Entrepreneurship Revision Questions
Question
Define the following concepts
(a) Entrepreneurship (3)
It is the process of bringing together creative and
innovative ideas and coupling these with management
and organizational skills in order to combine people,
money and other resources to meet an identified need
and thereby create a wealth.
(b) Entrepreneur (3)
It is the individual who initiates new ventures and takes the risks
(c) Sole trader (3)
One person business which is owned controlled and managed by
a single individual.
(d) Public enterprises (3)
Refers to socially owned and operated organizations with the
intention of supplying goods and services at reasonable prices for
the benefit of the whole community.
(e) Franchising (3)
Involves an existing, usually well-developed company allowing
someone exclusive rights to manufacture service or sell its
products in a particular.
(f) Intrapreneurship
Intrapreneurship is acting like an entrepreneur within a
larger organization. Intraprenuers are usually highly self-
motivated, proactive and action-oriented people who are
comfortable with taking the initiative, even within the
boundaries of an organization, in pursuit of an innovative
product or service. The intrapreneur has the comfort of
knowing that failure does not have a personal cost as it
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does for an entrepreneur, since the organization absorbs
losses arising from failure. Intrapreneurship allows the
freedom of experimentation and growth in an
organization. It fosters autonomy and independence when
studying every aspect of an issue and attempting to find
the best resolution
Question
Distinguish between Entrepreneurship distinguished from
Intrapreneurship.
Investors’ or entrepreneurs are innovative and creative but not
all of them are able to come up with innovations, and as such
they leave innovations to innovative managers of employees. An
employee or manager who is innovative and creative in an
existing organisation is known as an intraprenuer. Managers or
employees who carry out entrepreneurial roles are aware of
opportunities and they initiate changes to take full advantage of
them.The fundamental issue about the intraprenuer is that
he/she has to have innovative ideas and transforms them to
profitable activities within an existing organisation. In other
words, he/she is an initiator or originator of the commercial
undertaking. The word intraprenuership is attributed to Gordon
Pinchott an American who founded a school for intraprenuers to
help managers from large corporations to take responsibility for
creating innovations and turning ideas into profitable reality.
Question
Discuss the 4Ps of Marketing Mix
The marketing mix is about putting the right product or a
combination thereof in the place, at the right time, and at
the right price. The marketing mix is predominately
associated with the 4P’s of marketing. To create the right
marketing mix, businesses have to meet the following
conditions:
 The product has to have the right features - for
example, it must look good and work well.
 The price must be right. Consumer will need to buy
in large numbers to produce a healthy profit.
 The goods must be in the right place at the right
time. Making sure that the goods arrive when and
where they are wanted is an important operation.
A new product progresses through a sequence of stages from
 The target group needs to be made aware of the
introduction, to growth, maturity, and decline. This sequence is
existence and availability of the product through
known as the product life cycle and is associated with changes
promotion. Successful promotion helps a firm to
in the marketing situation, thus impacting the marketing strategy
spread costs over a larger output.
and the marketing mix.
Question
a) Introduction stage- first stage where the product is
Explain why the product life cycle is an important concept in
introduced into the market. Sales are low and
marketing.
profits are negative. Can use penetration pricing or
It describes the stages a product goes through from when it was
slamming pricing. Innovators are the customers.
first thought of until it finally is removed from the market. Not all
b) Growth stage- second stage whereby customer
products reach this final stage. Some continue to grow and
state to accept the product. Competition starts to
others rise and fall.
enter the market. Sales are picking up and profits
The Product Life Cycle
take a positive move. Early adopters are the
customers.
c) Maturity stage- third stage where sales and profits
have reached the maximum. Competition is stiff
and no increase in market share. Early majority are
the customers.

