KENYA METHODIST UNIVERSITY

COURSE TITLE UNIT CODE UNIT LECTURER STUDENT NAMES REG No

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COMPUTER INFORMATION SYSTEMS BUSS 114 ENTREPRENEURSHIP DR.KAMAU MOSES MUCHEMI MIGWI MAC-1-2994-2/2012

Question 1: Discuss in details the components of a business plan. In your discussion, include local examples where applicable. A business plan is a formal written statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Components of a business plan include: Business description- Statement of purpose, Marketing plan - to determine the sales breakeven point of your enterprise, prepare sales forecast Organization and Management, Operation/Production Risk Reduction and exit strategies and Financial plan projected income, cash flows, and pro-forma balance sheet. Expansion plans

As an example, I will detail a business plan for a commercial mobile software application that is primarily targeted at senior high school and lower level university students.

Business Description: Mobile Mathware is an upcoming software business specializing in creating educational applications in the field of Mathematics with a bias towards Calculus and Linear Algebra. Mobile Mathware has seen the need to create an applications that aids in solving common math problems in calculus and linear algebra using smartphones. Marketing Plan: currently we plan to advertise the application via KEMU yahoo groups at no cost. We will also market via social media and popular tech blogs. Also we will seek to enter into the local mobile applications challenges later in the year. Organization and Management: Currently the team is made up of three individuals, a software developer (I) responsible for creating and maintaining the app, a graphic designer responsible for the apps look and a marketing strategist responsible for marketing the app. Operation: the team currently operates from the school premises as the team is composed of continuing students. Being a software centric business, most of the work only requires computer usage which is achievable from anywhere. Risk Reduction: The team reached a conclusion that the software is developed using free and open source tools which are free available on the internet. The only investment made so far is time. Financial Plan: we are planning to invest an initial Ksh20, 000 for purchase of important software privileges for the BlackBerry app world software market. Our research has shown that Blackberry market has more chances of app purchases than Android, Nokia. With a minimum price of Ksh 200, only 100 downloads are required to recover the investment. Expansion Plans: we hope to purchase software tools which will enable us to develop for different platforms (Nokia, Android, Web) using the current knowledge of the BlackBerry environment only. As downloads increase there will be a need to hire extra workforce for customer care and support and general company management.

Question 2: Discuss briefly the role of entrepreneurship in the economic development of this country. The role of entrepreneurship in the economic development of this country: Job Creation it is only natural that a business owner is self-employed. As the business expands there is a need to employ more people thus creating job opportunities for others.

Tax base growth the more businesses there are in the country the wider the tax net subsequently more government growth which means more development. Infrastructural Development: growth of business is proportional to infrastructural development. Case in point is the growth of equity bank from a small lending outpost into a multi-national bank in both physical and financial infrastructure. Reduced crime rates crime is usually committed by unemployed and idle youth who find a way of surviving through criminal means. Most of these youth lack formal skills and the immediate remedy is setting up small informal businesses. A country with reduced crime rates also attracts more investment, subsequently more economic growth. Innovation a good business always attracts competition, thus it is essential for the entrepreneur to find creative ways of sustain his/her business. For example I Kenyas matatu industry entrepreneurs are always finding new methods to attract customers such as music systems or free internet. Improved living standards not only does the living conditions of a business owner improve with growth of the business, also competing businesses means lower goods and services pricing thereby improving living standards of the community by creating an affordable environment

Question 3: What are the different legal forms of businesses in Kenya? There are three major legal forms of business in Kenya for any entrepreneur who wants to set up a business in Kenya:

a). sole proprietorship A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor's. It is a "sole" proprietorship in contrast with partnerships. A sole proprietor may use a trade name or business name other than his or her legal name. b). partnership When business is conducted in or through a partnership, it is normally owned by 2-20 persons. The partnership would usually trade under a business name registered in the same manner as a sole proprietorship, the only difference being that the name is owned by all the partners jointly. The most notable characteristic of a partnership is that it ceases to exist upon the death or retirement of one of the partners. The remaining partners must therefore constitute a new partnership. To avoid disruption of business, the Partnership

Agreement normally contains transitional provisions in the event of the death or retirement of a partner. Partnerships are best suited for professional practices which are regulated by laws that do not permit operation of limited liability companies in the provision of professional services. For other businesses which are not so regulated it is difficult to find a reasonable justification for operating in partnership rather than via a limited liability company. The most basic form of partnership is the general partnership in which partners manage the business and are personally liable for its debts. In Kenya, however, limited partnerships exist, in which certain limited partners relinquish their ability to manage the business in exchange for limited liability for the partnerships debts. c). limited liability company A limited liability company is a form of business entity created by registration under the Companies Act (Cap 486) and having a certificate of incorporation as the evidence of its existence. It may either be private or public. A private company is usually created by persons having a common bond, e.g. family, friendship, investment objective, etc. In a sense, it is a members club open only to members within that bond and closed to strangers and outsiders. For that reason, the key feature of a private company is that shares in it are not freely transferable outside the membership. In contrast, a public company is one in which there is no restriction on the transfer of shares, either within or outside the existing membership. The minimum number of people required to form a public company is 7 and there is no statutory maximum. A distinction must be drawn between public and listed companies. Contrary to popular belief, a company does not have to be listed on the Stock Exchange to be public but to be listed on the Stock Exchange, the company must be public.