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Entr 330:Establishing &Amp; Managing Small Business Question Paper
Entr 330:Establishing &Amp; Managing Small Business
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2010
FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTMENT : BUSINESS ADMINISTRATION
TIME : 2 HOURS
INSTRUCTIONS Answer Question ONE and any Other TWO Questions
Case Study Clare thinks of a Small Business
Clare had a decision to make about her career. She was the manager in charge of the Payroll section in the accounts department of the Government Parastatal. Although no formal announcement had been made, it was strongly rumoured that the parastatal would soon be contracting out more of its central services, and that the payroll would be one of them. When this had happened in other areas, the options for individuals in Clares position were usually either to seek transfer to another department within the parastatal, take redundancy and look for employment elsewhere, or form an organization to put in a bid for the work that was being contracted out. Clare has been employed by the organization for a few years and would qualify for redundancy payment.
However she was a qualified bookkeeper and her management qualities were appreciated by other departmental heads, some of whom had approached her unofficially to see if she would be interested in moving into their department. While she liked the security of her monthly pay slip, pension scheme, health insurance and other benefits, Clare found her current job lacking in real challenge and she disliked the bureaucratic methods and political infighting within the organization. The independence of running her own business had some real attractions for her.
To Clare’s surprise when she discussed the idea with her husband, Andrew he was immediately supportive of it. “It’s about time you got out of the rut you’re in at work. The days of working for large organizations for life are over. We can now become entrepreneurs, putting our own ideas into action, creating work for ourselves” As they were discussing Clares father came in to see them. After Clare had outlined her options to him, he took a less sympathetic line towards self-employment. “It’s out of the frying pan into the fire. You will end up working for a big organization whatever you do, either as supplier or employee. Either way they stay in control of you small business or not”
Clare was further confused when she met an old school friend who had started her own business. “My only advice is don’t do it unless you can test the idea in some way to make sure it works. Otherwise it’s just not worthy the risk. I am just about making ends meet now and this is my second attempt. All that I have to show from my first business is a much larger mortgage. Clare started to learn that Small business could lead to some issues.
Question 1
a) Define the Term Small Business (5marks)
b) Clare is in a state of confusion after her discussion with the husband, the father and her friend. To assist her make a decision, discuss with her in details FIVE Advantage and FIVE Disadvantages of Self-employment. (10marks)
c) Establishment of a new Enterprise in a process. Take Clare through a detailed account of this process. (15marks)
Question 2
a) Discuss Maslow Theory of motivation and how it applies to entrepreneurship. (10marks)
b) Which Five factors do you consider to be barriers to engagement in self employment? (10marks)
Question 3
a) What is a business plan? (5marks)
b) Identify and discuss the various types of plans contained in a business plan. (15marks)
Question 4
a) “At start-up the entrepreneur needs to consider the alternatives regarding the legal form of the organization.” Robert Hisrich 2009. Discuss the factors that an entrepreneur would need to consider while choosing the legal form of his enterprise. (10marks)
b) What do you consider to be major problems faced by new ventures? (10marks)
Question 5
Write shorts notes on:-
a) Market Segmentation
b) Partnership
c) Financial Forecasting
d) Mcclellands Acquired Needs Theory in relation to entrepreneurship. (20marks)
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