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 d) Decline stage- fourth stage where sales and profits Question
take a decline move. Some companies often Calculate the Cost price
chicken out. Laggards are the customers. Exhibit
Question The entrepreneur – carpenter specializes in the
Explain the usefulness of the following to the manufacture of tables and has the following details for
entrepreneur costing. Calculate the total cost of one table.
a) Customer care Material used: Timber 2 000.00
b) Costing Nails 1 000.00
c) Stock control Varnish 500.00
Glue 500.00
a) Computers One (1) worker takes 5 hours to produce one item. The
Customer care -The manner in which customers are carpenter is paid $1 000 per hour
treated by the business. Customer care increases Other costs per month: Rent $5
reputation, good image, customer loyalty, increases 000.00
sales, profits, customer base, etc. Electricity $ 500.00
Costing- is process of calculating the amount of money Other wages $10 000.00
used in producing and providing goods and services. It Telephone $2 000.00
determines value of the product, quality, pricing, Transport $2 000.00
ascertain profits, marketing strategies and management 100 items are produced each month
plans Answer
Stock control- is continuous monitoring of stocks in the Direct Materials: Timber $2 000.00
warehouse/ storeroom/ shelves and stock movement in Nails $1 000.00
order to avoid theft, deterioration, provision of Varnish $ 500.00
information to management on inventory for decision Glue $ 500.00
making, avoid overstocking, determine reorder level- $4 000.00 (DC)
supply and demand Direct Material/Cost=$4 000.00
Computers- are machines used to store, process and Direct labour: 1 x 5 hours/item x $1 000.00/h r=$5 000.00
retrieval of data for decision making by management, Indirect Cost/item Rent $5 000.00
networking, saving time, paperless office, fast Electricity $ 500.00
Other wages $10 000.00
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 Telephone $ 2 000.00 Varnish $50 000
Transport $ 2 000.00 Total direct material cost $400 000
Indirect Cost/item $19 500.00 Step 2
100 items/month = $195.00/item Calculation of direct labour cost per table
Total cost of one item: TC=DC + DL + DE + IC Total hours per table 2hrs
Direct material cost + Direct Labour Cost + Direct Expenses + Total number of hours per table
Indirect Cost = $4 000.00 + $195.00 +$5000= $9 195.00 2x3=6hrs
NB: There are not direct expenses Direct labour rate per hour $100
Question 000/hr
a) An entrepreneur produces office tables and uses the Total direct labour cost per table $10
following materials to make one table 000x6hrs
Timber$200 000
Nails $100 000 =$60 000/table
Glue $50 000 Prime cost of production per table $60 000+$400 000 =$460
Vanish $50 000 000
3 workers working together take two hours to make one table Step 3
and each one is paid $10 000 per hour. Other costs in running Calculation of indirect cost per table
the business per month are: Total indirect cost per month
Rent $300 000 Rent $300 000
Electricity $100 000 Electricity $100 000
Water $100 000 Water $100 000
Transport $200 000 Transport $200 000
Other wages $800 000 Other wages $800 000
100 tables are produced per month = $1500 000
1) Calculate the total cost of one table. Number of tables produced per month 100 tables
ANSWER Therefore indirect cost per table 1 500 000÷100=$15
a) Material cost per item 000 per table
Timber $200 000 Step four
Nails $100 000 Calculation of total cost per item
Glue $50 000 Prime cost per table $460 000
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Indirect cost $15 000 Question
Total cost per table $475000 Explain the importance of Record keeping.
Pricing factors  Basis of financial projections/forecasts, planning, budgeting,
When setting prices the entrepreneur must consider the following manufacturing, trading, profit and loss account and the
variables or factors. balance sheet
a) Customers  Basis or future decisions and plans in terms of corporate
The business is expected to carry out a survey to determine how growth and investment
much customers are prepared to pay for the product. The selling  Basis for the analysis of expenses and revenue and profit
price should not be higher than what customers are prepared to  Basis for the control of cash flow
pay.  Basis for showing who owes he business and how much, and
b) Competitors to whom the business owes money and how much
The entrepreneur should carry out competitor’s analysis to  Record keeping tells the entrepreneur how much money in
determine the prices of competitors. If the entrepreneur sets the bank and how much you have in cash
higher prices than its competitors, he/she will lose customers to  Facilitates analysis of expenses, revenue and profit
competitors.  Provides a written record
Customers are economic beings who always choose the cheapest Question
(or best value for money) products. As such, the highest selling Explain the following business growth strategies terms.
