1. i) WHO ARE INTRAPRENEURS?

(4MARKS)
An intrapreneur is someone who works within a company to develop an idea into a workable
product. Intrapreneurs are basically employees within sizeable organisations with
entrepreneurial characteristics (creativity, vision, willingness to fail and try again etc). They test
and develop new ideas, often starting from a blank piece of paper.

ii) EXPLAIN THE DIFFERENCE BETWEEN ENTREPRENEURS AND INTRAPRENEURS
USING SUITABLE EXAMPLES (16 MARKS)

Even though intrapreneurship is rooted in entrepreneurship (Amo & Kolvereid, 2005;
Antoncic, 2001; Davis, 1999; Honig, 2001), there are several differences between these two
concepts. In this context Antoncic & Hisrich (2003) note that while intrapreneurs make risky
decisions by using the resources of the company, the entrepreneurs make risky decisions using
their own resources (Antoncic & Hisrich, 2003). Intrapreneurship takes place among employees
from within an organization while entrepreneurship tends to mainly be externally focused
(Antoncic & Hisrich, 2003; Davis, 1999). Entrepreneurs prefer to develop tacit knowledge, in
new organizations, instead of using procedures and mechanisms from other companies. On the
other hand intrapreneurs work in organizations that have their own policies, procedures and
bureaucracy (Antoncic & Hisrich, 2003; Davis, 1999).
An entrepreneur takes substantial risk in being the owner and operator of a business
with expectations of financial profit and other rewards that the business may generate. In start-
up entrepreneurship, the entrepreneur takes the risk in intrapreneurship and the company takes
the risk other than career- related risk. On the contrary, an intrapreneur is an individual
employed by an organization for remuneration, which is based on the financial success of the
unit he is responsible for. Intrapreneurs share the same traits as entrepreneurs such as
conviction, zeal and insight. As the intrapreneur continues to expresses his ideas vigorously, it
will reveal the gap between the philosophy of the organization and the employee. If the
organization supports him in pursuing his ideas, he succeeds. If not, he is likely to leave the
organization and set up his own business. In a start-up potential rewards for the individual
entrepreneur are theoretically unlimited where in intrapreneurship an organizational structure is
in place to limit rewards/compensation to the entrepreneur. Moreover in a start-up venture, one
strategic gaffe could mean instant failure on the contrary, in intrapreneur the organization has
more flexibility for management errors. Lastly, in a start-up entrepreneur is subject or more
susceptible to outside influences whereas, intrapreneur the organization is more insulated from
outside forces or influence.

Example of entrepreneurship: A classic case of entrepreneur is that of the founders of
Adobe, John Warnock and Charles Geschke. They both were employees of Xerox. As
employees of Xerox, they were frustrated because their new product ideas were not
encouraged. They quit Xerox in the early 1980s to begin their own business. Currently,
Adobe has an annual turnover of over $3 billion.

Examples of Intrapreneur:
A lot of companies are known for their efforts towards nurturing their in-house talents to promote
innovation. The prominent among them is Skunk Works group at Lockheed Martin. This group
formed in 1943 to build P-80 fighter jets. Kelly Johnson was the director of the project, a
person who gave 14 rules of intrapreneurship.
At 3M employees could spend their 15% time working on the projects they like for the
betterment of the company. On the initial success of the project, 3M even funds it for further
development. Genesis Grant is another 3M intrapreneurial program which finances projects
that might not end up getting funds through normal channels. Genesis Grant offers $85,000 to
these innovators to carry forward their projects. Robbie Bach, J Allard and teams XBOX might
not have been feasible without the Microsofts money and infrastructure. The project required
100s of millions and quality talent to make the product.






2) EXPLAIN THE 3 STEPS INVOLVED IN IDENTIFYING THE TARGET MARKET. (20
MARKS)

Target marketing means identifying specific market segments within a larger audience and
targeting them with ad campaigns. This process is commonplace in marketing and helps
companies get more value for their advertising investment. It goes against historical approaches
to marketing whereby companies would simply pay to deliver messages to mass markets
without considering the waste in paying to reach consumers who would never buy. By targeting
select markets, businesses with tight budgets can get more return from their advertisements.
Three main activities of target marketing are segmenting, targeting and positioning. These three
steps make up what is commonly referred to as the S-T-P marketing process. Companies and
marketers use this step-by-step approach to target marketing to figure out which segments offer
the best profit potential and how to effectively market to them.

