Trainees Manual for Craft in Entrepreneurship edited and -printed for the bookshop =B5

REPUBLIC OF KENYA
CRAFT ENTREPRENEURSHIP MANUAL
KENYA INSTITUTE OF EDUCATION

P O BOX 30231 00100
TEL 020 – 3749900-9
NAIROBI
SEPTEMBER 2012
KENYA INSTITUTE OF EDUCATION
TECHNICAL, INDUSTRIAL, VOCATIONAL

AND ENTREPRENEURSHIP TRAINING
(TIVET) PROGRAMMES
SEPTEMBER 2012
Kenya Institute of Education
P.O. Box 30231-00100
Nairobi
Email: info@kie.com
Off Murang’a Road
First printed 2012
© Kenya Institute of Education
All rights reserved. No part of this manual may be reproduced, stored in

retrieval system or transcribed in any form by any means electronic,
mechanical, photocopying, recording or otherwise without the prior written
permission of the copyright owner.
ISBN: 978-9966-31-300-3
Foreword
This manual is designed to assist trainees on how to interpret the revised

Entrepreneurship Education Curriculum.
The revised curriculum lead to reorganization and rationalization of the

subject and the content while making a conscious effort to respond to
pertinent contemporary issues in the society.
This manual facilitates the interpretation of the syllabus as well as suggesting

the appropriate teaching methods, guidelines and time management.
Entrepreneurs are expected to play a major role in realization of Vision 2030.

The entrepreneurship course content has been reorganized to be in line with
the Vision 2030 which aims at making Kenya a newly industrialized middle
income country providing high quality life for all its citizens.
It is my belief that this manual will provide a critical source of knowledge

and skills where the source materials are limited not only for Craft level but
even other relevant levels of Tertiary Education.
PROF. HENRY KAANE

EDUCATION SECRETARY
i
ACKNOWLEDGEMENT
The Director Kenya Institute of Education would like to thank the following
authors for their effort/contribution in the development of this
Entrepreneurship Manual.
1. Daniel K. Thiga Nairobi

Technical Training Institute
2. Rashida Kinya Kiambu Institute of Science &
Technology
3. Margaret Nganu Machakos Technical Training Institute
4. Eve – Anne W. Muturi Mang’u High School
5. Wambui King’ong’o Kenya Polytechnic University College
6. Cecilia Marwah KeKoBi
7. Joseph Munyaka Gituru Secondary School

8. Esther Mbugua Pangani Girls Secondary School
9. Josephine Kasera Ministry of Education
10. Redempta Oyeyo Ministry of Education
11. Monica Wambui Erother Media
12. Esther Mwiti Kenya Polytechnic University College
13. Prof. H Bwisa Jomo Kenyatta University of
Agriculture & Technology
14. Dr. M. Ofafa Kenyatta University
11. Cyprian Nkondi Kenya Institute of Education
12. Doris Ngugi Kenya Institute of Education
13. Patrick Andika Kenya Institute of Education
ii
Table of Contents
Foreword...................................................................................................................i
Acknowledgement...................................................................................................ii
1.0 Introduction...................................................................................................1
2.0 Objectives.......................................................................................................1
3.0 National Goals of Education in Kenya........................................................2
4.0 National Aims of Tivet..................................................................................2
5.0 Objectives of Craft Entrepreneurship Programme...................................3
6.0 Methodology...................................................................................................3
Module Title:............................................................................................................5
1.0 Introduction to Entrepreneurship...............................................................6
1.1 Introduction...................................................................................................6
1.2 Specific Objectives.........................................................................................6
1.3 Content.............................................................................................................
6
1.3.1 Define the Terms:...............................................................................6
1.3.2 The Importance of Entrepreneurship to:........................................7
1.4 Emerging Issues and Trends........................................................................7
1.5 Learning Resources.......................................................................................8
1.6 Activities.........................................................................................................8
1.7 Suggested Questions......................................................................................8
2.0 The Entrepreneur..........................................................................................9
2.1 Introduction...................................................................................................9
2.2 Specific Objectives.........................................................................................9
2.3 Content.............................................................................................................
9
2.3.1 Definition of an Entrepreneur...........................................................9
2.3.2 Reasons why People Become Entrepreneurs...................................9
2.3.4 Qualities of an Entrepreneur............................................................9
2.3.4 Distinguish between an Entrepreneur and a Business Person.....10
2.4 Emerging Issues and Trends......................................................................11
2.5 Learning Resources.....................................................................................11
2.6 Activities.......................................................................................................11
2.7 Suggested Questions....................................................................................11
3.0 Entrepreneurship and Self Employment...................................................12
3.1 Introduction.................................................................................................12
3.2 Specific Objectives.......................................................................................12
3.3 Content.............................................................................................................
12
3.3.1 Definition of Self Employment........................................................12
3.2.1 Role of Entrepreneurship in Self Employment.............................12
3.2.3 Advantages and Disadvantages of Self Employment....................12
3.3.4 Requirements of Self Employment.................................................14
3.4 Emerging Issues and Trends.....................................................................14
3.6 Activities.......................................................................................................14
4.0 Business Opportunities................................................................................16
2
4.1 Introduction.................................................................................................16
4.3 Content.............................................................................................................
16
4.3.1 Meaning of Business Opportunity..................................................16
4.3.2 Sources of Business Ideas.................................................................16
4.3.3 Methods of Generating Business Ideas...........................................17
4.3.4 Methods of Identifying Business Opportunities............................17
4.3.5 Assessing the Viability of Business Ideas and Translating them into
Business Opportunities....................................................................17
4.6 Activity..........................................................................................................19
5.0 Creativity and Innovation...........................................................................20
5.1 Introduction.................................................................................................20
5.3 Content.............................................................................................................
20
5.3.1 Definition of Terms..........................................................................20
5.3.2 Importance of Creativity and Innovation......................................20
5.3.3 Process of Creativity and Innovation.............................................21
5.3.4 Barriers to Creativity and Innovation............................................22
5.3.5 Managing Barriers to Creativity and Innovation.........................22
5.6 Activity..........................................................................................................23
6.0 Starting a Business Enterprise...................................................................24
6.1 Introduction.................................................................................................24
6.3 Content.............................................................................................................
24
6.3.1 Definition of Business Enterprise...................................................24
6.3.2 Legal Forms of Business Organisations.........................................24
6.3.3 Procedure for Starting A Business Enterprise..............................25
6.3.4 Factors to Consider when Starting a Business..............................25
6.3.5 Causes of Business Failure..............................................................25
6.6.6 Support Services Available for Small Enterprises........................27
6.6 Activities.......................................................................................................27
7.0 Managing a Business Enterprise................................................................29
7.1 Introduction.................................................................................................29
7.3 Content.............................................................................................................
29
7.3.1 Definition of the Term Management..............................................29
7.3.2 Functions of Management...............................................................29
2
7.3.3 Appropriate and Inappropriate Management Practices..............31
7.6 Activity..........................................................................................................32
8.0 Marketing.....................................................................................................33
8.1 Introduction.................................................................................................33
8.3 Content.............................................................................................................
33
8.3.1 Definition...........................................................................................33
8.3.2 Components of Marketing or Marketing Mix...............................33
8.3.3 Ways of Gathering Market Information........................................35
8.6 Activities.......................................................................................................35
9.0 Financial Management................................................................................36
9.1 Introduction.................................................................................................36
9.3 Content.............................................................................................................
36
9.3.1 Definition of Terms..........................................................................36
9.3.2 Types of Business Finance...............................................................37
9.3.3 Factors to consider when selecting a source of finance................40
9.3.4 Business Records..............................................................................41
9.3.5 Financial Decision Making..............................................................42
9.6 Activities.......................................................................................................45
10.0 Business Plan................................................................................................46
10.1 Introduction.................................................................................................46
10.3 Content.............................................................................................................
46
10.3.1 Definition of Business Plan............................................................46
10.3.2 Components of a Business Plan.....................................................46
10.3.3 Uses of a Business Plan...................................................................50
10.3.4 Writing a Business Plan.................................................................50
11.0 Information Communication Technology in a Small Business...............61
11.1 Introduction.................................................................................................61
11.3 Content.............................................................................................................
61
11.3.1 Definition of Information and Communication Technology (ICT)
61
11.3.2 Importance of ICT in Small Business Management...................61
2
11.3.3 Type of ICT Equipment/Tools......................................................62
11.3.4 Benefits of Each Type of ICT Equipment/Tools to Businesses
Phone...............................................................................................62
11.3.5 Challenges of using ICT in a Small Businesses............................64
11.6 Activities.......................................................................................................64
11.7 Suggested Question......................................................................................64
1.0 INTRODUCTION
This manual contains guidelines for Entrepreneurship Education

instructors/trainees on how to approach the teaching/learning of the subject.
The Entrepreneurship Education syllabus incorporates fundamental aspects

of the various entrepreneurship disciplines. Its aim is to equip the
instructors/trainees with necessary knowledge, skills, values and attitudes
that will enable them to start and manage a successful enterprise.
The instructor/trainee is advised to lay emphasis on the use of specific

objectives in the manual for effective training. The manual outlines several
instructional methods which serve as guidelines to effective training. The
instructor is encouraged to be creative and innovative in order to come up
with more instructional methods. Time allocation for the various topics has
been proposed and the instructor should feel free to make any necessary
adjustments.
The instructors are advised to attach more importance to the use of

professional documents to enhance training. Training/learning resources
have been suggested but the instructor is encouraged to search for other
relevant and appropriate resources.
Entrepreneurship Education has addressed contemporary issues such as

information and communication technology, environmental and economic
issues, HIV/AIDS, ethical issues and integrity. The instructor is advised to
integrate and infuse these emerging issues during the training of various
relevant topics.
The manual should be used together with the syllabus and relevant
textbooks.
2.0 OBJECTIVES
Objectives are the intended learning outcomes. They are very important in
guiding the learning process. There are four levels of objectives namely:
 National goals/objectives of Education
 Level objectives (Objectives of Tertiary Education)
 General objectives of Entrepreneurship, and
 Specific objective of each module
1
3.0 NATIONAL GOALS OF EDUCATION IN KENYA
Education enables a society to meet its needs. The society expresses its
needs in broad National Goals of education. A National Goal is a general
statement of intent expressing broad values of the society. It is a long-term
target. National Goals of education are derived from the philosophy or
political ideology and social-economic aspirations of the nation. The
National Goals of education in Kenya are given below.
Education in Kenya should:

i) Foster nationalism, patriotism and promote national unity
ii) Promote the social, economic, technological and industrial needs for
national development
iii) Promote individual development and self-fulfilment
iv) Promote sound morals and religious values
v) Promote social equality and responsibility
vi) Promote respect for and development of Kenya’ rich cultures
vii) Promote international consciousness and foster positive attitudes
towards other nations
viii) Promote positive attitudes towards health and environmental protection
4.0 NATIONAL AIMS OF TIVET