price should be equal to or less than the price charged by a) Market penetration strategy
competitors. b) Market development strategy
c) Product development
c) Cost and Profit d) Diversification strategy
The entrepreneur must consider the costs incurred in producing Market penetration
the product or the costs that the business is going to incur in Gaining more market share with the current company
producing the product. For the business to make a profit the market products in their current markets. The strategy
entrepreneur must set his/her selling price higher than the costs can be implemented by promoting more usage of the
incurred. product, attracting competitors’ customers and
NB: For a successful entrepreneur the lowest price = cost + profit convincing non users to use the existing product
need and the highest price = how much competitors charge or Market development strategy
customers will pay, whichever is lower. Company efforts to find or develop new markets for its
current products. This can be done by identifying
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potential uses in the current sales area where interests  pre-established promotion and advertising programs
for a product or services can be stimulated. Selling new provided
products to existing or current markets. Seeking  Financial and may be provided.
additional distribution channels in its present location.  Credit available in buying inventory and supplies
Product development  Decision making assistance, management procedure and
In addition to penetrating and developing markets training.
management should consider new product possibilities. Disadvantages
Company develops a product’s new features; different  the buyer inherits any ill will of the existing firm
quality levels and also tries to come up with a  certain employees may be inherited which are not assets to
technological breakthrough a potential product. the firm
Ansoff’s Growth Strategies Grid:  inherited clientele may not be the most desirable and
Market penetration Products development changing the firms image is usually difficult
Strategy strategy  procedures of the former may be difficult to follow
Market development Diversification strategy  renovation expenses
strategy  purchase price may not be satisfying

Current products. New products. Question

Explain the importance of using computers in a business

Question in your community.

Record keeping
Describe the advantages and disadvantages of Franchising.
 A system of distributing products/services through associated  Computers are used to keep records such as daily
sales
resellers.
 The franchiser gives rights to the franchisee to perform or use  employee records
 Memos and minutes of meetings.
something that is the property of the franchiser
 The objective is to achieve efficiency or profitable distribution  can also be used to store customer records in the
banking
of products/services within a specific area
 Both parties contribute a trademark reputation, known  Capturing and storing the information
 Also used in libraries to store book records and
products, managerial know-how produces or equipment.
facilitating payments for overdue books.
Advantages to the franchisee
 less risk with market tested products
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 Computers are also used in schools to keep student situations arise, which will thus alert the human being in
records such as name, address and age (for those in office.
education business e.g. private colleges).
Stock control Question
 Computers are used to monitor the inventory levels i.e. level Describe advantages and disadvantages of using computers.
of stock for each item an organisation has in their warehouse. Advantages
 The computer will be fed with information each time stock is  Large storage capacity
purchased or sold  Accuracy
 In return it will give up to date stock levels, items that are at  Reliability
re-order level, most selling stock and items enquiring special  Flexibility
attention.  Improved products
 This stock control function can be applied in any kind of  Efficiency
business, be it manufacturing, industry, retailers etc.  Paperless office
Disadvantages
Accounts  High computer crimes
 Computers can also be used to perform the accounting  Information cannot be easily accessed if lost
function. This is applied through the development of  Attacks by virus
accounting systems i.e. computer systems that automate  Sudden power cuts can affect the functions of computers
accounting activities. e.g. Pastel Accounting – an integrated Question
package that provide a variety of accounting functions Describe any five principles of risk management
 be part of decision making
Production control  explicitly address uncertainty and assumptions
 Computer systems can also be used to monitor production in  be systematic and structured
industry. In such cases, computers are fed with the  be based on the best available information
production output, they compare the actual output with the  take into account human factors
planned/desired output, if there is a variance, and they thus  be transparent and inclusive
give suggestions of what can be some to rectify the problem.  be dynamic, iterative and responsive to change
In some cases computers are used to monitor and control  be capable of continual improvement and enhancement
the industrial machinery just as what the human being does.  be continually or periodically re-assessed
They will be connected to an alarm that rings if unexpected Question
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Describe the following Strategies to Manage Risk
Risk Avoidance
Risk avoidance means avoiding projects or investments
that offer a higher level of risk than the company or
individual is willing to accept. Each individual or company
should determine the level of risk that is acceptable in an
investment or company activity. If the level of risk of the
potential activity is higher than the acceptable amount,
that opportunity is declined under the risk avoidance
strategy.
Risk Transfer
Risk transfer is used to eliminate the risk in exchange for
consideration given to the company that accepts the risk.
