NSSCO Entrepreneurship (6146) cheat sheet

Entrepreneur: a person who identifies an opportunity, combines factors of production (land, labour, capital, enterprise) and bears the risk of the venture.

Intrapreneur: an employee who innovates inside an existing organisation using the employer's resources; bears little personal financial risk.

Key entrepreneurial traits: initiative, risk-bearing, self-confidence, persistence, opportunity obsession, calculated risk-taking (not gambling).

Functions of an entrepreneur: idea generation, resource mobilisation, organising production, decision-making, risk-bearing, innovation.

Motives for starting a business: profit, independence, unemployment, filling a market gap, family business succession, social mission.

Small business contribution to the Namibian economy: employment creation, GDP contribution, tax revenue, rural development, supplier linkages.

Difference between entrepreneur and manager: entrepreneur owns and bears risk and seeks new opportunities; manager administers resources for a salary.

Business life-cycle stages: idea/conception, start-up, growth, maturity, decline or renewal - funding and control needs differ at each stage.

Sources of business ideas: own skills and hobbies, customer complaints, surveys, competitors, suppliers, trade fairs, newspapers, government tenders.

Idea screening criteria: market demand, capital required, skills needed, competition, legal requirements, risk level, profitability potential.

Brainstorming rule: defer judgement during generation, encourage quantity, build on others' ideas, then screen and rank afterwards.

SWOT analysis classifies internal Strengths and Weaknesses against external Opportunities and Threats; it is a matching tool, not a decision rule.

A business idea becomes an opportunity only when demand, feasibility, resources and timing all align.

Gap analysis: compare what the market currently offers with what customers need; the unmet need is the business gap.

Product-oriented idea: start from what you can make; market-oriented idea: start from a verified customer need - the latter has lower failure risk.

Feasibility study tests technical, financial, market and legal viability before a full business plan is written.

Invention: first creation of a new product or process. Innovation: successful commercial application of an idea.

Types of innovation: product, process, marketing, organisational, incremental (small improvements) and radical (disruptive breakthroughs).

Sources of innovation (Drucker): unexpected events, incongruities, process needs, industry structure changes, demographics, changes in perception, new knowledge.

Opportunity window: the period during which market conditions make a venture viable; it closes as competitors enter.

First-mover advantage: brand recognition, customer loyalty, patents; disadvantage: high pioneering costs and uncertainty.

Competitive advantage must be valuable, rare, hard to imitate and organised for use to be sustainable.

Creative thinking tools: mind mapping, SCAMPER (Substitute, Combine, Adapt, Modify, Put to other use, Eliminate, Reverse).

Patent protects an invention; trademark protects a brand mark; copyright protects original creative works; these are forms of intellectual property.

Business plan sections: executive summary, business description, products/services, market analysis, marketing plan, operations plan, management team, financial plan, risk assessment.

The executive summary is written last but placed first; it must stand alone and state the purpose and funding request.

Purposes of a business plan: raise finance, guide management, communicate with partners, test feasibility, set milestones.

Financial plan components: start-up capital estimate, projected income statement, cash-flow forecast, projected balance sheet, break-even analysis.

SMART objectives: Specific, Measurable, Achievable, Relevant, Time-bound.

A business plan is a living document; it is revised when market conditions, costs or strategy change.

Investors read the financial plan and management team sections most closely; unrealistic sales forecasts weaken credibility.

Contingency planning identifies alternative actions if key assumptions (sales, costs, funding) fail.

Primary data: collected first-hand for the specific problem (surveys, interviews, observation, experiments); costly and slow but current and relevant.

Secondary data: already published (statistics, census, trade reports, competitor websites); cheap and fast but may be outdated or not specific.

Population: the whole group of interest. Sample: a subset selected to represent it. Larger random samples give more reliable estimates.

Sampling methods: random, systematic, stratified, cluster (probability); convenience, quota, judgement (non-probability).

Questionnaire rules: short, unambiguous, unbiased wording; avoid leading and double-barrelled questions; pilot-test before use.

Market segmentation bases: demographic, geographic, psychographic, behavioural.

Market share = (own sales ÷ total market sales) × 100.

Research steps: define the problem, set objectives, choose method, design instrument, collect data, analyse, report and act.

Marketing mix (4Ps): Product, Price, Place, Promotion; services add People, Process, Physical evidence (7Ps).

Product decisions: features, quality, branding, packaging, product mix, product life cycle (introduction, growth, maturity, decline).

Pricing strategies: cost-plus, penetration (low entry price), skimming (high launch price), competitive, psychological, promotional.

Place/distribution channels: producer to consumer (direct); producer to retailer to consumer; producer to wholesaler to retailer to consumer.

Promotion mix: advertising, sales promotion, personal selling, public relations, direct marketing; choose by cost, reach and target audience.

Marketing concept: satisfy customer needs profitably rather than merely selling what is produced.

Unique Selling Proposition (USP): the feature that distinguishes a product from competitors and drives the message.

Break-even sales volume = fixed costs ÷ (selling price per unit − variable cost per unit).

Sources of finance: owner's equity, retained profit, bank loans, overdraft, trade credit, hire purchase, leasing, venture capital, government grants.

Internal finance: owner's savings, retained earnings, sale of assets. External finance: loans, shares, grants, trade credit.

Short-term finance (< 1 year): overdraft, trade credit. Medium-term (1–5 years): hire purchase, leasing. Long-term (> 5 years): mortgage, shares, long-term loan.

Fixed capital finances assets used repeatedly (machinery, premises); working capital finances day-to-day operations (stock, wages, bills).

Working capital = current assets − current liabilities.

Cost of finance: interest, arrangement fees, and the loss of control that comes with giving away shares.

