the law?
24. What is the total capital that Janet requires to start her café?
25. What is Janet’s capital contribution in financing the café?
26. How much capital does she intend to borrow?
27. What support evidence/documentation does Janet have that can strengthen her
efforts to borrow the funds she requires?
28. What records and reports would be required in running the café?
29. What will the total sales for the café be in one month and in one year?
30. What expenses will be incurred before the café starts its operations?
31. How much working capital will be needed to run the café?
32. What is the total amount for the fixed assets required by the café?
33. What is the total cost for each of the following payments by the café:
Stocks (items and foodstuffs)
Labour (all other employees)
Overheads (rent, electricity, etc.)
89
34. What will the Progressive Café’s sales and costs be for the first year?
Show Progressive Café’s sales and costs forecast for the first year.
35. How much cash will the Progressive Café have at the end of the first year?
Show the Progressive Café’s forecasted cash flow for the first year.
36. How much profit will Janet make at the end of the first year?
Show the Progressive Café’s forecasted income statement for the first year.
37. What will be the net worth of the Progressive Café at the end of the first year?
Show the Progressive Café’s forecasted balance sheet for the first year.
38. What is the gross profit/contribution margin of the Progressive Café in terms of
percentage?
39. What are the indicators that Janet is a socially responsible entrepreneur who
gives back part of her wealth to society?
90
MODULE 8: Topic 5
WORKSHEET 1
Read the following poems, A and B, to a colleague. Your colleague

then reads them to you. Discuss why you like the poems.
A. Thinking Attitude
You can do as much as you think you can,
But you'll never accomplish more.
If you are afraid of yourself, young man,

There's nothing for you in the store,
For failure comes from the inside first;

It's there, if you only knew it;
And you can win, though you face the worst,

If you feel you're going to do it.
Edgar A. Guest
B. Inside
If you think you are beaten, you are;
If you think you dare not, you don't.
If you'd like to win, but think you can't,
It's almost a cinch you won't
If you think you'll lose, you've lost.

For out in the world you'll find
Success begins with a fellow's will;
It's all in your state of mind.
Full many a race is lost

Ere wind a race if run,
And many a coward fails
Ere even his work's begun.
Think big, and your deeds will grow;
Think small and you fall behind;
Think that you can and you will,
It's all in the state of mind.
If you think you're outclassed, you are;

You've got to think high to rise,
You've got to be sure of yourself
Before you can win a prize.
Life's battle doesn't always go
To the strongest or faster man,
But sooner or later, the man who wins,
is the man who thinks he can.
Edgar A. Guest
91
MODULE 8: Topic 5
WORKSHEET 2
Are You Confident?
This checklist may be important to you. It should help you to

understand how much confidence you have in yourself. You may
not be quite sure how to answer some of these questions, but do
your best to decide which answer is more generally true for you.
If you have not experienced one of the following, decide how you
think you might act if you did.
1. Are you forgetful? YES NO

2. Do your moods change quite a bit without your knowing why?
3. Do you find a great many people boring?
4. Do things often go wrong for you when it isn’t your fault?
5. Would you say that you have a lot of failures?
6. Do you ever get so discouraged that you can’t seem to do
your job right?
7. Is it hard for you to speak in public?
8. Do you usually control your temper?
9. Do you often feel very sad or depressed?
10. Are your feelings easily hurt?
11. Would you say you are shy?
12. Do you join a group of strangers willingly?
13. Are you lacking in self-confidence?
14. Do you often feel grouchy?
15. Do you get tired of work quickly?
16. Would you say that people find more fault with you than
you deserve?
17. Do you have trouble deciding what to do next?
18. Do you worry over possible mistakes?
19. Do you make any plans which you don't carry out?
20. Do you think you are generally less attractive than others
of your sex?
21. Are you pretty “touchy” about many things?
22. Do you cry easily?
23. Would you say you are a nervous person?
24. Do you find it hard to make friends?
25. Are you easily discouraged?
26. Are you often in low spirits?
27. Does the future generally look bright to you?
92
MODULE 8: Topic 5
WORKSHEET 3
For each statement given below fill in a reason for it in the space
provided.
STATEMENT: Be sure of yourself and what you can do.
BECAUSE:
STATEMENT: Be happy about yourself and others.
BECAUSE:
STATEMENT: I courageously stand up for what I believe in.
BECAUSE:
STATEMENT: I get along with others.
BECAUSE:
93
GLOSSARY
Accounts payable The amount of money a company owes for goods and
services it has received; any outstanding debt that a
company has.
Accounts receivable Money, which is owed to a company by its customers