According to C-risk.com, this consideration is commonly
in the form of money paid to the company that accepts
the risk. The company accepting the monetary payment
then insures the company making the payment
accepting the risk and covering any expenses associated
with that risk if they occur.
Risk Retention
Sometimes the cost to either share a risk or transfer the
risk is too high. An example of this would be that the
premiums paid to the insurer are higher than the cost of
taking the risk itself in the view of the company. In a
private investment, an example could be if the other
investors are asking for clauses in the investment
contract that the original investor feels could cost it more
money than the financial risk of the investment.
Risk Control
The part of risk management which involve the provision
of policies, standards and procedures to evaluate, avoid
or minimize adverse risk facing the organisation
Question
Explain the socio-economic roles played by entrepreneurs in
contributing towards the development of Zimbabwe. Site
practical examples in your community (20)
 Creation of employment
 Charging fair prices- affordable prices
 Quality products- providing products that fit the purpose
for which they were manufactured to perform
 Social responsibility- assisting the less fortunate through
giving back to the community scheme i.e. sponsor social
events
 Generating foreign currency-do not externalize it but take
by
it to the bank
 Contribute to government revenue –pay tax VAT
 Supportive role to the government- receive sub-contracts
in manufacturing, distribution and construction
 Reduce anti- social activities- promiscuity , theft and
robbery are reduced
Question
Describe the concept of Social Responsibility
Is a broader concept that also covers business ethics. Social
responsibility defines the obligation that the business Community
or entrepreneur have for the well-being of the society. Social
responsibility also includes paying fax to the government. Social
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responsibilities also include taking care of harmful waste 4. Accessibility
products, dangerous emissions.  This refers to the degree of approachability and ease of
Question contact of the entrepreneur or his employees.
Describe the Importance of social responsibility to the  drop what you are doing ignored to greet and serve
entrepreneur. customer
o Productivity and efficiency may be increased / enhanced as 5. Courtesy
workers will be motivated with fair business practices  This refers to politeness, respect, consideration and
o corporate image building friendliness of your organization’s contact such as
o maintenance of sound mutuality relations with the society receptionist, secretaries, telephonist, etc, they must be

o increases sales polite and courteous at all times – remember, a smile

o increases market goes a long way.

o increases profits 6. Communication

 keep your customer well informed in a language and style
Question
they understand
Discuss the Ten tips for customer care.
 it is important to hear and understand what your
1. Reliability
customers are saying
 this refers to consistency of performance and
 communicate effectively with your suppliers as well
dependability
7. Credibility
 perform the service right the first time fulfill promises
 this refers to being trustworthy and faithful
 be impartial and avoid favouritism
 put customers at heart
 Be firm with friends and relatives as far as business
 they should feel that he/she is given priority and should
transactions are concerned.
have the trust that any order will be executed and
2. Responsiveness
received when expected
 This refers to the willingness as well as readiness of the
8. Security
entrepreneur or his employees in providing the services
 customer should be protected from danger, risk or doubt
within reasonable time immediately if not sooner.
within the premises
3. Competence
9. Knowledge of Customer
 This refers to the possession of the required skills and
 the entrepreneur should know the client specific
knowledge by those who deliver the services to the
requirements
customer. This will create confidence.
 be able to recognize regular clients
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 strive to provide individualized attention Explain why Small and Medium Enterprises continue survive in
 Understand what makes them buy is it need Price? Zimbabwe.
10.Tangibles A small business is generally a business that has low annual
 This could include the physical evidence (i.e. building, sales, few assets such as buildings, equipment, vehicles, serves
good handling, tools, equipment, packages etc). This local markets rather than national and international markets, has
could also include the appearance of your personnel small number of employees and usually the owner is solely
 employees must be neat, orderly and clean responsible for the success or failure of the venture.
