Basic Agro-food Processing

Level-I
Based on October 2019 Version 2 Occupational
standards
Module Title: - Developing Understanding of
Entrepreneurship
LG Code: IND BFP1 M12 LO (1-6) LG (65-70)
TTLM Code: IND BFP1 TTLM 1020v1

October 2020

1
 Table of Contents
LO #1- Describe and explain the principles, concept and scope of entrepreneurship .... 3
Instruction sheet .................................................................................................. 3
Information Sheet 1- Analyzing and discussing concept and principles of
entrepreneurship .................................................................................................... 6
Self-check 1 ..................................................................................................... 8
Information Sheet 2- Identify and discuss Entrepreneurial traits and distinguishing
features, ................................................................................................................10
Self-check 2 ....................................................................................................13
Information Sheet 3- Explaining and discussing the role of entrepreneurship.....14
Self-check 3 ....................................................................................................17
Information Sheet 4- Discussing and analyzing entrepreneurship for women and
disables .................................................................................................................18
Self-check 4 ....................................................................................................20
LO #2- Discuss how to become entrepreneur ...........................................................21
Instruction sheet .................................................................................................21
Information Sheet 1- Identifying basic principles of risk management.................18
Self-check 1 ....................................................................................................20
Information Sheet 2- Identifying and discussing common workplace hazards ......21
Self-check 2 ....................................................................................................24
Information Sheet 3- Explaining and discussing advantages and disadvantages .25
Self-check 3 ....................................................................................................29
Information Sheet 4- Identifying and explaining major competencies ...................30
Self-check 4 ....................................................................................................34
Information Sheet 5- Assessing Self-potential. .....................................................35
Self-check 5 ....................................................................................................37
Information Sheet 6- behaviors of successful entrepreneurs. ...............................38
Self-check 6 ....................................................................................................39
Information Sheet 7- Generating business ideas using ........................................40
Self-check 7 ....................................................................................................44

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 Information Sheet 8- Identifying and assessing Business opportunities. ...............46
Self-check 8 ....................................................................................................47
LO #3- Discuss how to start and organize an enterprise .............................48
Instruction sheet ....................................................................................................48
Information Sheet 1-concepts and legal business enterprises in Ethiopia.............50
Self-check 1 ....................................................................................................55
Information Sheet 2- Understanding and developing business Ethics ..................56
Self-check 2 ....................................................................................................57
Information Sheet 3- understanding facts about micro, small and medium
enterprises ............................................................................................................58
Self-check 3 ....................................................................................................59
Information Sheet 4- factors in micro, small and medium businesses ..................60
Self-check 4 ....................................................................................................61
Information Sheet 5- Discussing and understanding procedures ..........................62
Self-check 5 ....................................................................................................66
Information Sheet 6- Major factors to consider in selecting a location for a business
..............................................................................................................................6 7
Self-check 6 ....................................................................................................69
Information Sheet 7- Estimating Amount of money needed to start an enterprise 70
Self-check 7 ....................................................................................................71
Information Sheet 8- Identifying and discussing various sources of finance
72
Self-check 8 ....................................................................................................74
LO #4- Discuss how to operate an enterprise. ................................................75
Instruction sheet ....................................................................................................75
Information Sheet 1- Explaining and discussing processes ..................................78
Self-check 1 ....................................................................................................80
Information Sheet 2- skills, negotiation skills and time management ....................81
Self-check 2 ....................................................................................................84
Information Sheet 3- techniques and procedures of managing ............................85

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 Self-check 3 ....................................................................................................86
Information Sheet 4- selecting suppliers and the steps to follow. ........................87
Self-check 4 ....................................................................................................89
Information Sheet 5- new technologies can affect micro, small and medium business
..............................................................................................................................9 0
Self-check 5 ....................................................................................................91
Information Sheet 6- Perform risk assessment and management of business
enterprise. ............................................................................................................92
Self-check 6 ....................................................................................................94
Information Sheet 7- Inspecting and managing Qualities and inventories. ............95
Self-check 7 ....................................................................................................98
Information Sheet 8- basic concepts of monitoring ..............................................99
Self-check 8 ..................................................................................................100
LO #5- Discus how to prepare and use financial records ............................75
Instruction sheet ....................................................................................................75
Information Sheet 1- Discussing Importance of financial source documents. ....102
Self-check 1 ..................................................................................................104
Information Sheet 2- Identifying and preparing financial recording documents .105
Self-check 2 ..................................................................................................107
Information Sheet 3- different types of cost and expense ..................................108
Self-check 3 ..................................................................................................110
Information Sheet 4- the cost and expense of the enterprise ..............................111
Self-check 4 ..................................................................................................114
Information Sheet 5-Preparing and understanding simple financial statements ..115
Self-check 5 ..................................................................................................119
LO #6- Develop one’s own business plan ........................................................120
Instruction sheet ..................................................................................................121
Information Sheet 1- process of preparing/ writing a business plan. ..................123
Self-check 1 ..................................................................................................125
Information Sheet 2- Feasibility of business idea. ...............................................126

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 Self-check 2 ..................................................................................................129
Information Sheet 3- assess and analyze findings of the feasibility study ...........130
Self-check 3 ..................................................................................................131
Information Sheet 4- format in preparing business plan ......................................132
Self-check 4 ..................................................................................................133
Information Sheet 5- tarise or encounter whenstarting a business ......................134
Self-check 5 ..................................................................................................135
Operation Sheet 1- preparing business plan ...................................................... 136
LAP TEST .................................................................................................... 137
Reference Materials ..................................................................................... 138

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 LG #65 LO #1- : Describe and explain the
principles, concept and scope of
entrepreneurship

Instruction sheet

This learning guide is developed to provide you the necessary information regarding the
following content coverage and topics:
x Analyzing and discussing concept and principles of entrepreneurship.
x Identifying and discussing Entrepreneurial traits and distinguishing features,
entrepreneurial motivations and types of entrepreneurs.
x Explaining and discussing the role of entrepreneurship development for the
Ethiopian economy.
x Discussing and analyzing entrepreneurship for women and disables

This guide will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:
x Analyze and discuss concept and principles of entrepreneurship.
x Identify and discuss Entrepreneurial traits and distinguishing features,
entrepreneurial motivations and types of entrepreneurs.
x Explain and discuss the role of entrepreneurship development for the Ethiopian
economy.
x Discuss and analyze entrepreneurship for women and disables

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Learning Instructions:
1. Read the specific objectives of this Learning Guide.
2. Follow the instructions described below.
3. Read the information written in the information Sheets
4. Accomplish the Self-checks

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 Information Sheet-1 Analyzing and discussing concept and principles of
entrepreneurship

1.1 . Analysing and discussing the concept and principles of entrepreneurship.

Entrepreneurship is a key factor for the survival of small scale farming in an ever-
changing and increasingly complex global economy.

Farmer-entrepreneurs see their farms as a business. They see their farms as a

means of earning profits. They are passionate about their farm business and are
willing to take calculated risks to make their farms profitable and their businesses
grow.

The entrepreneurial environment Farmer-entrepreneurs operate in a complex and

dynamic environment. They are part of a larger collection of people including other
farmers, suppliers, traders, transporters, processors and many others. Each of these
has a role to play in producing products and moving them through to the market –
through the value chain. Each one needs to be an entrepreneur. They also need to
respect each other and work together to make the whole system work better and be
more profitable.
Entrepreneurship dynamics: successful farmer-entrepreneurs are technically
competent, innovative and plan ahead so they can steer their farm businesses through
the stages of enterprise development – from establishment and survival to rapid
growth and maturity. However, there are many challenges that these farmers face:
social barriers, economic barriers, regulations, access to finance and information, and
their own managerial capacity to cope with risks and changes and to seize
opportunities.
The idea of entrepreneurship is complex. When a farmer introduces a new enterprise
into his farming system, there are different stages of development that the enterprise
goes through. The skills of the farmer must also change and develop to meet the
management demands of the enterprise.

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 The development of a farm enterprise as a business occurs in five phases:
• Establishment
• Survival
• Early growth
• Rapid growth
• Maturity (and possible decline)

WHAT IS ENTREPRENEURSHIP?
Entrepreneurship, value chains and market linkages are terms that are being used
more and more when talking about agriculture and farming. Many small-scale farmers
and extension organization’s understand that there is little future for farmers unless
they become more entrepreneurial in the way they run their farms. They must
increasingly produce for markets and for profits. Becoming more entrepreneurial can
be a challenge for small-scale farmers. They will need help from extension workers
and other institutions.
What is an entrepreneur? An entrepreneur is someone who produces for the market.
An entrepreneur is a determined and creative leader, always looking for opportunities
to improve and expand his business. An entrepreneur likes to take calculated risks,
and assumes responsibility for both profits and losses. An entrepreneur is passionate
about growing his business and is constantly looking for new opportunities.
Entrepreneurs are also innovators. They always look for better and more efficient and
profitable ways to do things. Being innovative is an important quality for a farmer-
entrepreneur, especially when the business faces strong competition or operates in a
rapidly changing environment.
Agripreneurship is a sustainable employment strategy that will ensure self-reliance and
economic self-sufficiency to the entrepreneur and also to the community of the
entrepreneur. Agribusiness includes the manufacturing and distribution of farm inputs,
crop production activities, storage, processing, and distribution of farm products made
from them. The development of agricultural entrepreneurship refers to the promotion of
entrepreneurial skills amongst common individuals and building the entrepreneurial
approach in the field of agriculture.

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 FARMERS AS ENTREPRENEURS Can small-scale farmers become entrepreneurs?
Yes. Small-scale farmers all over the world have shown a remarkable ability to adapt.
They look for better ways to organize their farms. They try new crops and cultivars,
better animals, and alternative technologies to increase productivity, diversify
production, and reduce risk – and to increase profits. They have become more market
oriented and have learned to take calculated risks to open or create new markets for
their products. The farmer-entrepreneur is always looking for new opportunities. He
knows that new opportunities are found in the market. The farmer-entrepreneur wants
to make profits. He knows that profits are made in the market. An entrepreneurial
farmer has the initiative, drive, capacity and ability to take advantage of opportunities.
Small-scale farmers often have entrepreneurial qualities.

Table 1 Ladder of intentions and reasons for farming

FARMING EXCLUSIVELY FOR HOME CONSUMPTION
FARMING PRIMARILY FOR HOME CONSUMPTION
MARKETING SURPLUS FARMING PRIMARILY FOR THE MARKET W ITH SOME
HOME CONSUMPTION
FARMING EXCLUSIVELY FOR THE MARKET
 Principles of Entrepreneurship
 Be a Solution Provider
 Have a Vision
 Choose the Right Team
 Viable Product/Service
 Capital
 “Accountability
 Growth and Marketing
 Know Your Customer
 Priorities

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 Self-check 1 Written test

Name_________________________
Date_____________________

Direction: Answer all questions listed below. Illustrations may be necessary to aid
some explanations/answers.
1. Discuss the concept and principles of entrepreneurship( 1points)
2. Discuss entrepreneurial traits, motivation and types of entrepreneurs( 1points)
3. List the principles of entrepreneurship (1 points)

Note: Satisfactory rating – ≥3 Unsatisfactory - 3points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

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 Identify and discuss Entrepreneurial traits and
Information Sheet- 2 distinguishing features, entrepreneurial motivations and
types of entrepreneurs

2.1. Identify and discuss Entrepreneurial traits and distinguishing features,

entrepreneurial motivations and types of entrepreneurs

2.1. 1. Entrepreneurial Characteristics and traits

Characteristics that are found within all successful entrepreneurs

 Confident  Dedicated
 Feels a Sense of  Grateful
Ownership  Optimistic
 Able to Communicate  Gregarious
 Passionate about Learning  A Leader by Example
 Team Player  Not Afraid of Risk or
 System-Oriented Success
2.2.2. Entrepreneurial Traits of an Entrepreneur
a. Self-Motivated i. Self-Confidence
b. Leadership Skills j. Competitiveness
c. Risk-takers k. Technically Competent
d. Innovative l. Optimistic/hopeful
e. Ethical m. Visionary
f. Positive Attitude n. Decision-Making
g. Accessibility o. Communication Ability
h. Business Planning p. Passion

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Entrepreneurial motivation is the process of transforming an ordinary individual to a
powerful businessman, who can create opportunities and helps in maximizing wealth
and economic development.
Entrepreneurial Motivation can be:
a. The need for achievement (n Ach)/ Achievement motive:
b. The need for Power (n Plow)/Power motive:
c. The need for affiliation (n Aff)/Affiliation motive:
2 .3 . Classification of entrepreneurship

A. Based on the Type of Business:

1. Trading Entrepreneur: as the name itself suggests, the trading entrepreneur
undertake the trading activities. They procure the finished products from the
manufacturers and sell these to the customers directly or through a retailer. These

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 serve as the middlemen as wholesalers, dealers, and retailers between the
manufacturers and customers.
2. Manufacturing Entrepreneur: the manufacturing entrepreneurs manufacture
products. They identify the needs of the customers and, then, explore the resources
and technology to be used to manufacture the products to satisfy the customers’
needs. In other words, the manufacturing entrepreneurs convert raw materials into
finished products.
3. Agricultural Entrepreneur: the entrepreneurs who undertake agricultural pursuits
are called agricultural entrepreneurs. They cover a wide spectrum of agricultural
activities like cultivation, marketing of agricultural produce, irrigation,
mechanization, and technology.
B. Based on the Size of Enterprise:

1. Small-Scale Entrepreneur
2. Medium-Scale Entrepreneur
3. Large scale entrepreneur

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Self-check 1 Written test

Name__________________________________ Date__________

Direction: Answer all questions listed below. Illustrations may be necessary to aid
some explanations/answers.
1. Discuss briefly the characteristics of successful entrepreneurs (3points)
2. What are the traits of agricultural entrepreneurs? (2pts.)
3. Discus the classification of entrepreneurs? (1pts.)
Note: Satisfactory rating - ≥6 points Unsatisfactory - below 6 points
You can ask you teacher for the copy of the correct answers.
Answer Sheet

Name: ______________________________ Date: _____

Short Answer Questions

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 Explaining and discussing the role of entrepreneurship
Information Sheet-3 development for the Ethiopian economy.