Gearing = long-term debt ÷ (long-term debt + equity) × 100; high gearing raises financial risk.

Start-up capital = fixed assets + initial working capital + preliminary expenses.

Accounting equation: Assets = Owner's Equity + Liabilities.

Double-entry rule: every transaction has equal debit and credit entries; total debits always equal total credits.

Books of account: cash book, sales journal, purchases journal, sales returns, purchases returns, general journal, ledger.

Source documents: receipt, invoice, credit note, debit note, cheque counterfoil, bank statement, petty cash voucher.

Trial balance: list of ledger balances; it proves arithmetical accuracy only, not the absence of all errors.

Income statement: Revenue − Cost of sales = Gross profit; Gross profit − Expenses = Net profit.

Balance sheet: statement of assets, liabilities and equity at a specific date; it reflects the accounting equation.

Petty cash imprest system: a fixed float is restored by the amount spent, supported by vouchers.

Production methods: job production (one-off custom items), batch production (groups of identical items), mass/flow production (continuous high volume).

Productivity = output ÷ input; rising productivity lowers unit cost.

Economies of scale: lower average cost as output rises (bulk buying, specialisation, spreading fixed costs). Diseconomies arise from poor coordination and communication.

Break-even point in units = fixed costs ÷ contribution per unit, where contribution = price − variable cost per unit.

Margin of safety = actual sales − break-even sales; it shows how far sales can fall before a loss.

Quality control inspects finished output; quality assurance builds quality into every process (TQM).

Stock control: maximum, minimum and reorder levels; Economic Order Quantity balances ordering and holding costs.

Lean production reduces waste (overproduction, waiting, transport, over-processing, inventory, motion, defects).

Human resource cycle: recruitment, selection, induction, training, appraisal, reward, discipline, separation.

Recruitment steps: job analysis, job description (duties), person specification (qualities required), advertising, shortlisting, interview, appointment.

Training types: induction (orientation), on-the-job (mentoring, job rotation), off-the-job (courses, simulations).

Maslow's hierarchy (physiological, safety, social, esteem, self-actualisation) and Herzberg's hygiene factors versus motivators explain motivation.

Labour turnover = (number leaving ÷ average number employed) × 100.

Gross pay = basic pay + overtime + allowances; net pay = gross pay − deductions (tax, social security, pension).

Employment contract essentials: job title, duties, pay, hours, leave, notice period, disciplinary procedure.

Staff appraisal compares performance against agreed standards and identifies training needs.

Forms of business ownership: sole trader, partnership, close corporation, private company, public company, cooperative.

Sole trader: unlimited liability, full control, full profit, no separate legal personality.

Private company (Pty Ltd): separate legal personality, limited liability, shares not offered to the public.

Partnership: 2–20 partners (generally); a partnership agreement sets profit-sharing, capital and dissolution rules; liability is usually unlimited.

A contract requires offer, acceptance, consideration, capacity, intention and legality; breach gives the injured party remedies.

Business registration in Namibia involves the Ministry of Industrialisation and Trade (BIPA), plus tax registration with NamRA and, where relevant, social security (SSC).

Consumer protection and fair trading law prohibits misleading advertising and unsafe goods.

Intellectual property: patent (invention), trademark (brand), copyright (creative work), registered designs.

Business ethics: moral principles guiding decisions beyond legal minimums - honesty, fairness, transparency, respect for stakeholders.

Corporate social responsibility (CSR): voluntary action benefiting community, employees, environment and customers.

Triple bottom line: Profit, People, Planet - economic, social and environmental performance.

Code of conduct: written standards of behaviour with procedures for reporting and disciplining breaches.

Conflict of interest: a personal interest that could improperly influence a business decision; must be declared and avoided.

Whistle-blowing: reporting illegal or unethical practice internally or to a regulator; protected in many jurisdictions.

Ethical issues: bribery, misleading advertising, exploitation of child or cheap labour, environmental pollution, invasion of privacy.

Sustainable practice: reduce, reuse, recycle; energy efficiency; fair sourcing; these can lower long-run costs.

Communication process: sender, encoding, message, channel, receiver, decoding, feedback, noise.

Formal channels follow the organisation structure (downward, upward, horizontal); informal channels (the grapevine) spread fast but are unreliable.

Barriers to communication: noise, jargon, language differences, emotional state, poor listening, information overload, faulty channel.

Written business documents: memorandum (internal), business letter (external), report (structured findings and recommendations), notice and agenda (meeting).

Meeting documents: notice, agenda, minutes; the chair runs the meeting and the secretary records it.

Effective email: clear subject line, one purpose, professional tone, proofread, no confidential data insecurely sent.

Active listening: attention, no interruption, paraphrase to confirm, appropriate non-verbal feedback.

A curriculum vitae and covering letter are persuasive documents tailored to a specific job advertisement.

ICT business uses: accounting software, point-of-sale, e-commerce, email, social media marketing, cloud storage, mobile money.

Benefits of ICT: speed, accuracy, lower clerical cost, wider market reach, better records. Risks: downtime, cost, data loss, cybercrime.

E-commerce risks: fraud, insecure payment, data breaches; controls include encryption, strong passwords and two-factor authentication.

Backup rule: keep regular backups, stored separately (off-site or cloud) and tested for restoration.

Risk management cycle: identify risks, assess likelihood and impact, treat (avoid, reduce, transfer, accept), monitor and review.

Risk transfer: insurance; risk avoidance: stop the risky activity; risk reduction: controls and training; risk acceptance: retain and budget for it.

Physical security controls: locks, alarms, CCTV, access control. Data controls: permissions, antivirus, firewalls, staff training.

Business continuity plan: documented steps to keep operating or recover quickly after a disruption.