The aims of TIVET are:
i) To provide increased training opportunities for the increasing number
of school leavers to enable them to be self supportive
ii) To develop practical skills and attitudes that will lead to income
generating activities in rural and urban areas through self- employment
iii) To provide practical education and training

skills which are responsive and relevant to Kenya’s industrial,
commercial and economic needs
iv) To provide the technical knowledge and vocational skills necessary to

enhance the pace of Kenya’s development
v) To encourage self-employment while at the same time producing

skilled artisans, technicians and technologists for both formal and
informal sectors at the ratio of one technologists to five technicians to
thirty craftsmen/ artisan (1:5:30)
2
5.0 OBJECTIVES OF CRAFT ENTREPRENEURSHIP
PROGRAMME
The general aims of the craft Programme are:
1. To develop skills which will be responsive
and relevant to the country’s manpower needs at middle level
2. To prepare trainees so that they can enter the
world of work with confidence for either salaried or self-employment
3. To impart adequate skills that will enable the
trainee to work as a technician
4. To impart necessary knowledge and skills for
further training
6.0 METHODOLOGY
Entrepreneurship Education is a practical subject. It is dynamic since it is
influenced by social, economic, political, legal and technological changes
among other factors.
Entrepreneurship activities carried out in the business world are practical to

the lives of the trainees and the society as a whole. Training in
entrepreneurship therefore should be participatory in nature. The instructor
should therefore allow opportunities for the trainees to share experiences.
The instructor should be creative and innovative in the approach to various
topics and subtopics. Practical approaches and use of real life cases to
expound certain concepts is encouraged. Some of these approaches include
field trips, case studies, resource persons, observations and brain storming.
Field Trips
These are organized visits to places of learning interest. The trips should
give the trainee first hand information and understand various aspects of
entrepreneurship.
Field trips should be well planned in advance and the learners should be
sensitized on what to expect and look for. This helps them to be focused in
their observations during the visit. Field trips should be appropriate and cost
effective. They can actually be made within the immediate training locality.
Case Studies
A case study is a detailed study of a person/group/organization in order to
learn about their development and relationship with other similar people or
organizations.
3
The aim of training using case studies is to allow critical analysis of the
given sample in order to gain insight of the concept being addressed. For
instance, a case study of a successful entrepreneur can highlight to the
trainee, key entrepreneurial characteristics, business activities success factors
and contributions to individual, local and national development.
Resource Persons
This approach is appropriate where the trainee may feel inadequate in a
given topic or a certain concept may require in-depth analysis. Experts from
various entrepreneurial disciplines should be invited to highlight on the
specific relevant issues. Resource persons should be sourced very carefully
and be briefed well on how to deliver the information appropriately to the
trainee. The instructor should be present during the presentation to
recapitulate the lesson by relating the presentation to the objectives of the
lesson or to manual the trainees in reacting to the presentation. The trainee
should be exposed to the specific objectives before the presentation.
Discussion, Brainstorming and Debate

These methods are used to make the trainees express their views on specific
topics in groups. For this approach to be successful, the instructor should
plan ahead on the areas for discussion on order to achieve the training
objectives.
The instructor can manual the discussion by asking leading questions for
discussion and involve as many trainees as possible. The instructor should
harmonize the ideas and come up with practical conclusions.
The participatory method can easily apply to entrepreneurship education as

trainees share different experiences.
The discussion method is appropriate in generating varied views which in

future may be converted into viable business opportunities. It goes a long
way in inculcating positive attitudes towards entrepreneurship.
Planning is of vital importance in ensuring successful debates. Opportunity

should also be accorded to as many learners as possible to participate in the
debate.
Time Allocation
Entrepreneurship education has been allocated 55 hours.
Professional Documents
4
The instructor’s attention is drawn to the important role played by
professional documents such as schemes of work, lesson plans and records of
work covered in facilitating the training/learning process. A format of each
of the professional documents has been as shown in the Entrepreneurship
Guide.
MODULE TITLE:
MODULE UNIT: ENTREPRENEURSHIP EDUCATION – 60 Hours
INTRODUCTON
This module unit is intended to equip the trainee with necessary knowledge,
skills, values and attitudes that will enable him/her to plan, start, operate and
manage a personal, group, private or public enterprise. It is also intended to
instil in the trainee the drive necessary to venture into profit making
activities.
GENERAL OBJECTIVES
By the end of this module unit, the trainee should be able to;-
a) appreciate the importance of entrepreneurship.
b) acquire entrepreneurial competencies necessary for planning, starting and
managing a business
c) demonstrate positive attitude towards self employment
d) portray a desire to venture into business
e) identify viable business opportunities
f) demonstrate entrepreneurial behaviour in planning, starting and
managing a business enterprise
g) demonstrate creativity and innovation in their day to day business
activities
h) appreciate the role of business planning
i) appreciate the emerging issues and trends related to the business
environment.
5
1.0 INTRODUCTION TO ENTREPRENEURSHIP
1.1 Introduction
Small scale enterprises are very important because of the role they
play in the development of the Kenyan economy. Small enterprises
create many jobs, provide a variety of goods and services, contribute
a lot of revenue and promote the use of locally available resources.
The people who are engaged in these types of enterprises are called
entrepreneurs.
This sub-module unit introduces the concept of entrepreneurship and

its importance in relation to the individual, society and the nation.
1.2 Specific Objectives

By the end of the sub-module unit, the trainee should be able to:
a) define entrepreneurship
b) explain the importance of entrepreneurship.
1.3 Content
1.3.1 Define the terms:
Entrepreneurship
It is the process of scanning the environment in order to identify a
business opportunity, gathering resources with an aim of establishing
a profit making enterprise, under conditions of risk.
Entrepreneur
This is a person who is able to identify a business opportunity within
an environment, gather the necessary resources and take reasonable
risk to innovatively start a successful business enterprise. A person
who is able to translate a vision into a real business
Enterprise
A business organisation that provides goods and services; and has
growth potential
Business
Any activity under taken by an individual or organisation to produce
goods and services to earn profit
6
Self employment
Refers to earning one's living directly from one's own business rather
than as an employee of another. A self – employed person is an
individual who operates a business as a sole proprietor or partner in a
partnership.
1.3.2 The importance of entrepreneurship to:

(a) An individual
- Improved standards of living
- Utilization of personal resources for a gain
- Self satisfaction
- Self employment
- Financial freedom
- Personal security
- Self esteem
- Independence
(b) A Community
- Job creation
- Community development
- Utilization of local resources
- Resource mobilization
- Recognition
- Exploitation and conservation of the environment
(c) A nation
- Promotion of national productivity (GNP).
- Wealth creation.
- Conservation of foreign exchange.
- Taxation(Source of government revenue)
- Export promotion.
- Enterprise culture.
- Create demand and supply.
- Production of goods to services.
- Curbing urban migration.
- Economic balance (Forward and backward linkage).
1.4 Emerging issues and trends

 Introduction of business incubation centers. These centers provide
the necessary facilities and support services for business success
at reasonable cost. They include:
- Premises
- Machines
- Equipment
7
- Tools
- Internet services
- Business training
- Business counseling
- Book-keeping and accounting services
- Marketing assistance
- Networking
Examples of incubators include:

- Export Processing Zones (E.P.Z’s)
- Kenya Industrial Estates
- Kenya Industrial Research Development Institute (KIRDI)
- Agricultural Technology Centers, among others.
- Kenya Kountry Business Incubator. (KeKoBI)
NB: The Business Incubation Association of Kenya (BIAK) is the

umbrella organization of incubators in the country.
 Introduction of entrepreneurship education at all levels of
education to inculcate the entrepreneurial culture.
1.5 Learning resources

 Textbooks.
 Newspaper cuttings
 Training manuals
 Role models
1.6 Activities
 Identify different entrepreneurial activities within your locality
and explain their benefits to the community.
 Identify the contribution of entrepreneurs to a country’s
development.
1.7 Suggested questions

1. Explain the following terms:
(i) Entrepreneurship
(ii) Entrepreneur
(iii) Enterprise
8
2.0 THE ENTREPRENEUR
2.1 Introduction
Entrepreneurs are people who are able to identify opportunities where
others are unable to.
Entrepreneurs possess unique characteristics that make them stand

out as different from other business people
This sub-module unit focuses on the characteristics of entrepreneurs

necessity for business success, differences between entrepreneurs and
business people

By the end of the sub-module unit the trainee should be able to:
a) define an entrepreneur
b) explain reasons why people become entrepreneurs
c) explain the qualities of a successful entrepreneur
d) distinguish between an entrepreneur and a business person.
2.3 Content
2.3.1 Definition of an entrepreneur.