1.3. Role of Entrepreneurs in economic development of a country

1. Employment opportunities
Entrepreneurs employ labor for managing their business activities and provide
employment opportunities to a large number of people. They remove unemployment
problem.
Agricultural entrepreneurship is often construed as a tool for empowering the rural
unemployed youth who have the capability of starting an enterprise and to excel in the
fields of agriculture and allied activities.
2. Balanced Regional Development
Government promotes decentralized development of industries as most of the
incentives are granted for establishing industries in backward and rural areas. Thus, the
entrepreneurs to avail the benefits establish industries in backward and rural areas.
They remove regional disparities and bring balanced regional development. They also
help to reduce the problems of congestion, slums, sanitation and pollution in cities by
providing employment and income to people living in rural areas. They help in improving
the standard of living of the people residing in suburban and rural areas.

3. Mobilization of Local Resources

Entrepreneurs help to mobilize and utilize local resources like small savings and
talents of relatives and friends, which might otherwise remain idle and unutilized.
Thus they help in effective utilization of resources.
4. Optimization Of Capital
Entrepreneurs aim to get quick return on investment. They act as a stabilizing force by
providing high output capital ratio as well as high employment capital ratio.
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 5. Promotion of Exports
Entrepreneurs reduce the pressure on the country’s balance of payments by exporting
their goods they earn valuable foreign exchange through exports. Eg.The fresh onions,
tomatoes, cabbage and potatoes for exports to Djibouti and from there to Saudi Arabia,
Yemen and other Middle East destinations are mainly produced by small scale farmers.

The produce is exported in bulk without any value addition and tends to have a
relatively low value, price and quality. Due to a general lack of care and proper facilities
during transport however, produce often arrives in poor condition. Also some of the
large state farms, i.e. Upper Awash Agro-Industry Enterprise (UAAIE) near Wonji and
the Horticulture Development Enterprise (HDE) near Ziway, sometime produce and
transport the produce directly by state owned trucks and trains to the international
harbour in neighboring Djibouti. These export vegetables from smallholders (some of
them organized into cooperatives) are cultivated in the areas around Dire Dawa and the
various Rift valley lakes where vegetables are produced on small plots irrigated with
lake water.

The farmers tend to sell all their produce to middlemen and traders who pick it up from
the roadside in small open trucks and bring it to Djibouti for further export.

6. Social Advantage
Entrepreneurs help in the development of the society by providing employment to
people and paves for independent living they encourage democracy and self-
governance. They are adept in distributing national income in more efficient and
equitable manner among the various participants of the society by horticultural products.
7. Increase per capita income
Entrepreneurs help to increase the per capita income .
8. Capital formation

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A country can attain economic development only when there is more amount of
investment and production e.g horticultural crop production, agronomic crop production,
and spice crop production. Entrepreneurs help in channelizing their savings and savings
of the public to productive resources by establishing enterprises. They promote capital
formation by channelizing the savings of public to productive resources.
9. Growth of capital market
Entrepreneurs raise money for running their business through shares and debentures.
Trading of shares and debentures by the public with the help of financial services sector
leads to capital market growth.
10. Growth of infrastructure
The infrastructure development of any country determines the economic development of
a country, Entrepreneurs by establishing their enterprises in rural and backward areas
influence the government to develop the infrastructure of those areas.

11. Development of Trader

Entrepreneurs play an important role in the promotion of domestic trade and foreign
trade. They avail assistance from various financial institutions in the form of cash credit,
trade credit, overdraft, short term loans, loans and unsecured loans and lead to the
development of the trade in the country.
12. Economic Integration
Entrepreneur reduces the concentration of power in a few hands by creating
employment opportunities and through equitable distribution of income. Entrepreneurs
promote economic integration in the country by adopting certain economic policies and
laws framed by the government. They help in removing the disparity between the rich
and the poor by adopting the rules and regulation framed by the government for the
effective functioning of business in the country.
13. Inflow of Foreign Capital
Entrepreneurs help to attract funds from individuals and institutions residing in foreign
countries for their businesses.

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 Self-Check 3 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to
Aid some explanations /answers:
1. Mention the finical institutions that avail for development of Trader? ( 2 points)
2. What is the importance of economic Integration for entrepreneur?(3 points)
3. Explain the role of entrepreneurship in Ethiopia economy?(2pts)

Answer Sheet
Score = ___________

Rating: ____________

Note: Satisfactory rating - ≥7 points Unsatisfactory - below 7 points

You can ask you teacher for the copy of the correct answers.

Name: _________________________ Date: _______________

Short Answer Questions

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 Discussing and analyzing entrepreneurship for women
Information Sheet-4
and disables

4.1. Discussing and analyzing entrepreneurship for women and disables

Disability, on such a definition, is a complex phenomenon involving interaction between

a person’s body and the society in which they live. Disabled people are defined as such
if they have a physical or mental impairment and the impairment has a substantial and
long-term adverse effect on their ability to carry out normal, day-to-day activities.

Impairment refers to a wide range of bodily functions or conditions, and might be

grouped as:
 physical (dysfunction of the musculoskeletal, neurological, cardiac,
circulatory and respiratory body systems);
 mental illness or disorder (schizophrenia, neuroses and psychotic
conditions, anxiety and emotional disorders, phobias, depression);
 cognitive (brain injuries, dementia);
 sensory (sight loss or blindness, hearing); and
 Intellectual or developmental (below average general intellectual
function).
Looking at the personal characteristics of disabled entrepreneurs, self-employment
rates vary by type and severity of impairment, gender, education and residential
location.

Self-employment rates were higher among people who were severely limited in their
daily activities than among those reporting some or no limitation in daily activities .There
is some evidence on self-employment rates among people with specific disabilities. For
these people, self-employment might offer the only opportunity for active labour market
participation and the associated incomes and living standards. Even individuals who
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have been labour market inactive might be able to create self-employed jobs that
enable them to earn a livelihood and contribute to the wider economy. Self-employment
might be a valid option for many disabled individuals since it facilitates achieving a
better balance between disability status and working life.

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Self-Check 4 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to
Aid some explanations /answers:
1. Define disability? (2 points)
2. W hat is effect of disability and being woman for entrepreneur? (3 points)
Answer Sheet
Score = ___________

Rating: ____________

Note: Satisfactory rating -≥ 5 points Unsatisfactory - below 5 points

You can ask you teacher for the copy of the correct answers.

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LG #66 LO #2- Discuss how to become
entrepreneur

Instruction sheet

This learning guide is developed to provide you the necessary information regarding the
following content coverage and topics:
x Developing the positive mind set, attitude towards poverty and “can do
mentality”.
x Discussing and analyzing self-employment as an individual economic
independence and personal growth.
x Explaining and discussing advantages and disadvantages of self-employment.
x Identifying and explaining major competencies of successful entrepreneurs.
x Assessing Self-potential.
x Identifying and discussing the behaviors of successful entrepreneurs.
x Generating business ideas using appropriate tools, techniques and steps.
x Identifying and assessing Business opportunities
x
This guide will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:
x Develop the positive mind set, attitude towards poverty and “can do mentality”.
x Discuss and analyze self-employment as an individual economic independence
and personal growth.
x Explain and discuss advantages and disadvantages of self-employment.

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 x Identify and explain major competencies of successful entrepreneurs.
x Assess Self-potential.
x Identify and discuss the behaviors of successful entrepreneurs.
x Generate business ideas using appropriate tools, techniques and steps.
x Identify and assess business opportunities

Learning Instructions:
1. Read the specific objectives of this Learning Guide.
2. Follow the instructions described below.
3. Read the information written in the information Sheets
4. Accomplish the Self-checks
5. Perform Operation Sheets
6. Do the “LAP test

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Information Sheet-1 Developing the positive mind set, attitude towards poverty and
“can do mentality”.

1.1. Develop the positive mind set, attitude towards poverty and “can do
mentality”.
Positive Mental Attitude/PMA is the right mental attitude. The right mental attitude is
most often comprised of the plus characteristics symbolized by such words as faith,
integrity, hope, optimism, courage, initiative, generosity, tolerance, tact, kindliness and
good common sense.
Negative Mental Attitude/NMA is ‘it is has opposite characteristics to PMA. After years
spent studying successful men, the authors of success through a PMA have come to
the conclusion that a positive mental attitude is the one simple secret shared by them
all. PMA helps to overcome the disadvantages of poverty.
A person with PMA aims for high goals and constantly strives to achieve them.
 Ways to Build a Positive Mindset

1) Start the day with positive affirmation.

2) Focus on the good things.
3) Find humour in bad situations.
4) Turn failures into lessons:
5) Transform negative self-talk into positive self-talk.
6) Focus on the present.
7) Find positive friends, mentors and co-workers.
8) Remember that you are powerful.
9) Know that no one is better qualified.
Believe that you are more than enough

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 Self-Check -1 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in
the next page:
1. How positive mind set up developed?( 2pts)
2. What are the factors that affect positive mind?(1pts)
3. List the way of alleviating the attitude lead to poverty?(1pts)

Note: Satisfactory rating - ≥4 points Unsatisfactory - below 4 points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

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Information Sheet-2 Discussing and analyzing self-employment as an individual
economic independence and personal growth

2.1 Understanding self-employment

Self-employment is a situation in which an individual works for himself instead of

working for an employer that pays a salary or a wage.

Self-employment is an activity where individuals create their own employment

opportunities by creating a business.

A self-employed individual earns his income through conducting profitable operations

from a trade or business that he operates directly.

Self-employed person is his or her own boss and generates revenue based on the
services that they can offer.
Reasons for W age Employment or Going into Business

A. Economic – to earn more money

B. Psychological – to feel useful and needed

C. Social – to be with people

D. Critical incidents – Shocks

E. Practical reasons – Rational

F. Personal reasons – Emotional

1. CRITICAL INCIDENT (Economic, Psychological, Sociological)

x Inheriting family wealth.

x Being fired/sacked/made redundant/retired.

x Transferred to different job or location.

x Challenged by people you know/emulating others.

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 x Unhappy with your boss or colleagues.

x No job opportunity after leaving school or vocational training.

2. PRACTICAL REASONS (Economic, Psychological, Sociological)

x To make a living and/or get rich.

x To prepare for retirement. That is, “something to do” in retirement

x To Provide additional income, or both.

x For supplemental income and equity building, such as in real estate.

x To use as a tax shelter or business write-off.

x To have something to occupy spare time. (To relieve boredom).

x To create a common cause for th e whole family,

thereby building togetherness.

3. ABSTRACT PERSONAL REASONS (Economic, Psychological,

Sociological)

Some of the abstract, personal reasons include:

x For emotional rewards, a realization of self-worth, self-image, seeing your

Creativity develops and expands.

x To escape working for someone else.

x To have flexible working hours – the freedom to do what you please,

when, you please.

x To stop having to take orders.