for products and services provided on credit.
Assets The economic resources owned by a business, such as

¨cash, ëquipment, buildings and ïnventory. Assets
can be divided into ¨current assets and ¨fixed assets
Balance sheet A balance sheet is a ¨financial statement, which

indicates what you own and what you owe on any given
day in the life of a business.
Brainstorming Brainstorming is a technique for creative problem-

solving as well as for generating ideas. The objective is
to come up with as many ideas as possible.
Business enterprises Business ventures that provide ¨profits as rewards.
Business idea A business idea is the response of a person or persons,

or an organization to solving an identified problem or to
meeting perceived needs in the environment (markets,
community, etc.)
Business opportunity A business opportunity may be defined simply as an

attractive investment idea or proposition that provides
the possibility of a return for the person taking the risk.
Such opportunities are represented by customer
requirements and lead to the provision of a product or
service that creates or adds value for its buyer or end-
user.
Cash Money
Cash balance The amount of cash held by the company on a

particular date.
Cash flow The movement of money in to and out of a business

during a period of time.
Cash flow projection A forecast, which shows what money is likely to come in
to and go out of a business during a period of time in
the future.
94
Collateral An asset (such as a car or a property) that guarantees

the repayment of a loan. The borrower risks losing the
asset if the loan is not repaid according to the terms of
the loan contract.
Competition Provides more efficiency in the market. It encourages

better-quality items at a lower price.
Competitor A business that is engaged in selling and buying goods

or services in the same ¨market as another player.
Compare ¨direct competitors and ïndirect
competitors.
Consumer A person who buys goods or services for his own needs
and not for resale.
Contribution margin ¨Revenues minus all costs of the öutput (a product or

service) that vary with respect to the number of output
units.
Cooperative A cooperative is a group of people operating a business

through a jointly owned and democratically run
organization.
Costs All the money a business spends to make and sell

products and services. Cost can be divided into ¨direct
costs and ïndirect costs
Creativity Creativity is the ability to design, form, make or do

something in a new or different way.
Credit Another word for debt. The promise to pay in the future
in order to buy or borrow in the present. Credit is given
to customers when they are allowed to make a
purchase with the promise to pay later. A bank gives
credit when it lends money.
Credit financing Borrowing needed capital.
Current assets Current assets include cash and anything that can be
converted into cash within twelve months. (e.g.: cash,
bank accounts, äccounts receivable, and ïnventory).
Current liabilities A current liability is anything you owe that has to be

paid by using a current asset. Current liabilities are
usually items to be paid within twelve months, including
taxes, loans and bills due to creditors.
Debt ¨Credit
95
Debt financing Borrowing needed capital.
Decentralization The spread of power away from the centre to local

of business branches, e.g. if a company opens several subsidiaries.
Delivery note A document that the ¨supplier sends with a delivery. It

lists the type and quantity of goods delivered. Often,
the supplier wants you to sign the delivery note as
proof that you have received the goods.
Direct competitors A business that is engaged in selling and buying goods

or services in the same market as your business.
Direct costs All costs that can be directly related to the products or
services you make or sell, or the production of those
products or services. There are two different types of
direct costs: direct material costs and direct labour
costs.
Diversification of Larger variety of goods or services offered, e.g. if a

business bookshop, which solely sold books, starts to sell
newspapers and magazines.
Economies of scale Economies of scale are situations where the cost of