This is a person who has the ability to identify a business
opportunity, gather necessary resources, take reasonable risk and start
a successful business enterprise.
2.3.2 Reasons why people become entrepreneurs

The following are some of the reasons people become entrepreneurs:
i) To be your own boss
ii) To make use of available resources for gain
iii) To create employment
iv) To survive/supplement one’s income
v) For self-esteem
vi) For personal achievement
vii) For personal security
2.3.4 Qualities of an entrepreneur

Some common characteristics of successful entrepreneurs include:
i) Hardworking
9
Starting a business is hard work. Success comes very slowly for
those who are not willing to work hard
ii) Strong leadership

Starting a small business is full of uncertainty and risk. To
make it through these tough early stages, entrepreneurs must
have strong leadership skills
iii) Self-confident
Entrepreneurs should have confidence in making decisions and
guiding the enterprise
iv) Risk taker
An entrepreneur is a person who is ready to commit resources in an

uncertain situation in pursuit of profit.
i) Flexible
Entrepreneurs need to be able to adapt to changing
circumstances such as customer tastes, technology and
competition.
ii) Independent
Persons who own and operate their own businesses are often
looking for freedom to make their own decisions.
iii) Optimistic
Entrepreneurs should have a positive outlook that enables them
to see the potential benefits in negative situations. Entrepreneurs
don’t dwell on negatives but on the positive possibilities in every
situation.
iv) Creative
Entrepreneurs need to be creative to be able to design or make
things differently from others
v) Achievement oriented
Entrepreneurs are highly motivated to achieve. They tend to be
very competitive.
2.3.4 Distinguish between an entrepreneur and a business person

These two terms are used interchangeably. It is important to note that
there are differences in the two titles.
The table below highlights the differences between an entrepreneur

and a business person
10
Entrepreneur Business person
Engaged in business that Engaged in business with the

grows by making profit objective of stability
This person is creative and Business person is contented with

innovative - always seeking state of business once it becomes
new ways of doing things stable
Highly effective in approach to Less aggressive- does not seek to

business issues dominate the market

 Networks are being created among entrepreneurs enabling them
to go global
 Business clubs - entrepreneurs are now more aware and are
utilizing the business clubs to access opportunities and markets

 Textbooks
 Role models
 Business games
 Business magazines
 Business features
2.6 Activities
 Role play of different business situations in class
 Visit a successful entrepreneur and write his/her story

1. Describe an entrepreneur
2. Identify characteristics of a successful entrepreneur
3. Explain various ways of becoming an entrepreneur
11
3.0 ENTREPRENEURSHIP AND SELF EMPLOYMENT
3.1 Introduction
The entrepreneurship course prepares trainees to start their own
enterprises, empowers them to be self employed and engage in
productive activities. Self employment is a situation where a person
starts and operates a business enterprise.
Self employment does not only improve the standard of living of an

entrepreneur, but also enables him/her become an active contributor
to the social and economic activities of the community and nation.
This sub-module unit discusses the importance of entrepreneurship to

self employment.
3.2 Specific objectives

(a) define the term self employment
(b) outline the role of entrepreneurship in self employment
(c) explain the importance of self employment
(d) highlight the advantages and disadvantages of self employment
(e) list the requirements of self employment
3.3 Content
3.3.1 Definition of self employment

It is a situation where individuals create and run/operate their own
income generating activities.
3.2.1 Role of entrepreneurship in self employment

- It motivates or creates a desire for being one’s own boss
- It opens up employment opportunities
- Helps a self employed person operate his/her business in a better
way.
3.2.3 Advantages and disadvantages of self employment
Advantages
- Personal satisfaction
Personal satisfaction means one having a feeling of
accomplishment
12
- Independence:
This means freedom from the control of others. One is able to use
one’s knowledge, skills and abilities. Self employed people have
more freedom of action compared to employed people.
- Income
This is the amount of money left after all expenses have been
paid. By being self employed, one is able to determine one’s
income
- Job security
This is the assurance of continued employment and income. One
cannot be laid off, fired or forced to retire
- Status:
This is a person’s social rank or position in society or in an
organisation. There is pride in being an owner/ manager.
Disadvantages
- Possible loss of invested capital
Invested capital refers to the entrepreneurs’ money used in the
enterprise. If a business succeeds the profits are high, if it fails,
the invested capital is lost.
- Uncertain income
There is no guaranteed fixed income.
- Long working hours

Entrepreneurs are all-round managers who shoulder all the
responsibilities of the business thus spending most of their time in
business.
- Competition
Small businesses are unable to compete favourably with large
enterprises.
- Lack of skilled personnel

Small businesses are unable to employ qualified personnel due to
their limited income.
13
3.3.4 Requirements of self-employment
It is important for entrepreneurs to know the requirements needed to
go into self-employment. These are: skills, capital, premises,
machinery, equipment and tools
Skills
These are competencies needed to perform a given task
Capital
This is the money needed to start and operate a business. It could be
used to acquire materials, tools and equipment needed for business
operations.
Machinery, equipment and tools

These are the facilities needed for the business to operate. They can
be bought, hired or leased depending on the amount of money the
entrepreneur has at the time of starting the business.
Premises
These are buildings where a business is carried on. The premises can
be rented or owned.

 There are more youths engaging in self employment after
acquiring higher education.
 Gender –there are more women entrepreneurs in self employment
thus encouraging various financial and non- financial
organisations to develop products targeting women.

 Textbooks.
 Newspaper features
 Role models
 Business games
3.6 Activities
 Discuss the role the government plays to encourage
entrepreneurship development
 Visit various self-employed persons and find out the business
challenges facing them
14
1. Explain the meaning of self employment.
2. Explain the importance of self employment to the individual,
community, and nation.
3. Discuss the advantages and disadvantages of self employment.
15
4.0 BUSINESS OPPORTUNITIES
4.1 Introduction
Starting a successful business requires knowledge, skills, abilities and
values. It is therefore important for entrepreneurs to develop viable
business ideas by identifying community needs for products and
services.
This sub-module unit focuses on business ideas and opportunities,

methods of generating these ideas and opportunities and finally
assessing the viability of the generated opportunities.

By the end of the sub-module unit the trainee should be able to:-
a) explain the meaning of a business opportunity.
b) explain the sources of business ideas
c) generate business ideas.
d) explain ways of identifying business opportunities
e) assess the viability of business ideas and translate them into
business opportunities.
4.3 Content
4.3.1 Meaning of business opportunity

A business opportunity is an attractive idea which provides the
possibility of a return for the entrepreneur taking the risk. Such
opportunities are presented by customer requirements and leads to the
provision of a product or service which creates or adds value to the
buyers.
4.3.2 Sources of business ideas

- Hobbies, skills, interest, talents
- Need in the community
- Chaotic situation/crisis
- A.S.K and other exhibitions, newspapers, and magazines
- Own environment
- Financial institutions
- Government agencies
- Seminars, workshops
- Competitors
16
4.3.3 Methods of generating business ideas.
1. Personal competencies, skills, talents, hobbies, interests,
commitments, goals, objectives
2. Business factors
- Market demand
- Availability of raw materials
- Management skills
- Unskilled/skilled workers
- Ease of starting a business
- Capital
- Government regulation
- Environmental factors
4.3.4 Methods of identifying business opportunities

This is done by assessing each business idea according to the
following factors:
(i) Personal factors
- Your personal business goals
- Available personal resources
- Personal interests, skills/hobbies
- Family and friends
- Your commitment
(ii) Business factors

- Availability and size of market(customers)
- Raw materials available
- Management skill
- Relevant workers to hire
- Ease of starting the business
- Sources of external money
- Government regulations ( e.g. taxation, license)
4.3.5 Assessing the viability of business ideas and translating them into
business opportunities.
Ideas and opportunities need to be screened and assessed for viability
once they have been identified or generated. This is not an easy task
though important because it makes the difference between success
and failure.
The exercise certainly helps in minimising the risks and thus the odds
of failure.
17
Identifying and assessing business opportunities involves
determining risks and rewards/ returns reflecting the following
factors.
1. Personal goals and competencies of an entrepreneur

It is important for an entrepreneur to possess competencies,
knowledge, skills and abilities before starting a business where
these competencies are lacking, it’s vital to develop or bring in
others/managers that compliment what is already available.
2. Length of the ‘widow of opportunity’

Opportunities do not exist forever. The entrepreneur has to know
for how long this widow will be opened in order to invest on that
which lasts longer
3. Industry/market
Is there a need for the product/service? It is also important to
know the size of the mar
4. Management team
Those businesses that require high level of capital injection,
require proper management skills
5. Competition
Check out whether the business has a competitive edge over other
competitors’ e.g. potential constraints and if the industry faces
existing entry barriers
6. Resources
Availability and access of these resources determines whether
certain opportunities can be pursued
7. Environment
This refers to political, economic, geographical, legal and
regulatory and also physical environment within which a business
operates.