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Self-Check -2 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in
the next page:

1. W hy self-employment is needed? (3points)

2.Discus the reason why the individuals enter to business or self-employment ?(3pts)
3. List advantage and disadvantage of self-employment. (1points)

Note: Satisfactory rating -≥ 7points Unsatisfactory - below 7 points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

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 Information Sheet -3 Explaining and discussing advantages and disadvantages
of self-employment.
3 .1 . Explaining and discussing advantages and disadvantages of self-
employment.
Being an employee is a situation in which an individual works f or an
employer/organization that pays a salary or a wage.
 Advantage of Self Employment
 Reaping the rewards of your own  Leads rather than follows
efforts,  Can implement own ideas
 Independence and freedom,  Can be creative
 A better work/life balance,  Potential income
 Improved quality of life and
increased job satisfaction.
 Disadvantage of Self-employment
 More stress,
 Less time with your family,
 Isolation from colleagues and
customers,
 Responsibility for your own tax,
 Long, irregular hours of work
 Broad responsibility
 Must take risks
 Income not stable nor
guaranteed
 Time constraint
 Uncertain future
 Hard to delegate work

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 Self-Check -3 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in
the next page:
1. List the advantage of self-employment? (3 points)
2. List disadvantage of self- employment .(3 points)

Note: Satisfactory rating –≥ 6 points Unsatisfactory - below 6 points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Score = ___________

Rating: ____________

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Information Sheet 4 Identifying and explaining major competencies of
successful entrepreneurs

1 .1 . Identifying and explaining major competencies of successful

entrepreneurs

Competency is a cluster of related abilities, commitments, knowledge, and skills that

enable a person (or an organization) to act effectively in a job or situation. Competency
indicates sufficiency of knowledge and skills that enable someone to act in a wide
variety of situations.

 There are three major competencies for successful entrepreneurship.

A. Knowledge: Entrepreneurs need more than just their personality or personal traits.
They need ideas, opportunities, and resources. Knowledge allows farmers to make
informed choices. It puts them in a better position to compare the current practices
being used with alternatives.

Farmers obtain knowledge through experience and observation - from listening to

and learning from other farmers, observing how things are done and then practicing
it themselves. Extension workers are another source of knowledge. Information and
its communication is an important aspect of knowledge creation and accumulation.
Farmers need knowledge in each of the key areas of farm management: planning,
implementing and controlling.

They also need information about primary production, harvesting, processing,

wholesaling and retailing and about input supply, financial services, transport,

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 packaging, promotion and advisory services. Knowledge in the context of business
may be manifested by information on, or familiarity with aspects such as:
 Business opportunity  Production processes
 Market  technical matters
 Customers  Business management
 Competitors  sources of assistance
 Skill: has been defined as the ability to apply knowledge and can be acquired or
developed through practice,
a. Technical Skill
In addition to being entrepreneurs, entrepreneurial farmers must also be excellent
farmers. This requires technical competencies particularly in three areas: managing
inputs, managing production and managing marketing.
b. Managerial Skill
Entrepreneurial and technical competencies need to be complemented by
managerial competencies in the functions of diagnosis, planning, organising, leading
and controlling. The farmer-entrepreneur performs these functions in each of the key
areas of the farm business: managing inputs, production and marketing
c. Traits: have been defined as the aggregate of peculiar qualities or characteristics
which constitutes personal individuality. Entrepreneurship is about looking forward –
identifying opportunities, creating a vision of how the business will grow, innovating
and taking risks. Entrepreneurs have some special qualities or characteristics that
set them apart from the average farm manager.
It is component of a person's behaviour that is assumed to serve as an explanation of
his or her enduring personal characteristics such as:

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  Hard W orking  Willing to Listen
 Self-Confident  Sets Own Standards
 Builds for the Future  Copes with Uncertainty
 Profit-Oriented  Committed
 Goal-Oriented  Builds on Strengths
 Persistent  Reliable and Has
 Copes with Failure Integrity
 Responds to Feedback  Risk-Taker
 Demonstrates Initiative

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 Self-Check -4 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided
in the next page:
1. W hat is competence? (3points)
2. Discuss and describe the major competencies for successful entrepreneurship. (5
points)

Note: Satisfactory rating – ≥8 points Unsatisfactory - below 8 points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

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 Information Sheet -5 Assessing Self-potential.

5.1. Assessing self-potential to determine if qualified to become future

entrepreneur
A growing number of employees are becoming dissatisfied with paid employment
for a variety of reason:
 They dislike following orders
 Their abilities are not being recognized
 Income is at a set level
 Their responsibility is limited
 Implementation of their own ideas is difficult
 They are unhappy about dependency on their employer

Dissatisfied employees may seek new opportunities to become self-employed.

They tend to go into business for themselves for a variety of reasons:

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5.2 Types of self-potential qualifications to become future entrepreneur
 An entrepreneur initiates an enterprise or idea, typically in business, and accepts
full responsibility for the outcome.
 Entrepreneurs are considered to be essential individuals in a Capitalist society.

1. Market Knowledge
 Entrepreneurs know customer desires. They research purchasing trends of key
demographics and view the market for their products through customers' eyes.
 An entrepreneur should be skilled in identifying an opening and quickly gathering
resources to fill it. Rather than looking at the current state of a key market or business
model, he looks to the future and adapts his business strategy to allow for shifting
trends.
2. Resilience
 Successful entrepreneurs tend to be independent thinkers and resilient in their
pursuit of an objective. They are self-reliant, self-confident and passionate about their
work, even when times are bad, as indicated as the Mentors, Ventures and Plans
website. They harbor strong beliefs that often go against traditional thinking.
 An entrepreneur should be aware of potential risks and rewards and be strong-
minded enough to cope with failure.

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 Self-Check -5 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in
the next page:

1. What are the dissatisfied the growing number of self-employers? (2pts)

2. Identifying Potentials of Entrepreneurs? (3pts)
3. What are the types of self-potential qualification? (2pts)

Note: Satisfactory rating – ≥7 points Unsatisfactory - below 7 points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

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 Information Sheet- 6 Identifying and discussing the behaviors of successful
entrepreneurs.

6. 1.Identifying and discussing the behaviors of successful entrepreneurs.

 They plan their day in advance.  They know their strengths and
weaknesses.
 They position themselves to
serve.  They hire A-team players.

 They set clear goals.  They are constantly learning.

 They take calculated risks.  They evaluate their actions and

priorities e a ch day

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 Self-Check -6 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet
provided in the next page:

1. The mention behaviours of Successful Entrepreneurs? ( 5 points)

a. _________________________

b. __________________________

c. ___________________________

d. ____________________________

e. _____________________________

Answer Sheet

Name: _________________________ Date: _______________

Short Answer Questions

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 Information Sheet 7 Generating business ideas using appropriate tools, techniques
and steps.

7.1. Generating business ideas using appropriate tools, techniques and steps.
A business idea is the response of a person or persons, or an organization to solving an
identified problem or to meeting perceived needs in the environment (markets,
community, etc.). Idea generation is the process of creating, developing, and
communicating ideas which are abstract, concrete, or visual.

Idea Generation Methods

1. Focus groups: A group of individuals discuss and provide information in a
structured format to arrive at new business ideas.
2. Brainstorm: Is a group method for obtaining new ideas and business solutions.
This method is extensively used for generating ideas for new product packing and
distribution.
3. Check list: The new ideas for the business are developed based on discussions on
list of related issues. A specific area of discussions is listed by entrepreneur and a
list of questions, suggestions and statements are developed for in-depth discussions
and arrive at a business idea.
4. Problem inventory analysis: It is a method of obtaining new ideas and solutions
for business by focusing on the problems. The group is given the problems that are
commonly felt by consumers, dealers, transporters and general public and based on
the identified problems, product ideas that provide solutions are hallucinated.

Steps to Generate Business Ideas

 Steps to Generate Business Ideas.

Step1. Develop a Basic Business Idea: This step calls for identifying the broadest
needs and wants of customers that will be a base for the development of product lines
and product ranges. It consists of the following three sub steps.
Step 2: Analysis of Internal and External Environment (SWOT Analysis)

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 Entrepreneurship environment refers to the various facets within which enterprises
have to operate in. These entrepreneurial environments are most rationally divided
into two major parts: internal and external environment. The major objective of this
step is to identify the threats and opportunities faced by the prospective
entrepreneur in the light of the strengths and weaknesses that are apparent, hence
the name SW OT analysis. The two major parts of this step are:

1) Scanning the External Environment

By and large, entrepreneurship is influenced by environments created by the
external forces. These external forces are demarcated as macro and micro
environmental forces.
a. Macro – Environment
Macro environment is the type of environment that is not specific to a given
entrepreneur or company. Macro environmental force more or less include the
following environments
 Economic environment:
 Socio-cultural environment:
 Political- legal environment:
 Technological environment:
b. Micro - Environment
Micro environmental forces on the other side are forces that are specific to
companies or entrepreneurs. It includes forces like customers, suppliers,
competitors, intermediaries, etc
Sources of Environmental Scanning
1. Formal Sources: research studies, consultants
2. Secondary Sources: publications, magazines, books
3. Internal Sources: MIS records, co- employees
4. External Sources: marketing intermediaries, customers, suppliers etc
2) Assessing the Internal Environment

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 It identifies the weaknesses and strengths that are internal in nature. In sensible
terms it is assessing the expertise, resources, abilities, skills, costs, organizational
structure and culture, manufacturing techniques etc.
Step 3: Developing Feasibility study (decide GO/NGO)
Definition of Feasibility study
It is an analysis and evaluation of a proposed project to determine:-
 if it is technically feasible,
 if it is feasible within the estimated cost, and
 if it will be profitable.
Feasibility studies are almost always conducted where large sums are at stake. It is
also called Feasibility analysis. Feasibility study should focus on the following:
x Marketing feasibility: total demand size, growth rate of market.
x Technical feasibility: Technical knowhow of production cost of acquisition.
x Physical resource feasibility: availability of raw materials & supp
x Financial feasibility: availability of adequate capital, and cost of funds.
x Time feasibility: duration required to operate the business & make expected
profit.
If feasibility fails, no go is the option. If feasibility test results positive, go is the
option.
Step 4: Generating Business Plan.
After testing the feasibility of business idea, a business plan is prepared. A business
plan transforms the idea in to how it will be applied and projects the likely results to be
attained. It leads the transformation of idea into reality.
Step 5: Developing Action Plans
Definition of action plan:-It is a sequence of steps that must be taken, or activities that
must be performed well, for a strategy to succeed.
An action plan has three major elements.
1. Specific tasks: what will be done and by whom.
2. Time horizon: when will it be done?
3. Resource allocation: what specific funds are available for specific activities? It is
also called action program

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Step 6: Implementation and Evaluation

When action plans are materialized, business plans are considered to be implemented.
After implementation follow evaluation. Evaluation is mainly concerning towards making
sure the achievement of mission, objectives etc.

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 Self-Check -7 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet
provided in the next page:

1. What is business idea? ( 2pts )

2. How can you create business? (3pts)

3. List the steps of to create business idea? (2pts)

Answer Sheet

Name: _________________________ Date: _______________

Short Answer Questions

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 Information Sheet- 8 Identifying and assessing Business opportunities

8.1. Identifying and assessing Business opportunities

Seeing, seeking and acting on opportunities is one of the characteristics of successful
entrepreneurs. It is also the basis for starting and maintaining successful
ventures/business. It involves not only generating ideas and recognizing opportunities,
but also screening and evaluating them to determine the most viable, attractive
propositions to be pursued.
A business opportunity may be defined simply as an attractive investment idea or
proposition that provides the possibility of a monetary return for the person taking the
risk. Such opportunities are represented by customer requirements and lead to the
provision of a product or service which creates or adds value for the buyers or end-
users.

 Characteristics of a good business opportunity

To be a good business opportunity, it must fulfill, or be capable of meeting, the
following criteria:
A. Real demand: responds to unsatisfied needs or requirements of customers who
have the ability to purchase and who are willing to buy.eg the demand for root
and tuber crops ,fruits, citrus, spices and stimulants.
B. Return on investment: provides acceptable returns or rewards for the risk and
effort required
C. Be competitive: be equal to or better (from the viewpoint of the customer) than
available competitors
D. Meet objectives: meet the goals and aspirations of the person or organization
taking the risk
E. Availability of resources and skills: the entrepreneur is able to obtain the
necessary resources.

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Self-check -8 Written test

Name_________________________
Date_____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to aid
some explanations/answers.
1. Discus the business opportunity? (3pts)
Note: satisfactory rating: and, but unsatisfactory: below 3. You can ask your
teacher for the copy of the correct answer.
.

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 LG #68 LO #3- Discuss how to start and
organize an enterprise

Instruction sheet

This learning guide is developed to provide you the necessary information regarding
the following content coverage and topics:
x Identifying and discussing the concepts and legal forms of business enterprises
in Ethiopia.
x Understanding and developing business Ethics.
x Discussing, clarifying and understanding facts about micro, small and medium
enterprises.
x Identifying and explaining key success factors in micro, small and medium
businesses.
x Discussing and understanding procedures for identifying suitable market for
business.
x Identifying and discussing Major factors to consider in selecting a location for a
business.
x Estimating Amount of money needed to start an enterprise.
x Identifying and discussing various sources of finance

This guide will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:
x Identify and discuss the concepts and legal forms of business enterprises in
Ethiopia.
x Understand and develop business Ethics.

