School of Applied Health, Innovation and

Sciences
Unit: 1STU102 Principles of Entrepreneurship

Lecture Notes

March 2023 Presentation By: Mr. Uapimbisa Tjambiru

Learning outcomes
On completion of this unit a learner should:

A. Explore the nature of enterprise

B. Investigate the motivations for entrepreneurship
C. Examine the opportunities and constraints for enterprises
and entrepreneurs
D. Examine the entrepreneurial skills required to launch an enterprise
A. Explore the nature of enterprise

Enterprise: It’s a business organization/entity that is formed to generate a profit by providing

goods/services.
• An enterprise create jobs
• It contributes to the national income/GDP
• It contributes to the sustainable economic development

Entrepreneur: This refers to the person that starts an enterprise.

• He/she comes up with an idea and work it out
• He/she researches to identify a market for a new product/service
• He/she identify & fill gaps in the market for existing products/services
• He/she identify risks facing an enterprise & initiate solutions
Entrepreneurship: These refers to the processes through which an entrepreneur creates a
product/service.
• These processes include planning, development, organizing and marketing of the new
product/service in order to acquire massive profits.
• In a nutshell, the entrepreneur is the actor, entrepreneurship is the act and the outcome of the act
is the enterprise.

Reflective questions:
1. Categorise the terms enterprise, entrepreneur and entrepreneurship starting with the one that
comes first until the final one.
2. Develop practical scenarios of what an enterprise is, an entrepreneur and entrepreneurship.
Types of enterprises

• Start-up enterprise: This is a business organization that is in the first stages of operation.
This might be due to high costs required to progress
• Lifestyle enterprise: Type of business that is set up to maintain a certain lifestyle e.g.
gym/fitness
• Social enterprise: Is a business that put the interests of people and planet ahead of
shareholder gain. These businesses are driven by a social/environmental mission and
reinvest profits into creating positive social change
• Franchise enterprise: Business that involves a franchisor--- a person who establishes a
brand’s trademark and a franchise--- a person who pays royalty to do business under the
franchisor's name and system e.g. KFC
Legal formats of an enterprise

• Sole proprietorship/trader: This is an enterprise that is owned and operated by an

individual.
• Partnership: This is an enterprise consisting of a small number of individuals (2-20), they
share ownership and decision-making.
• Public limited company: Type of enterprise owned and managed by a director and
shareholders. It offers/trade shares to the public
• Private limited company (Pty.LTD): This is an enterprise that is limited to a maximum of 50
shareholders, however it doesn’t publicly trade it’s shares.
Risks of an enterprise

• Competition, strategies to beat competitors coming on to the market

• Compliance to policies & safety legislations
• Finances, high interest rate on loans, non-payment by customers
• Operational risks, breakdown or theft of key equipment
• Health & safety, risk to health and safety of people, your employees, customers and
communities that are impacted by your operations
Mindset of an entrepreneur/qualities

• Creativity
• Confidence
• Positivity
• Motivation
• Discipline
• Persuasion
• Adaptability
• Flexibility
Practical Homework: Explore the above mentioned qualities, elaborate them in your own
words.
Practical Task 1

• Explore the pros & cons of the legal formats of an enterprise. As a start-up entrepreneur,
which legal format would you recommend to legally register your business and why?

(Marks: 30)
B. Investigate the motivations for Entrepreneurship

1. The role of motivation when starting a new venture

• Autonomy, which refers to the freedom to make own choices, flexibility and better work
opportunities
• Seeking personal challenge which results in fulfilling a vision and enhance personal
reputation/fame
• Financial motives which include financial security, larger income and wealth
• To create a legacy, such as a family business
 Entrepreneurs are intrinsically motivated people who believe in their ideas and are
passionate about implementing them.
 Motivation may differ among entrepreneurs, but they all believe in providing innovative
business solutions
2. Barriers to setting up a new venture

 Every entrepreneur aims to follow their passionate approach and convert it into a
successful business by earning more and more profits and creating goodwill in the
market.
 But many barriers can block the path to the success of entrepreneurship. So there is no
other option for an entrepreneur to be successful without solving or removing these major
barriers in their respective field.
• Viability, the ability of the business to survive by providing goods/services to customers.
This survival is linked to the financial position and performance of the business
• Regular cash flow, constant amount of money being transferred in and out of the business
• Raising a start up capital, there should be a stable and regular source of finance to keep the
production process smooth. If this first and the most critical barrier can be solved easily then
the future barriers can also be tackled.
• Lack of skills & experience e.g. financial management skills, also nowadays, most business
ideas are based on technology. A business needs to have a strong base of skilled and
knowledgeable human resources or employees
• Complying with regulations e.g. taxes, licenses & environmental obligations. The politics of a
country or region can also become a barrier to the success of entrepreneurship
• Psychological Pressure e.g. parental pressure, societal pressure, financial pressure, carrier
pressure, etc.
3. Importance of entrepreneurs to the economy