producing one unit of a good or service decreases as
the volume of production increases. Economies of scale
tend to occur in industries with high fixed/ start up
costs in which those costs can be distributed across a
large number of units of production (e.g. car
production, electronic equipment, etc.).
Enquiry Question to a ¨supplier to find out the types of goods,

prices, payment, deliver and other conditions they offer.
The answer to an enquiry is a ¨quotation.
Enterprise In its wider sense, an enterprise is any identified idea

that is translated into a planned and satisfactorily
implemented activity. In its narrower sense, it refers to
a business venture or undertaking.
Entrepreneur Someone who organizes and manages a business

undertaking and assumes the risk for it.
Equipment All the machinery, tools, workshop fittings, office

furniture, etc. that a business needs. Equipment is
normally expensive and expected to last for a long time.
Equity capital Money the owner puts into the business.
Expenses All ¨costs for operating the business.
96
Feasibility The proof of a ¨business idea being able to generate

¨profit.
Financial statement A written report which quantitatively describes the

financial health of a company. Includes an ïncome
statement and a ¨balance sheet.
Fixed assets Fixed assets are things that cannot be changed into cash
easily (within twelve months). They are items that the
business acquired for long-term use. Fixed assets include
land, buildings, machinery, ëquipment, and vehicles.
Franchise A franchise is an arrangement whereby the

manufacturer or sole distributor of a trademark, product
or service gives exclusive rights for local distribution to
independent retailers in return for their payment of
royalties and conformity to standardized operating
procedures.
Fringe benefits Benefits provided to an employee in addition to the

salary (e.g. holidays, sick leave, insurances).
General General ledger accounts are used to record financial

ledger accounts transactions which effect the ¨balance sheet.
GNP per person Total ¨Gross National Product divided by the nation’s
population
Gross National The amount of all national öutput of goods and

Product services.
Gross profit Calculated by subtracting the cost of goods sold from

sales.
Guarantor Someone who formally accepts responsibility for a loan.

If the loan is not repaid according to the terms of the
loan contract by the borrower, the guarantor will have
to do it.
Income statements The income statements are the statements that list the
sales income, sales costs and överhead expenses,
thereby giving a monthly ¨profit or loss figure.
Indirect competitors Firm that provides products and/or services that, while
not the same, can be a substitute for the
products/services of another business. (e.g. a producer
of orange juice vs. a producer of apple juice,
Gymnastics courses vs. gymnastics videotapes, books).
Indirect costs All other costs, except ¨direct costs that you have for
97
running your business. Indirect costs are normally not

directly related to one particular product or service.
Indirect costs are sometimes called overheads, or
expenses.
Infrastructure The basic facilities and services for the functioning of

the society, such as transportation and communications
systems, water and power systems, and public
institutions (e.g. schools, hospitals).
Innovation Introduction of a new idea into the marketplace in the

form of a new product or service, or an improvement in
organization or process.
Input Something put into a system, such as resources, in

order to achieve a result.
Inventory All raw materials, items available for sale or in the

process of being made ready for sale (in a narrower
sense: all items available for sale).
Investor Someone who commits capital in order to gain financial

returns.
Invoice A document that tells you to pay for the goods or

materials you have received. An invoice list details of
what you have bought and tells you how much you
must pay, when you must pay, who you must pay and
how you must pay.
Knowledge Knowledge consists of a set or body of information

stored, which may be recalled at an appropriate time.
Legal person An individual or group that is allowed by law to take

legal action. It may include natural persons as well as
fictitious persons (such as corporations).
Liability 1. The state of being legally obliged and responsible.