 Globalisation has opened unlimited business opportunities for
small business enterprises
 Regional trading blocs have opened a wider market for
entrepreneurs to exploit
18
4.5 Learning Resources
 Textbooks
 Newspapers
 Role models
4.6 Activity
 The trainees to come up with various business opportunities and
assess each for viability

1. Define the terms:
(i) Business idea
(ii) Business opportunity
2. Differentiate between business idea and business opportunity
3. State the sources of business ideas
4. Explain the methods of identifying business opportunities
19
5.0 CREATIVITY AND INNOVATION
5.1 Introduction
Since customers’ tastes and needs are continually changing, the
entrepreneurs must think of new ideas and better methods of running
their businesses in order to satisfy the customer.
This sub-module unit will discuss the importance of creativity and

innovation, the barriers to creativity and innovation including
managing barriers to creativity and innovation.
5.2 Specific objectives

a) define the terms creativity, innovation, discovery and invention
b) explain the importance of creativity and innovation
c) explain barriers to creativity and innovation
d) explain ways of managing barriers to creativity
5.3 Content
5.3.1 Definition of terms
Creativity
Creativity is the ability to bring something new into existence
Innovation
It is the ability to do existing things in a new way. Having a new use
for old things is also innovation
Discovery
It is making known that which has been in existence but whose uses
have not been perceived
Invention
It means bringing something new into existence
5.3.2 Importance of creativity and innovation

 It leads to increased productivity
 It motivates employees to become more creative
 It leads to diversification of products and services
 It helps in profit maximization
20
 A variety of goods and services is introduced
5.3.3 Process of creativity and innovation

1. Preparation. Getting the mind ready for creative thinking using
methods such as:
 realizing that every situation is an opportunity to learn
 reading on a variety of topics/subjects
 creating a file of interesting articles
 developing the ability to listen to and learn from others
 attending professional/ trade association meetings, both to
brainstorm with others having a similar interest and to learn
how others have solved a particular problem.
2. Investigation. Studying the problem and understanding its

components
 Transformation. Identifying the similarities and differences
in the information collected
3. Incubation. The subconscious needs time to reflect on the

information collected
Incubation can be enhanced by:

 doing something totally unrelated to the problem/opportunity
under investigation
 taking time to day dream (freeing the mind from self imposed
restrictions)
 playing and relaxing
 thinking about the issue before going to sleep so that the
subconscious can work on it during sleep
 working on the problem or opportunity in a different
environment
4. Illumination. It occurs when all the previous stages start getting

Clear.
 Verification. Involves testing if the idea will work, is
practical to implement and is a better solution to a particular
problem or opportunity. Experiments, test marketing and
piloting are some of the methods that can be used
 Implementation. Transforming the idea into reality. This is

what distinguishes the entrepreneur from the inventor.
21
5.3.4 Barriers to creativity and innovation
 Cost of research and development is high
 Inability to protect invention through patents
 Searching for the one right answer
 Blindly following ‘the rules’
 Being over specialized
 Fearing to look foolish
 Fearing mistakes and failure
 Believing that you are not creative
 Viewing play as frivolous
 Focusing on being logical
5.3.5 Managing barriers to creativity and innovation

 Budgeting for research and development
 Strengthening public institutions that process the patenting
process
 Rewarding creativity
 Promoting creativity training
 Avoid mental blocks
 Be systematic
 Be a problem solver
 Approach issues from different angles
 Avoid routine practices
 Concentrate on the end results rather than the means
 Avoid looking for consensus

 Creativity and innovation is lacking in many small enterprises
 Large organisations are changing their products and services
regularly to cater for upcoming needs of their customers

 Textbooks
 Newspapers
 Textbooks
 Internet
 ICT equipment
22
5.6 Activity
 The trainees, in groups to draw a chair and compare the features
and uniqueness of each group’s chair

1. Distinguish between creativity and innovation
2. Explain the importance of creativity and innovation to an
entrepreneur
23
6.0 STARTING A BUSINESS ENTERPRISE
6.1 Introduction
When starting a business the entrepreneur must comply with certain
requirements and regulations.
This sub-module unit looks at the procedure to be followed in starting

a business, factors to be considered in starting a business including
support services required and available for the entrepreneur.

a) define the term business enterprise
b) explain the various legal forms of business organisations
c) describe the procedure of starting a business enterprise
d) explain the factors to consider when setting up a business
enterprise
e) discuss the causes of business failure and hoe to manage them
f) identify support services available for small business enterprises.
6.3 Content
6.3.1 Definition of business enterprise

- A business enterprise is an organisation or company that provides
goods and services.
- A business or undertaking
6.3.2 Legal forms of business organisations

(i) Micro enterprise
In Kenya a micro enterprise is a business that is either run by the
owner manager alone or one that has employed less than ten
people
(ii) Small enterprise

A small business is one that has less than 50 employees.
(iii) Medium scale enterprise

A medium scale enterprise is one that employs more than 50
people but less than 100 People.
24
(iv) Large enterprise
A large enterprise is one that employs more than 100 people.
NB: This is one way of classifying the sizes of business enterprises.
6.3.3 Procedure for starting a business enterprise

 Idea generation
 Market survey
 Selection of location
 Resource mobilization
 Business registration
 Licensing
 Business plan
6.3.4 Factors to consider when starting a business

 Knowledge and skills for operating the business.
 Availability of market (customers)
 The cost of starting and operating the business.
 Are there many competitors.
 The place where the business will be located.
 The rules and regulations for operating the business.
 How much profit will the business make?
 The number of employees required, their qualification and their
duties.
 The machinery, tools and equipment required and their cost.
6.3.5 Causes of business failure

 Lack of business management skills
This is the major cause of business failure. How to select, plan,
manage and grow a business are skills that the entrepreneur must
acquire before venturing into business.
To gain business management skills, an entrepreneur needs to
attend small business.
Management courses which are conducted by various institutions.
 Inadequate financing
Inadequate financing for both start up and operations may also
lead to business failure.
Proper planning for financing is required in three areas namely:-
25
- personal financing
- start up finance
- operating finance
 Lack of proper record keeping

Without proper record keeping it is difficult to monitor and
evaluate the progress of a business. Proper recording is required
to determine the performance of the business.
To overcome this problem, systematic record keeping should be

put in place. This will help the entrepreneur measure progress and
make timely decisions to correct any short comings
 Improper costing and pricing

Entrepreneurs who are unable to cost their products properly will
end up pricing their product or services improperly. Consequently
this can lead to business failure.
The final price must include direct and indirect costs plus the
profit margin
To overcome this problem, the entrepreneur should learn how to

cost and price their products or services competitively. With this
knowledge the entrepreneur is able to control the costs thus
increasing profit margin.
 Incompetent employees
If the employees lack the pre-requisite qualification and skills,
they cannot be productive and efficient. This may lead to business
failure.
To overcome this problem, the entrepreneur should hire the right

people for the job and remunerate them accordingly.
 Neglecting customers
Neglecting your customers is business suicide. The customer is
the king of the business without customers there is no business.
To avoid this, the entrepreneur must make every effort to be in
touch with his or her customers, to ensure they are satisfied.
Employees should also be taught to treat customers with the
respect they deserve
26
 Ignoring the competition ignored the competition to their
detriment.
The market has become so competitive that every entrepreneur
must watch what the competitors are doing and develop strategies
to counteract the competition
6.3.6 Support services available for small enterprises

1. Training services
2. Marketing services
3. Banking services
4. Insurance services
5. Postal services
6. Management – business mentors
7. Technology provision
8. Business incubators

 Many large enterprises are combining in order to compete
effectively in the global market
 Large enterprises are also establishing branches in other regions.
 Large buildings being re- innovated to create stalls to
accommodate micro- businesses.

 Business premises
 Registration documents for business enterprises
6.6 Activities
 Identify the different types of business enterprises within the
locality
 Make use of available resource services within the locality
 Find out the business support services available in your locality

1. Explain the meaning of the following types of businesses
(i) Micro-enterprises
(ii) Small businesses
(iii) Medium businesses
(iv) Large businesses
2. Outline the procedures involved in setting up a business
27
enterprise.
3. Explain factors to consider when starting a business
4. Outline the support services available for small enterprises.
28
7.0 MANAGING A BUSINESS ENTERPRISE
7.1 Introduction
Any business large or small must apply managerial skills in order to
come up with decisions that are practical. These decisions involve the
utilisation of business resources so as to achieve organisational goals.
This sub-module introduces to the trainees the basic functions of

management such as planning, organising and controlling for
effective and efficient utilisation of business resources.

By the end of this sub-module unit, the trainee should be able to:
a) define the term management
b) explain the functions of management
c) outline the appropriate and inappropriate management practices
7.3 Content
7.3.1 Definition of the term management

 Getting things done through and with people in formally
organized groups
 Process of getting things done through the effort of other people
 Management is defined as a set of activities applied to achieve
business objectives by using its resources effectively and
efficiently in a changing environment. Being effective means
having the intended results while being efficient means
accomplishing the objectives with a minimum of resources.
Management is therefore creative problem solving. Factors such
as employees, technology, competition and costs keep changing.
Managers make decisions about the use of business resources and
are concerned with planning, organizing, leading and controlling
business activities to achieve their goals.
7.3.2 Functions of management
Planning
 It means deciding in advance what actions to take, when and how
to take them.
29
Planning is necessary for committing and allocating the
organization’s limited resources towards achieving its objectives
in the best manner possible.
This is the process of determining what the business wants to

accomplish (goals) and deciding which activities can be applied
to achieve them. Planning provides a road map on how an
entrepreneur can get to the desired point. Planning helps the
entrepreneur to start off well compared to those who fail to plan
Planning is a good tool that helps an entrepreneur to remain
focused to the achievement of the business goals.
Organizing
 It refers to the formal grouping of people and activities in a
manner that facilitates achievement of objectives
 It refers to activities involved in grouping jobs for employees
within the business.
 It involves arranging employees into small departments to
carry out business activities. This in return helps to achieve
business goals because it is not possible for an individual to
achieve alone. It answers questions such as: - Who reports to
whom? How are tasks related together? Who is responsible for
the completion of tasks and who coordinates this group of
people?
Leading
 Leading is influencing other people’s activities to achieve
business goals. It involves influencing employees to get
committed to business activities and goals.
 A leader is always trying to make creative and innovative
decisions that help cope
 With continuously changing markets, technology and
competing environments.
The leader therefore encourages the people’s hearts and spirit
to move in the same direction, achieving business goals.
Controlling
 Controlling refers to those activities that a business employs to
ensure that it achieves its goals. It involves gathering and
interpreting
30
information about work performance and taking corrective
action where necessary
 Controlling also means checking the progress of the plans and
correcting deviations that may occur along the way
 Controls may be used to measure physical quantities such as
volume of work produced, amount of raw materials consumed
per hour e.t.c
 It also measures monetary results like value of sales, capital
expenditure and return on investment.
7.3.3 Appropriate and inappropriate management practices.