Question
Explain the benefits/importance of customer care to a business in Reasons for continued survival of small firms
your community.  Small businesses are able to be more flexible, innovative
 If customers are put first, the entrepreneur will be and can react changes much quicker
rewarded with new business and increased profit margins  Small businesses play a supportive role to the giant firms
and sales. by being subcontracted in construction, distribution,
 Customer care creates new customers. service and manufacturing sectors
 Constructive consumer dialogue enables the entrepreneur  Small businesses serve small markets (market riches)
to know and understand what the customers’ needs and where large firms do not have interest
wants.  Small firms receive government support through the
 It builds good relationships and loyalty with customers. Ministry of Small to Medium Enterprises, ministry of Youth
 Can make passive customers become in violated Development Gender and Employment Creation and
participants (i.e. loyalty). Ministry of Higher and Tertiary Education that is they
 Create corporate excellence. receive support in form of training and funds. Small firms
 Build good reputation and good image i.e. it is a tool for also pay lower taxes.
good corporate image building.  Small firms supply their goods and services in smallest lots
 Business can become a market driven entity as you get than giant firms which usually supply in bulk
information on what your customers need and want.  Small firms offer specialized and personalized services to
customer’s e.g. electrical businesses.
 Small firms remain small usually during the initial phases
of new technology or innovation or product introduction as
Question the firms will be studying market reactions and modifying
the products.
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Question  Small firms contribute to government revenue through
Discuss the role played by small firms to the economy of payment of business and employment taxes
Zimbabwe.  Small businesses contribute to the national income of the
 Small businesses create employment for the business country (GDP – Gross Domestic Products) and to the
owner as well as the other fellow citizens (employment improvement of the balance of payment
creation)
 Small businesses increase the range of goods and Question
services available to the local community (provision of Briefly describe any five characteristics of a good
goods and services) especially in rural areas where goods entrepreneur
and services were previously unavailable.  Risk taking –take calculated risks, forecast and
 Small businesses reduce anti-social activities such as foresees the future
theft, robbery, promiscuity and burglary  Innovative- provides unique services
 Small businesses reduce rural-urban migration as more  Creative- develops the venture and gives efficient
goods and services and employment opportunities services.
become available in rural areas. This will help to decrease  Organized – demonstrate good managerial
the pressures on urban in terms of sanitary problems, principles
theft, robbery and promiscuity.  Customer orientation- center on customer needs
 Small firms contribute in the improvement of the standard and carryout a constant needs analysis
of living of the community  Flexibility – takes identified opportunities with
 Small firms contribute in stabilizing the economy through caution and makes the out of them.
increased employment, reduced prices and improved  Integrity- - must be a principal entrepreneur.
standard of living  Patriotic – business should sustain itself without
 Small businesses help in indigenising the economy. If the over profiteering.
economy is in the hand so indigenous people, resources  Reliable- should be dependent upon for services.
are not expatriated.  Profit oriented- employ profitable business
 Small firms help in the generation of foreign currency approaches to strengthen and enlarge the
 Small firms contribute in the production of quality and enterprise
affordable products by being in competition with giant  Drive and energy- be tireless
businesses  Goal setting – set specific, measurable, achievable,
realistic, and timely goals
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 State the components of Maslow hierarchy of needs of theory.
Question A. Basic, social, ego-fulfillment, self-actualization
Discuss any three roles played by Small to Medium Enterprises B. Basic, safety, social, ego-fulfillment, self-actualization
(SMES) in the development of the national economy. C. Social, basic, safety, self-actualization ego-fulfillment
 a means of mobilizing the resources of a country and D. Basic, safety, ego-fulfillment, social, self-actualization
strengthening its capacity Question
 Empower marginalized groups in society State the 4 agents of production and the reward that each gets
 Promotion of privatization Answer:
 Promote an innovative and competitive economic Agent Reward/Income
structure Land Rent
 Better equipped to respond to the grass roots needs of Labour Wages/salaries
the communities and markets they serve Capital Interest
 Earn foreign currency for the country Entrepreneurship Profit
 Increase the gross domestic product through their Question
innovations and creativeness State the four functions of management
Functions of management are:
Question  Planning
Describe 4 ways in which an organization can build a successful  Organization
relationship with customers (8)  Leading
(a) Positive and Proactive attitude from staff; staff should be  Controlling
helpful and friendly 
(b) Knowledgeable staff; customers expect to deal with staff Question
members who know the product, the nature of the Discuss how Maslow” Hierarchy of needs theory can be used to
service, how to solve the problem, how to give advice etc. motivate workers by an entrepreneur.