2. An obligation to pay money to another party.
It includes anything that the business owes (e.g.
loans, credit notes, taxes and mortgages).
¨Current liability, ¨long-term liability
Liberalization In economics liberalization refers to the opening of

markets, or removing restrictions on market entry.
Limited company A limited company is legally registered business, which

has shareholders and is governed by statutes and laws.
It has the authority to transact business in same manner as
a person.
98
Long-term liabilities Any debt that cannot be paid within twelve months,
such as a mortgage.
Management Directing and controlling the affairs of a business.
Market The market for a business is all the people within a

specific geographical area who need a product or
service and are willing and able to buy it.
Market research Surveys, which are done to determine the cost of doing
business, any competition, potential sales, wishes of
potential customers, local economic situation etc.
Marketing The commercial processes involved in promoting and

selling and distributing a product or service to satisfy
customers.
Marketing concept A marketing concept directs an owner of a business to

focus efforts on identifying, satisfying and following up
the customer’s needs, all at a ¨profit.
Marketing mix The marketing mix is used to describe how owners can
combine the following four areas into an overall
marketing programme: Products and Services,
Promotion, Distribution and Price.
Marketing strategy Marketing strategy includes identifying customer groups

(target markets), which a business can serve and
tailoring its product offers, prices, distribution,
promotional efforts and service towards that particular
market segment (managing the ¨marketing mix).
Monopoly Strictly defined it is a situation in which there is only

one seller of a product or service in a market (=total
control on price), but it is often used to suggest any
situation in which a firm has considerable power over
market price.
Net profit This is the amount remaining when the expenses are
deducted from the ¨gross profit. This figure will
indicate whether you are operating at a ¨profit or a
loss.
Net worth This is what is actually owned by the business after

subtracting ¨liabilities. It represents the initial
investment of the owners and retained earnings.
Non-business types Non-business ventures do not provide ¨profits as

of enterprise reward, but other types of rewards, which could be
either physical or psychological.
99
Operating expenses Running costs. Examples of operating expenses include

inventory, supplies, advertising, payroll, taxes, repairs
and equipment, insurance, monthly rent and utilities.
Order A request to a seller to supply certain goods. You can

make your order by visiting, phoning, or writing to the
¨suppliers.
Output The results of the operation of any system.
Overhead Ïndirect costs
Over-production Too many products offered relative to the demand.
Payroll ¨Records detailing the salaries, wages, allowances and

deductions for each employee for a specific period.
Personnel Personnel management is the management task during

management which the human resources are managed. Managing
personnel is the process of making sure the employees
are as productive as they can be.
Petty cash A small amount of ¨cash kept on hand by a business

for incidental expenses.
Product life cycle A marketing theory in which products or brands follow a

sequence of stages including: introduction, growth,
maturity, and sales decline.
Productivity Productivity is the amount of öutput produced by a

unit of input. It indicates the degree to which the
resources are put to good use. To increase productivity
means to produce more with less.
Profit Money, which is earned in trade or business, especially

after paying the costs of producing and selling goods
and services. It is an incentive for the assumption of
risk. Profit is used for two things – it is returned to
owners and it is put back into the business to update it.
Quotation An answer to an ënquiry in which a ¨supplier makes

an offer to sell certain goods. In a quotation a supplier
gives detailed information about the type of goods,
prices, payment, delivery, and other conditions.
Receipt Written proof that you have paid for the goods or
services you bought. The seller signs the receipt he or
she gives you.
100
Record A book or other document with organized written

information about business transaction.
Return on Compares the amount of income from an investment

investment (net benefits) of a project versus its total costs. ROI is
often expressed as a percentage.
Revenue Revenue is the earnings of a company before any costs

or expenses are deducted (often used as equivalent to
turnover).
Security ¨Collateral
Self-employment Self-employment is an activity where individuals create

their own employment opportunities by creating a one-
person business.
Service In economics and marketing a service is the non-

material equivalent of goods. Examples: Haircut,
Cleaning, Development of websites.
Shareholder A shareholder is a person (¨legal or individual) who

owns shares of stock in a corporation or a company.
Skill Skill is the ability to apply knowledge.
Start-up costs Expenses that occur just once when starting the
business. Once your business is started, you may never
have these expenses again.
Subcontractor A subcontractor is an individual or a business that signs

