EED 413

HND II COMP
 Definition
●
Enterprise
– a project or undertaking, especially a bold or complex
one.
– a business or company.
●
Entrepreneur
– a person who sets up a business or businesses, taking
on financial risks in the hope of profit.
●
Entrepreneurship
– the activity of setting up a business or businesses,
taking on financial risks in the hope of profit.

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 Forms of business
●
Sole Proprietorships: are one-man businesses. The owner
provides the capital, takes decision and assumes all risk. They are
the most common.
●
The partnership : is an Association of two or more persons carrying
on business with a view to making profits through the pursuit of
lawful objective.In Nigeria, the number of people to form an ordinary
partnership must not exceed twenty while in the case of banking; the
number must not exceed ten persons. The people forming the
association are called partners. They agree from the start what
capital each brings to the business, specific functions each will
perform and how profits will be shared. These conditions are
embodied in the partnership “deed”. The partnership agreement or
deed clearly specifies the right and duties of partners and
privileges of such partners.
●

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 Forms of business
●
The limited liability company (corporation) is an “artificial
being, invisible, intangible and existing only in contemplation
of law”. Being a mere creation of the law, it possesses only
the properties which the charter of its creation confers upon
it either expressly or as incidental to its very existence. The
company has the right to acquire, own and sell property, sue
and be sued.In Nigeria, company formation and
operationsaresecured through company incorporation in
accordance with the company Act 1968 and the CAMA
1990, and its subsequent amendmentin2004
●
There are two types of company formation in Nigeria;
private companies and public companies..

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 Classification of business forms
●
Private vs. public
●
Profit vs. non-profit
●
Formal vs. informal
●
Individual vs. community
●
Local vs. foreign
●
Business vs. social
●
Small vs. large
●
Manufacturing vs. service
●
Consumer vs. industrial

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History of entreprenurship in Nigeria
●
Past very often has a direct bearing on what the
country is actually facing. Entrepreneurship is
not what it used to be in Nigeria today. The
majority of Nigerians used to be business
people. Many Nigerians were primarily
interested in trade before the era of
colonization. In fact, the wealthy were traders at
the time. Well before money was widely known
as the ledger tender, individuals traded for what
they did not have what they had in surplus.

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History of entreprenurship in Nigeria
●
The style of entrepreneurship changed during the
colonial era. They brought their goods to the
colonial masters and made Nigerians their
intermediaries. Then came formal education and
the colonial masters' established businesses.
There were many young Nigerians employed by
these firms. As many Nigerians began to accept
formal education, most individuals were trained
not to be entrepreneurs, but to join the labor
force. The entrepreneurial mentality started to
fade away.

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A Budget: is a financial plan that shows
expected income and expenditure over a
certain time period.

Why budget?......
1. To ensure money is available to
cover costs

2. Reduce risk of impulse buying

3. Avoid build up of debt

4. Money for a ‘rainy day’

Income:

- is money or a benefit in kind you

receive
- 1. Regular
2. Irregular (additional)
3. Benefit-in-Kind
1. Regular Income:

- Is what you are sure of receiving

- You can plan to spend it
- E.G. Wages/ Salary/Child Benefit
2. Irregular Income:

- Is what you are not sure of receiving

- You cannot plan to spend it
- E.G. Bonus / Lotto Win
3. Benefit- in –Kind:

- Non money income received for work

done
- Incentive to work hard
- Boosts employee morale
Wages
•Is regular income for hours worked or
number of goods produced.
• E.g. Builder

Salary
•Is regular income received for doing a job
no matter how many hours you spend at it.
•E.g. Teacher
* Min wage €6.06
 Expenditure
Fixed: Spending money on goods and services
regularly. Amount does not vary.

Irregular: Spending money on goods and services

regularly But the amount spent varies.

Discretionary: Spending money on things we want but

do not need
 Expenditure
Fixed Irregular Discretionary

Rent Car running costs Presents

Mortgage Phone bills Holiday

Insurance Groceries Entertainment

Clothes Magazine
Current Expenditure: Spending money
on day-to-day items

Capital Expenditure: Spending money

on durable items for long term usage
Opportunity
Cost

The item we do without when we have

to make a choice between two or
more actions
 Opportunity Cost
You have €50 to spend .

You can buy a ticket to go and see a

or you can buy 5 video games.

What is your decision?

Impulse
Buying
“Buying without
thinking”
False
Economy

Buying something because it is

cheap but in the long run costs you
more
False
Economy

She only cost

a euro dad
and she is
going to have
puppies!
 Why saving
●
Saving can give you freedom
●
Saving provides financial security
●
Saving means you can take calculated risks
It allows you to enjoy greater security in your
life. If you have cash set aside for emergencies,
you have a fallback should something
unexpected happen. And, if you have savings
set aside for discretionary expenses, you may
be able to take risks or try new things.

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 Financial Management
●
“Financial management is nothing but to manage
cash out flow by considering the cash inflow and
future obligation towards family.”
●
Why is Financial Planning Required
– Long term and short term objective.
– Secure the future of yourself and family.
– Unpredicted events.
– Family future protection
– Peaceful retired life
– Discharge of family obligation

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 Entrepreneur characteristics
●
Creativity: Becoming an entrepreneur starts with an idea. You
need to see opportunities, find innovative ways to do things and
bring solutions to the public.
●
Passion: Passion is what drives entrepreneurs. They usually love
what they do, and this helps them invest their time in their projects.
●
Motivation: Motivation is the will to accomplish certain things.
Entrepreneurs are driven to make their business a success and
push themselves.
●
Product or service knowledge: Entrepreneurs know what they
have to offer and to whom they can sell it.
●
Ability to network: The ability to connect with people and to
recognize opportunities for partnership is crucial to successful
entrepreneurship.

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 Entrepreneur characteristics
●
Self-confidence: Entrepreneurs believe they can achieve their goals.
●
Optimism: Entrepreneurs are dreamers with a plan in place: They
see the positive side of the situation and always move forward.
●
Vision: Entrepreneurs have vision. They see a big picture they wish
to accomplish, which fuels their efforts and pushes them to do more.
●
Goal mindset": Entrepreneurs are goal oriented. They know what
they want to achieve, set a goal and work toward that objective.
●
Risk-taking: Entrepreneurs are ready to take risks. They plan for the
unknown so they can make calculated decisions that are profitable
for them and their business.
●
Persuasiveness: Entrepreneurs know their business and how to talk
about it to people. They need to persuade others to believe in their
idea.

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 Entrepreneur characteristics
●
Decision-making: Entrepreneurs need to make quick decisions
and take action for the success of their business.
●
Tenacity: Entrepreneurs overcome challenges. They persevere
through difficulties and hold on to their goals and dreams.
●
Money management: Entrepreneurs need to understand the
financial situation of their business. Even if they hire a specialist
like an accountant, they are the decision-maker and must know
their situation to run the business successfully.
●
Adaptability: When they start a business, entrepreneurs often
need to multitask. Flexibility in your schedule, as well as in your
thinking, is crucial to continue growing in challenging situations.

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