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 x Discuss, clarify and understand facts about micro, small and medium
enterprises.
x Identify and explain key success factors in micro, small and medium
businesses.
x Discuss and understand procedures for identifying suitable market for business.
x Identify and discuss major factors to consider in selecting a location for a
business.
x Estimate amount of money needed to start an enterprise.
x Identify and discuss various sources of finance

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Learning Instructions:
1. Read the specific objectives of this Learning Guide.
2. Follow the instructions described below.
3. Read the information written in the information Sheets
4. Accomplish the Self-checks

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Information sheet 1 Identifying and discussing the concepts and legal forms of
business enterprises in Ethiopia

1 .1 . Identifying and discussing the concepts and legal forms of business

enterprises in Ethiopia
A business (also known as an enterprise, a company, or a firm) is
an organizational entity and legal entity made up of an association of people, be
they natural, legal, or a mixture of both who share a common purpose and unite in order
to focus their various talents and organize their collectively
available skills or resources to achieve specific declared goals and are involved in the
provision of goods and services to consumers. A business can also be described as an
organisation that provides goods and services for human needs.
There are four types of business structures:

A. Sole proprietorship
It is a form of business ownership in which a single individual assumes all the risk of
operating the business, owns its assets, controls and uses any profit that is made. This
form is known also as individual or single proprietorship, sole ownership or individual
enterprise.
The features of sole proprietorship are as follows
a) Single ownership c) No separate legal entity d) Undivided risk
b) Owner- manager e) Unlimited liability
 Advantages of sole proprietorship:
1. Ease and low cost of formation 3. Freedom and promptness in
and dissolution action
2. Direct motivation and personal 4. Business secrecy
care 5. Social desirability
6. Absolute control
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 7. Flexibility in operations 9. Personal touch
8. Minimum government control

Disadvantages of sole proprietorship:

1. Limited resources and size 3. Limited managerial skills
2. Unlimited liability 4. Uncertain future

B. Partnership
A partnership is a non-incorporated business that is created between two or more
people. In a partnership, your financial resources are combined with those of your
business partner(s), and put into the business. You and your partner(s) would then
share in the profits of the business according to any legal agreement you have drawn
up.

In a general partnership, each partner is jointly liable for the debts of the partnership.
In a limited partnership, a person can contribute to the business without being
involved in its operations. A limited liability partnership is usually only available to a
group of professionals, such as lawyers, accountants or doctors.
General characteristics partnership:
a) Plurality of persons h) No separate legal entity
b) Unlimited liability i) Duration
c) Contractual relationship: j) Restriction on transfer of
d) Agency relationship interest
e) Capital contribution k) Unlimited liability
f) Utmost good faith & trust l) Unanimity of consent
g) Management
 Advantage of Partnership 2. Large financial and
1. Ease of organization managerial resources
3. Personal supervision

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 4. Reduced risk 2. Risk of implied agency
5. Flexibility 3. Lack of harmony
6. Democratic functioning 4. Lack of continuity
7. Better public relations 5. Non transferability of interest
 Disadvantage of Partnership 6. Lack of public confidence
1. Unlimited liability

C. Corporation
Another type of business structure is a corporation. Incorporation can be done at the
federal or provincial/territorial level. Corporation is defined as “an artificial being,
invisible, intangible and existing only in contemplation of law being the mere creature of
law, it possesses only those properties, which the character/ certificate of incorporation
of its creation confers upon it.”
Features of Corporation:
1. Separate legal entity 4. Perpetual existence
2. Limited Liability 5. Separation of ownership from
3. Transferability of shares management
 Advantage of Corporation  Disadvantage of corporation
1. Financial Strength 1. Difficulty of formation
2. Limited Liability 2. Lack of owner’s personal interest
3. Scope of expansion 3. Delay in decision making
4. Stability 4. Fraudulent management
5. Efficient & bolder management 5. Double Taxation
6. Diffused Risk 6. Lack of secrecy
7. Public confidence 7. Expensive management

D. Co-operative
A co-operative is owned and controlled by an association of members. It can be set up
as a for-profit or as a not-for-profit organization. This is the least common form of
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business, but can be appropriate in situations where a group of individuals or
businesses decide to pool their resources and provide access to common needs, such
as the delivery of products or services, the sale of products or services, employment,
and more.
In general “Co-operatives are associations of persons usually with a limited means who
have voluntarily joined together to achieve a common economic end through the
formation of a democratically controlled business organization, making equitable
contributions to the capital required and accepting a fair share of risks and benefits of
the undertaking”.

Features of Cooperatives:
1. Voluntary/ Open membership 5. Only members subscribe
2. Equality of voting rights capital for the enterprise
3. Democratic control 6. Registrations & legal status
4. Service motto 7. Government control
Advantage of Cooperatives

 Democratic Management  Low Operating Costs

 Limited Liability  General Reserves
 Stability & Continuity  Exemption & Privileges
 Easy Formation  Social Advantage

x Disadvantage of Cooperatives
 Limited Capital
 Lack of Managerial Talent
 Lack of Motivation
 Delay in decision making and Implementation
 Lack of Secrecy and Government Regulations
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  Limitation of Size
 Lack of Public confidence

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Self-check 1 Written test

Name_________________________ Date ---------------------

Directions: Answer all the questions listed below. Illustrations may be necessary
to aid some explanations/answers.
1. Define business (3poits)
2. Define cooperative (5points)
3. Discuss briefly the types of business structures (10 points)

Note: satisfactory rating: 18 and, but unsatisfactory: below 18. You can ask your
teacher for the copy of the correct answer.

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Information sheet 2 Understanding and developing business Ethics

2.1. Understanding and developing business ethics

Business ethics refers to contemporary organizational standards, principles, sets of
values and norms that govern the actions and behavior of an individual in the business
organization.
Business ethics also means conducting all aspects of business and dealing with all
stakeholders in an ethical manner
The importance of business ethics in business development are:

1. attracts investment
2. promotes benefits to the organization
3. adjusts employees’ behavior
4. improves public image of the company

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Self-check 2 Written test

Name_________________________ Date_______________

Directions: Answer all the questions listed below. Illustrations may be necessary
to aid some explanations/answers.
1. Define business ethics? (3poits)
2. W rite the factors affecting business ethics? (5points)
3. W rite the importance of knowing business ethics for business development? (3
points)

Note: satisfactory rating: 11 and above, but unsatisfactory: below 11. You can ask
your teacher for the copy of the correct answer.

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 Information sheet 3 Discussing, clarifying and understanding facts about micro,
small and medium enterprises

3.1. Discussing, clarifying and understanding facts about micro, small and
medium enterprises
a. Micro enterprises
Micro enterprises are everywhere around us like an ice-cream parlor or your favorite
cafe in your neighborhood. These are small businesses with minimal employees and
minimal capital. A microenterprise usually operates with less than 10 people and is
started with a small amount of capital.

In a developing country, necessity compels micro entrepreneurs to represent the vast

majority of small business sector. They add value to the economy by creating micro
business, enhancing the income & lowering the overall cost of business. The number of
micro entrepreneurs is high due to the reason that no proper training and formal jobs
are available to them.
b. Small enterprises
Sometimes called a small business, a small enterprise is a business that employs a
small number of workers and does not have high volume of sales. In technical terms, it
is an independently owned and operated company that is limited in size and in revenue
depending on the industry. Such enterprises are usually privately owned sole
proprietorships, corporations or partnerships.

c. Medium enterprises
The category of medium scale enterprises is made up of enterprises which employ
fewer than 250 persons. These enterprises emerge from the slow and steady growth of
successful small businesses. As a company earns more revenue, it starts keeping aside

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the capital required for buildings, equipment and recruitment of more employees. This
eventually creates a bridge between small business and big corporations

Self-check 3 Written test

Name_________________________ Date____

Directions: Answer all the questions listed below. Illustrations may be necessary
to aid some explanations/answers.
1. Differentiate and discuss enterprise (5 points)

Note: satisfactory rating: 5 and above, but unsatisfactory: below 5. You can ask
your teacher for the copy of the correct answer.

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Information sheet 4 Identifying and explaining key success factors in micro,
small and medium businesses

4.1. Identifying and explaining key success factors in micro, small and medium
businesses

There are a number of key success factors applicable for any start-up businesses.
Below are some of them:
 Having a Good Relation with Stakeholders
 Preparing business plan
 Managing financial resources
 Understanding financial statement
 Learning to manage people effectively
 Keeping in tune with yourself
 Taking up short professional courses in management (entrepreneurship)
 Being sensitive to your customers

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Self-check -4 written tests

Name_________________________ Date------------------
Directions: Answer all the questions listed below. Illustrations may be necessary
to aid some explanations/answers.
1. list the factor affecting Micro, Small and Medium Businesses( 5 points)

Note: satisfactory rating: 5 and above, but unsatisfactory: below 5. You can ask
your teacher for the copy of the correct answer.

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Information sheet 5 Discussing and understanding procedures for
identifying suitable market for business.

5.1. Identifying Suitable market for business is depending on the following

information:

a) Identifying Market Information

1. What is a market? The market for a business is a specific geographical area that
people who need to buy and sell products/services.
Potential customers can be described as:
1. People who need or want the product or service.
2. People who are able to buy the product or service
3. People who are willing to buy the product or service
2. What should entrepreneurs know about potential customers?
1. Know the customers
2. Know what different customer groups wants
3. Know where the customer buys
4. Know when the customer buys
5. Know how the customer buys
3. Where can customer information be located?
Customer information can be obtained from trade associations (publications), chambers
of commerce, government agencies (including local government), newspapers and
magazines, and individual research by conducting a market survey in the community.
b) Identifying Marketing Concept
Marketing concept is a fundamental idea of marketing that organizations survive and
prosper through meeting the needs and wants of customers. This important perspective
is commonly known as the marketing concept. T he marketing concept is

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about matching a company's capabilities with customer wants. This matching process
takes place in what is called the marketing environment.

Businesses do not undertake marketing activities alone. They face threats from
competitors, and changes in the political, economic, social and technological
environment. All these factors have to be taken into account as a business tries to
match its capabilities with the needs and wants of its target customers.

An organization that adopts the marketing concept accepts the needs of potential
customers as the basis for its operations. Success is dependent on satisfying customer
needs. Marketing is based on the fact that:

a) Business policies and activities should be focused on satisfying customer needs,

and
b) Profitable sales volume is a primary goal.

When applying the marketing concept, a small business should:

a. Determine the needs of their customers (market research);

b. Analyze their competitive advantages (marketing strategy);
c. Select specific markets to serve (target marketing); and
d. Determine how to best satisfy those needs (marketing mix).

c) Conducting Market Research

Definition: The process of gathering, analyzing and interpreting information about a
market, about a product or service to be offered for sale in that market, and about the
past, present and potential customers for the product or service; research into the
characteristics, spending habits, location and needs of your business's target market,
the industry as a whole, and the particular competitors you face.
Market research should also identify trends that may affect sales and profitability levels.
Population shifts, legal developments and the local economic situation should be
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monitored to enable early identification of problems and opportunities. Competitor
activity also should be monitored; competitors may be entering or leaving the market.

d) Determining Marketing Strategy

Marketing strategy is an organization's strategy that combines all of
its marketing goals into one comprehensive plan. A good marketing strategy should be
drawn from market research and focus on the right product mix in order to achieve the
maximum profit potential and sustain the business. The marketing strategy is
the foundation of a marketing plan.
Marketing strategy includes identifying customer groups (target markets) which a small
business can serve better than its large competitors, and tailoring its product offers,
prices, distribution, promotional efforts and services towards that particular market
segment (managing the marketing mix).

e) Identifying Target Marketing

Target marketing is a marketing and advertising operation that is targeted for a specific
group of people defined by age, sex, socioeconomic status, race, or educational level. It
involves breaking a market into segments and then concentrating your marketing efforts
on one or a few key segments.
F. Understanding Marketing Mix
The marketing mix is a business tool used in marketing and by marketing professionals.
The marketing mix is often crucial when determining a product or brand's offer. It is
used to describe how entrepreneurs can combine the following four areas (which are
called four Ps) into an overall marketing program.

Marketing mix (4 P's)

The four core marketing activities include: product, price, place and promotion.

a. Product: the item or service that is being offered, through its features and
consumer benefits and how it is positioned within the marketplace whether it be a
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 high or low quality product. A ‘Product’ is also either a good or service, which is
offered to the market by a company.

b. Price: is a reference to the sacrifices made by a consumer to acquire a product and

may include both monetary and psychological costs such as the combination of the
ticket price, payment methods and other associated acquisition costs.

c. Place: refers to the way that a product physically reaches the consumer - where the
service or item is sold; it also includes the distribution channels in which the
company uses to get products or services to market.

d. Promotion: refers to marketing communications used to convey the offer to

consumers and may include; personal selling, advertising, public and customer
relations, sales Product.

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Self-check 5 Written test

Name_________________________ Date______

Directions: Answer all the questions listed below. Illustrations may be necessary
to aid some explanations/answers.
1. Explain the marketing procedure?( 5 pts)
2. discuss briefly the marketing activities(5 pts)

Note: satisfactory rating: 10 and , but unsatisfactory: below 10. You can ask your
teacher for the copy of the correct answer.