• They generate economic wealth by increasing the national income

• They provide jobs which increases the living standard of citizens
• They bring about social change by creating solutions to major sociological problems
• They bring about technological advancements by replacing older, inefficient technologies
with evolved and advanced systems
• Entrepreneurship ensures that wealth is distributed evenly, reducing inequalities,
(entrepreneurs become donors and philanthropists)
• Entrepreneurship inspires a generation, the chance of owning something is infectious
C. Examine the opportunities and constraints for enterprises
and entrepreneurs

1. Sources of finance
• Source of finance refers to where a business/enterprise acquire money to fund its daily
activities & operations
• An enterprise can gain finance from either internal or external sources
Internal sources of finance
• Refers to the money that comes from within the business
Examples:
 Owners capital refers to the money invested by the owner of a business which often
comes from their own personal savings
 Retained profits is when a business makes a profit and re-invest some or all of the money
into the business in order to expand
 Selling assets involves selling products owned by the business in order to raise money
quickly or when the products are not needed
External sources of finance
• This refers to money that comes from outside of the business
Examples:
 Business obtaining money from friends/family
 A bank loan, money borrowed from a bank to be paid off with interest over an agreed
period of time
 Overdraft, when the business uses more money than they have in their bank account,
leaving the account to a minus/negative, to be payed back to the bank on interest rates
(usually high)
 Venture capital/business angels, refers to individuals willing to invest money into a new or
growing business in exchange for an agreed share of the profits
2. Government and non-governmental support

 Government grants, are a fixed amount of money awarded by the government to a

business on the condition that they meet a certain criteria such as providing jobs in areas
of high unemployment (usually not to be payed back)
 Leasing is a way of renting an asset that the business requires such as a truck or office
machines. Monthly payments are made and the leasing company is responsible for the
provision of the leased item
2. Government and non-governmental support
2. Government and non-governmental support

• Enterprising libraries: Using the public libraries network to reach into communities to
provide coaching, advice meeting spaces, and IT support to people interested in
developing a business proposal and bringing it to market
• Local Enterprise Partnerships (LEP’s): These are partnerships between local authorities
and businesses that decides the priorities for investment in roads, buildings and facilities
in the area.
• Enterprise Zones (EZ’s): Geographically defined areas, hosted by LEP’s in which
commercial and industrial businesses can receive incentives to set up or expand in order
to encourage development and economic growth
Namibian governmental support

• Empretec Namibia Programme: Officially launched on the 16th October 2019 under the
Ministry of Industrialization and Trade
 It’s aim is to unlock the growth potential of micro, small and medium enterprises in
Namibia
 The program is hinged on four key pillars which are Institutional Capacity Development,
Entrepreneurship Development, Establishment of start-ups & enterprise growth and
Development of a National Entrepreneurship Strategy
• The National Policy on micro, small and medium enterprises in Namibia , drafted July
2015
 The vision is thriving MSME’s (micro, small & medium enterprises) that ensure effective
utilization of available resources and contribute significantly to the economic growth
 The MSME policy is aligned with the key guiding policies established under vision 2030
Non-governmental support for enterprises and entrepreneurs

• Non-governmental organizations show their presence as the next sector from the public &
private sector to carry a supporting mission which takes over the things that public and
private sector cannot accomplish
• In this entire global chaos, NGO’s stand out by improving basic civil rights, which allows
previously discriminated entrepreneurs to access more opportunities
• They also provide and distribute international aids, obstructing disagreements, regional
conflicts and terror phenomenon at national and international scale
Example of NGO support in Namibia
• Co-operation for Development (CD), a London-based NGO launched in Oshana region as
a credit scheme to sustain female entrepreneurs operating especially in the informal
markets of Oshakati
• Community Small Enterprise Development Agency (COSEDA), it is an NGO that provides
credit to micro and small businesses operating in Katutura (Windhoek), which may not be
able to access credit in the formal banking sector
 COSEDA provides credit through the savings and credit scheme known as “Ngaturitunge
Pamwe”---- which means “Let’s Develop Ourselves Together”.
 It draws inspiration from traditional community practices which focus on self-help, mutual
support and sharing in local communities

Practical Homework:
Explore the governmental and non-governmental supports for enterprises, how can you as
an entrepreneur access their services and what are their requirements? [30]