There is no single generally accepted and practiced management
theory. The practice of management has existed in its most basic
forms since ancient times. Among the widely acceptable
appropriate management practices include the following:-
 Develop “one best way” to perform any task
 Select, train, teach and develop each worker
 Co-operate with workers for coordination
 Divide the work and the responsibility equally
 Provide discipline at the work place
 Employees should receive orders from one superior only
 Unity of direction
 Fair and satisfying pay
 Encourage the workers to develop new ways of achieving
company goals
 Provide human relations in management practice
 Relate continually with the surrounding business environment
in search of environment
 Increased concern for quality of work-life
 Increased concern for job security
 Encourage group decision making
 Increased concern for work-family issues
It is important to note management practices will continue to

change today and tomorrow, due to the changing environment.
Management practices which do not create the desired goals are
regarded as inappropriate. It fails to do what has been listed in
7.3.3
31
 Technological advancement by allowing managers to manage
in the comfort of their homes or mobile offices.
 Firm flexibility where the organisation structure is flatter
giving the employees room to make decisions.

 Textbooks
 Questions and answers
 Class presentation
 Observation
 Written tests
 Business games
7.6 Activity
 Select a business enterprise within your locality and highlight
some appropriate and inappropriate management practice by
the enterprise.

1. Explain the five functions of management
2. Explain the importance of small business management
3. Describe ways of managing business resources
32
8.0 MARKETING
8.1 Introduction
Marketing is an important aspect of business management. It is
through marketing that a business creates awareness about its
products.
This sub-module unit will deal with definition of the terms market
and marketing, components of marketing and methods of gathering
market information

By the end of this sub-module unit, the trainee should be able to:
a) define the terms market and marketing
b) outline the components of marketing
c) identify ways of gathering market information
8.3 Content
8.3.1 Definition
A market is a place where goods are sold and brought.
A market is a place where sellers exhibit or show their goods for the
buyers to see and purchase/ buy
Marketing is the process of making known what products/ services an

entrepreneur is selling or wants to sell.
8.3.2 Components of marketing or marketing mix
Product
It means the ‘goods and service’ combination that the company offers
to the target market.
This is the tangible item or product the entrepreneur intends to sell.
Place/ Distribution
The actual location or where the product is to be sold or the premises
is located.
33
It includes the activities that make the product available to target
consumers.
Price
This is the unit value attached to the product
It also refers to the amount of money that customers have to pay to
obtain the product
Promotion
This is the process of letting buyers know about the product, how it is
made, its benefits, cost, and quality among others.
It also refers to the activities that communicate the benefits of the

product and persuade target customers to buy it.
An effective marketing program puts together all the marketing mix

elements. Figure 7.1 shows the marketing mix elements.
Figure 7.1 The marketing mix elements
MARKETING MIX
PLACE
PRODUCTS Channels
Product variety Coverage
Quality Assortments
Design Locations
Features Inventory
Brand name Transport PROMOTION
Packaging
Advertising
Sizes
Personal selling
Services
Sales promotion
Warranties
Publicity
PRICE
List price
Discounts
Allowances
Payment
period
Credit terms
TARGET MARKET
34
TARGET MARKET
8.3.3 Ways of gathering market information
Market information could be gathered through:
 Asking customers
 Reading relevant materials e.g. business pamphlets
 Getting information from chamber of commerce
 Exhibitions/ shows
 Listening to people talk

 E - commerce - it is the use of ICT, e.g. the Internet to carry out
business activities
 Focusing on the customer needs or satisfaction
 The need for meeting quality standards (KEBS)
 The need to address environmental standards (NEMA)

 Text books
 Newspapers
 Magazines
 Resource persons
8.6 Activities
 Choose a product and explain how to market it based on the 4Ps
 Discuss the marketing styles used by local entrepreneurs
8.7 Suggested Questions

1. An entrepreneur of manufactured goods wants to start a new
business in a certain area. Write down methods he/she can use
to gather market information
2. Discuss the importance of the 4Ps of marketing
35
9.0 FINANCIAL MANAGEMENT
9.1 Introduction
Financial management is a critical part in any business enterprise.
Financial management is closely related to the use of other resources.
For example, lack of control in purchasing results in inefficient use of
physical resources, perhaps by not having the right raw materials at
hand when needed, meaning that the business’ financial resources
will not have been used properly.
Financial management will involve coming up with proper

budgeting. Budgets will help the enterprise to anticipate and control
finance resource needs in purchasing, wages and settling debts.
By the end of the sub-module unit, the trainees should be able to:
a) define the terms:
i) financial management
ii) business finance
b) identify types of business finance
c) identify sources of business finance
d) explain factors to consider when selecting a source of finance
e) set up and maintain proper business records
f) interpret finance records and make appropriate business decisions
9.3 Content
9.3.1 Definition of terms
Financial management:
This is the process of controlling the financial resources within a
business enterprise. To achieve this objective, the entrepreneur must
come up with formal plans called budgets and cash flow statements.
Business Finance:
The monetary resources available to the business enterprise, that is at
the disposal of the business organisation.
36
9.3.2 Types of business finance
This will range from personal savings, grants to borrowed funds.
Personal Savings: often, the small business owner will have to

contribute a significant percentage of the necessary capital. Few if
any small and medium enterprises are started without the
commitment of the entrepreneurs personal funds.
These funds will get the business started and keep it running
smoothly. These funds might not be enough and the entrepreneur
will need to look elsewhere for other sources for additional financing.
Advantages of this source are:

(i) It is the least expensive since they do not have interests to be
paid for
(ii) It is easy to control as no permission will be sought to use these
funds
(iii) It can be supplemented with another source.
Disadvantages:
(i) May not be enough (inadequate)
(ii) May be used without proper planning
(iii) May take too long to raise enough capital
Family and friends

After the entrepreneur, family and friends are the next common
source of capital for the enterprise. They are likely to support the
venture because of their relationship with the entrepreneur. They
may give the entrepreneur the morale and motivation to start the
business.
Advantages:
(i) May avail (give) the entrepreneur funds without many (any)
conditions
(ii) The funds may carry little or no risk to the business
(iii) Re-payment period may not be fixed
(iv) Can be supplemented by other sources, therefore creating a
possibility of more capital
(v) Family/friends may give ideas on how to manage the business
37
Disadvantages:
(i) They might feel that they own part of the business and
(interfere) in its management
(ii) They might claim part of the profits
(iii) In case of default, enmity may creep within the
family/business
(iv) Jealousy/ enmity may creep in if the business prospers
Joint ventures
This is where two or more entrepreneurs come together to start a
business by putting capital together. Joint ventures could apply the
same operating principles as partnerships which are discussed
elsewhere in this manual.
Joint ventures could also involve two entrepreneurs operating in

different regions where they exchange goods for sales in their
respective regions.
The following are some of the advantages and disadvantages of joint

ventures.
Advantages:
- Risks are shared
- Investment capital shared
- No costs are involved
- Ideas are shared
Disadvantages:
- Shared profits
- Disagreement may arise over management, financing or sharing
profits
- Blames may arise over failures
Borrowing from the government

The government has set up a Youth Enterprise Fund to help young
entrepreneurs engage in incoming activities. This kitty is open to the
youth aged between 18-35 years throughout the country. The fund is
availed through an identified bank such as Equity, Family Bank,
Cooperative Bank and Kenya Commercial Bank. The only drawback
to this fund is the long bureaucratic chain involved before one
accesses the money.
38
Advantages of this fund are:
- Available or accessible to all youths aged between 18 – 36 years
of age.
- Demand no security or collateral.
- Minimal interest rates.
Disadvantages:
- High competition.
- Tedious due to long bureaucracy.
- May involve political patronage.
- Restricted amounts.
- There is an age barrier
Borrowing from Banks/Financial Institutions

Entrepreneurs can also get financing from these institutions. These
are borrowed in the short term and the entrepreneur has to have
collateral. The collateral could be in the form of business assets such
as land, buildings or equipment. The entrepreneur’s personal assets
can also be used. Regularly develop partners such as World Bank
and International Monetary Fund and channel funds through these
banks for business development in the country.
Advantages of such institutions are:
- Can lend large amount of money to start or even expand a
business.
- Using other people’s money
- Some loan offers are unsolicited.
Disadvantages:
- Demands collateral in some cases larger than the amount
borrowed
- High interest rates over a single period of time
- Borrowing restricted in ability to repay
- Some loan charges are hidden
- Some loan conditions are ambiguous
Micro Finance Institutions