a contract to perform part or all of the obligations of
another’s contract. The incentive to hire subcontractors
is a cut in cost to the general contractor while receiving
the same or better service than the general contractor
could have provided by itself.
Supervision When someone watches a person or activity and makes

certain that everything is done correctly, safely, etc.
Supplier Any person or business that sells goods or services to

other businesses.
Supply and demand Interaction of consumers and producers who strike an

equilibrium price. Prices can change because of different
conditions for consumers and producers.
Target marketing Concentrating ¨marketing efforts on one or two key

market segments.
101
Tax return A form that is completed by a taxpayer that shows his

or her income and other tax information.
Tax shelter Any technique, which allows to reduce or avoid tax

liabilities.
Time management Teaches techniques that aim to increase the

effectiveness of a person in getting the things done that
need to be done. It includes the perception of time as a
valuable asset and the systematic structuring of it to
conserve resources and maximise productivity.
Trait Trait is the aggregate of peculiar qualities or

characteristics, which constitutes personal individuality.
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KNOW ABOUT

Peter Tomlinson and Klaus Haftendorn

International Labour Office, Geneva

Know About Business

First published 1996

Entrepreneurship education stimulates young people to think about

The importance of education and training for an entrepreneurial society

The Millennium Development Goals adopted in 2000 address the

Between 2001 and 2004 a number of countries adopted KAB in their

corresponds better to the needs of education programmes in a fast-

A one week workshop in ILO’s International Training Centre (ITCILO)

This new edition constitutes the generic international version of Know

Klaus Haftendorn and Peter Tomlinson

KNOW ABOUT BUSINESS

MODULE 1 – WHAT IS ENTERPRISING? ............................. 5

MODULE 2 – WHY ENTREPRENEURSHIP? ......................... 18

MODULE 3 – WHO ARE ENTREPRENEURS? ....................... 24

MODULE 4 – HOW DO I BECOME AN ENTREPRENEUR? ..... 36

MODULE 5 – HOW DO I FIND A GOOD BUSINESS IDEA?... 47

MODULE 6 – HOW DO I ORGANIZE AN ENTERPRISE? ....... 54

MODULE 7 – HOW DO I OPERATE AN ENTERPRISE? ......... 68

MODULE 8 – WHAT ARE THE NEXT STEPS TO

Ä To enable learners to appreciate that everybody’s lifestyle

1 Enterprises in Your Community

Local Small Businesses

List up to 15 businesses that provide goods and services in your

Questions for the Entrepreneurs

2. What were your objectives in starting your business?

3. How did you identify your business idea?

4. What product or service does your business provide?

6. What problems did you encounter in starting and operating your

7. How did you solve these problems?

8. What were your sources of finance to start the business?

10. Do any of your family members own a business?

12. Who is/was your mentor?

14. Have you ever failed in business?

15. How do you use your profits?

16. How do you compete with other similar businesses?

18. What is the best and worst part of being an entrepreneur?

Having an Enterprising Attitude

Write down examples of situations that reflect your personal values,

5. What is something you do very well?

6. What are your three most important enterprising skills?

7. What motto (a phrase or saying) highlights your skills as an enterprising person?

Life Situation Questionnaire

Identify a real life problem and respond to the following questions

1. What is the real problem situation?

2. What activities need to be done to resolve the situation?

3. Who should resolve the situation?

4. When should the activities be done?

5. What is needed to do it?

6. What resources are needed to resolve the problem situation?

7. How should the activities be done?

8. What is your responsibility in resolving the problem situation?

Improving Your Enterprising Skills

WHAT YOU WANT TO TWO WAYS EXPECTED

4. Design and make

5. Want people to like

Check Your Self Management Skills

3 If you answered “no” to more than 11 questions, you have a real

PROBLEM: suppose you are self-employed in a small business employing 4 people, (2

Alternative Potential Potential Potential Outcomes

Solution Evaluation Form