(c) Provision of customer friendly systems; use of simple  Physiological needs for such things as food, sex and air. They
payment systems, clear guidance on product availability, represent the basic issues of survival and biological function.
helpful signs etc. The entrepreneur can provide teas and lunches. Uniforms
(d) Efficient products and services; give special emphasis on can be provided to workers. The entrepreneur can provide
quality of products or services provided. accommodation to its workers and clean water. Can also
Question ensure that there is gender balance.
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 Security needs for a secure physical and emotional Identify the four reasons behind the need for
environment-the entrepreneur can provide work suits, entrepreneurs to prepare a business plan
helmets, safety shoes, free from accidents and hazardous  It serves as a basis for taking strategic decisions
gasses and chemicals, etc.  To source funds from investors or financial
 Belonging needs includes the need for love, affection and institutions
need to be accepted by one’s peers .this is related to social  Use as a measure of management control against
process-the entrepreneur can organize get together parties, which the company can monitor actual levels of
sports for workers to socialise. achievements
 Esteem –ego needs which relate to self-respect which  Provides a framework through which employees
involves the desire for confidence, strength, and others can be informed of company direction
independence ,freedom and achievement Question
 Self-actualization- the desire to become more and more of Appraise the statement that small scale entrepreneur continues
what one is capable of becoming which simply means that to survive despite the existence of giant business (20)
one wants to realize his or her potentials and capabilities  Small business survive due to government laws and
e.g. doing challenging tasks-entrepreneur can allow regulations –ministry
managers to study abroad. Award of bonuses based on  Have low costs of production-size
performance; promote high performers, provision of paid  Demand versus supply-match
holidays, verbal appraisal  Levels of competition in the industry
 Provision of substitute goods
Question  Location of the business- accessible
Examine the reasons which results in some business plan fail  Customers in the environment the business is situated
Business plan fail because  Inventory control ensures control on the direct costs of a
 Goals set being unreasonable purchasing and holding inventory
 Goals not measurer able (goals not being smart)  It prevents theft and damage.
 Lack of commitment  Maintain time and accurate records of inventory.
 Uncertainties(economy, political ,environment) Question
 Lack of experience in the planned business An entrepreneur needs to understand and respond to his
 Technological changes environment to survive. Describe five factors in the business
environment which can affect a business enterprise
Question
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Macro-environmental factors are external factors affecting the Allocation of resources to the units of an
business. The entrepreneur has no control over them organization or business to perform the arranged
 Political environment- stability, instability, political parties activities and assigning authority and power to
government people to the organizational units and the entire
 Economic environment- interest rates, forex, inflation, organization.
income tax Controlling is setting the standards and measuring
 Social cultural environment-beliefs ,values norms, or weigh the actual performance against the set
artifacts standards and gives corrective measures for any
 Technological environment-internet, e mail website e- deviation in order to achieve the stated goals.
commerce, e banking Leading which is influencing, motivating and
 Legislation/government- rules , laws training organizational members in order to
 Ecological environment- drought , floods, earthquakes achieve stated goals.
Micro-environmental factors are internal factors affecting
the business. The entrepreneur can control them Question
 Employee –knowledge, experience, abilities , sex Identify and explain any four sources of financing a business (10)
 Customers- disposable income, class, lifestyle, Sources of financing a business
consumption patterns Personal savings- money set aside by the owner to start a
 Supplier- payment terms, delivery, quality ,price business. Can be kept in savings account until it’s enough to
 Financial institutions- bank charges, interest rates commence a business
services Selling shares- contributing capital by shareholders
 Competitors- prices, substitute products, Leasing – renting space/ building
weaknesses , strengths Loan – borrowed capital from financial institutions
Question Overdraft – withdrawing more than what is in your current
Examine the functions of management in a business or account (using a cheque)
organization (15) Hire purchase- credit buying of fixed assets, paying monthly
a) Management carry out planning, a process of installments while using the asset.
setting out objectives and courses of action to Debt factoring- selling debt books to a debt collector to get
achieve set objectives cash below book value.
Organizing – a process of arranging activities Trade credit- getting stock on credit basis paying after 30 days,
60 days or 90 days.
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Debentures- loan capital from finance houses
Retained profits- ploughing back profits to expands the
business
Question
Entrepreneurship and intraprenuership (2 mark each)
Entrepreneurship is the process of bringing together creative and
innovative ideas and coupling these with management and
organizational skills in order to combine people, money and other
resources to meet an identified and thereby create wealth/ profit.