These include organizations such as Kenya Women Finance Trust,
Faulu Kenya, PLAN International and Strengthening Informal Sector
Training and Enterprise (SITE). These institutions avail funds
sourced from donor communities, development partners and the
government.
39
They lead to groups as well as to individual entrepreneurs. Some of
these organizations discriminate, for example KWFT will lend to
women only, while PLAN International identifies the most needy.
Advantages of these institutions are:
- Available at grass root level.
- Flexible lending rates
- Collateral may not involve physical property.
- May offer managerial and marketing links
- They extend the funding to the most needy.
Disadvantages:
- May not operate in all regions of the country
- May limit the entrepreneur to operate as a group
- Some of these institutions may restrict their lending to
women/men only. Discriminate their lending principles i.e. to
gender, orphans
- Funds lent may be insufficient
- Rules/ regulations of getting funds are rigid
9.3.3 Factors to consider when selecting a source of finance
An entrepreneur is meant to gather scarce resources and then to
organize them by exploiting opportunities in the market in an
innovative way with an ultimate goal of profit making
He therefore has to consider some factors when choosing a source of

finance. They are as follows:
a) Purpose
The reason for borrowing the money e.g.
 For the purchase of fixed assets/non current assets i.e.
machinery, land, furniture among others
 To meet day to day transactional purposes as the working
capital (cash) circulating in the business.
b) Risk
Small businesses are risky because they may not be able to
pay their debts. Financiers always provide a risk premium to
cater for the allowance of default.
c) Debt control
The higher the debt, the higher the possibility from outside
control. An entrepreneur can control debt outsides by
40
avoiding or minimizing much debt by using savings and
reserves.
d) Collateral
This is the property or asset against which finance is obtained. It
can be sold in case the borrower is unable to repay the loan e.g.
land, buildings, machinery, motor vehicles among others.
e) The conditions/terms of repayment

The entrepreneur should borrow money after having understood
lending policies and terms of the lending institutions/lender
f) Weather/economic conditions
The entrepreneur should realize that the weather/ economic
situation can affect borrowing as well as repayment of the loan
e.g. the inflation rate
Cost of Capital
The entrepreneur should take the loan where cheapest
g) Government policies
The government may regulate the rates volume of credit to the
small businesses. The small enterprise sector has remained at 4%
of the entire volume of credit.
9.3.4 Business Records
It is very necessary for the entrepreneur to maintain effective control
of the business. Records are also important for tax purposes. The
entrepreneur should be comfortable and be able to understand what is
going on in the business.
An entrepreneur should be able to identify key incoming and

outgoing revenues. The most important records that a business
should maintain are; incoming revenue (sales) and outgoing revenue
(expenses/costs). For an entrepreneur to carry the day-to-day running
of the business, he/she must be able to maintain the most basic
records off the business. Such records are as follows:
i) Purchase Journal
ii) Sales
iii) The Cash Book
iv) The General Journal
41
(i) Purchase journal.
 This is a diary where all stock bought on credit is recorded on
a daily basis. It has three columns which include the date,
detail, and amount.
 The date column records the date when the goods were
purchased.
 The details column records the person or organization that
sold the goods on credit while the amounts column records
the value of goods purchased.
Format of a purchase journal
Date Details Amount
(ii) Sales journal.

 This is a diary where all goods sold on credit are recorded
on a daily basis.
 Just like a purchase journal it has three columns for the
date, details and amount column.
 The details column records the names of persons to whom
goods were sold on credit.
Format of a Sales Journal
Date Details Amount
(iii) The cash book.

The cash book is a record where cash received and cash paid
are recorded. It is divided into two sides. The left side is used
for recording cash received while the right side is used for
recording cash payments.
9.3.5 Financial decision making

These are determined by profits made by the business. Profits are
determined by three key areas of the business:
 Purchasing
 Sales
 Marketing
42
Financial decision revolve around buying goods, paying for those
goods when sales are made and expenses involved in operating the
business. When profits are low, the business owner has to evaluate
his/her purchasing principles, determines why sales are not
covering the profits, and check his marketing strategies, to
determine at what stage the business is losing money. It is
therefore in order for the business owner (entrepreneur) to assess
each sector of the business on its own.
i) Purchasing
- Open a diary of all major sellers of the products/services
dealt in
- This diary should contain a price list.
- Compare the prices and determine from which seller to
purchase from
- Decide which is a better option getting goods on credit or
cash payment
ii) Selling Price

- Determine what competitors are demanding for similar
products/services
- Compare with your pricing and adjust accordingly
- At this juncture, it is also imported to determine the method
of production to re-evaluate the pricing of the
product/service.
- Review other costs of production and adjust the prices
accordingly.
iii) Marketing strategies

- Review if too costly
- Review if none exists
- Open new outlets to increase sales volume
- Check earlier studies on marketing
Calculating Net Profit

It is very important for the business owner to check regularly
his/her operational expenses to determine the profit margin. Any
business must incur certain expenses in the course of trading.
Examples of such expenses are; rent, rates, wages, electricity and
water bills, transport costs and advertising costs.
43
If these expenses exceed the gross profit, then the business is
operating at a loss. The business owner must come up with a
trading profit and loss account prepared in manner explained
below.
KOSKE’S PROFIT AND LOSS ACCOUNT FOR THE YEAR

ENDING 31ST DECEMBER 2009-10-15
Purchases 150,000 Sales 200,000
Expenses: Gross profit 50,000

Rates 1,500
Rent 5,000
Wages 5,000
Electricity 3,500
Water 800
Advertisement 4,500
Transport 6,000
Total expenses 25,300
Net profit 24,700 _____
50,000 50,000
Therefore Koske’s net profit of Ksh 24,700 is the return on capital

invested in the business. In order to make his financial decisions
he has to compare one year’s profit with those realised in other
years.
If Koske had invested Ksh. 100,000 in the business, he could

calculate his profit turn-over as follows;
Net profit × 100 = 24,700 × 100 = 24.7%

Capital 100,000
This would guide Koske whether it is profitable to continue with
the business or re-invest elsewhere.
It is also important for Koske to calculate the net profit to gross
profit.
44
 Changes in global economic trends: the global economic
recessions/problems in the international financial markets will
affect the local economic climate through increased interest rates.
 Finance is no longer an issue

Competition has made it easier for small businesses to access
Credit easily.

 Textbooks
 Newspapers
 Role models
9.6 Activities
 Carry out a field study to identify different sources of financing a
business stating the benefits and limitations of each source
 Discuss the kind of products offered by financial institutions
which are beneficial to local businesses
9.7 Suggested Questions

1. Explain the meaning of business finance
2. What are the various sources of business finance
3. Differentiate between personal and business finance.
45
10.0 BUSINESS PLAN
10.1 Introduction
This is a statement justifying the business and gives a step-by-step
explanation of how the business will achieve its goals. It acts as a
guide and reference document in regards to decision making and
utilisation of the business resources.
Key highlights of the business plan are its focus on financial,

organisational and marketing plans which are the fundamentals for
any enterprise to be competitive.
This chapter will address the steps followed in writing a business
plan.

By the end of this sub-module unit the trainee should be able to:
a) define the term business plan
b) outline the uses of a business plan
c) identify the major parts of a business plan
d) use a template to write a business plan
10.3 Content
10.3.1 Definition of business plan

A business plan is a written document that describes the goals and
objectives of the business and lists the steps that will be taken to
achieve those goals and objectives.
- It describes all the relevant external and internal elements in
starting a new venture.
- A business plan is referred to as a game plan or road map and
answers the questions; where am I now? Where am I going? How
will I there?
10.3.2 Components of a business plan

A business plan should be comprehensive enough to give any
potential investor a complete picture and understanding of the new
venture and will help the entrepreneur clarify his or her thinking
about the business.
It should include information on such matters as product or service,

market, marketing strategy, production methods, ownership and
management structure, financing needs and projections.
46
The following are the components of a business plan:
a) Introductory page
It briefly identifies the address and name of the business, its
owner(s), nature of the business, amount of financing required
and profit potential.
b) Executive summary
Contains a three to four page summary of the main contents of the
business plan. It is prepared after the entire plan is written. It
includes business description, target market, competitive
advantage, management team, financial plan, among others.
c) Business description
This section describes the nature of the business and what the
entrepreneur hopes to accomplish with that business.
Example of information contained includes:-
 Name of the business.
 Location.
 Major activity of the business.
 Major customers.
 Amount to be involved.
 Growth plan
d) Marketing plan
This describes how the product(s) or service(s) will be priced,
distributed, and promoted.
Specific forecasts for product(s) or service(s) are indicated in
order to project profitability of the venture.
The following information is contained in the market plan
Potential customers
This section describes the potential customers and how the
business plan attracts and holds them.
Competition
This section describes the names of key competitors and where
they are located, comparison of the goods/services with those of
the competitors, the strengths and weaknesses of the competitors
and how the business plan will capitalize on their weaknesses.
47
Pricing
This section deals with methods of calculating the selling price
and factors influencing the price. It also touches on credit terms
proposed, discounts to be allowed and any after sale services to
be offered.
Sales tactics
This section deals with the methods of selling the products. This
could either be direct selling or indirect selling. The method of
recruitment and retention of the sales force and agents is also
covered here.
Sales promotion plans

This section deals with promotion methods to be used, frequency
of advertisements, cost of advertising, how to measure
effectiveness of the adverts, cost of each promotional event.
Distribution
This section deals with channels to be utilized, the distribution
cost, anticipated distribution problems and how to overcome such
problems.
e) Organization/ management plan

This is the section that describes the key management personnel
required, their qualifications, duties, salaries and incentives.
- It also identifies other employees needed, their duties, pay,
training needs.
- The organizations structure is also defined.
- Other support services required are highlighted in this section
- e.g. banking services, legal services, management consultancy
Etc.
- Plans on management of finances and record-keeping after the
business gets going are included in this section.
- Any licenses, permits or regulations affecting the business are
discussed here.
f) Operational plan/Production plan.

