TEST 1 – 2017

1. Briefly, explain the following terms as used in entrepreneurship: (4 marks)

a) Intrapreneurship is the entrepreneurial behaviors, attributes and skills that employees
display in an established organization.
b) Enterprise is an entrepreneurial activity/ business undertaking.
c) Entrepreneur is a person who develops a new idea and takes the risk of setting up an
enterprise to produce a product or service that satisfies customer needs.
d) Locus of control is a measure of the extent to which people believe they can control
their own destinies. People with an internal locus of control are those individuals who
believe themselves to be in control of their own destinies.
e) Networking: An entrepreneur acts to develop and maintain business contacts by
establishing good working relationship. He/she builds networks with relevant
stakeholders since know-who is important to build trust.

2. What are the reasons that push people to engage in self-employment? (4 marks)
 To utilize the skills and knowledge which one possesses.
 To make a living and obtain the basic needs of life.
 To make more money so as to increase own and/or family wealth.
 To engage oneself in an income generating activity due to lack of job placement after
graduation.
 To do something one likes/enjoys most for personal satisfaction.
 To develop a common cause for the family by creating jobs for family members.
 To avoid working for someone else.
 To avoid taking orders from other people.

3. Entrepreneurship is known to be one of the most important inputs in economic d evelopment.

Also, for many developing countries, private sector development has been a powerful engine of
economic growth and wealth creation. Discuss. (4 marks)
Discuss the role of entrepreneurship in economic development.
 Employment Creation: Entrepreneurship generates employment because entrepreneurs
are self-employed and at the same time start many industrial units, which offer jobs to
millions. In this way, they offer solution to the growing unemployment particularly
educated unemployment, which is a problem of many nations.
 Contribution to the Country’s National Income: Entrepreneurship increases the national
income through entrepreneurs who produce goods and services for consumption within
the country as well as to meet the demand of exports. The domestic demand increases
with increase in population and increase in standard of living. The export demand also
increases to meet the needs of growing imports.
 Utilization and Mobilization of Natural Resources: Entrepreneurship brings about
effective utilization and mobilization of resources indicated by the fact that
entrepreneurs play a fundamental role in utilizing and adding value to local resources.
 Technology Development and Transfer: Entrepreneurship play a key role for
innovations and creative ideas that solve problems with the efficient use of technology.
 These technologies are easier to acquire, transfer and adopt. In this country, simple
technologies have been developed for processing juices, sugar, production of electricity
and others.
 Better standard of living: Entrepreneurship brings about better standard of living since
entrepreneurs play a vital role in achieving a higher rate of economic growth. They are
able to produce goods at lower cost and supply quality goods at lower price to the
community according to their requirements. When the price of commodities decreases,
the consumers get the power to buy more goods for their satisfaction.
 Balanced National Development: Entrepreneurship leads to industrial growth and
business leads to development of public benefits like transport facilities, health,
education, entertainment etc. Concentration of industries in cities and towns results in
rapid development.
 Income Generation and Poverty Relief: Entrepreneurship as a major source of
employment is recognized as being capable of generating income for a large section of
the population, particularly the less educated and unskilled, and as such, it is often seen
to be in the front line in reducing poverty.
 Industrial Development and Growth: Entrepreneurship leads to the development of
business/industrial entities, which can create a strong industrial base for faster
economic and industrial development including promotion of forward and backward
industrial linkages in the country.

4. (a) Is a small business in other countries defined the same as small business in Tanzania?
Elaborate your answer using examples from Tanzania context. (4 marks)
No, small business in other country does is not defined the same as in Tanzania. For example in
the context of Tanzania, Small enterprises are mostly formalized undertakings engaging
between 5 to 49 employees or with capital investment from TShs. 5 million to TShs.200 million.
But in the context of other country, the capital investment may increase and decrease.

(b) What do you think are the dangers of one becoming paid employee? (4 marks)
 The work is organized in such a way that every employee is furnished with
responsibilities, rules and regulations. Employees are liable for punishment if they fail to
perform as required and are unable to comply with the specified rules and regulations
so there is no independence since the employees have to follow orders.
 There is risk of losing job by being laid off.
 The employees do not have the right to any profit as they are not owners of the
business and the income is fixed.
 There is a limitation of action, responsibility and decision making due to bureaucracy.
This limits personal freedom and professional growth of employees and makes it
difficult to implement ideas.
 Individual ability not easily recognized.
 There is high dependence on the employer.
TEST 1; 2016: Attempt only two questions. Question one is compulsory

1. (a) Briefly define the following terms: (4 marks)

i) Entrepreneurship is a phenomenon in the economy by which individuals or companies
assume risks to create something new in order to obtain the benefits from the new venture .
On the other hand, Entrepreneurship is the process of identifying business idea that will
enable you to start and managing the business.
ii) Entrepreneur is a person who develops a new idea and takes the risk of setting up an
enterprise to produce a product or service that satisfies customer needs.
iii) Intrapreneur is a person who operates in an entrepreneurial way from within an established
organization.
iv) Enterprise is an entrepreneurial activity/ business undertaking.

