Entrepreneurship and Small

Business
Lecture notes
 Course Overview
1.0 Business as a System
I. Meaning of small business
II. Entrepreneurship
 Small BUSINESS Introductions

A business activity is any legal entity that may be

owned by one person as a Sole Proprietor or can be
owned jointly by two or more people thereby creating
partnership.

The main aim of many business operations is to make

a profit either in the short or long term.

A business activity is not only trading activities i.e.

buying and selling, but can include other forms of
business activities like Banking, Insurance,
Manufacturing, Providing Educational services,
Transportation both passenger and cargo, Internet
services etc.
Intro cont’
Small Business And Big Business Are Joined
Together. Big businesses provide an anchor of
economic stability in a community. They provide
large numbers of jobs that create the disposable
income small business depend on. Moreover, big
businesses depend on the goods and services small
businesses provide their employees.
 Introductions
Entrepreneurship: Art of creating or developing
a business through innovation, creativity ,
progressive imagination and risk taking initiative.
Art
Developing
Innovativeness
Creativity
Risk taking
Entrepreneur Types
Entrepreneur Types cont
Push factors mean those influences, which push
individuals toward entrepreneurship
Pull factors mean influences, which pull people
towards entrepreneurship
History of entrepreneurship
Privatization 1991
Loss of jobs (10,ooo job loses)

 Privatization process, over 10,000 people lost jobs on 1

year
69% of the people lost their job due to privatization

The government retrenched as part of SAP

After privatization poverty increase from 62% to 70%

Entrepreneurship

 58% of the Zambian population are entrepreneurs

 micro entrepreneurs are the majority and the poorest among entrepreneurs.

 Mostly have financial challenges

Micro entrepreneur Distribution
Red ocean
 Competition
 No technological advancement
 Selling Homogenous products
 No growth
 Fighting for same customers
 Blue ocean
 Technological advancement
 No competition
 Dominating the market
Reasons why many small businesses fail.

Management - Chapter 6
16
Stages in the life cycle of Small Business.

Management - Chapter 6
17
Roles of Small Business in economic
growth
They provide jobs
They introduce new products
They meet the needs of larger organizations
They inject a considerable amount of money into the
economy.
They take risks that larger companies sometimes
avoid
They provide specialized goods and services
Roles of Small Business in economic
growth cont’
Capital formation: Mobilizing idle funds
 Create large scale employment opportunities
Promote balanced regional development
Increase GNP and per capita income
Increase wealth creation
Improves standards of living
Roles of Small Business in economic
growth cont’
Provide employment to rural
Utilization of local resources
 equal distribution of local resources
Balanced regional development( Multifacility zones)
 Improved economic condition.
Factors Contributing to the Increase in
the Number of Small Businesses

E-commerce Social media

Technological Growing diversity in

advances entrepreneurship

6-21
Financing Possibilities over
the Life of a Small Business