If the business is involved in manufacturing, a production plan is
necessary. It describes the manufacturing process. It describes the
physical plant layout, the machines and equipments needed, raw
materials, requirements, names, addresses of suppliers and cost of
manufacturing.
48
- If the venture is a retail store service or other type of a
business this section would be titled operational plan. The
entrepreneur needs to describe the chronological steps in
completing a business transaction. E.g. retail shop would need
to describe the process of purchasing merchandise, how the
merchandise will be stored and presented for sale, and the
control system for inventory.
g) Financial plan
This section deals with several aspects of financing needs and
application of funds. There are several financial plans which
include the following:-
 Pre-operation plan
It shows costs incurred before the business starts operations
e.g. Market research, equipment, photocopying, transport
costs, installations, among others.
 Working capital statement

This shows the funds needed to start and continue operations.
It includes cost of raw materials, finished goods, debtors and
cash requirements.
 Pro-forma income statement

This shows estimated sales, cost of goods sold, gross profit,
expenses and net profit.
 Pro-forma balance sheet.

This shows the projected financial position of the business at
future stated dates. It shows the expected assets, liabilities and
working capital.
 Cash flow projections

This shows the anticipated movement of cash within the
business. It projects the expected sources of cash and
projected expenditures.
 Break- even calculations

This shows the level of sales needed for the business to cover
expenses.
49
Profitability calculation
This shows the relationship of profit and sales and
investment. We use figures like return on investment, gross
profit percentages.
 Sources and application of funds.

This shows how much money will be needed and where it
will be obtained from.
NB: No matter how good the business plan is, it will be of little
use if the person you intend it for does not read it. The appearance
of the report presents the readers with a first impression that
should be positive.
10.3.3 Uses of a business plan

A sound business plan serves as a focal point for organising the
whole business and for raising required funds.
The following are the major areas of a business plan.
(i) As a financial tool
By preparing a business plan, the owner is able to know the
financial gaps and negotiate with financial institutions in
advance so as to fill the financial gaps identified.
(ii) Business plan as a blueprint
A business plan serves as a blueprint for starting, expanding or
operating a business just as a builder draws plans (blue print)
before starting construction of a home, a business person should
plan the business operations prior to implementation.
(iii) Business plan reduces problems
Many small business persons spend time solving small
problems and don’t have an opportunity to do anything else. By
preparing a business plan, problems can be anticipated and
decisions on how they should be avoided can be determined.
(iv) Business plan forces the owner to justify their plans of action.
By preparing a business plan the owner is able to prove the
validity or explain the reasons for making certain decisions. All
planning aspects of a business and any decisions made by
owners/ managers are always justifiable.
10.3.4 Writing a business plan
Business Plan for Micro and small enterprise
50
Micro enterprises normally do not need a business plan. But sometimes it
may be helpful for financing and business planning. Business plans for micro
enterprise are rather rudimentary and adapted to the very limited accounting
and management capacity of micro enterprises.
Business plans for small enterprises are more detailed than micro
business plans but also based on a limited capacity in accounting, cost
calculation and financial projection of the small business owners.
Business Plan
Personal Data
Full name of the business operator /partners........................................

Address: ....................................................................................................
Educational qualification
..................................................................................................
Special
training ...................................................................................................
.
Work
experience ..............................................................................................
......
1. Business Profile
Type of the plan/work/business
.................................................................................................................
.................................................................................................................
................................................................................................................
Legal form of the

business: .................................................................................................
...............
Year of the Business plan:
From.................to......................... ...........................................
Work premises at the disposal of the operator
51
(location, size,
facilities) .................................................................................................
...............
................................................................................................................
...............................................................................................................
Specify, if there is any advantage or problem related to the location:

.................................................................................................................
............................................................................................................
.............................................................................................................
.............................................................................................................
............................................................................................................
2. Production Plan
2.1 Production and Sales

No Item Total Quantity Sales per Capacity /
. per year year Utilisation
1
2
3
2.2 Machinery/Equipment
No Item Unit Price Total Maintenanc
Value e Costs
1
2
3
4
Total:
2.3 Raw Material Requirement
No Item Quantity Total Annual
. Value Source
1
2
3
4
Total:
52
2.4 Utilities / Infrastructure
No Item Annual Total Maintenance
. Requirement Annual
Costs
1 Electricity
2 Gas
3 Water
4 Rent
5 Other
Total:
2.5 Labour
No Particulars No. of Staff Annual Further Training
. Wages/ required
Salaries
1 Skilled
2 Semi-skilled
3 Unskilled
4 Owner’s
salary
5
Total:
2.6 Administrative and Selling Costs

No. Item Quantity Amount
Total:
53
3. Market Study
Main Customers and Market

Segments: ......................................................................................................
.............
........................................................................................................................
........................................................................................................................
..................................................................................................................
........................................................................................................................
........................................................................................................................
..................................................................................................................
..................................................................................................................
Competitors
No. Competitor Main Products Price per Unit
Marketing Strategy to win Customers and overcome

Competitors: ................................................................................................
........................................................................................................................
........................................................................................................................
........................................................................................................................
........................................................................................................................
........................................................................................................................
.......................
........................................................................................................................
List of Suppliers
Suppliers Products/ Ranking of price -
Equipment/ performance
Working materials
54
4. Cost Calculation
4.1 Fixed Capital

No Item Value
. a. Initial b. Actual Depreciatio
n
(a-b)
1 Land/Building
2 Machinery/
Equipment
3 Furniture and
Fixtures
Total:
4.2 Working Capital
No Item Duratio Quantit Value
. n y
1 Raw materials stock
2 Semi-finished goods
stock
3 Finished goods stock
4 One year production
expenses (utilities,
administration, wages,
salaries)
Total:
5. Financing
Financing
No. Item Value Remarks
Own funds
Loan for fixed capital items
Working capital loan
55
Other
Total
6. Yearly Profit and Loss Statement
Yearly Profit and Loss Statement
Period: from............... to....................
Gross Sales
Less: Returns and allowances -
= Net Sales =
Less: - Costs of goods sold -
- Direct material -
- Direct labour -
- Overhead -
= Gross Profit =
Less: - Administrative and selling expenses -
- Salaries -
- Telephone -
- Water -
56
- Electricity -
- Rentals -
- Others -
= Operating Profit =
Less: - Interest expense -
= Net Profit before Tax =
Less: - Estimated Income Tax -
= Net Profit after Tax =

Date
Signature
57
Instruction to the Business Plan (See format/guide above)
Business plan for micro and small enterprises is similar to the business plan
for start-ups. Difference is that the small business plan is based on existing
experiences of previous production periods.
Instruction to 1: Write down the type of business/activity in which the

business operator is engaged. In this section the following issues have to be
addressed: the legal form of the business, the business type / merchandizing,
manufacturing or service/, the type of products or services. The location of
the business can play a decisive role in its success or failure. Explain the
work premises and other utilities at the operator’s disposal and describe the
specific working premise problems, the space needed for the business, the
desirable features of the location and its accessibility to the market. If there is
anything in the location that is of special interest for your business you can
stress it, too.
Instruction to 2: The production plan includes the estimated production and

sales per year based on the previous experience. Capacity/utilisation means
the percentage on how you are at the limit of your production and sales
capacity with the respective product. In 2.2 put the value of the machinery
and equipment and the maintenance costs. Depreciation costs will be
highlighted under 4.1 Cost calculation - fixed capital. Under 2.3 raw material
required for the projected production (2.2). Utilities and costs of
infrastructure such as electricity, water, rent to run the projected production
plan including maintenance costs. 2.5 Labour categories required and
salaries as well as further trainings required. 2.6 administrative costs to run
the projected production plan.
Instruction to 3: The key issue in sales performance or marketing as a

whole is to know better the likes, dislikes and expectations of customers. The
yearly sales should be planned based on certain market surveys or past
experience, if any is available. The market surveys will indicate the different
customer segments (e.g. age, social status or region). Focus has to be given
to those customers who are likely to purchase the product/service of the
enterprise. Planning the yearly sales enables to find out about the desired
production amount (it makes no sense to produce more than you can sell)
and the yearly income. Describe the months during which sales are expected
to be high, in order to make the necessary preparations ahead of time and
exploit the advantage. For defining the unit price per product/service you
should first know the unit costs (see production costs) as well as the prices of
your direct competitors. In addition there is a need to identify the strength
and weaknesses of competitors in their product quality/quantity and identify
58
how their product/services differ from yours, their pricing and advertising
techniques. The supply market should also be analysed. Identify the main
suppliers for your equipments and raw materials, make price and quality
comparison and a final ranking of price and performance of suppliers.
Instruction to 4: Under cost calculation it will be important to include

depreciation costs of the fixed capital. Depreciation is the estimated price to
the use of an asset. You need to know it to calculate the costs of your
product/service. One of the various methods of defining yearly depreciation,
and the simplest one, is to divide the purchasing price of the asset by the
number of years of usage. Working capital should be detailed in different
categories including utilities and administrative expenses and calculated for a
one-year production plan.
Instruction to 5: Financing will be calculated on the basis of the preceding

cost calculation and the availability of own funds. Own funds are important
to convince the financial institution to grant loan because own funds show
the capability of the business owner of organized savings and business
management.
Instruction to 6: The Profit and Loss Statement (PLS) is one of the

financial analysis tools employed by business enterprises to track the
performance of their enterprises. The PLS is the difference between sales and
expenses of an enterprise over a given period of time, often one year. If this
difference is positive, it is termed profit, while if it is negative, it is then
termed loss.
The PLS is important for business operators/managers in checking the

