L9 l ENTREPRENEURSHIP l Types of entrepreneurs

Question 1

List all the types of entrepreneurs.

Answer 1

• Techno-entrepreneur
• Tourism entrepreneur
• Social-entrepreneur
• Enviro-entrepreneur

Question 2

What are the “new” types of entrepreneurs?

Answer 2

• Emerging entrepreneurs
• Informal entrepreneurs
• Youth entrepreneurs

Question 3

What are Emerging entrepreneurs?

Answer 3

Used to describe entrepreneurs who have previously been disadvantaged.

Question 4

What are Informal entrepreneurs?

Answer 4

• The informal entrepreneur operates in the informal sector.
• no fixed premises or formal business location.
• do not pay income tax.

Question 5

What are Youth entrepreneurs?

Answer 5

• There are many Private-Public-Partnerships (PPP’s) initiatives that have been set up to help encourage youth entrepreneurship.

Question 6

The road to entrepreneurship:

Question 7

What are some options to consider for starting a business?

Answer 7

Starting a new business

Buying an already established business

Franchise

Family business

Question 8

Elaborate on starting a new business.

Answer 8

• complicated than buying an existing business.
• The entrepreneur will need to decide on the best form of ownership and complete the necessary formation procedures for the business to operate legally.
• more costly than buying an existing one.
• risky

Question 9

Elaborate on starting buying an already established business.

Answer 9

• lowers the legal costs or effort to get the business going.
• saves the entrepreneur the time of looking for a new (suitable) location and building customer loyalty.
• already have sound networks such as suppliers and distributors.

Question 10

What are some aspects the entrepreneur should consider when buying an already established business?

Answer 10

Reasons for the sale of the business

Customer base of the business

Financial position of the business

The industry / market the business operates in

Contracts the business has already entered into

SARS (South African Revenue Services) requirements

The profitability of the business

The business form of ownership

Question 11

Elaborate on buying a Franchise?

Answer 11

• entrepreneur gets a business where the name / brand is already established and successful.
• Entrepreneurs buy into franchises as they are buying the right to use that franchisor’s name, logo, production systems and overall success recipe which has been a proven and an established customer base.

Question 12

Elaborate on a Family business.

Answer 12

• high success rate, as the entrepreneur has usually grown up in the business and understands the processes of the business and the customer base.
• traditionally been aimed at survival, but as newer generations see the benefits of entrepreneurial ventures, a number of family-owned businesses are moving from survival to growth enterprises.

Question 13

The entrepreneurial process:

Question 14

What is the entrepreneurial process?

Answer 14

1. Identify an opportunity.
2. Assess the resources required.
3. Develop the business plan.
4. Managing the entrepreneurial venture.

Question 15

What does Feasibility mean?

Answer 15

Is the idea/opportunity ‘’workable’’ and can it be practically implemented?

Question 16

What does Viability mean?

Answer 16

Does the idea / opportunity have the potential to generate suitable profits and a ROI (Return on Investment)?

Question 17

How does an entrepreneur figure out whether the opportunity is Viable and feasible?

Answer 17

Research the different factors from the macro and market that may have an impact on the business.

Question 18

What are some things a entrepreneur must research?

Answer 18

• Location
• Needs and Wants of people.
• Look at competitors to make sure the market is not already saturated as this will limit the potential for profit.
• SWOT analysis

Question 19

What are the steps of buying a business?

Answer 19

1. Assessing resources required
2. Developing the business plan
3. Managing the entrepreneurial venture

Question 20

Growing a business venture:

Question 21

What is the primary objective of any entrepreneur?

Answer 21

To create profit and keep it for the long term.

Question 22

It is important that the entrepreneur takes into account the growth stage the business is where?

Answer 22

Incubation

Start-up

Breakthrough

Maturity

Decline / Rejuvenation

Question 23

Phase 1: Incubation

Answer 23

Pre-birth stage of the business. The entrepreneur has identified an opportunity and has assessed the feasibility and viability of the opportunity and will then prepare for the establishment of a business.

Question 24

Phase 2: Start up

Answer 24

Production and trading will commence during this stage.

Question 25

Phase 3: Breakthrough

Answer 25

• rate at which the business grows will increase.

Question 26

What are some problems faced during the breakthrough phase?

Answer 26

Cash flow

Production complications and time

Delivery / Distribution

Labor and skills

How can these problems be solved?

Question 27

Phase 4: Maturity

Answer 27

• Established itself in the market.

Question 28

Phase 5: Decline / Rejuvenation

Answer 28

• The entrepreneur will need to protect the competitive advantage by constantly looking for methods to re-design products / services and to prevent the business from reaching this stage.