(b) Mention four roles of entrepreneurship in economic development. (8 marks)

(Repeated TEST 1- 2017)

2. Why is it necessary to prepare business plan before starting any new business? Give five
reasons. (8 marks)
 It enables an entrepreneur to plan for his business.
 It enables the entrepreneur to evaluate the feasibility of the business idea and allow
him/her to make mistakes on paper, rather than in the market-place.
 Once completed, it will make an entrepreneur feel more confident about his/her ability to
set up and operate the venture.
 It will indicate how much money is needed, what it is needed for, when and for how long it
is required.
 It gives an insight into the business planning process. This process is important to the long-
term health of a business due to the fact that businesses are dynamic, as are the
commercial and competitive environments in which they operate.
 Which is well thought-out and carefully prepared is a valuable way to introduce the
entrepreneur to different sources of financing.
 It allows the entrepreneur to conduct an in-depth analysis of the enterprise’s economic
capability and viability.
 It is an excellent tool for self-assessment. It enables entrepreneurs to assess their strengths
and weaknesses.
 It forces the entrepreneur to formulate objectives in a more realistic manner at an early
stage of operation. It is a guide to keep you focused and making progress during the
business startup phase.
 It provides direction in the early days of operation and creates a framework for the
entrepreneur to start and grow the business.
 It creates a measure for evaluating changes in the business industry.
 It helps the entrepreneur learn how to manage own business more effectively while
becoming an expert in the industry and business.
 It helps an entrepreneur to decide whether to start business or not
3. Explain why young educated graduates should opt for self-employment rather than wage
employment. Give at least five reasons. (8 marks)
 To utilize the skills and knowledge which one possesses.
 To supplement income from salary for paying living expenses or invest in real estate
 To make a living and obtain the basic needs of life.
 To make more money so as to increase own and/or family wealth.
 To engage oneself in an income generating activity due to lack of job placement after
graduation.
 To do something one likes/enjoys most for personal satisfaction.
 To engage oneself after retirement from a paid job or retrenchment
 To continue with family background i.e. inherit family business from parents or other
close relatives.
 To develop a common cause for the family by creating jobs for family members.
 To avoid working for someone else.
 To avoid taking orders from other people.
TEST 1; 2015: Attempt only three questions. Question 1 is compulsory.

1. List down and explain at least four roles of entrepreneurship in economic development of the
nation. (20 marks) (Repeated TEST 1 - 2017)

2. Define the following terms: (10 marks)

i) Entrepreneurship is a phenomenon in the economy by which individuals or companies assume
risks to create something new in order to obtain the benefits from the new venture.
ii) Intrapreneurship is the entrepreneurial behaviors, attributes and skills that employees display in
an established organization.
iii) Enterprise is an entrepreneurial activity/ business undertaking.
iv) Micro Business, in the context of Tanzania, micro enterprises/ business are those engaging up to
four people employing capital amounting up to Tsh. 5.0 million. The majority of micro
enterprises fall under the informal sector.
v) Small Business, in the context of Tanzania, Small enterprises are mostly formalized undertakings
engaging between 5 to 49 employees or with capital investment from TShs. 5 million to
TShs.200 million.

3. Write briefly on any four challenges that stand in the way toward starting business venture in
Tanzania. (10 marks)
 Lacking of Financial Support: Despite existing policies on financial support for small
businesses, very few entrepreneurs receive financial help when they need it. In Tanzania,
many entrepreneurs are facing a major challenge of lacking financial support starting their
own business; on the other hand, most of financial institutions do not provide the loans for
small firms if they do not present acceptable feasibility study or good business plan.
 Poor Infrastructure: Inadequate provision of physical economic infrastructures like reliable
roads, water, electricity, and machinery in a given geographical setting.
 Inadequate educational orientation, limited entrepreneurial experience and market
opportunities.
 Lacking of natural resource: For example, someone has decided to introduce the cultivation
of watermelons but he/she may miss the cultivated area or farmland and that could be be
the reason to not starting his/her own business.
 Political systems, which discourage individual freedom, free, market economy and private
enterprises and therefore policies, which contradict individual motives and desire to excel.
 Psychological factors like security – orientation, conformity and compliance and high need
for affiliation. In other words, a psychological environment which is not endowed with
drives and urges for entrepreneurial excellence.

4. Explain why most educated young graduate opt for wage employment rather that self-
employment. (10 marks)
 Lacking of financial support or capital for proper establishment and/or operation of the
business.
 Assurance of getting a uniform and predictable salary regardless of whether the
organization is working profitably or not. Therefore, there is minimal risk in terms of
payment schedules.
 There are some benefits accrued from being a wage employee, including paid holidays and
vacations, maternity leave for females, sick leave, overtime, entitlement to pension and
other social security funds at the end of employment period or death.
 There are regular and fixed working hours. Working longer than the specified time leads
liability to overtime payments.
 The employees do not bear a risk of losing income (in form of capital) through business
failure.
TEST 2 – 2015

1. List down and explain at least five roles played by busi ness development services to small
businesses in Tanzania. (20 marks) (Repeated TEST 1-2017)
2. Describe the following terms; (10 marks)
i. Innovation and creativity:
Innovation is the process of introducing something new or improved product, or of new
or improved processes and organization methods in the design, production and
distribution of goods and services.
And Creativity is the ability to bring something new into existence by using your
imagination to be inventive. It allows you not only to come up with new products or
services, but also to find new ways of doing your job and other things.
ii. Locus of control is a measure of the extent to which people believe they can control
their own destinies. People with an internal locus of control are those individuals who
believe themselves to be in control of their own destinies.
iii. Business development services (BDS) are service provided to businesses on either a
formal or informal basis. These services are important for improving the performance
of the enterprise, its access to markets, and its ability to compete. They include
Operational services and Strategic services.
iv. Need for achievement: This is the desire to do well for the sake of inner feeling of
personal accomplishment. A person endowed with such a need will spend time
considering how to do a job better or how to accomplish something important to them.
v. Risk taking propensity: This is the tendency to choose more risky alternatives, the level
of risk preference (low, moderate, high) is thought to influence individuals to start
business. Risk level is known to be specific to individuals due to differences in
experiences, capital, resources, capability, etc. Successful entrepreneurs tend to take
moderate calculated risks.
3. Write briefly any 4 challenges that stand in the way towards starting business ventures in
Tanzania. (10 marks) (Repeated on Test 1 - 2015)
4. Explain the at least five advantages of including marketing plan into the business plan
document. (10 marks)
TEST 1 – 2014

1. Explain any five different entrepreneurship characteristics that are displayed by successfully
entrepreneurs (Repeated on Final 2014)
2. List any four 10 methods that can be employed to develop entrepreneurial
attributes/characteristics. (Repeated on Final 2016)
3. What are the 5 reasons may lead a person decide to establish a business venture?
List the reasons that push people to go into business (Repeated on Test 1 - 2017)

4. (a) What is meant by the following types of business ownership;

i. Sole proprietorship (Repeated on Final 2015)
ii. Partnership (Repeated on Final 2015)
(b)Give two advantages and one disadvantage of each (Repeated on Final 2015)
5. (a) Define the terms;
i. Micro enterprise (Repeated on Final 2015)
ii. Small enterprise (Repeated on Final 2015)
(b) List any six characteristics of a small business
 Simple in organization structure
 Owner makes most decisions
 Open communication at a personal levels
 Employees do a variety of tasks
 Planning is primarily short term
 Strong link between ownership and management
 Low job security
 High responsibility/accountability
 Continuous problems in financial matters
 Flexible
 Vulnerable
 Decisions may be more subjective than objective
 Less specialization
 Individual ideas/talents spotted and promoted
 Privately owned/business owner cannot be separated from his/her business
 Short decision making time
 There are opportunities for cooperation

6. Give any five reasons why many educated people in this country opt for wage employment
despite the importance of self-employment. (Repeated Test 1 – 2015 & Final 2015)
7. What is business growth? (Repeated on Final 2014)
TEST 1 – 2013

1. (a) Define the following terms

i. Entrepreneur (Repeated)
ii. Intrapreneur (Repeated)
(b) Give and explain any three different entrepreneurship characteristics that are displayed by
successful entrepreneurs (Repeated on Final 2014)
2. Why is it necessary to promote entrepreneurship in this country?
Discuss the role of entrepreneurship in economic development. (Repeated on TEST 1 - 2017)

3. List any 10 characteristics of small businesses. (Repeated on Test 1 - 2014)

4. Explain why most educated young graduates opt for wage employment rather than self -
employment (Repeated Test 1 – 2015 & Final 2015)
5. Give five reasons which pulls and five reasons which pushes an individual to opt for self-
employment. (Repeated on Final 2016)
6. (a) List any four sources of business ideas
 Yourself guided by life/work experience, skills interests and hobbies
 Discussions/brainstorming with friends and relatives/family members
 Copying other businesses
 Utilizing available resources
 Newspapers, radio, TV and trade fairs/exhibitions
 Surveying to find out: Community needs not presently met, inadequately met
markets/demands, Support needs of existing businesses in the area e.g. sub-contracting
opportunities.
(b) Explain the following processes which take place during business start-up stage
i. Acquiring motivation: This is the process of finding the stimulus and commitment to
pursue the objective of setting up a business. In this process it is important to assess and
develop one’s capabilities for setting up and running a business.
ii. Business idea validation: This is the act of justifying the strength of the business idea in
terms of its viability, practicability and achievability when it is transformed into a
business. The best method to do this is through carrying out a market research in order
to collect information/ data on customers, competitors, machinery/technology etc.

7. Outline factors that guide identification /choice of technology for starting a business
Appropriate technology is the technology that is fitted to the context of its use taking in to
account the health, climate, biodiversity, and ecology and the psycho-social context which
includes social institutions, politics, culture, economics, ethics and the needs of individual.
Appropriate technology is determined by the following factors:
 Objective function of the user of technology
 Value judgement system of the user of technology
 Surroundings of the user of technology
 FINAL 2016
SECTION A
1) List any four methods that can be used to develop entrepreneurial characteristics. (4 marks)
 Try to see something from a different perspective.
 Challenge routine and custom
 Observe others and copy
 Experiment
 Exercise time management
 See mistakes and failures as stops on the way to success
 Identify yourself with successful people
 Add value to everything you do
 Expose yourself to challenging situations
 Set both short and long term goals
 Finish what you start
 Try to make things happen to yourself
 Solve your own problems before seeking help
 Feel proud about yourself and your work
 Set times for completion of activities
 Focus on learning by doing
 Consider different ways making an income

2) Briefly explain the meaning of the following terminologies: (4 marks)

a) Entrepreneurship is a phenomenon in the economy by which individuals or companies assume
risks to create something new in order to obtain the benefits from the new venture.
b) Intrapreneurship is the entrepreneurial behaviors, attributes and skills that employees display
in an established organization.
c) Small Business in the context of Tanzania, Small enterprises are mostly formalized undertakings
engaging between 5 to 49 employees or with capital investment from TShs. 5 million to
TShs.200 million.
d) Micro Enterprise in the context of Tanzania, micro enterprises/ business are those engaging up
to four people employing capital amounting up to Tsh. 5.0 million. The majority of micro
enterprises fall under the informal sector.

3) Business plan has been described as important before it starts up. With this in mind, mention the
important contents summary of executive summary of business plan. (4 marks)
The contents of the executive summary can include brief information on the following:
 The significant products and/or services
 What makes the business unique or distinctive
 The market analysis
 An overview of the management team
 The company's strategies for future success
 The current competition in the market
 Requested funds and plans for their use
  If the business depends largely on technology, a brief overview of the technological
capabilities should be included.
4) Briefly outline the role of entrepreneurship in economic development. (4 marks) (Repeated)
5) Explain the meaning of legal services? Give examples of legal services as important for business
formalization in Tanzania. (4 marks)
Legal services are those services involved in legal and regulatory processes required for setting up
and operating a formal business in the country. Such services are provided by public organizations
which have been given the authority by the government to perform them.
The examples of legal services as important for business formalization in Tanzania include:
 Company registration: All businesses operating in this country must register with the
Business Registration and Licensing Agency (BRELA), which is under the Ministry of
Industries and Trade.
 Investment approval: In making application for investment incentives from Tanzania
Investment Center.
 Obtaining a general business license: All businesses must obtain a general business license
issued under the Business Licensing Act, 1972.
 Registration with tax authorities: Once a company has been incorporated by the Registrar
of Companies, the company is required to register with the nearest Tanzania Revenue
Authority (TRA) office.

Section B
1) Outline factors behind push or pull factors as related to entrepreneurship development (give at least
5 point for each factor). (10 marks)
The reasons that push people to go into business are:
 To utilize the skills and knowledge which one possesses.
 To supplement income from salary for paying living expenses or invest in real estate
 To make a living and obtain the basic needs of life.
 To make more money so as to increase own and/or family wealth.
 To engage oneself in an income generating activity due to lack of job placement after
graduation.
 To do something one likes/enjoys most for personal satisfaction.
 To engage oneself after retirement from a paid job or retrenchment
 To continue with family background i.e. inherit family business from parents or other close
relatives.
 To develop a common cause for the family by creating jobs for family members.
 To avoid working for someone else.
 To avoid taking orders from other people.
The reasons that pull people to go into business are:
 To achieve a specific status, fame and recognition in the society
 To utilize the available resources.
 To make excess money.
 To be a boss of oneself.
  To provide services/products which are required in the society/do something worthwhile to
the community.
 To reap unlimited profits.
 To be a leader rather than a follower

2) (a) What is a business plan? (2 marks)

A business plan is a document with contents which give details about plans for a start-up or existing
business. This document is used to describe business goals and strategies, as well as provide a
blueprint of financing and marketing plans.

(b) List any eight advantages of a good business plan. (8 marks)

i. It enables an entrepreneur to plan for his business.

ii. It enables the entrepreneur to evaluate the feasibility of the business idea and allow
him/her to make mistakes on paper, rather than in the market-place.
iii. Once completed, it will make an entrepreneur feel more confident about his/her ability to
set up and operate the venture.
iv. It will indicate how much money is needed, what it is needed for, when and for how long it
is required.
v. It gives an insight into the business planning process. This process is important to the long-
term health of a business due to the fact that businesses are dynamic, as are the
commercial and competitive environments in which they operate.
vi. Which is well thought-out and carefully prepared is a valuable way to introduce the
entrepreneur to different sources of financing.
vii. It allows the entrepreneur to conduct an in-depth analysis of the enterprise’s economic
capability and viability.
viii. It is an excellent tool for self-assessment. It enables entrepreneurs to assess their strengths
and weaknesses.
ix. It forces the entrepreneur to formulate objectives in a more realistic manner at an early
stage of operation. It is a guide to keep you focused and making progress during the
business startup phase.
x. It provides direction in the early days of operation and creates a framework for the
entrepreneur to start and grow the business.
xi. It creates a measure for evaluating changes in the business industry.
xii. It helps the entrepreneur learn how to manage own business more effectively w hile
becoming an expert in the industry and business.
3) Explain the difference between self-employment and wage employment as related to
entrepreneurship development. (10 marks)
Self-employment
 This is the type of employment where a
person engages himself/herself in an
economic activity for gaining income in
a profitable business.
 Owner can give orders for
implementation and implement his/her
own ideas.
 Potential income is unlimited.
 Being independent and experiencing
pride in ownership.
 Utilizing unique skills related to modern
technology as a personal initiative and
ability to respond to market
opportunities.
 Creation of jobs.
Wage employment
 It is a type of employment where a
person is employed in an organization
(public/private) for a specific monthly
wage.
 There is a limitation of action,
responsibility and decision making due
to bureaucracy. This makes it difficult
to implement ideas.
 The employees do not have the right to
any profit as they are not owners of the
business and the income is fixed.
 There is high dependence on the
employer. There is no independence
since the employees have to follow
orders.
 Individual ability not easily recognized.
 The employee can’t create jobs to
others

4) (a) What is consultancy? (2 marks)

Consultancy is the services offered by a consultant.
While a consultant is an expert or a professional in a specific field and has a wide knowledge of the
subject matter. Consultant recommends a course of action to solve a problem and/or design,
develop & improve particular structures based on her/his expertise in specific field.

(b) Describe briefly any four personal assets which consultant should develop? (4 marks)
 A concern for personal reputation
 Professionalism inputting the client interests first
 Ability to quickly form a consultant-client relationship
 Persistence in identifying real problem cause and seeking permanent solutions
 Determination to add value to client organizations

(c) Explain the significance of initial consultant-client meeting in the consultation process. (4 marks)
 Exploring clients perceptions of problems or opportunities
 Exploring client’s attitude to risks of innovative solutions/actions
 Identifying potential blockages to implementation
 Exploring present system for monitoring and measuring performance
 Establishing if there has been prior failed or successful attempts to carry out the process.
5) (a) Define the term technology? (2 marks)
Technology is the broad set of competences and tools covering know-how, experience and
equipment, used by humans to produce services and transform resources. Technology is often a
consequence of science and engineering.

(b) In specific terms, technology is composed of four components. Provide explanations for the four
components of technology. (8 marks)
 Technoware: It includes machine and equipment.
 Infoware: It is the technical and instruction manuals, textbooks and scientific journals
related to the particular machinery and equipment.
 Organoware: It is the organizational structure of the entity where the technology is applied.
 Human-ware: It includes the technical experts who have the requisite technical skills.
FINAL 2015
SECTION A
1. Write short notes on the following terms: (10 marks)
i) Entrepreneurship is a phenomenon in the economy by which individuals or companies
assume risks to create something new in order to obtain the benefits from the new venture.
ii) Entrepreneur is a person who develops a new idea and takes the risk of setting up an
enterprise to produce a product or service that satisfies customer needs.
iii) Intrapreneurship is the entrepreneurial behaviors, attributes and skills that employees
display in an established organization.
iv) Intrapreneur is a person who operates in an entrepreneurial way from within an established
organization.
v) Enterprise is an entrepreneurial activity/ business undertaking.
vi) Micro Business in the context of Tanzania, micro enterprises/ business are those engaging
up to four people employing capital amounting up to Tsh. 5.0 million. The majority of micro
enterprises fall under the informal sector.
vii) Small Business in the context of Tanzania, Small enterprises are mostly formalized
undertakings engaging between 5 to 49 employees or with capital investment from TShs. 5
million to TShs.200 million.
viii) Medium Enterprises in the context of Tanzania employ between 50 and 99 people or use
capital investment from TShs.200 million to TShs.800 million.
ix) Large Enterprises in the context of Tanzania employ over 100 people or use capital
investment from above TShs.800 million.

2. Despite huge benefits associated with self-employment /entrepreneurship most educated

young graduates still opt for wage employment rather that self-employment. Provide with at
least five reasons why this continuous to happen in Tanzania. (10 marks) (Repeated Test 1 –
2015)

Section B:
1) It has been stated that entrepreneurs play a great role in developing economy of a nation. By
using entrepreneurship knowledge that you have learnt, discuss five roles played by
entrepreneurs in the economy of developing country like Tanzania. (10 marks)
 Creation of jobs for himself/herself and others
 Increasing personal and family income
 Improving standard of living in the community by making goods and services available at
competitive prices.
 Creating income for the government through payment of taxes.
 Acting as a role model for other people to emulate in the community
 Utilizing local resources, which are available and are comparatively cheap with simple
procurement procedures and less handling costs.
2) Assume that you are about to start a new business venture while knowing that business plan
document is very important for your business. Briefly mention 10 reasons why business plan is very
important for your business venture before it launches? (10 marks)
 It enables an entrepreneur to plan for his business.
 It enables the entrepreneur to evaluate the feasibility of the business idea and allow
him/her to make mistakes on paper, rather than in the market-place.
 Once completed, it will make an entrepreneur feel more confident about his/her ability to
set up and operate the venture.
 It will indicate how much money is needed, what it is needed for, when and for how long it
is required.
 It gives an insight into the business planning process. This process is important to the long-
term health of a business due to the fact that businesses are dynamic, as are the
commercial and competitive environments in which they operate.
 Which is well thought-out and carefully prepared is a valuable way to introduce the
entrepreneur to different sources of financing.
 It allows the entrepreneur to conduct an in-depth analysis of the enterprise’s economic
capability and viability.
 It is an excellent tool for self-assessment. It enables entrepreneurs to assess their strengths
and weaknesses.
 It forces the entrepreneur to formulate objectives in a more realistic manner at an early
stage of operation. It is a guide to keep you focused and making progress during the
business startup phase.
 It provides direction in the early days of operation and creates a framework for the
entrepreneur to start and grow the business.
 It creates a measure for evaluating changes in the business industry.
 It helps the entrepreneur learn how to manage own business more effectively while
becoming an expert in the industry and business.
 It helps an entrepreneur to decide whether to start business or not

3) The following are the legal forms of business. Give any two advantages and any two disadvantages
of each business legal form; (10 marks)
i. Sole proprietorship: This is a type of business formed, owned and controlled by one person.
The business owner is not legally separated from the business.
Advantages:
 Simple in organization.
 Owner free to make all decisions.
 Owner enjoys all the profit.
 There are few legal restrictions.
 Easy to discontinue business operations.
Disadvantages:
 Owner’s lack of ability and experience might hinder progress/growth of the
business.
 Difficult to attract and keep good employees.
  Difficult to raise capital required by the business.
 Proprietor has unlimited personal liability for business debts.
 Proprietor takes responsibility of all losses made by the business.

ii. Business partnership: This is a type of business formed by two or more persons who come
together for the purpose of establishing and running a business and sharing profits. A
partnership is restricted to a maximum of 20 persons in general trading or 10 in banking
business.
Advantages:
 Easy to start, organize and discontinue.
 Combines individual talents, skills and judgment.
 There is increased sources of capital for business development.
 There is definite legal status of the business under law.
 Has certain tax advantages.
Disadvantages
 Partners have an unlimited and mutual liability for business debts.
 Life of business may be limited with enforced termination.
 There is a possibility of disagreements among partners.

iii. Limited company: This is a form of business which is set up as a separate body legal entity
from persons i.e. Shareholders who own it. The company owns assets, makes contracts and
conducts business transactions in its own capacity as legal entity.
Advantages:
 Stakeholders have limited liability for business debts
 The business has a perpetual life
 It is easy to transfer ownership
 Is easy to expand the business
 It is applicable to both small and large businesses
Disadvantages
 It is expensive to register, organize and manage.
 Starting the business is complicated
 There are many government regulations to consider

iv. Cooperative: It is formed by a number of people who decide to work together voluntarily.
All members are equal and have equal voting powers. A cooperative must be registered with
the Registrar of Cooperatives.
Advantages
 Low cost to start the business
 There is no personal liability by the members for the debts
Disadvantages
 It is complicated in the procedure of starting the business.
 v. Franchising: This is a business involving buying trade rights from a large business. For
example Coca-Cola Production company. A franchise is a temporary business investment
involving renting or leasing an opportunity, not the purchase of a business for the purpose
of ownership.
Advantages of Franchises
 It provides an established name recognition to the business. If a small business
is associated and linked with a big business-then there is a high probability that
the small business would be boosted due to the firm backup and support of an
established big business.
 It gives bulk purchasing power to small business and industries which enables
the business to buy equipments, products and other necessities to run the
business with ease and without worrying about the financial investment.
 The franchisor provides the training and management facilities to the business.
A company which provide capital and investment to any small business have
vested interest in the success of the small business.
Disadvantages of Franchises
 Any decision a small business owner is to be made has to be consulted and
approved by the franchisors. This limits the authoritative control of the small
business owner to a great extent.
 There are several occasions when the term and conditions imposed by the
investors and franchisors are biased.
 A complete and thorough research is required to select the right franchise and
to determine whether it would work for the business or not.
 Disputes can occur between the small business and franchisor.

4) (a) What do you understand by project proposal? (2 marks)

This is a document designed to present a plan of action, outline the reasons why the action is
necessary, and convince people to agree with and approve the implementation of the actions
recommended in the body of the document.

(b) Outline at least 7 key components of project proposal document (8 marks)

i. Introduction: This section gives information of what the project is all about, and why it is
worth taking the time to consider the project i.e. Project justification.
ii. The background: This section cites specific reasons why the project plan is a good one,
based on historical data, projections of future needs and performance, and the current
circumstances of the business. The background helps to build the case for how the project
can meet the needs that have arisen due to past actions while also anticipating future needs
and how to address them. Justification of the problem is also included.
iii. Beneficiaries: Direct beneficiaries of the project including people who receive direct
benefits from the project intervention. Indirect beneficiaries including project staff,
development partners etc.
iv. Implementation Strategy: This section gives an outline of all procedures that are necessary
to make the project successful. This helps to define short term and long term goals for the
project, explaining how to systematically accomplish each step and what type of return can
 be expected from the effort. It includes project elements: development objectives, purpose,
outputs, activities and inputs. These are summarized in form of Logical Framework Analysis.
v. The budget: This section gives what is the cost involved in the implementation of the project
proposal. In this section, the details are backed up with facts and figures that cover every
aspect of the financing needed to launch and maintain the project over time.
vi. Outcome of implementing the project: This section spells out all of the benefits. The
benefits may include such items as increasing the public profile of the business, generating
more sales, or increasing profits due to more efficient use of available resources.
vii. Organization and management: This includes the organization and management structure
of the project including the human resources and consultancy services.
viii. Sustainability and risks: This includes statements about external and uncertain factors
which may affect each of the level of the project and which have to be taken into account in
the project design through mitigating measures. The positively worded statements are
assumptions; while the negatively worded statements are indicative of risk areas.
ix. Monitoring and Evaluation: This includes the statement about the time-scale of monitoring
and evaluation of the project.
x. The Work Plan: This is an outline of the project which provides a guideline of project
implementation, monitoring and evaluation.

5) (a) Describe six stages of technological development process of a new product (6 marks)
i. Generation of New-product Ideas: Ideas from new products can be obtained from research
using SWOT (Strength, Weaknesses, Opportunities, and Threats) analysis, market and consumer
trends, trade shows and company’s Research and Development (R&D) department. A strong
point can also be made for listening to employee suggestions for new industrial products.
Employees are also a major source for new consumer goods ideas.
ii. Product Idea Screening: This is designed to reduce the number of new-product ideas being
worked on at any one time. Criteria needed for screening include whether the product fits in
well with present products, profit potential, marketability, and personnel requirements.
iii. Concept Development and Testing: It involves the process of developing the marketing and
engineering details investigation of intellectual property issues and searching for patent data
bases. It also includes carrying out virtual computer aided rendering and rapid prototyping to
prove the feasibility of the product.
iv. Commercial evaluation: This is the process of carrying out a business analysis by estimating the
selling price based on competition and customer feedback, sales volume based on market size
and the profitability.
v. Technical product development: This is the process of building and production of physical
prototypes involving the development of process flow diagram.
vi. Product testing: This is also known as consumer testing which is the process of measuring the
extent to which a product fulfills the claims made by the manufacturer in comparison to the
other products. The test is carried out to see what the product can do, how it compares to a
similar products and whether the product can fulfill the claims which the manufacturer makes in
typical usage situations. Once this process is completed the technology is ready for production
and dissemination to the users.
(b) Outline 4 forces driving technological development (2 marks)
i. Must be need or demand for the technology
ii. Meeting the need must be theoretically possible, and the knowledge to do so must be
available from basic science.
iii. Must be able to convert the scientific knowledge into practice in both engineering and
economic terms.
iv. The funding, skilled labor, time, space, and other resources needed to develop the
technology must be available.
v. Entrepreneurial initiative is needed to identify and pull all the necessary elements together.

(c) List down 4 important characteristics in technological transfer (2 marks)

i. The characteristics of the technology
ii. The characteristics of originator of the transfer
iii. The enabling (or disabling) environment in the country of the origin.
iv. The condition of the transfer
v. The characteristics of recipient
vi. The enabling (or disabling) environment in the host country
Final 2014

Section A
i. Define the following terminologies
a) Enterprise is an entrepreneurial activity/ business undertaking.
b) Entrepreneur is a person who develops a new idea and takes the risk of setting up an
enterprise to produce a product or service that satisfies customer needs.
ii. People start their own business due to the both pull and push factors. Give two factors of each
type. (Repeated on Final 2016)
iii. Give two reasons as to why business ideas need validation.
 It helps the entrepreneur to decide on the viability and profitability of the business.
 It generates a knowledge base for the entrepreneur with regard to the structure of the
enterprise industry, market, technology and raw materials supply.
 It educates the entrepreneur with regard to the degree of risks underlying the business
(project) proposal.
 It prepares the ground for project implementation by considering the choice of location,
the selection of plant and machinery, and determining the manpower and utilities
requirements.
 It forms a basis upon which financial assistance can be sought from financial institutions.

iv. Write brief notes on business development services.

Business Development Services (BDS) are service provided to businesses on either a formal or
informal basis. These services are important for improving the performance of the enterprise,
its access to markets, and its ability to compete. They include Operational services and Strategic
services.

v. Differentiate between wage employment and self-employment.

Wage employment
It is a type of employment where a person is employed in an organization (public/private) for a
specific monthly wage.
Self-employment
This is the type of employment where a person engages himself/herself in an economic activity
for gaining income in a profitable business.

vi. Mention four forms/sources of financing from which prospective entrepreneurs can obtain
capital necessary to start their business.
 Own savings
 Personal borrowing from relatives and friends
 Money raised through mortgage of personal assets like land, buildings etc.
 Government funds through its ministries and organizations eg. SIDO, NGOs providin g
short term credits and grants
 Loans from financial institutions or commercial banks
 Venture capital fund
 Private money lenders
vii. Explain the term business growth.
Business growth is in terms of increasing in size, profitability, turnover, capital etc. Businesses
grow by developing profitable products or markets, by improving the processes i.e. becoming
more efficient.

viii. Write brief notes on industrial analysis

An industry analysis defines the industry in which the business will operate (e.g., retail,
information distribution, financial services) and the future prospects of the industry. This is
among the parts that included on business plan document.

ix. Explain the functions of Tanzania Bureau of Standards (TBS).

 To provide for the testing of locally manufactured and imported commodities with a
view to determine whether such commodities comply with the provisions of laws
dealing with standards relevant to such commodities.
 To undertake measures or quality control of commodities of all description and promote
standardization in industry and commerce.
 To provide training to the industries and small and medium enterprises (SME) on
matters concerning quality packaging design.
 To make arrangements or provides facilities for testing and calibration of precision
instruments , gauges and scientific apparatus for the determination of degrees of
accuracy by comparison with standards approved by the ministers on recommendation
of the council and the Issue of certificate in regard there to.
 To provide standard marks which allows manufactures whose products have conformed
to Tanzania standards to use the TBS mark of quality.
 To provide symbols which manufactures may use to promote thei r products and
consumers seek as evidence of quality.

x. (a) What is meant the term “technology transfer”

Technology Transfer is set of processes covering the flows of know-how, experience and
equipment within or between organizations and between countries. It includes a range of
formal & informal cooperation between technology developers and technology seekers .
The technological knowledge that is transferred can assume various forms. It can be embodied
in goods, services and people, and organizational arrangements, or codified in blueprints,
designs, technical documents, and the content of innumerable types of training.

(b) List any two factors that influence technology transfer.

 Type of technology and life cycle (Marketability)
 Skills
 Organization culture
 Language barriers
 Laws and regulations
 Political environment
 Infrastructure (financing, utility support, communication, etc.)
SECTION B
1. (a) Entrepreneurship Education is considered as “Value Addition” to students’ professional
training. Discuss this statement.
Entrepreneurship is a process of exploring the opportunities in the market place and arranging
resources required to exploit these opportunities for long term gain. Entrepreneurship is
included as module that is conducted through formal lectures, guided group discussions, and
tutorial sessions. This module is considered as “Value Addition” to students’ professional
training because it helps the students on the following aspects:
 It helps the students to understand what is entrepreneurship and how to relate it to
Small Business
 It helps the students understanding the roles of Entrepreneurship in Economic
Development
 It helps the students understanding on how to identify and validate business ideas
 It helps the students understanding on how to plan to establish Small Business
 It helps the students understanding on how to manage resources of a Small Business
 It helps the students understanding on how to develop, prepare, and present a Business
Plan

(b) Explain at least three factors that can hinder entrepreneurship achievement/motivation.
 A society (as part of entrepreneur’s environment) which does not encourage or facilitate
entrepreneurial spirit and urge to excel.
 Some social-cultural beliefs in society that act as barriers to entrepreneurial
development e.g. the belief that high profit is unethical, or that industrial or technical -
oriented activities are basically roles of a particular social, gender or ethnic category.
 Political systems which discourage individual freedom, free market economy and private
enterprises and therefore policies which contradict individual motives and desire to
excel.
 The economic environment in terms of policies, financial institutions (and the governing
funding regulations) which for instance have a very rigid credit system i n the banking
system or non-existence of funding organizations.
 Psychological factors like security – orientation, conformity and compliance and high
need for affiliation. In other words, a psychological environment which is not endowed
with drives and urges for entrepreneurial excellence.
 Inadequate provision of physical economic infrastructures like reliable roads, water,
electricity, and machinery in a given geographical setting.
 Inadequate educational orientation, limited entrepreneurial experience and market
opportunities.
2. Explain any five entrepreneurship characteristics that are displayed by a successful
entrepreneurs
 Initiative: An entrepreneur takes actions that goes beyond job requirements or the
demand of the situation.
  Opportunity seeking: An entrepreneur is opportunist so he/she quickly sees and seize
opportunities. He/she searches for change, responds to it and exploits it as an
opportunity.
 Drive and Determination: An entrepreneur is not discouraged by difficulties and
problems that come up in the business or his/her personal life. This persistence and
determination is fueled by a burning desire to achieve the goal of succeeding in the
chosen field of business and other activities and the belief that he/she can control
his/her own destiny.
 Demand for quality and efficiency: An entrepreneur is always competing with others to
do things better, faster, and at a less cost, he/she strives to achieve excellence.
 Risk taking: An entrepreneur has a venture spirit and willingness to take risks which
enable one to calculate their risks before taking action. They place themselves in
situations involving moderate risk so they are moderate risk takers.
 Commitment to work: An entrepreneur will work long hours after just to be able to
keep his/her promise to his/her client. He/she does the work together with his/her
workers to get a job done and is task oriented so dedicated to complete the tasks
related to his/her business and other important activities.
 Independence: Entrepreneurs have a sense of autonomy by being independent in
thought and action. Since they have the need to control their future, so start business
because they like to be their own boss.
 Self-confidence: Entrepreneurs must demonstrate extreme self-confidence and positive
self-concept in order to cope with all the risks of operating their own business. They
tend to believe in their capabilities and so tend to be responsible for their own
decisions. Belief in one's capabilities is very important in achieving any goal.
 Problem solving attitude: An entrepreneur is able to respond and solve problems
related to his/her business and other activities before seeking external help.

3. (a) What is meant by the following types of business ownership?

(b) Give two advantages and one disadvantage of each.
i. Limited company: This is a form of business which is set up as a separate body legal
entity from persons i.e. Shareholders who own it. The company owns assets, makes
contracts and conducts business transactions in its own capacity as legal entity.
Advantages:
 Stakeholders have limited liability for business debts
 The business has a perpetual life
 It is easy to transfer ownership
 Is easy to expand the business
 It is applicable to both small and large businesses
Disadvantages:
 It is expensive to register, organize and manage.
 Starting the business is complicated
 There are many government regulations to consider
 ii. Franchise: This is a business involving buying trade rights from a large business. For
example Coca-Cola Production company. A franchise is a temporary business
investment involving renting or leasing an opportunity, not the purchase of a business
for the purpose of ownership.
Advantages of Franchises
 It provides an established name recognition to the business. If a small business
is associated and linked with a big business-then there is a high probability that
the small business would be boosted due to the firm backup and support of an
established big business.
 It gives bulk purchasing power to small business and industries which enables
the business to buy equipments, products and other necessities to run the
business with ease and without worrying about the financial investment.
 The franchisor provides the training and management facilities to the business.
A company which provide capital and investment to any small business have
vested interest in the success of the small business.
Disadvantages of Franchises
 Any decision a small business owner is to be made has to be consulted and
approved by the franchisors. This limits the authoritative control of the smal l
business owner to a great extent.
 There are several occasions when the term and conditions imposed by the
investors and franchisors are biased.
 A complete and thorough research is required to select the right franchise and
to determine whether it would work for the business or not.
 Disputes can occur between the small business and franchisor.

4. (a) Define the term market research

Market research/survey is a tool through which (though it may not possible to eliminate
completely the risk or guarantee opportunity) it’s intelligent and systematic use reduces level of
risk and improves the probability of success. This is also called validation of business idea.
Or, Market research is defined as the systematic and objective process of gathering, recording,
and analyzing data for aid in making marketing decisions.
Before entrepreneurs actually commit themselves to opening a business, the most important
question to answer is “Will it sell?” and good market research will help provide the answer.

(b) Explain the need of carrying out marketing research by the entrepreneur and the key
information from an exercise.
For an entrepreneur the risk of setting up an enterprise and managing it successfully depends
mainly on how he/she makes decision in condition and uncertai nty. Uncertainty involves both
risk and opportunity. The market for the product/service of his/her business must therefore be
examined and analyzed thoroughly before going into it.
The essence of marketing research is to provide information used in decision making so that it
can reduce the level of risk and improve the probability of success.

The key information/components of market research are:

 i. Introduction: Includes end products/services, end users, suitability and strength of
selecting a particular product or service.
ii. Product/service: Includes specification, sizes, brands, packaging selling price and others.
iii. Assessment of demand: Includes class and type of customers/clients, patterns of
consumption and frequency of purchase, product life cycle and prese nt status, past
demand patterns, future/anticipated demand projections, buying criteria and
influencing factors.
iv. Supply position: Includes Current availability of production vs utilization, present local
and imported supply sources their price comparisons, services, and others.
v. Marketing practices:
 Present prevailing marketing practices including distribution,
packaging/forwarding, credit policy, delivery and after sales services.
 Selling price, taxation structure and commission patterns (if they apply).
 Purchasing procedures, time and practices prevailing.
vi. Own market plans and strategies:
 Own marketing share of supply-demand gap.
 Strengths and special services to be offered (if any).
 Possible clientage and their likelihood of buying from you.

5. Explain the main elements of production plan of a business plan.

 The physical plant: Type of premises, plant/office/facilities layout, size capacity and
utilization, location and main facilities, power and other utilities.
 Equipment: Description of the equipment necessary and how much is needed, sources,
cost, utilization and maintenance.
 Assets: A list of assets, such as land, buildings, furniture, equipment and vehicles etc.
 Materials: Types of raw materials needed to produce the product or service and other
supplies and their prices and purchasing arrangements and their storage.
 Production: Explanation of production techniques/methods and/or manufacturing
operations, production cost, quality control, product testing, product costing, price
testing.
 Other: Hours of operation, licenses/permits required, regulatory issues, and business
insurance required.

6. (a) Define the terms:

i. Consultant is an expert or a professional in a specific field and has a wide knowledge of
the subject matter.
ii. Expert consultation is the intervention of a professional help in which a consultant
recommends a course of action to solve a problem and/or design, develop & improve
particular structures based on her/his expertise in specific field.

(b) Explain the main characteristics of a good consultant.

 Technical Skills: It is important for a consultant to possess technical skills i.e. the
expertise in a particular field. This goes beyond the school/college training and should
include actual experience in the chosen field. In the information technology industry this
 expertise can become obsolete very quickly It is important to continually sharpen one’s
technical skills so as to catch up with rapid changes in technology.
 Interpersonal Skills: A consultant should possess interpersonal skills because he/she has
to work with people. He/she needs the ability to put ideas into words, to listen to
others, and to provide support. There is also a need to be able to disagree and to
suggest ideas counter to what the client may be proposing.
 Consulting Skills: A consultant needs consulting skills. This is a sequential process of
consulting that a consultant need to follow to get from start to finish.