efficiency of their business strategies and taking proper actions. The
statement is also important for bankers to check business profitability before
extending credit. The statement can only be drawn up based on certain
source documents such as the cashbook, otherwise it would be very difficult
to apply, especially for micro enterprises. For the statement to be applied in a
given enterprise a certain level of accounting system is needed to be in place.
The P+L statement has the following components:
 Gross sales: the total value of sales which is obtained by multiplying

the price of each product with the total units of output sold.
 Returns and allowances: stands for the value of damaged goods that
are returned by customers to the business enterprise for which the
business replaces the damaged goods with new. It also considers
59
payments made as sales commissions, discounts, etc., which again
are deducted from Gross Sales to result in Net Sales.
 Costs of goods sold: stands for the costs involved with regard to
direct labour, direct material and factory overhead costs which are
deducted from Net Sales to arrive at Gross Profit: Direct material:
stands for those material costs directly accrued in the production
process, such as raw material. Direct labour: refers to costs of all
labour inputs directly used in the production of goods/services of a
given enterprise. Often direct labour costs are measured on unit rates
and costs of daily labour. Overhead costs: stands for those costs
incurred, but which are not directly related to the production process.
E.g. depreciation of machinery or equipment, shade rent, etc.
 Administrative and selling expenses: This includes costs incurred

for certain administrative purposes and for the distribution of
products. These are deducted from Gross Profit to arrive at Operating
Profit. These expenses are for example, salaries of management and
support staff, expenses related to telephone, water and electricity bills
as well as office rents and other similar expenses.
 Interest expense: this is the amount of interest to be paid on the

amount of loan obtained, based on the current interest rate.
 Estimated income tax: the amount of tax that has to be paid as per
the income tax proclamation.

 E-commerce: Organisations are now able to access consumers/
suppliers through the internet. E-commerce allows a business
enterprise to post/have its profile in a website.
 Other organisations can be able to get the profile of this business
and competitors can now be in a position to know the products
the business avails to its customers, and that way obtain a
competitive advantage.

 Text books
 Newspaper cuttings
 Resource person
 Sample business plans
 Role models
60
 Trainers manual
10.6 Activity
 Fill the business plan template provided.
 Let your colleagues go through it before presenting it to your
instructor for guidance.
61
11.0 INFORMATION COMMUNICATION TECHNOLOGY IN A
SMALL BUSINESS
11.1 Introduction
Like all businesses, a small business needs information, not just data.
Data is un-organised facts. Information is data that is relevant for a
specific purpose.
A small business requires information on new products, technological
changes and competitors to be able to cope.
The information must be accurate, timely, complete and relevant to
meet the demands of today’s business environment.

By the end of this sub-module unit the trainee should be able:
a) Define ICT
b) State the importance of ICT in the management of a small
business
c) Identify various types of ICT equipment/tools
d) State the benefits of each type of equipment/tools
e) Identify the challenges of using ICT in small business
11.3 Content
11.3.1 Definition of Information and Communication Technology (ICT)

This is a system that organises past, present, and projected data from
both internal and external sources that which the small business can
utilise in pursuit of its objectives.
11.3.2 Importance of ICT in small business management

As stated earlier, a small business requires information that is
accurate. This information must be true and reliable for the
entrepreneur to make decisions.
The information must also be timely. This does not necessarily mean
quick and immediate. It means information that is accessible
precisely when it is needed. Major benefits of ICT in small business
management include:
 increased profits.
 time management
 cost-effectiveness
 increase in sales
 market exposure.
62
 reduced work force/ human labour
11.3.3 Type of ICT equipment/tools

Major ICT tools/equipment include
- Phone i.e. mobile phones
- The Fax machine
- Radio
- Television
- The Print Media e.g. newspapers, advertising papers/magazines
and business directories
- The Computer
11.3.4 Benefits of each type of ICT equipment/tools to businesses

Phone
 The phone is used to communicate verbally with customers and
suppliers. This includes both the fixed line and mobile phones
Other than verbal communication, the mobile phone is also used
for sending and receiving messages, sending and receiving money
e.g. M-Pesa.
Benefits of a mobile phone

 It is affordable
 It is easy to use and any one can understand its functions
 It is portable and therefore can be used anywhere at any time
 It is efficient because feedback is immediate
 It can be used in extreme remote areas as long as the network
coverage is available.
Radio
(i) This is a very effective way to advertise a business
(ii) it is quite inexpensive and can reach a wide audience
(iii) Some communities have local radio service stations and the
small business may use this service to advertise its products or
services where the entrepreneur may be interviewed during a
programme. Examples of such radio service stations are; Inooro
FM, Murembe FM and Ramogi FM.
Television
A small business may use the television as a tool for sourcing
technological information, new products/services, market trends and
63
general information that will assist the entrepreneur to run his
business.
Print Media
Examples of such are; newspapers, advertising papers/magazines and
business directories
a) Newspapers e.g. the local dailies(The Nation) which the business
enterprise can use to :
 advertise their products/services
 get information on market trends
 access information on new technology, new products/services
 access information on political and economic trends in the
country
b) Advertising Magazines/Papers/Journals/Business directories
These are useful tools for advertising products/services/ location
of the business enterprise
The Fax machine

This is short for “facsimile machine”. This is a machine that allows
transferring a copy of a document through the telephone line. Both
the person sending and receiving it must have a fax machine.
Benefits of the fax machine to small business

 The message sent is received instantly
 If one is dealing with people far away, the fax can be a less
expensive means of communication
 The sent copy is like the original copy
 A message sent through a fax machine confirms in writing
anything that has been previously agreed on verbally
The Computer
This is one of the modern ways of communicating and advertising in
use. It can be used in the following ways;
 Word processing – writing letters or receipts
 Storing information – financial data, customers addresses,
suppliers addresses
 Keeping track of records – purchases and sales
 Reminder messages – products or service delivery dates
 Generating advertising leaflets, posters or flyers
 Generating financial statements
 E-business – this is publicizing the business through the Internet
64
11.3.5 Challenges of using ICT in a small businesses
 Expensive i.e. high costs incurred in buying ICT tools/equipment
and maintenance.
 Technology may fail or keep on changing
 Sources of power (e.g. electricity)

 M-pesa: mobile service used not just as a means of sending and
receiving money but also to sell goods/services, pay bills
(electricity, water, creditors), and also as a means of safe deposit/
banking.
 Marketing: the mobile phone can be used as a tool of
advertising a business product/service.

 Textbooks
 Newspapers
 Textbooks
 Internet
 ICT equipment
11.6 Activities
1. Discuss how available ICT can be used in a small business
appropriately.
2. Visit a small business which uses ICT equipment/tools and
discuss how it contributes to the business’ performance.
11.7 Suggested question

How can the entrepreneur use the current technological advancement
for the benefit of his/her business?
65

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REPUBLIC OF KENYA

CRAFT ENTREPRENEURSHIP MANUAL

KENYA INSTITUTE OF EDUCATION

TECHNICAL, INDUSTRIAL, VOCATIONAL

First printed 2012

© Kenya Institute of Education

All rights reserved. No part of this manual may be reproduced, stored in

This manual is designed to assist trainees on how to interpret the revised

The revised curriculum lead to reorganization and rationalization of the

This manual facilitates the interpretation of the syllabus as well as suggesting

Entrepreneurs are expected to play a major role in realization of Vision 2030.

It is my belief that this manual will provide a critical source of knowledge

PROF. HENRY KAANE

1. Daniel K. Thiga Nairobi

4. Eve – Anne W. Muturi Mang’u High School

5. Wambui King’ong’o Kenya Polytechnic University College

6. Cecilia Marwah KeKoBi

7. Joseph Munyaka Gituru Secondary School

This manual contains guidelines for Entrepreneurship Education

The Entrepreneurship Education syllabus incorporates fundamental aspects

The instructor/trainee is advised to lay emphasis on the use of specific

The instructors are advised to attach more importance to the use of

Entrepreneurship Education has addressed contemporary issues such as

Education in Kenya should:

4.0 NATIONAL AIMS OF TIVET

iii) To provide practical education and training

iv) To provide the technical knowledge and vocational skills necessary to

v) To encourage self-employment while at the same time producing

Entrepreneurship activities carried out in the business world are practical to

Discussion, Brainstorming and Debate

The participatory method can easily apply to entrepreneurship education as

The discussion method is appropriate in generating varied views which in

Planning is of vital importance in ensuring successful debates. Opportunity

MODULE UNIT: ENTREPRENEURSHIP EDUCATION – 60 Hours

This sub-module unit introduces the concept of entrepreneurship and

1.2 Specific Objectives

1.3.1 Define the terms:

1.3.2 The importance of entrepreneurship to:

1.4 Emerging issues and trends

Examples of incubators include:

NB: The Business Incubation Association of Kenya (BIAK) is the

1.5 Learning resources

1.7 Suggested questions

Entrepreneurs possess unique characteristics that make them stand

This sub-module unit focuses on the characteristics of entrepreneurs

2.2 Specific Objectives

2.3.1 Definition of an entrepreneur.

2.3.2 Reasons why people become entrepreneurs

2.3.4 Qualities of an entrepreneur

ii) Strong leadership

iv) Risk taker

An entrepreneur is a person who is ready to commit resources in an

2.3.4 Distinguish between an entrepreneur and a business person

The table below highlights the differences between an entrepreneur

Engaged in business that Engaged in business with the

This person is creative and Business person is contented with

Highly effective in approach to Less aggressive- does not seek to

2.4 Emerging issues and trends

2.5 Learning resources