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Information sheet 6 Identifying and discussing Major factors to consider in selecting
a location for a business

6. 1.Factors to Consider When Choosing a Business Location are:

1. Availability of raw materials

If you intend running a manufacturing or production business, then the nearness or
availability of raw materials is a factor you must not joke with when choosing your
business location. If your business is not sited close to these raw materials, then
sourcing and transportation will reduce your profit margin.

2. Nearness to market
The next important factor to consider is the nearness of your business to its customers.
Are your customer’s resellers or end users? Answering this question will help you
determine the best area to locate your business. Remember that for your business to
succeed, you must make it easy for customers to find your product.

3. Availability of basic infrastructure

Availability of basic infrastructure can affect your choice of small business location.
Amenities and infrastructure such as water supply, power supply, good road network
and security are things to consider when locating your business.

4. Economic policy
The economic policy or system of a particular region may also affect your decision and
choice of location. Some economy favor capitalists and others are driven by socialism;
where the government controls all businesses. Other sub-factors to consider are
government’s policy, fiscal and monetary policy, exchange rates, taxes, levies and
duties.

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 5. Demographics
Demographics as a factor can have a big influence on your choice of business location.
The type of product or service your business offers and the status of the customers will
play a vital in your choice of small business location.
6. Psychographics
The mindset of your customers or the aura/feeling of a particular region is also a
factor to consider when choosing a location for your small business. For example; if
you site your business in a region where tribalism thrives, then you are doomed if
you are not a member of the tribe.

7. Industrial Clusters / areas

Some entrepreneurs may decide to site their business in industrial areas or clusters due
to the infrastructure and amenities/facilities already on ground. Industrial areas are
areas mapped out specifically for commercial purposes especially manufacturing firms.

These areas are sometimes given special attention such as good road network,
constant power supply, etc. In some certain regions, heavy duty manufacturers are
forced by the government to site their companies in these industrial areas.

8. Export processing zones

Locating your business in an export processing zone may be a smart choice for you
especially if are an exporter. Locating your business in such regions means a reduction
in transportation cost, faster inspection and clearance of your products by custom
officials and so on

9. Free trade zones

International free trade zones and trade fair centers are also good places to site your
business because it is accessible and normally receives wide publicity.

10. Distributive channel

If your business don’t deal directly with end users or final consumers, then it’s wise to
put your distributive channel into consideration when choosing a location for your small

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business. The more you make it easier for your distributors to access your products, the
better for your business.

11. Competition
Are competing companies close by? In some instances, this can be advantageous if
comparison shopping is popular. You might end up catching the excess from nearby
businesses if you are situated near an entertainment area or restaurant

Self-check 6 Written test

Name_________________________ Date_________________

Directions: Answer all the questions listed below. Illustrations may be necessary to aid
some explanations/answers.

1. Discuss briefly about the factors affecting business Location? (5 pts)

Note: satisfactory rating: 5 and above, but unsatisfactory: below 5. You can ask your
teacher for the copy of the correct answer

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Information Estimating Amount of money needed to start an enterprise
sheet 7

7. 1.Estimating amount of money needed to start an enterprise

Ways to estimate the amount of money to start a business

1. List spending on assets
Your business assets are the things you need to use in your
business over the long term. For example, if you're starting a land,
tools, store, that might include items such as shelves, tables, and
so on.
2. List spending on expenses.
Not everything you purchase is an asset. You also spend money
on expenses. For example, it costs money to set up a legal
corporation, a partnership. The money you spend to build your
website, the costs of fixing up your office and the salaries you pay
employees to help you set up are also examples of expenses.
3. Determine how much money you'll need to get started.
The final piece of the problems knows how much cash you'll need
to have in the bank for the early months while your startup is
ramping up and not generating enough sales to cover costs and
expenses.

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 Self-check 7 Written test

Name_________________________ Date_______________________
Directions: answer all the questions listed below. Illustrations may be necessary to
aid some explanations.
1.W rite the Sources of Finance to start business. (3points)
2. how can you estimate start-up money? (2pts)
Note: satisfactory rating: 5 and , but unsatisfactory: below 5. You can ask your teacher
for the copy of the correct answer.

Reference materials
1. https://www.entrepreneur.com/article/220342

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Information sheet 8 Identifying and discussing various sources of finance

8. 1.Identifying and discussing various sources of finance

 Money is a huge part of your life. It can determine what you can do and where
you can go. Learning how to manage your money the right way is an important
step toward taking control of your life.
 Understand where your money is coming from, where it’s going to, and how to
make sure that the way you manage your money falls in line with the values that
matter most to you.

Where to Get Money to Start a Business

Where can you get money to start your business?

What's the biggest obstacle to starting a business? For most people, the answer is
money. W hen you calculate your startup costs and then add in the amount of money
you need to cover your personal expenses during the startup phase, getting enough
money to start your new business can seem like an impossible dream.

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Sources of Finance to start |Business

1. Individual investor as sources of funds:

This includes sources as personal savings, funds from friends, relatives & local
investors and the sale of capital stock as major sources of funds.
 Short-term financing: Short-term debt is any debt that will be repaid within one
year. The three primary categories of short term debt are:
a. Trade credit: Trade credit (open-book credit (open account) and promissory notes.)
is the most widely used source of short term financing for business in which the
supplier finances the purchase by giving the buyer 30 days or more to pay
b. Loans: The real business of most banks is lending money to commercial borrowers.
The interest on a short term loan may be either fixed (constant-rate) or floating
(variable-rate).
1) Secured Loans: Secured loans are those that are backed by something of
value, known as collateral, which may be seized by the lender should the
borrower fail to repay the loan.
2) Unsecured Loans: An unsecured loan is one that requires no collateral.
Instead the lender relies on the general credit record and the earning power of
the borrower.
c. Commercial paper: represents a promise to pay back a stated amount of money
within the stated number of days (legally, 1 to 270 days).
 Long-term financing: One of the basic principles of finance is that long-lived
assets are purchased with long terms funds. To finance long term projects such as
major construction, acquisition of other companies, research & development, most
companies rely on a combination of internal & external funding resources. The four
main sources of external funding are loans, leases, bonds & equity.

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 Self-Check 8 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to
aid Some explanations /answers:

1. Short answer .(2 points each)

1. Identify source of capital?(3pts)

2. Determine what you can do and where you can go? (3pts)

Note: satisfactory rating: 8 and , but unsatisfactory: below 8. You can ask your teacher
for the copy of the correct answer

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LG #68 LO #4- Discuss how to operate an
enterprise.

Instruction sheet

This learning guide is developed to provide you the necessary information regarding the
following content coverage and topics:

x Explaining and discussing processes of hiring and managing people.

x Discussing and understanding the importance, techniques and application of

self-management skills, negotiation skills and time management skills,
decision skills.

x Explaining and discussing the techniques and procedures of managing sales.

x Identifying and discussing factors to be considered in selecting suppliers and the

steps to follow.

x Explaining and discussing awareness of how new technologies can affect micro,
small and medium business.

x Performing risk assessment and management of business enterprise.

x Inspecting and managing Qualities and inventories.

x Explaining and understanding basic concepts of monitoring and evaluation.

This guide will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:

x Explain and discuss processes of hiring and managing people.

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 x Discuss and understand the importance, techniques and application of self-
management skills, negotiation skills and time management skills, decision skills.

x Explain and discuss the techniques and procedures of managing sales.

x Identify and discuss factors to be considered in selecting suppliers and the steps
to follow.

x Explain and discuss awareness of how new technologies can affect micro,
small and medium business.

x Perform risk assessment and management of business enterprise.

x Inspect and manage qualities and inventories.

x Explain and understand basic concepts of monitoring and evaluation

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Learning Instructions:

1. Read the specific objectives of this Learning Guide.

2. Follow the instructions described below.
3. Read the information written in the information Sheets
4. Accomplish the Self-checks
5. Perform Operation Sheets
6. Do the “LAP test”

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Information sheet 1
Explaining and discussing processes of hiring and
managing people.

1. 1. Hiring Process
The hiring process is the process of reviewing applications, selecting the right
candidates to interview, testing candidates, choosing between candidates to make the
hiring decision and performing various pre-employment tests and checks.

During the hiring process, a human resources manager will use the following steps to
determine the best possible fit for the job:

1. Review job applications: means reading each application that is received to

determine whether the candidate possesses the skills, education, experience or
other qualifications needed for the job.
2. Test candidates: is the next step and generally involves testing candidates for job
skills or knowledge to determine whether the candidate is qualified for the position.
3. Interview selected candidates: is a meeting between the job seeker and the
employer to evaluate whether the candidate has the right qualifications for the job.
4. Choose candidates based on pre-determined selection criteria: is done by
comparing the candidate's qualifications to a pre-determined list of qualifications or
criteria necessary to perform the job.
5. Perform background and reference checks: involves: checking a candidate’s
credit, criminal records, education records, and military records.
6. Send selected candidates for a health check:

b. Managing people
Human Resource Management includes conducting job analyses, planning personnel
needs, recruiting the right people for the job, orienting and training, managing wages

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and salaries, providing benefits and incentives, evaluating performance, resolving
disputes, and communicating with all employees at all levels.
8. Functions of human resource management include:
 Employment
 Organizational planning and development
 Wage and salary administration
 Employee services
 Industrial relations

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 Self-Check -1 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to
aid Some explanations /answers:

1. Write the function of human resource management?( 2points)

2. Write the steps to hiring?(2points)

Note: satisfactory rating: 4 and , but unsatisfactory: below 4. You can ask your teacher
for the copy of the correct answer

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Information sheet 2
Discussing and understanding the importance, techniques and
application of self-management skills, negotiation skills and
time management skills, decision skills

.2.1. Self-Management Skills

Self-management skills are those abilities that allow an employee to feel more
productive when doing daily routine regardless of the working environment. W ell-
developed self-management skills will help you efficiently communicate with co-workers,
management and customers, make right decisions, plan your working time, and keep
your body healthy.
 The key self-management skills are:

x Stress-Resistance
x Problem Solving
x Communication
x Time Management
x Memory/Remembrance
x Physical Activity
2.2.Time management Skill
Time is something that cannot be saved. You simply lose more and more of it as the
day progresses. All entrepreneurs need to manage time effectively, and the key to using
time effectively is through better time management. By budgeting time, entrepreneurs
will achieve better results.
Time Management Techniques:-Time management is similar to having good work
habits. Making the best use of time simply means achieving the maximum output in the
time available.
There are several ways to manage time:
1. Identify specific daily goals.
2. Avoid interruptions and distractions.
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3. Self-motivation.
4. Establish deadlines.
5. Use the telephone
6. Take notes.
7. Don’t do everything.
8. Work in blocks of time.
2.3.Negotiation Skills
Negotiation skill is a method by which people settle differences. It is a process by
which compromise or agreement is reached while avoiding argument and dispute. The
circumstances of negotiation occur when two parties or groups of individuals disagree
on the solution for a problem or the goal for a project or contract. A successful
negotiation requires the two parties to come together and hammer out an agreement
that is acceptable to both.
Effective Negotiation Skills
a. Problem Analysis
b. Preparation
c. Active Listening
d. Emotional Control
e. Verbal Communication
f. Collaboration and Teamwork
g. Problem Solving
h. Decision Making Ability
i. Interpersonal Skills
j. Ethics and Reliability

2.3. Decision-Making Skill

Decision making is the thought process of selecting a logical choice from the
available options. W hen trying to make a good decision, a person must weigh the
positives and negatives of each option, and consider all the alternatives. For
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 effective decision making, a person must be able to forecast the outcome of each
option as well, and based on all t h e se items, determine which
option is the best for that particular situation.

The Decision-Making Process

The stages in the decision-making process are:

1. Defining the problem, challenge, or opportunity

2. Generating an array of possible solutions or responses
3. Evaluating the costs and benefits, or pros and cons, associated with each option
4. Selecting a solution or response
5. Implementing the option chosen
6. Assessing the impact of the decision and modifying the course of action as
needed

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 Self-Check 2 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to
aid Some explanations /answers:

Short answer.

1.) W hat are the effective management skills? (2pts)

2. Discuss briefly Effective Negotiation Skills? (4 points)

Note: satisfactory rating: 6 and but unsatisfactory: below 6. You can ask your teacher
for the copy of the correct answer

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Information sheet 3 Explaining and discussing the techniques and procedures of
managing sales

3 .1 . Managing Sales.
sales management is the process of developing a sales force, coordinating sales
operations, and implementing sales techniques that allow a business to consistently hit,
and even surpass, its sales targets.
Approaches to Effective sales management
x Attracting the buyer’s attention.
x Determining customers’ needs, wants, problems and goals.
x Showing how the product or service will satisfy those needs.
x W orking-out the problems that prevent customers from buying.
x Asking for the customers’ business.
Techniques of sale managements
x Speak plainly. Tom Werner / Getty Images. ...
x Ask for input. If you're considering a policy change or a new campaign, get your
team together and ask for their input. ...
x Explain new approaches in detail. ...
x Be a team player. ...
x Treat all your salespeople equally. ...
x Give positive feedback.