Intraprenuership is the process of being innovative and creative
in an existing organization
Question
Appraise the statement that entrepreneurship in the
Zimbabwean economy is not trouble. (20)
The above statement is not true, since the business
environment in Zimbabwe is not friendly due to a number
of challenges being faced by the economy:
Challenges faced by Entrepreneurs
 Competition from giants
 Lack of foreign currency to import or finance
exports
 Political instability
 High exchange rates
 Changes in cultural values, beliefs and norms i.e.
cultural dilution by western cultures
 Technological changes, cannot cope due to lack of
capital and expertise
 Natural disasters e.g. persistent droughts
 HIV/AIDS
 Import duties and high tax rates e.g. VAT
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Question
Explain the main factors associated with the statement that the
customer is always the King and is right (20)
Reliability i.e. consistency of performance and dependability
Responsiveness willingness and readiness of the entrepreneur in
providing the services within reasonable time immediately if not
sooner.
Competence possession of required skills and knowledge
Accessibility degree of approachability and ease of conduct
Courtesy politeness, respect, consideration and friendliness of
your organization’s contract e. g. the receptionist, telephonist etc
Communication keep your customer well informed
Credibility being trustworthy and faithful
Security customer should be protected from danger, risk or doubt
from the premises
Tangibles physical evidence eg buildings good handling tools and
appearance of personnel
Question
Outline some of the major reasons why small businesses fail in
Zimbabwe. Give specific examples where possible (20)
 Lack of capital to expand
 Lack of skills and experience to utilize new technology
 Stiff competition from the giant firms
 Failure to adopt to change in technology
 Serving local markets instead of international markets
 Owner is solely responsible hence no-one to share ideas
for better decision making
Question
Benefits of advertising
 To inform of the new product e.g. prices, range.
  To remind about product  Never show that the customer is wrong or is behaving
 Enable customer to choose i.e. bring variety badly
 Creates competition which can lead to low prices ,  Always take it that she /he is right
quality products  Accept that some customers visit you with hidden agenda
 Making the product known to the people  Be upright in your dealings
 Helps consumers to know knew products
 Educates consumers on product usage, dangers Question
Question Define the following terms in relation to business
Discuss the effects of HIV/AIDS at the workplace (employment  Advertising
and production) and to the national economy (20)  Packaging
Workplace  Franchising
 Production time lost due to sick leave and time taken  Product
consulting doctors and seeking medication  Market share
 Skilled manpower lost hence low production Advertising-Techniques used by organization to inform
 Victimization and stigmatization some people may not customers of particular characteristics of a product and
want to work with the infected encouraging them to buy the product
 Reduces company incentives as most of the money is Packaging-Protection given to a product in order to preserve it ,
channeled to catering for the sick and enables easier transportation and storage before it reaches
 Increased company expenses through medical aid the consumer. It may in some cases be a used vehicle for
donations to orphanage homes and recruitment advertising by swaying customers through written messages.
National Economy Franchising-Licensing agreements and contracts where a firm
 Loss of the active age group (24-49 ) reaches a wider market by offering the format by small firms and
 Increases the nation’s expenses through provision of receive commission on sales , it can be viewed as some type of
drugs ,testing and research subcontracting
 Victimization and stigmatization Products- are goods or services, or tangible or intangibles in
 Catering for orphans from the government revenue business
 Low production (low GDP) Market share-An organization’s overall sales compared to the
Question market in which it operates / firm’s sales compared to sales
Explain two ways of dealing with unprincipled customers. (2) enjoyed in the overall market
Question
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Describe how an entrepreneur can invest in the community in
which he is operating (10)
 sponsoring disadvantaged children’s education
 building houses at benefit to the community
 assisting unemployed, the sick and elderly
 HIV awareness campaigns
 Building infrastructure such as roads
 Introduction of technology
 Sponsoring social activities such as soccer

Question
State clearly, five functions of a business plan to an entrepreneur
(5)
 shows goals of a firm
 Basis for strategic decisions-
 basis for sourcing funds
 Standard measure of performance
 framework to inform employees and others of company
decisions

Question
Define social responsibility
Obligation that the business community or entrepreneur has for
the wellbeing of the society (plough back)

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