Segmenting
Segmenting means breaking up the market into smaller, homogeneous segments. Within S-T-P,
it is a virtual brainstorming step whereby the business considers all possible market segments.
Segmenting strategies include demographics, lifestyle, geographic and behavioral approaches.
Demographics segmentation means you break up markets based on personal traits like age,
race, marital status, gender and income. Lifestyle segmenting means you divide customers by
hobbies and interests. Geographic segmentation makes local, state, regional, national or
international markets key. Behavioral segmenting is based on such things as usage patterns
and benefits sought from the product.

Targeting
Following the brainstorming of possible segments in step one, the next step is to pick a select
market to target or focus on. Companies often focus on one market segment at a time with
marketing and ad campaigns. Whichever market is the most attractive from a profit standpoint
or long-term potential is usually selected first. Factors including size of the market, growth
potential and competitive intensity impact the perceived opportunity in targeting a given market.

Positioning
Positioning is how the company wants the targeted market to perceive its brand or product.
Some companies make quality a key positioning message and try to market their product as top
quality for the target market segment. Other qualities commonly used to differentiate include
service, unique features, environmental friendliness, family friendliness, safety, reliability,
durability and low cost. The key is to stand out from competitors with a unique message that
appeals to the interests of the targeted market.

3) FOR A BUSINESS THAT YOU WISHTO START ON YOUR OWN, EXPLAIN 6 STAGES OF
BUSINESS DEVELOPMENT (20 MARKS)

Erik, David and me met together, envisioned a restaurant where we could follow our cooking
passions and serve organic, farm-fresh, "slow food" dishes at affordable prices. But the food
wasn't the only thing that was slow. Once we decided to join forces and launch an eatery, we
took our time to carefully plan every aspect of the business before taking the plunge. Before
launching our business, here are six steps to ensure a successful start.

a. Go beyond the business plan.
Planning carefully before launching a new business is not limited to preparing a business
plan, says Bruce Bachenheimer, clinical professor of management and director of the
Entrepreneurship Lab at Pace University in New York City. "While preparing a business plan is
generally a valuable exercise, there are other ways to plan carefully," he says. Bachenheimer
recommends three planning methods.
The Apprentice Model: Gaining direct industry experience, as the founders of Tender Greens
did.
The Hired-Gun Approach: Partnering with experts who have in-depth knowledge and
experience.
The Ultra-Lean School of Hard Knocks Tactic: Figuring out a way to rapidly test and refine
your model at a very reasonable cost.
While writing a business plan is certainly helpful, the real value is not in having the finished
product in hand, but rather in the process of researching and thinking about your business in a
systematic way, according to Victor Kwegyir, founder and CEO of Vike Invest, a U.K.-based
business consultancy.



b. Test your idea.
Sixty percent of new businesses fail within the first three years, according to Victor
Green, a serial entrepreneur and author of How to Succeed in Business by Really Trying. "Too
often people rush into business without carefully checking out their idea to see if it will work," he
says. "Research is essential."
While the internet makes it possible to conduct research without leaving your desk, Green says
Google isn't enough. "Talk to real people who are in the business you want to go into. Talk to
people who might be your customers and get their views and opinions," he says. "Test your
ideas if possible."

c. Know the market.
Ask questions, conduct research or gain experience to help you learn your market inside
and out, including the key suppliers, distributors, competitors and customers, Bachenheimer
says. "You also have to really understand the critical metrics of your market, whether it's as
simple as sales per square foot and inventory turnover, or an esoteric measure in a highly
specialized niche market," he says.

d. Understand your future customer.
In most business plans, a description of potential customers and how they make purchasing
decisions receives much less attention than operational details such as financing, sourcing and
technology. But in the end, it will be the customers who determine your success or failure, Blue
Canyon Partners' Brown says.
"You need to know who they are going to be, what drives their purchase decisions, what
you can do that will differentiate your offering from that of competitors and how you can
convince them of the value of your offer," he says. "And the answers to those questions
shouldn't be off-the-cuff guesses. They need to be well-grounded in reality and market testing."
Understanding your future customers can be the difference between changing a failed aircraft
engine on the ground vs. doing so midflight, Brown says.
e. Establish cash resources.
"Cash is king, so you must take steps to adequately capitalize the business and secure ready
sources of capital for growth," says Steve Henley, senior managing director and national tax
practice leader at Cbiz MHM, an accounting and management service provider. "A good cash-
forecasting tool is critical so that you can plan for the sources and uses of cash on a rolling
basis."
While some startups rely on owners' capital, others look to investors. Tender Greens'
owners raised funds from friends, family members and colleagues.To determine how much cash
you'll need, develop a cash-flow statement that estimates your expenses and income. Be sure
to include appropriate expense levels by researching actual business costs rather than
estimating based on your personal experience as a retail consumer. Limit your need for cash by
avoiding long-term commitments, like long-term leases, until necessary, adds Cbiz's Henley.
"There will be a considerable amount of uncertainty during the first few years, so be
conservative in making commitments for resources that might not be yet needed."
f. Choose the right business structure.
From the beginning, it's crucial to select the appropriate corporate structure for your business,
which will have legal and tax implications. The structure you choose can also ensure the
success of future decisions, such as raising capital or exiting the business.
Most startups should probably operate as either an LLC or an S Corporation, Henley
says, because starting with one of those structures and converting to a C Corporation later is
much easier than starting as a C Corp and trying to convert to an LLC or S Corp. To determine
which structure is best for your business, Henley outlines four considerations.
Liability limitations: For C Corps, S Corps and LLCs, the owners' personal liability is generally
limited to the amounts invested and loaned. There is unlimited liability for general partners.
Startup losses: If your company is an S Corp or an LLC, also known as "pass-through"
structures (because tax liabilities and benefits "pass through" to the owners' personal tax
return), you can usually write off startup costs as losses on your personal tax return. In a C
Corp, startup costs producing tax losses can only be utilized at the business level and offer no
future benefit if the new company has future tax profits.
Double taxation: "Generally, double taxation of earnings is avoided for pass-through entities,
but not for C Corporations," Henley says.
Capital-raising plans: If you plan to take your business public or fundraise through private
equity, these plans may require that the company not be a pass-through structure.




















4) EXPLAIN THE CHARACTERISTICS OF SMALL BUSINESS IN MALAYSIA. (20 MARKS)

Small business may be small in amount, but nevertheless they are vital to our countrys
economy. Not every small business eventually grows to the size of large corporation. Some
businesses are ideally suited to operate on a small scale for years, often serving a local
community and generating just enough profit to take care of company owners. Small-scale
businesses display a distinct set of identifying characteristics that set them apart from their
larger competitors.

Revenue and Profitability
Small-scale business revenue is generally lower than companies that operate on a larger scale.
The Small Business Administration classifies small businesses as companies that bring in less
than a specific amount of revenue, depending on the business type. The maximum revenue
allowance for the small business designation is set at $21.5 million per year for service
businesses.
Lower revenue does not necessarily translate into lower profitability. Established small-
scale businesses often own their facilities and equipment outright, which, in addition to other
factors, helps to keep costs lower than more leveraged businesses.
Employees
Small-scale businesses employ smaller teams of employees than companies that operate on
larger scales. The smallest businesses are run entirely by single individuals or small teams. A
larger small-scale business can often get away with employing fewer than one hundred
employees, depending on the business type.
Market Area
Small-scale businesses serve a much smaller area than corporations or larger private
businesses. The smallest-scale businesses serve single communities, such as a convenience
store in a rural township. The very definition of small-scale prevents these companies from
serving areas much larger than a local area, since growing beyond that would increase the
scale of a small business's operations and push it into a new classification.
Ownership and Taxes
The corporate form of business organization is not well-suited to small-scale operations.
Instead, small-scale businesses prefer to organize as sole proprietorships, partnerships or
limited liability companies. These forms of organization provide the greatest degree of
managerial control for company owners, while minimizing the hassle and expense of business
registration.These businesses generally do not file their own taxes; instead, company owners
report business income and expenses on their personal tax returns.
Locations
A small-scale business, by definition, can be found only in a limited area. These companies are
not likely to have sales outlets in multiple states or countries, for example. A large number of
small-scale businesses operate from a single office, retail store or service outlet. It is even
possible to run a small business directly out of your home, without any company facilities.



5) i) WHAT IS A BUSINESS PLAN. (2 MARKS)

A business plan is a written description of your business's future. A business plan is a written
statement of your business; what you want to achieve with it and how you will do that.

ii) EXPLAIN 4 REASONS WHY A BUSINESS PLAN IS IMPORTANT (8 MARKS)
Many entrepreneurs are intimidated by the idea of writing a business plan. The idea of
writing such a detailed document may remind you of the dreaded days of school, or may just
feel that you can better utilize your time elsewhere. But, the business plan is a strong business
tool, especially for the small business owner. It provides you with every detail about your
business and allows you to review the hard, clear facts that are needed to make strong and
successful business decisions, even if it means starting the business over.
To map the future
A business plan is not just required to secure funding at the start-up phase, but is a vital aid to
help you manage your business more effectively. By committing your thoughts to paper, you
can understand your business better and also chart specific courses of action that need to be
taken to improve your business. A plan can detail alternative future scenarios and set specific
objectives and goals along with the resources required to achieve these goals. By
understanding your business and the market a little better and planning how best to operate
within this environment, you will be well placed to ensure your long-term success.
To develop and communicate a course of action
A business plan helps a company assess future opportunities and commit to a particular course
of action. By committing the plan to paper, all other options are effectively marginalized and the
company is aligned to focus on key activities. The plan can assign milestones to specific
individuals and ultimately help management to monitor progress. Once written, a plan can be
disseminated quickly and will also prompt further questions and feedback by the readers helping
to ensure a more collaborative plan is produced.

Forecasting
For you to forecast aspects of your business, you must understand your business current and
historical standings. The business plan provides a detailed snapshot of your business at a point
in time. In most cases, the first snapshot is the just before the small business startup. The plan
should be updated at least once each year and at every defining business event. The
continuous updates will provide you with an ever-developing business document, which you can
use to review the past history, trends and statistical changes within your business. You can use
this information to benchmark the upward and downward fluctuations of your business while
being able to identify the causes of these fluctuations.
Financing
Financing is one of the most common uses of the business plan. Because the business plan
provides such a detailed review of your small business, it is a key tool for obtaining financing for
your business. Investors are able to review the details and obtain clear snapshots of your
business, including its operations, financial stability and forecasted sales and income. Along
with a strong credit score and capital, most lending institutions want to see a business plan
when considering a business loan application.

iii) EXPLAIN THE CONTENTS OF A BUSINESS PLAN. (10 MARKS)
The statement should be kept short and businesslike, probably no more than half a page. It
could be longer, depending on how complicated the use of funds may be, but the summary of a
business plan, like the summary of a loan application, is generally no longer than one page.
Within that space, you'll need to provide a synopsis of your entire business plan. Key elements
that should be included are:
Business concept :
Describes the business, its product and the market it will serve. It should point out just
exactly what will be sold, to whom and why the business will hold a competitive advantage.
Financial features :
Highlights the important financial points of the business including sales, profits, cash flows
and return on investment.
Financial requirements :
Clearly states the capital needed to start the business and to expand. It should detail how
the capital will be used, and the equity, if any, that will be provided for funding. If the loan for
initial capital will be based on security instead of equity, you should also specify the source
of collateral.
Current business position :
Furnishes relevant information about the company, its legal form of operation, when it was
formed, the principal owners and key personnel.
Major achievements :
Details any developments within the company that are essential to the success of the
business. Major achievements include items like patents, prototypes, location of a facility,
any crucial contracts that need to be in place for product development, or results from any
test marketing that has been conducted.