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Self-Check 3 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to aid
Some explanations /answers:

Short answer

1. What is sale management?( 2points)

2. W rite approaches to effective sales management?(4 points)

3. Discus the techniques of sale managements? (2pts)

Note: satisfactory rating: 8 and above, but unsatisfactory: below 8. You can ask your
teacher for the copy of the correct answer.

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Information sheet 4
Identify and discuss factors to be considered in selecting
suppliers and the steps to follow.

4.1. Factors to be considered in selecting suppliers

Suppliers are important to entrepreneurs because they provide a variety of services to

businesses. The entrepreneur should select suppliers who offer low prices, give the
most helpful advice, provide prompt delivery of goods, and are sympathetic in their
financial dealings with entrepreneurs.

x Cultural Fit – including values.

x Cost – covering price, Total Cost of Opportunity (TCO)
x Value – value for money and value generation opportunities.
x Experience in the market and current references.
x Flexibility.
x Response to change – in orders and products.

Entrepreneurs should follow specific procedures when purchasing goods, materials

and equipment from suppliers.
1. Determine your business needs.
2. Identifying potential suppliers.
3. Contact a supplier either by visiting the supplier’s office personally, telephoning
the supplier, or writing a letter to the supplier. Each potential supplier should
provide written information to you regarding the kinds of goods, materials or
equipment each supplier can provide.
4. Select the best suppliers. The entrepreneur must decide what conditions and
priorities are most important in selecting suppliers. Is it credit, reliability, prices,
discounts or other considerations?
5. Order goods, but make sure your order is in writing. Think carefully about the
quantities you need:
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 6. Check the goods as soon as they are received. The supplier usually sends a
delivery note (invoice) with the goods or materials. The delivery note lists
details of the goods. The supplier will want you to sign the delivery note
(invoice) as proof that you have received the goods listed.
7. Check the invoice because the invoice lists what you have bought and when
and how the supplier is to be paid.
8. Make the payment to the supplier by cash or check. Make sure to get a receipt
so there is proof of payment.

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Self-Check 4 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to aid
Some explanations /answer

1. write the importance of suppliers in business?( 2points)

2. What are the factors to be selecting suppliers?(2pts)

Note: satisfactory rating: 4 and , but unsatisfactory: below 4. You can ask your teacher
for the copy of the correct answer

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Information sheet 5 Explain and discuss awareness of how new technologies
can affect micro, small and medium business

5.1.Technology ("science of craft", from Greek "art, skill, cunning of hand"; and - -logia
is the collection of techniques, skills, methods, and processes used in the production
of goods or services or in the accomplishment of objectives, such as scientific
investigation. Technology can be the knowledge of techniques, processes, and the like,
or it can be embedded in machines to allow for operation without detailed knowledge of
their workings.
5 .2 . Characteristics of appropriate technology for use in small and medium
business
The appropriateness of technology for use in a small business is determined by a
number of characteristics such as
x Simple: easy to understand/to use.
x Effectiveness: way of producing a successful result.
x Availability: things that you can get, buy/find.
x Flexibility: able to change to suit new conditions or situations.
x Cost-effective: giving the best possible profit in comparison with
the money that spent.
x Efficient: no waste of time, money, or energy.
x Durable: likely to last long time without breaking/getting weaker.

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Self-Check 5 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to aid
Some explanations /answers:

1. Define technology by business concept? (2points)

2. W rite the Characteristics of appropriate technology for use in small and medium
business? (4 points)

Note: satisfactory rating: 6 and , but unsatisfactory: below 6. You can ask your teacher
for the copy of the correct answer

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Information sheet 6
Perform risk assessment and management of business
enterprise.

6.1. Business Risk: is a circumstance or factor that may have a negative impact on the
operation or profitability of a given company.
 Can be the result of internal conditions, as well as some external factors that
may be evident in the wider business community.
 When a company’s risk factor is considered to be increased due to outside
factors that are beyond the control of the company to correct, chances of
attracting new investors is severely limited
 a change in demand for the goods and services( climatic problems at time of
horticultural crop maturity, perishability, quality loss, over production of
horticultural crops, pest and disease attack--)
 customer habits change
 new competitors appear
6.2. To carry out a business risk analysis, follow:
a. Identify Threats: The first stage of a risk analysis is to identify threats facing
you.
b. Estimate Risk: by using the formula, Risk = probability of event x cost of
event.
c. Manage Risk: Risk may be managed in a number of ways:
i. By using existing assets
ii. By contingency planning
iii. By investing in new resources
d. Review: might involve formal reviews of the risk analysis, or may involve
testing systems and plans appropriately.

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 Figure. 1. Business Risk Analysis Tool

6.3. Risk management techniques

The term risk management is a relatively recent (within the last 20 years) evolution of
the term "insurance management." The concept of risk management encompasses a
much broader scope of activities and responsibilities than doe’s insurance
management. Risk management is now a widely accepted description of a discipline
within most large organizations.
Techniques

x incorporate risk management into the core values of the company,

x support those values with actions,
x conduct a risk analysis,
x implement specific strategies to reduce risk,
x develop monitoring systems to provide early warnings about
potential risks, and
x perform periodic reviews of the program.

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Self-Check 6 Written Test

Name: ____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to aid
Some explanations /answers:

1. Define business risk? (2pts)

2. Causes of business risk? (4 pts)

3. Discus the risk management tools? (2pts)

Note: satisfactory rating: 8 and, but unsatisfactory: below 8. You can ask your teacher
for the copy of the correct answer

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Information sheet 7
Inspecting and managing Qualities and inventories.

1.1. Inspection is critical appraisal involving examination, measurement, testing, gauging,

and comparison of materials or items.

Inspection of horticultural crop includes

x hygienic quality and safety, nutritional quality, organoleptic quality

Use or service quality:

x convenience (easy to use)

x conservation

Psychosocial or subjective quality:

x satisfaction, pleasure

An inspection determines if the material , produce or item is in proper quantity and

condition, and if it conforms to the applicable or specified requirements. Inspection is
generally divided into three categories:
i. Receiving/Incoming inspection,
ii. In-process inspection, and
iii. Final inspection.

In quality control (which is guided by the principle that "Quality cannot be inspected into
a product") the role of inspection is to verify and validate the variance data; it does not
involve separating the good from the bad.
7.3 Ways to Manage Inventory
Inventory management is a system used to oversee the flow of products and services in
and out of an organization. A company may decide to incorporate one key inventory
management technique or combine a variety of techniques to meet organizational
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needs. Businesses utilize inventory management strategies to create invoices and
purchase orders, generate receipts and control inventory-related accounting.

Quality is essentially about learning what you are doing well and doing it better. It also
means finding out what you may need to change to make sure meet the needs of your
services users. Quality is the totality of features and characteristics of a product/service
that bear on its ability to satisfy stated or implied needs of customers. E.g. Color,
texture, size, and flavor continue to be the predominant quality characteristics important
for successful international marketing of horticultural crops.

Quality is about:
 Knowing what you want to do and how want to do it
 Learning from what you do
 Using what learn to develop your organization and its services
 Seeking to achieve continuo’s improvement
Inspection is critical appraisal involving examination, measurement, testing, gauging,
and comparison of materials or items. An inspection determines if the material or item is
in proper quantity and condition, and if it conforms to the applicable or specified
requirements. Inspection is generally divided into three categories: (1)
Receiving/Incoming inspection, (2) In-process inspection, and (3) Final inspection
Inventory management is a system used to oversee the flow of products and services
in and out of an organization.
7 .4 . Ways to Manage Inventory
 Hiring Inventory Control Personnel: An efficient method for managing inventory is to
hire a dedicated inventory control specialist.
 Monitor Inventory Levels: determining the inventory demands of the business. Limit
seasonal inventory and cut back on inventory that does not sell.
 Identify Delivery of Customer: This involves measuring how often your inventory
sells and how long it takes to get into the hands of your customers.
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 Hiring Inventory Consultant: Inventory consultants are responsible for maintaining
accuracy, cycle counting, shipping and receiving, and managing order-picking
operations.
 Use data base to Purchase: Many businesses manage inventory by designing an
inventory management database or purchasing inventory management software.

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Self-Check 7 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to aid
Some explanations /answers:

1. Define inspection? (2points)

2. Classify and discuss inspection? (4 points)

Note: satisfactory rating: 6 and , but unsatisfactory: below 6. You can ask your
teacher for the copy of the correct answer

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Information sheet 8 Explaining and understanding basic concepts of
monitoring and evaluation

8. Monitoring
Is on-going analysis of business progress towards achieving planned results with the
purpose of improving management decision making
Evaluation is assessment of the efficiency, impact, relevance and sustainability of the
business’s actions.
Monitoring and evaluation (M&E) is a process that helps improve performance and
achieve results. Its goal is to improve current and future management of outputs,
outcomes and impact.
It is mainly used to assess the performance of projects, institutions and programs set up
by governments, international organisations and NGOs. It establishes links between the
past, present and future actions.

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 Self-check 8 Written Test

Name: ________________________ Date: ___________________________

Directions: Answer all the questions listed below. Illustrations may be necessary to aid
some explanations/answers.

1. Discuss understanding of basic concepts of monitoring and Evaluation( 5 points)

Note: satisfactory rating: 5 and, but unsatisfactory: below 5. You can ask your teacher
for the copy of the correct answer

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LG #69 LO #5- Discus how to prepare and
use financial records

Instruction sheet

This learning guide is developed to provide you the necessary information regarding the
following content coverage and topics:
x Discussing Importance of financial source documents.
x Identifying and preparing financial recording documents.
x Discussing and understanding different types of cost and expense.
x Factors and procedures in knowing the cost and expense of the enterprise.
x Preparing and understanding simple financial statements.

This guide will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:
x Discuss Importance of financial source documents.
x Identify and prepare financial recording documents.
x Discuss and understand different types of cost and expense.
x Know factors and procedures in the cost and expense of the enterprise.
x Prepare and understand simple financial statements.

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Learning Instructions:

7. Read the specific objectives of this Learning Guide.

8. Follow the instructions described below.
9. Read the information written in the information Sheets
10. Accomplish the Self-checks
11. Perform Operation Sheets
12. Do the “LAP test”

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Information sheet 1 Discussing Importance of financial source documents.

1.1. Record keeping

Is writing down all information involved in a particular business

The source document is essential to the book keeping and accounting process as it
provides evidence that a financial transaction has occurred. During an accounting
or tax audit, source documents back up the accounting journals and general
ledger as an indisputable transaction trail.

You would keep source documents for your business just like you keep receipts
for tax-deductible items for your taxes. If your taxes are audited, the source
documents provide the proof that you've made those purchases. The same holds
for your business, but in business, you keep original documents for every
financial transaction, not just charitable donations.

.
Importance of good record keeping:
 To monitor the progress of your business,
 To increase the likelihood of business success ,
 To prepare your financial statements,
 To identify sources of your income,
 To keep track of your deductible expenses,
 To keep track of your basis in property,
 To prepare your tax returns,
 To aid in planning for the future;
 To know strength and weakness of business;
 To provide information about the existing resource use pattern

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Self-check 1 Written Test

Name: ________________________ Date: ___________________________

Directions: Answer all the questions listed below. Illustrations may be necessary
to aid some explanations/answers.

1. Define record keeping. (2 points)

2. Discuss the importance of record keeping (3points)

Note: satisfactory rating: 5 and above, but unsatisfactory: below 5. You can ask
your teacher for the copy of the correct answer

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Information sheet 1 Identifying and preparing financial recording documents

1.1. Financial record is formal documents representing the transactions of a business,

individual or other organization. Financial record includes preparing a statement of
retained earnings and cash flow, preparing income statements and the company's
balance sheet and tax returns.
 Financial Recording documents include:
a) Journal: journals are the first a formal book in which information regarding
transaction is recorded
b) Ledger: also called book of final entry, a ledger records classified and
summarized financial information from journals (the 'books of first entry') as
debits and credits, and shows their current balances.
c) A balance sheet: is a financial statement that summarizes a company's assets,
liabilities and shareholders' equity at a specific point in time
d) Payroll sheet: is the document that payment paid to workforce or employees.
e) Account receivable: is the document that shows the amount of money to be
received future.
Account payable: it is the document that show the amount of money to be paid
future.

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 Written Test
Self-check 1

Name: ________________________ Date: ___________________________

Directions: Answer all the questions listed below. Illustrations may be necessary
to aid some explanations/answers.

