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GSE 301
Made Easy

NOTE
This material is a summary of the text (Contemporary
Entrepreneurship Development) and hence should not be
seen as a substitute to the original text. Readers are hereby
encouraged to go through the original text to fully understand
the material.

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CHAPTER 1
NATURE PURPOSE AND SCOPE OF BUSINESS
* Business refers to an occupation in which goods and services are produced and sold in return for
money.
* The prime objective of business is profit making
* Business organization is an entity that is both commercial and social, which provides the necessary
structure to achieve the central objective of trade in goods or services
* Business enterprises are institutions whose primary objective is Profit-making
* Forms of business org. includes:
> Sole Proprietorship: this is the simplest form of business under which an individual can operate a
business. Feature of SP. Includes:
1. Simplistic in nature
2. Easy and simple to set-up
3. It does not require legal recognition and attendant formalities.
4. There is no distinction between the business and the owner.
5. Management rest with the owner/proprietor him/herself
6. Owner has unlimited liability
7. Owner bears all the profits earned and bears all losses incurred by the business.

Advantages of SP
1. It is easy to form, formal registration is not necessarily needed
2. There is independence and freedom in decision making.
3. There is high secrecy in the business
4. Presence of tax advantage
5. Dissolution of business is very easy.

Demerits of SP
1. A sole proprietor has unlimited resource at his/her disposal.
2. There is limitation to the ability of the proprietor
3. He is fazed with unlimited liability
4. Life span of the business is usually limited.

> PATNERSHIP: This is an arrangement where parties, known as partners, agree to cooperate to advance
their mutual interests. A partnership agreement may be either written or not.
Features of partnership include:
1. Profit of the business are shared according to partners’ contribution to the business.
2. Partnership is not separated from the partners
3. It is easy to form, as initial starting cost is low
4. Death of a partner can lead to the dissolution of the partnership.
5. Partners risk their personal assets.

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Benefits of Partnership
1. It is easy to form
2. Shared financial commitment
3. Complementary skills
4. It provides employment opportunities
Demerits of Partnership
1. Joint and individual liability
2. Possibility of disagreement among partners
3. Discord among partners on shared profit.

> LIMITED LIABILITY COMPANY: this is an artificial creature, invisible, intangible, and existing in only one
contemplation of law.
* A company is legally formed by meeting the condition stipulated in the Companies and Allied Matter
Act (Decree), 1990.
*Promoters must apply for registration at the Corporate Affairs Commission together with both a
Memorandum and Articles of Association.
*The Registrar-General, issues a Certificate of Incorporation if the Memorandum and the Articles of
association are in order.
* The business environment includes Customers, competitors, government regulatory agencies, legal
and political framework and institutions, technological development and social cultural factors that
influence business behavior
* The objectives of business are:
- Profit objective - Growth objective - Market Share objective
- Survival - Employee Satisfaction - Image and Reputation
- Social Objective - National Objectives - Shareholder Satisfaction
* The purpose of business activity is to identify and satisfy the needs and wants of the people, with the
overall aim of earning profit.
* Functions of a business are:
> Production Function: The transformation of inputs into specified outputs as demanded by the market
and society.
> Marketing Function: The distribution of goods and services produced by the business’ production
department.
> Finance Function: The arrangement of sufficient capital for the smooth running of the business.
> Personnel Function: Finding suitable employees, training them, as well as motivating them.

*The theories on the purpose of business are:

> Shareholder’s theory: Shareholder theory encompasses the idea that the main purpose of business
lies in generating profits and increasing shareholder wealth.
> Stakeholder Theory: states that firms can best generate competitive advantage and wealth by taking
more than just their shareholders into account
* The characteristics/features of business are:
> Exchange of goods and services
> Profit: the reward of business is profit.
> Involvement in numerous transactions > Marketing and distribution of goods

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> Risk taking and Uncertainties > Availability of buyer and seller
> Production of goods and services > Development of skills for economics
> Social Obligations > Meeting human needs and wants

*The scope of business may be looked into from two perspectives; Industry and Commerce
> Industry: This activity of extraction, production, conversion, processing or fabrication of products.
The products of an industry may be a:
1. Consumers goods: goods used by final consumers
2. Capital goods: goods used in the production of other goods
3. Intermediate goods: these are materials that were once the finished products of one industry
but are now intermediate product of other industries.
*The types of industry are:
- Primary Industries: which can be;
1. Extractive industry: one which draws it products from natural sources
2. Genetic Industries: one involved in the breeding of plants and animals for use in further
reproduction.
- Secondary Industries: which can be;
1. Manufacturing Industries: one engaged in producing goods through the creation of “form
utility”. The products of extractive industry eventually become the raw-materials of manufacturing
industry. M.I may take the form of Analytical, Synthetic, Processing and Assembly line.

>Commerce: This is an interchange of goods or commodities between different entities, either

domestically or foreign/internationally. The main function of commerce is to remove the hindrance of
persons through trade, place through transportation, insurance and packaging, time through
warehousing and storage, and knowledge through salesmanship.
The concept of commerce usually covers two important areas; Trades and Service business or Aids or
trade.
* Trade can be classified into
(i) Domestic Trade: this is an internal trade. Payment is made in national or local currency and it can be
further subdivided into retail and wholesale trade.
(ii) Foreign Trade: this is an international trade. It involves the use of foreign currency.
* Service Business: There are referred to as Aids to Trade and they include:
I. Banking
ii. Transportation
iii. Warehousing
iv. Insurance
v. Advertising
vi. Communication.

* