FTVETI

Department of Entrepreneurship
Assignment for the Course Entrepreneurship

Name: Degitu Diriba

ID No: TTK/ 0869 /08

Year: 2013 E.C

Section: 5

Dep’t: ICT
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Part i. Answer the following questions

1. Describe the consideration in setting entrepreneurial goals

ANSWER

 The setting entrepreneurial goals considers are:

A. Goals should be specific
 They should be clear, concrete & written.
 There is something about getting it down on paper that forces you to understand what you want.
This process of putting your goals in to words may help you realize how vague your thinking
really is writing your goals on paper will help you to develop a sense of personal commitment to
your goals. The point is that you must know what being in shape means for you before you can
take action.
B. Goals should be measurable
 You need to be able to know when you have reached goals the easiest goals to measurable are
probably financial.
 There are at list two (2) reasons why setting measurable goal is important.
 First it helps you know exactly where to aim having a goal which no measurable is something like
aiming for a target when you are not sure where it is.
 Second having measurable goals provides you with opportunities succeed.
C. Goals should be set for a definite time period

Setting deadlines for completing your goal is important many people may say that they work best
under pressure. They tend to leave things to the last minute. Although they realize that they could
probably be more through if they would start early and plan their time.

D. Goals should be set both short range and long range goals
 There are really two kinds of short range goals. One types of short range goal is a set toward along
range goal.
 Other types of short range goal are in dependent of longer range goal. Both kinds of short range
goals are necessary. The first kind helps you work toward a long term goal which is important to
you. The second kind can help you develop confidence in your ability to accomplish more difficult
or complicated goals.
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2. Describe the risk taking behaviors of entrepreneurship

 Entrepreneur ship is the attempt to create value through recognition of business opportunity, the
management of risk taking appropriate to the opportunity and through the communicative and
management skills to mobilize human, financial and material resource necessary to bring profit.

3. Define micro and small enterprises as per the definition employed in Ethiopia

 Micro and small enterprise is specific form of small enterprise. Such enterprise usually include
small service business, bakeries, metal working business, small furniture makers, reaper and
maintenance business, coping business and small scale food production business.
 The lower limit in the micro enterprise category is the one person business.
 The upper limit is often fairly arbitrarily drawn at business with a maximum of ten (10)
employees and or maximum capital of about us dollar 50,000. This definition usually refers to
the category set by most developed countries. More over studies indicate that this group or micro
enterprise provides most jobs in the industrial sector of many developing countries varying from
40 % to 90%.

4. What is the importance of micro and small enterprises for the economic development of a
country?

 Developing countries are deviating attention to the development of small scale enterprise in a
variety of ways.
A. Micro and small enterprise s are considered to be greatest value in building up a local
production structure and promoting economic growth.

B. Micro &small enterprise are also considered as a means of creating employment opportunity
achieving a fair distribution of national resource income, knowledge & power.

5. Describe the failure factors associated with micro and small enterprises in Ethiopia.

 Failure can be trust up on an entrepreneur through external condition or fabricated by the

entrepreneur through personal short coming.
A. External factors of failure
 Every business is affected by externalities like :-
a. Economic business cycles.
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 b. Fluctuating interest rates interrupted supplies.
c. Labor market trends
d. Inflation
B. Personal factors of failure
 It include the following things
a. In experience:- lack of technical skills & management acumen.
b. Arrogance:- many small business people become consumed with their own brilliance.
c. Miss management:- in experience entrepreneurs simply make bad decisions in critical
situation.
d. Lack planning:- research show less than half of small business owners had formal plans prior
to going in to business.

6. Describe the difference between creativity, innovation

 Creativity: - is the ability to develop new ideas & to discover new ways of looking at
problems and opportunities.
 Innovation: - is the ability to apply creative solutions to through problem and opportunities in
order to enhance people’s lives or to reach society.
 Generally creativity is thinking new things but innovation is doing new things.

7. What are the sources of a business idea?

Hobbies /personal interest

Personal skill & experiences
Franchise
Mass media/ newspaper, magazines , tv & internet
Business exhibition
Surveys
Customer complaint
Change in society
Being creative
Brain storming

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8. Describe the layout/component of a business plan

1. Executive summary: - is the first section of your business plan & also the last one you should
write.

 A good executive summery includes key facts about your business such as :-
 Business & product description
 Current positioning & targeting
 Financial outlook & requirements
 Past & future achievement goals.

2. Business over view: - in this section of the business plan you should explain precisely.

 what your company does

 What are its products or services
 In which market its operates
 Who are its customer

3. Sales & marketing strategy: - this section of the business plan requires a deep understanding of
your market space & how your business potion of its self with in mile and compete with existing
players.

4. Operations & management: - this section out lines all they day to day operations of the business.
You should include:-

 Production or service delivery

 Quality control
 Inventory
 suppliers
 Credit policies
 Legal environment
 Location

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9. Mention the steps of analyzing your competitor when you think of starting a business

 There are many steps of analyzing starting business.

 Step 1 – get oriented
 Step 2 – discover the primary business objectives
 Step3- define scope
 Step4- formulate your business analysis plan
 Step5- define the detailed requirement
 Step6- support the technical implementation
 Step7 - help the business implement the solution
 Step8 – assess value created by the solution

10. Describe the legal forms of business ownership

 There are six legal forms of business owner ship

i. Sole proprietor ship:- it’s the most common form of business organization .
 It’s easy & in expensive to start up since the sole proprietor merely has to starting
doing business.
 In addition to being relatively easy to set up a sole proprietor ship is easy to run.
2. General partnership:- if two or more person agrees to do business together, a
partnership form is formed. Generally partnership may be formed informally by oral
agreement or formally by written partnership agreement.
3. Limited liability partnership:-is special kind of general partnership.
 The d/c b/n a limited liability partnership & ordinary general partnership is in the
partner’s exposure to liability.
 In addition, in most states, limited liability partnership is required to file an annual
report.
4. Limited partnership:- limited partnership (lps) consists of two kinds of partners general
& limited partners.
 General partners have the same rights power & liabilities as partners in ordinary
general partnership.
 Limited partners are partners whose liabilities are limited to their investment in the
business.

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 5. Limited liability Company: - limited liability Company (llc) is another statutory entity.
 It is neither a partnership or nor corporation but hybrid entity with the same of the
characteristic of each.
 It is formed in general by filling articles of organization with the proper state filling
of filler.
 An llc may be solely owned or it may have several owners. The owner s of llc is
called members.
6. Business Corporation: - is the most complex form of business organization.
 It is formation & it is internal operations are governed by state law.
 There are four main advantages to doing business as corporation.
i. The investors are not liable for the corporation obligations.
ii. The corporation has perpetual existence.
iii. Capital can be raised by selling stokes & security.
iv. The corporations are centralized management so the investors do not have to be
involved in the day to day operation.
 There are three disadvantages to the corporate form of organization.
i. It is the most expensive to form.
ii. It is the most complex to operate.
iii. It is the subject to "double taxation” that is the corporation pay to a tax on the
income when it is distributed to them in the form of divides or distributions up
on the corporation liquidation.

11. Is entrepreneur born or learned/made?

 Entrepreneurs are made /learned. It is comes though learning.

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Part ii- case study

Case study: 1

1. A recent graduate of a technical institute is quite skilled in the use and application of computer
technology. She wants to start a cyber café close to the institute where students can
meet, socialize and use the five computers she hopes to purchase for the café. She will
probably need to borrow capital to start her business. If you were her, how would you respond
to the following questions regarding obtaining capital?
a. How much will five computers for the cyber café cost?
 If one computer 5000birr-6000bir so for five computer 25000 up to 30,000birr will be
needed.
b. Will she be able to obtain credit from the store where she purchases the computers?
 She by from second hand market
c. Where can she go to borrow?
i. Equity capital:- her capital, from family, from friend
ii. Debt financing: From bank, loan and saving institute and finance
d. If she has to go to a bank for a loan, how can she increase her chances of obtaining a loan?
She must prepare business plan, she must have house plan and she must have guarantor
e. How much capital will she need to finance a cybercafé?
Five computer=25,000-30,000birr
Five computer table =2500birr
Six chairs =1500birr
Internet Modem/2MB =1300birr
Switch = 3000birr
25meter network cable =250birr
14Rj-45 =40birr
One stabilizer = 500birr
Two divider = 200birr
Internet service =500birr
Total cost price =39790birrr

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 Case study: 2

2. The story of Thomas Edison

When he was young, Thomas Edison’s parents took him out of school after his teachers
declared that he was “stupid” and “un teachable.” Edison spent his early years working and
being fired from various jobs, culminating in his firing from a telegraph company at the age of
21. Despite these numerous setbacks, Edison was never discouraged from his true calling in
life: inventing! Throughout his career, Edison obtained more than one thousand patents. And
although several of these inventions such as the light bulb, stock printer, phonograph and
alkaline battery – were groundbreaking innovations, the vast majority of them could be fairly
described as failures. Edison is now famous for saying that genius is “1% inspiration and 99%
perspiration.” One of Edison’s best examples of perseverance occurred after he was already a
successful man. After inventing the light bulb, he began seeking an inexpensive light bulb
filament. At the time, ore was mined in the Midwest of the United States, and shipping costs
were very high. In order to minimize his costs with ore, Edison established his own ore-mining
plant in Ogdensburg, New Jersey. For nearly ten years, he devoted his time and money to the
enterprise. Edison also obtained 47 patents for innovations that helped make the plant run
more smoothly. And even despite those inventions, Edison’s core project failed because of the
low quality of ore on the east coast. However, despite that failing, one of those 47 inventions
(a crushing machine) revolutionized the cement industry, and actually earned Edison back
almost all of the money he had lost. Later, henry ford would credit Edison’s Ogdensburg
project as the main inspiration for his model t ford assembly line. And in fact, many believe
that Edison paved the way for modern-day industrial laboratories. Edison’s foray into ore-
mining demonstrates that dedication can pay off even in a losing venture.
Reflection questions:
What are the major challenges that Thomas Edison faced?
o Expulsion from school
o Dismissal from work site
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 o Core project failure
What were his achievements?
o Getting over 1000 patent right
o Obtaining 47 patents to assist ore mining plant
o Established ore mining plant
What are the causes for his success?
o Edison never discourages on his true calling in life
What do we learn from the story of Thomas Edison?
o we have learned that it is possible to be successful by not giving up and by
preserving with challenges we face in our work

Attempt the following questions/activity

3. Activity:
1. Think about your life so far, and list the five major achievements in business/personal
life.
A. When I was a primer school student I planned to finish secondary and I finished secondary.
B. When I was trainee from college I want to be a trainer.
C. When I start trainer in Oromiya region West Shoa, I plan to work around Addis Abeba. I
am trainer in Sululta TVET College.
D. After I work two year I plan to get education opportunity, and plan to have marriage. Now
I am successful in both.
E. When I was married I plan to have children, now I am a mother of two children’s.

2. Think about your strengths in running a business. Write four of them which you are most
proud of?
A. I know how to manage money and people.
b. I can prepare solution for a risk that occurs in business.
C. I am ready to work hard.
D. I can change business best practice as I went.

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3. Think about what’s important to you, and where you envision your business/life in the
future.
What is the goal of your business/life?
A. I want to grow my business operation.
B. I want to be more efficient in my business operation.
C. I want to improve my employee responsibility.
D. I want to improve my response time to customer complaint.
E. I want to increase my profit.

4. Build the knowledge and skills that you need to succeed. What do you need to know, do or
learn in order to accomplish the business/life goal stated above?
A. I want to know about how to handle customer.
B. I know how become competitive.
C. I want to know how to satisfy customers can need.
5. How do you think you can acquire this knowledge and these skills so that you will be able
to move forward confidently?
 Yes because if I know about how I can satisfy my customer I am not afraid to move
forward confidently.
6. When you are starting, do not try to do anything clever or elaborate. There is no need to be
perfect – just enjoy doing simple things successfully and well. Focus on the basics, set small
goals and achieve them, and you will find yourself accelerating towards success! So, what
basics or initial steps will you take towards reaching your goal?
A. Have a reason and stand to achieve the goal
B. Planning and organizing to reach at the destination point.
C. Having positive attitude
D. Stay positive
E. Believe in yourself.

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