1. Define finical record. (2 points)

2. List the activities included under finical record (3points)

Note: satisfactory rating: 5 and above, but unsatisfactory: below 5. You can ask
your teacher for the copy of the correct answer

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Information sheet 3 Discussing and understanding different types of cost
and expense

3 .1.Types of cost and expense

 Direct costs: are those that only occur, when an enterprise is manufacturing goods
or producing a service or buying goods to resell such as material and labor and your
overheads, such as rent,.
 Indirect costs: are all other costs generated from business activities that are not
direct costs such as administration costs selling costs, distribution costs.
Costs can also be categorized into:
 Fixed costs: are costs which don’t vary in proportion to the level of the business
activity. Example: Rent, insurance premiums, equipment lease payments, etc., must
be met, regardless of whether you are open for business or not.
 Variable costs: Costs are only variable if they change with changes in production
and sales volume. For example, if your sales increase by 10 percent, so too will the
variable costs associated with the sale. Examples include telephone, casual
wages, and delivery.

 Here are some examples of both types of costs:

Fixed Costs:
 Depreciation  Managerial salaries
 Rent of building  Office Expenses
 Leasing  Insurance on vehicles or fire
 Rates and utilities (heating, insurance
lighting)  Loan repayments

Variable Costs:
 Stock purchases  Freight Costs
 Sales Commissions  Packaging Costs
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  Power consumption
 Incentive payments

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Self-check 3 Written Test

Name: ________________________ Date: ___________________________

Directions: Answer all the questions listed below. Illustrations may be necessary
to aid some explanations/answers.

1.Define cost.(2 points)

2. Differentiate direct and indirect costs (3points)

Note: satisfactory rating: 5 and above, but unsatisfactory: below 5. You can ask
your teacher for the copy of the correct answer
Information sheet 4 Factors and procedures in knowing the cost and expense
of the enterprise

4.1. Procedures in knowing the cost:

1. Analyze the flow of actual units

2. Convert the inventory to determine the equivalent units
3. Identify the total costs
4. Calculate the average cost per equivalent unit
5. Allocate these costs to finished units and W ork in Process units

Cost management explained in 4 steps

Cost management is concerned with the process of finding the right project and carrying
out the project the right way. It includes activities such as planning, estimating,
budgeting, financing, funding, managing, controlling, and benchmarking costs so that
the project can be completed within time and the approved budget and the project
performance could be improved in time.

Cost management covers the full life cycle of a project from the initial planning phase
towards measuring the actual cost performance and project completion.
Step 1: Resource planning
Resource planning is the process of ascertaining future resource requirements for an
organization or a scope of work. This involves the evaluation and planning of the use of
the physical, human, financial, and informational resources required to complete work
activities and their tasks. Most activities involve using people to perform work. Some
activities involve materials and consumables.
Resource planning begins in the scope and execution plan development process during
which the work breakdown structure, organizational breakdown structure (OBS), work
packages, and execution strategy are developed. The OBS establishes categories of
labor resources or responsibilities; this categorization facilitates resource planning
because all resources are someone’s responsibility as reflected in the OBS.

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Resource estimating (usually a part of cost estimating) determines the activity’s
resource quantities needed (hours, tools, materials, etc.) while schedule planning and
development determines the work activities be performed. Resource planning then
takes the estimated resource quantities, evaluates resource availability and limitations
considering project circumstances, and then optimizes how the available resources
(which are often limited) will be used in the activities over time. The optimization is
performed in an iterative manner using the duration estimating and resource allocation
steps of the schedule planning and development process.

Step 2: Cost estimating

Cost estimating is the predictive process used to quantify, cost, and price the resources
required by the scope of an investment option, activity, or project. It involves the
application of techniques that convert quantified technical and programmatic information
about an asset or project into finance and resource information. The outputs of
estimating are used primarily as inputs for business planning, cost analysis, and
decisions or for project cost and schedule control processes.

The cost estimating process is generally applied during each phase of the asset or
project life cycle as the asset or project scope is defined, modified, and refined. As the
level of scope definition increases, the estimating methods used become more definitive
and produce estimates with increasingly narrow probabilistic cost distributions.

Step 3: Cost budgeting

Budgeting is a sub-process within estimating used for allocating the estimated cost of
resources into cost accounts against which cost performance will be measured and
assessed. This forms the baseline for cost control. Cost accounts used from the chart of
accounts must also support the cost accounting process. Budgets are often time-
phased in accordance with the schedule or to address budget and cash flow
constraints.

Step 4: Cost control

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Cost control is concerned with measuring variances from the cost baseline and taking
effective corrective action to achieve minimum costs. Procedures are applied to monitor
expenditures and performance against the progress of a project. All changes to the cost
baseline need to be recorded and the expected final total costs are continuously
forecasted. W hen actual cost information becomes available an important part of cost
control is to explain what is causing the variance from the cost baseline. Based on this
analysis corrective action might be required to avoid cost overruns.

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 Self-check 4 Written test

Name_________________________ Date_______________________

Directions: answer all the questions listed below. Illustrations may be necessary to
aid some explanations.
1. Discuss and explain cost procedures? (2pts)
2. Mention cost management steps? (2pts)
Note: satisfactory rating: 4 and , but unsatisfactory: below 4. You can ask your teacher
for the copy of the correct answer.

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Information sheet 5 Preparing and understanding simple financial
statements

5.1. Types of financial statements

A c o m p l e t e s e t o f f i n a n c i a l s t a t e m e n t s i s u s e d t o g i ve r e a d e r s a n o ve r vi e w o f t h e
f i n a n c i a l r e s u l t s a n d co n d i t i o n o f a b u s i n e s s.

T h e f i n a n c i a l s t a t e m e n t s a r e c o m p r i s e d o f f o u r b a s i c r e p o r t s , wh i c h a r e a s f o l l o ws :

a ) I n c o m e s t a t e m e n t : p r e s e n t s t h e r e ve n u e s , e xp e n s e s , a n d p r o f i t s / l o s s e s
g e n e r a t e d d u r i n g t h e r e p o r t i n g p e r i o d . T h is i s u s u a l l y c o n s i d e r e d t h e m o s t
i m p o r t a n t o f t h e f in a n c i a l s t a t e m e n t s , s i n c e i t p r e s e n t s t h e o p e r a t i n g r e s u l t s o f
a n e n t i t y.

Example: ABC Business Income Statement for the Year Ended January 3, 1998
(Dollars in thousands)

Total sales $172,428

Cost of sales $134,373
Gross profit $38,055
Selling, general and administrative $14,844
expenses
Income from operations $ 23,211
Other income $1,503
Interest expense $31
Income before provision for income $24,683
taxes
Provision for income taxes $10,016
Net income $ 14,667

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b ) B a l a n c e s h e e t : pr e s e n t s t h e a s s e t s , l i a b i l i t i e s , a n d e q u i t y o f t h e e n t i t y a s o f
t h e r e p o r t i n g d a te .

As set = L i a b i l i t i e s + Ow n e r’ s E q u i t y

Example: ABC Business balance sheet for month December 31, 2000 (Dollars in
thousands)

Asset Liability and Owner’s Equity

Cash $ 5,000 Accounts payable $ 8,000

Accounts receivable $ 7,000 Notes payable $ 2,000

Inventory Total liabilities $10,000

$10,000
Equipment $ 7,000 Total owner’s equity $19,000

Total assets Total Liability & Total Equity $29,000

$29,000

Example: “XY” Company Balance Sheet at December 31, 2000

Current Assets
Cash $110,000
Accounts receivable 466,000
Inventories 812,000
Prepaid expenses 32,000
Total current assets $1,420,000
Noncurrent assets
Land $ 85,000
Buildings and equipment
(net of accumulated $552,000
depreciation of

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 $313,000)
Total noncurrent assets $637,000
Total assets $2,057,000
Current Liabilities
Accounts payable $260,000
Notes payable 225,000
Warranty obligations 112,000
Accrued expenses 75,000
Taxes payable 27,000
Total current liabilities $699,000
Noncurrent liabilities
Bonds payable $350,000
Mortgage payable 150,000

Total noncurrent liabilities $500,000

Total liabilities $1,199000

Shareholders’ equity
Paid-in capital $600,000
Retained earnings 258,000
Total shareholders’ equity $858,000
Total liabilities and shareholders’ equity $2,057,000

c ) S t a t e m e n t o f c a s h f l o w : p r e s e n t s t h e ca s h i n f l o ws a n d o u t f l o ws t h a t o c c u r r e d
d u r i n g t h e r e p o r t i n g p e r i o d . T h i s c a n p r o v i d e a u s e f u l c o m p a ri s o n t o t h e i n c o m e
s t a t e m e n t , e s p e c i a l l y wh e n t h e a m o u n t o f p r o f i t o r l o s s r e p o r t e d d o e s n o t r e f l e c t t h e
c a s h f l o ws e xp e r i e n c e d b y t h e b u s i n e s s . T h i s s t a t e m e n t m a y b e p r e s e n t e d wh e n
is s u in g f in a n c ia l s t a t em e n t s t o ou t s id e pa rt ie s .
The Newton Company Cash Flows Statement for the Year Ended December 31,
2000

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 Cash flows from operating activities:
Cash received from customers $61,000
Cash paid to suppliers (37,000)

Cash paid for general and administrative functions (19,900)

Taxes paid (3,000)

Net cash provided by operating activities 1,100
Cash flows from investing activities:
Purchase of equipment (2000)
Cash flows from financing activities:
Net borrowings 1,000
Net increase in cash 100
Cash at beginning of year 4,900 (Jan,01,2000)
Cash at end of year 5,000 (Dec,31,2000)

d ) S t a t e m e n t o f r e t a i n e d e a r n i n g s : pr e s e n t s c h a n g e s i n e q u i t y d u r i n g t h e r e p o r t i n g
p e r i o d . T h e r e p o r t f o r m a t v a r i e s , b u t c a n i n c l u d e t h e s a l e o r re p u r c h a s e o f s t o c k ,
d i vi d e n d p a ym e n t s , a n d c h a n g e s c a u s e d b y r e p o r t e d p r o f i t s o r l o s s e s . T h i s i s t h e
le a s t u s e d of t h e f in an c ia l s t a t em e n t s , a nd is c o mm o n ly o n ly in c lu d e d in t h e a u d it ed
f in an c ia l s t a t em e nt p ac k a ge .

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 Self-check 5 Written test

Name_________________________ Date_______________________

Directions: answer all the questions listed below. Illustrations may be necessary to
aid some explanations.
1. Discuss and explain Financial Recording documents? (2pts)
2. Discuss types of financial statements? (2pts)
3. Discuss types of cost and expense that occur in a business? (2pts)
4. Write importance of good record keeping? (2pts)

Note: satisfactory rating: 8 and , but unsatisfactory: below 8. You can ask your teacher
for the copy of the correct answer.

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LG #70 LO #6- Develop one’s own business
plan

Instruction sheet
This learning guide is developed to provide you the necessary information regarding the
following content coverage and topics:

x Discussing and understanding the concept, importance and process of

preparing/ writing a business plan.

x Feasibility of business idea.

x Interpreting, assessing and analyzing findings of the feasibility study.

x Applying standard structure and format in preparing business plan.

x Identifying and understanding problems that may arise or encounter when

starting a business

This guide will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:

x Discuss and understand the concept, importance and process of preparing/

writing a business plan.

x Check feasibility of business idea.

x Interpret, assess and analyze findings of the feasibility study.

x Apply standard structure and format in preparing business plan.

x Identify and understand problems that may arise Inspect and manage qualities
and inventories.

x Explain and understand basic concepts of monitoring and evaluation

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Learning Instructions:

13. Read the specific objectives of this Learning Guide.

14. Follow the instructions described below.
15. Read the information written in the information Sheets
16. Accomplish the Self-checks
17. Perform Operation Sheets
18. Do the “LAP test”

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Information sheet 1 Discussing and understanding the concept, importance
and process of preparing/ writing a business plan.

1.1. A business plan is a blueprint/proposal of your company, presented in standard

business format that is logical and well documented. A business plan is also a formal
statement of business goals, reasons they are attainable, and plans for reaching them.
It may also contain background information about the organization or team attempting to
reach those goals. A business plan is not just a document. It is a holistic analysis of
your company, the environment it operates in, and a route map to achieving success
based on the resources available.

x Importance Business Planning

1. To plan for an uncertain future
2. To help grow your business
3. To commit to a particular course of action
4. To manage cash flow
5. To value a business
6. To ensure all bases are covered
6.2. The Business Plan Process
The business plan process is simply the steps you go through and actions you take
when producing a business plan. In effect, it describes how you produce your business
plan. W hile most people focus on the ‘final output’, i.e. the business plan itself,
the business planning process is extremely important for entrepreneurs.
The process of producing a business plan forces entrepreneurs to examine areas of
their business that typically may not be subject to much scrutiny. For example,
entrepreneurs do not tend to routinely produce cash flow forecasts, so the requirement
to produce one as part of the business planning process forces them to consider the
impact of cash on their business.

