Berbice Educational Institute

Business Education department

Easter term 2022
Principles of Business
Section 3: Establishing a business
Grade 10
Handout # 17
Topic Entrepreneurship
Subtopic: The Entrepreneur

Definition of key concepts:

Entrepreneurship: refers to the process of creating a new enterprise and bearing all of its risks,
with the hope of making profits.

Entrepreneur: someone who shows vision and creativity, taking the financial risk of starting and
managing a new business venture.

Self-actualization: psychologists describe this as a state when all basic and mental needs have
been met and the individual reaches full potential. Successful entrepreneurs often suggest that it
was only through creating their own businesses that they were able to make full use of their
potential.

Examples of small business in the different sectors of industry.

Primary sector Secondary sector Tertiary/ service sector
● Fishing e.g. a small ● Jewellery making ● Hairdressing
boat owned by an ● Dressmaking ● Car repairs
entrepreneur ● Craft manufacturing ● Café and restaurants
● Building trades such ● Child-minding
● Market gardening- as carpentry. (babysitting).
producing cash crops
to sell at local
markets.

Functions of an entrepreneur
1. Conceptualizing: is the phase during which the entrepreneur writes his ideas on paper to
identify the concept that will later layout the foundation of his business model. He/she
then breaks the ideas down into modules and then changes the setting in each module to
improve it, to optimize it.
2. Planning: is the management process concerned with defining goals for a company’s
future direction and determining the resources required to achieve those goas.
3. Accessing funds: is that act allocating resources to finance a need, program, or project.
While this is usually in the form of money, it can also take the form of effort or time from
 an organization or company. Sources of funding include credit, venture capital,
donations, grants, savings, subsidies and taxes.

4. Organizing: this involves coordinating and allocating a firm’s resources in order to carry
out its plans. It includes developing a structure for the people, positions, departments and
activities within the firm.
5. Operating and evaluating the performance of the business: the effect of the business
operation performance has a great influence on the growth and development of a
corporation, therefore, the purpose of measuring the business operation performance is to
understand whether the application and allocation of the resources in a business has
reached its optimality and the completeness progress of goals.
6. Taking financial risks in the setting up of the business: is the possibility of losing money
on an investment or business venture. Financial risk is a type of danger that can result in
the loss of capital to interested parties.
7. Entitlement to the profits and losses of the business: with the establishment of any
business it is expected that the entrepreneur will reap all of the profits earned and also
incurred financial losses if the business fails. This is why it is believed that entrepreneurs
take great financial risks in the establishment of their own businesses.

Subtopic 2: Characteristics of the typical entrepreneur

The following are the characteristics of an entrepreneur that are associated with the personal
traits and leadership qualities of an entrepreneur:
1. Creative and innovative: entrepreneurs may not be ‘inventors’ in the traditional sense, but
they must be able to create a new niche in the market, attract consumers in innovative ways and
present their business as being ‘different’ from others in the same market.

2. Commitment and goal-oriented: it is never an easy option to set up and run your own business.
It is hard work and may take up many hours of each day. A willingness to work hard, keen
ambition to succeed and achieve the goals set, energy and focus are all essential qualities of a
successful entrepreneur.

3. Flexible and multi-skilled: an entrepreneur will have to make the product (or provide the
service), promote it, sell it and keep accounts. These different business tasks require a person
who has many different qualities, for example keen to learn technical skills, an ability to get on
with people, good at handling money and keeping accounts.

4. Leadership skills: entrepreneurs have to lead by example and must have a personality that
encourages people in the business to follow them and be motivated by them.

5. Self-confidence, persistence and perseverance: many newly created businesses fail, but this
would not discourage a true entrepreneur, who would have such self-belief in their business idea
that they would ‘bounce back’ from any setbacks. If one business idea has failed it does not
mean that it will not be successful with some changes to the product or service or in another area.
Keeping going-perseverance-is essential.

6. Willing to take calculated risk: entrepreneurs must be willing to take risks in order to see
results. Often the risk they take is with investing their own savings in the new business. This can
lead to profits-but losses can also be made. Which may put at risk the owner’s own savings.

Class Activity
Case study

Kingston Enterprise blossoms

Fitz Golding had the idea for his rose-growing business on Valentine’s Day when he looked for
roses for his wife in Kingston. The city was a ‘rose-free area’, so he decided to start growing
them himself. In 1996 he opened two greenhouses growing just roses. He used his own savings,
so took a considerable risk. His confidence in the growth of flower giving at times of major
festivals encouraged other investors too. At first he sold the flowers in Jamaica, but his business
became profitable, allowing them to enjoy a good standard of living. This is the big dream, and
for many it does become a reality.

Questions:
● What risks are there for an entrepreneur starting a new business?
● What are the three most important qualities that you think are needed by a successful
entrepreneur? Explain your answer.