The followings are the basic business plan processes:

 Decide who is going to write the plan (if not themselves).

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  Gain an understanding of what a business plan contains.
 Decide how to write their plan
 Ensure that they know the content for the various sections of the business
plan.
 Collaborate with partners or with colleagues from various departments (if the
plan is for a bigger firm).
 Make sure the financials are realistic and accurate.
 Have someone review the plan.
 Print and bind the plan (if a formal document is needed) and/ or produce a
presentation.
 Submit the plan to the recipient.
 Update the business plan as new details emerge.

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Self-check 1 Written test

Name_________________________ Date_______________________

Directions: answer all the questions listed below. Illustrations may be necessary to
aid some explanations.

1. Define business idea (3 points)

2 Write the importance of business plan ( 3point)

Note: satisfactory rating: 6 and above, but unsatisfactory: below 6. You can ask your
teacher for the copy of the correct answer.

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Information sheet 2 Feasibility of business idea

2.1. Feasibility of business idea.

x There is no magic answer to this question. Experience has shown that some of
the most bizarre ideas, such as the concept of a personal computer have turned
into successful businesses, while some have not.

x It's important to look critically and impartially at your business idea when
determining whether or not it's worth investing your time and money.

x It can be difficult to remain impartial about an idea you're passionate about, so

talk to a business advisor to get a qualified and objective perspective.

x While there are no guarantees that your business will succeed, a feasibility study
will help you determine whether your idea will make a profit before you make a
financial commitment.

x It's important to remember that what is considered feasible may differ greatly
from person to person depending on the return on investment they want and the
risk they're willing to take on.

x In your feasibility study you should analyse your business idea, market and
competitive advantage as well as the financial feasibility of the business.

Analyze the business idea

 In this first stage of your feasibility study you need to look objectively at the idea
and determine its profitability. This objective analysis would include:

x assessing the market size;

x assessing the competitive advantage of your idea;

x obtaining independent endorsement of the idea;

x assessing capital requirements;

x considering your management ability; and

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 x Finding out if anyone else has tried your business idea, and if they failed -
why?

Market analysis

 Once you have determined there is a market for the product or service you
are planning to supply, you need to conduct some more research which
should include the following:

Demand analysis:

 Here you determine the type of demand that exists for your product or
service (eg: consumer, distributor), and establish the size of the market and
its growth capacity.

Supply analysis:

 Look at the lifecycle of the industry. Is it the right time for you to be entering
it? Also study the way the industry is structured and think about how that will
affect your business.

 Relationship analysis: how do the various groups within the industry

interact? W hat is the bargaining power of buyers and suppliers? Is there a
threat of substitute products or new entrants?

Competitive advantage analysis

 Now that you've established that your idea is a good one and that there is a
market for what you are offering, you need to determine what makes your
product or service special. Ask yourself these questions:

x How is my product or service different to those offered by my

competitors?

x Why will customers purchase the product or service from me rather than
my competitors?

x Are there any barriers to me entering the market?

x What makes my competitors successful?

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 Financial feasibility analysis

 The final part of your study should address the financial feasibility of the
business idea which involves the following:

x preparing a sales forecast;

x estimating start-up and working capital requirements;

x estimating profitability; and

x Assessing financial viability

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 Self-Check 2 Written Test

Name: _____________________________ Date: ___________________________

Time started: _______________________ Time finished: ____________________

Directions: Answer all the questions listed below. Illustrations may be necessary to
Aid Some explanations /answers:
1. What are the Problem solving is a four-step process? (4)
2. List the classification of sourcing information?(3)

x Note: satisfactory rating: 7 and , but unsatisfactory: below 7. You can ask your
teacher for the copy of the correct answer.

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 Information sheet 3 Interpret, assess and analyze findings of the
feasibility study

3.1. Interpret, assess and analyze findings of the feasibility study

A business feasibility study is a comprehensive report that examines in detail the five
frames of analysis of a given project.
A feasibility study evaluates the project's potential for success; therefore, perceived
objectivity is an important factor in the credibility of the study for potential investors and
lending institutions.
Feasibility study should focus on the following:

Marketing feasibility: total demand size, growth rate of market

In the case of horticultural crops marketing includes

x planning production;
x growing and harvesting;
x grading of products and their packing, transport, storage, processing, distribution
and sale;
x Sending information from production area to market (e.g. products available,
volumes) and from market back to producing areas (e.g. prices and supply
levels, consumer preferences and changes in taste).

 Technical feasibility: Technical knowhow of production cost of acquisition.

 Physical resource feasibility: availability of raw materials & supp
 Financial feasibility: availability of adequate capital, and cost of funds.
Time feasibility: duration required to operate the business & make expected profit

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Self-check 3 Written test

Name_________________________ Date_______________________

Directions: answer all the questions listed below. Illustrations may be necessary to
aid some explanations.

1. Define business feasibility study ( 2points)

2. Why business feasibility study needed?(3 points)

3 Write the focus areas of feasibility study? ( 3point)

Note: satisfactory rating: 8 and , but unsatisfactory: below 8. You can ask your teacher
for the copy of the correct answer.

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Information sheet 4 Applying standard structure and format in preparing
business plan

4.1. The basic parts of business plan include:

1 Executive Summary

The executive summary is an overview of the entire business plan and will either
capture the reader’s attention or make them lose interest before reading any further. A
crucial part of the business plan, the summary will basically tell readers the history of
your company, where it is today and what direction it is headed; this is where you sell
other on the potential success of your business idea.

2. Market Analysis

Market analysis include in this section a description of the industry, information on your
target market, evaluation of your competition and market test results.

3. Company Description

Company description includes the nature of your business and factors that will make
your business a success. Include a description of how your product or service will meet
a need and any potential clients identified as having that need.

4. Management and Organization

This part of business plan details about ownership of company, management and board
of directors (if applicable). Qualifications, experience and education are important to
provide readers with an insight as to how these individuals fit into the organizational
structure and what they can bring to the table in their designated roles.

5. Marketing and Sales Management

Outline pricing and sales information. Include rationalizations for why your audience will
buy your products or services and how you will reach them through marketing and
advertising efforts.Describe the marketing strategy and how you intend to drive sales.
Include market penetration strategy, growth strategy, distribution strategy and

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communication strategy. Sales strategies should also be included to provide information
on sales staff and activities.

6. Product or Service Line

Describe the products manufactured or sold or the services offered. Classify the
different types of products or services and provide a brief description of each. Describe
to readers what you are selling and how the product or service will benefit current and
potential customers. Provide evidence that your company offers a product or service
that serves as a solution to a problem identified by your target market. Information
regarding service or product costs, suppliers and any new services which may be added
should be included in this part.

7. Financials

Both past financial data as well as prospective financial data will be required by
potential lenders. Include the following financial statements for the past three to five
years; cash flow statements, balance sheets and income statements. The same
statements should be prepared with forecasted data for the next five years. In general
financial plan includes all financial information, from startup costs to balance sheets.
The financial section should outline:
i. The amount necessary to start or maintain the business
ii. The amount needed over the next two, three, and even five years
iii. Plans to use funds
iv. Anticipated need for additional funding
v. Ongoing business expenses, including salaries, insurance costs, promotional
expenses, etc.

1. Assessment of Risk:-evaluation of weakness of business, use of new technology,

etc…
Appendix: Documents which may be included in the appendix include market study
details, reference letters, personal and business credit history, patents, permits,
contracts and contact information for consultants

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Self-check 4 Written test

Name_________________________ Date_______________________

Directions: answer all the questions listed below. Illustrations may be necessary to
aid some explanations.

1. Briefly discuss the parts of business plan ( 5points)

Note: satisfactory rating: 5 and above, but unsatisfactory: below 5. You can ask your
teacher for the copy of the correct answer.

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Information sheet 5 Identifying and understanding problems that may arise or
encounter when starting a business

5.1. Some key hurdles that all entrepreneurs and business owners face when
starting a business are:

A. Competition
New businesses are often the little kid in a very, very large, bully-filled playground. Rival
companies that are already trading in similar markets to yours, already have the upper
hand and advantage. They have been operating for a longer time, have gained more
knowledge in operating that sort of business, know the market better and can probably
adapt to the market changes quicker.

B. Lack of Funding
99% of people thinking of starting a business wont because of the realisation of the
costs and the lack funding available. It’s funny that we start businesses with the aim of
making loads of money, but in fact you can’t make money unless you have money to
fund the business from the beginning. Financial risk plays a huge part in small
businesses, ensuring and maintaining a healthy cash flow is essential. Start-ups need
substantial amounts of money to cover costs. W hen you’re starting from scratch there’s
many things that need to be developed, for example, logos, website, accountants,
marketing materials, staffing, launch programme, merchandise, the list goes on and the
bill goes up and up!!
C. Time Restraints
Starting a business is not a part time Saturday job, business owners need to be able to
commit to extremely long hours in the start-up phase. There is everything from staff
contracts and health and safety policies to marketing materials and websites to develop
and the longer this takes the longer the business takes to be established and the higher
the financial risk becomes. The owner will become responsible for everything from the
grunt work to the office managerial responsibilities.

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 D. Poor Planning
Many business fail in the first year due to poor planning and preparation before
declaring themselves as “OPEN FOR BUSINESS!” Before launching any business
everything from suppliers to rates should be investigated. Noticing a hike in unexpected
costs after you have just launched a business can bankrupt the plans in no time. Extra
time should be taken ensuring that everything is covered, the best way to do this is by
creating a comprehensive business plan.

E. No Historical Data
New start-ups often face the problem of just not knowing what is going to happen or
what should happen. Launching a new business concept to the market or even for the
business owner they with little knowledge of the industry can be extremely hard to plan
for, as there are no expectations.

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 Self-check 5 Written Test

Name: ________________________ Date: ___________________________

Directions: Answer all the questions listed below. Illustrations may be necessary to aid
some explanations/answers.
1. what are problems while doing business?(5)

Note: satisfactory rating: 5 and above, but unsatisfactory: below 5. You can ask your
teacher for the copy of the correct answer.

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Operation sheet-1 preparing business plan

Steps to generating your successful business

1. Start thinking! Get your brain to work

2. Buy a note book

3. Follow your passion

4. Keep your eyes open

5. Capitalize on your strengths

6. Explore new things

7. Check your bank account

8. Know what you want in life

9. Choose a business that suits your personality

10. Read about other people that started their own business

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LAP Test preparing business plan

Name: ___________________________ Date: ________________

Time started: ________________________ Time finished: ________________
Instructions: Given necessary templates, tools and materials you are required to
perform the following tasks within 2-3 hours.
Task 1: develop the business plan for horticultural crops ( Avocado, mango, Tomato,

Cabbage, Carrot, Beet root

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 List of References materials

Charantimath, P. M., 2011. s.l.: Pearson Education. Entrepreneurship development’ for

enterprising women? Kraus-Harper, U., 1991. Small Enterprise Development,
2(1), pp. 41-45. Entrepreneurship in Africa: a study of successes
Fick, D. S., 2002. s.l.:Qurom Books. Further reading 125 Entrepreneurship in Livestock
and Agriculture.

Rudmann, C., 2008., Frick, Switzerland: Research Institute of Organic Agriculture FiBL.
Entrepreneurship Development and Small Business Enterprise
Faltin, G., 1999. Hamburg, Germany, Paper presented to the UNESCO meeting on the
Future of W ork and Adult Learning.
SMEs Gibb, A., 1999. Small Enterprise Development, 10(4), pp. 27-38. Developing the
Entrepreneurial Skills of Farmers: some myths explored.
Faltin, G., 1999. Hamburg, Germany, Paper presented to the UNESCO meeting on the
Future of W ork and Adult Learning.
SMEs Gibb, A., 1999. Small Enterprise Development, 10(4), pp. 27-38. Developing the
Entrepreneurial Skills of Farmers: some myths explored.
https://www.learnhowtobecome.org/entrepreneur/

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 AKNOWLEDGEMENT
We would like also to express our appreciation to the TVET instructors and respective
Regional TVET Bureau, TVET College/ Institutes, UNESCO Project (best education for
African rise (BEAR)) and Federal Technical and Vocational Education and Training
Agency (FTVET) who made the development of this this Teaching, Training and
Learning Materials (TTLM). W ith required standards and quality possible.
This Teaching, Training and Learning Materials (TTLM) was developed on September
2020 at Bishoftu, Federal management institute ETHIOPIA

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 The trainers who developed the Teaching, Training and Learning Materials (TTLM).
No Name Edu. Field of Address E -mail address College
Level study
1. 1. Gedefa A Postharvest 0922944326 [email protected] Yeka
Yadasa management Industrial
college
2. Alemu A Animal 0912355539 [email protected] Bure PTC
Abate production
3. Tewodros B Hotel 0925750057 [email protected] D/Tabor PTC
Kassahun management
4. Zelalem A Leadership 0918021238 [email protected] Amhara TVED
Taye and Bureau
management Coordinator

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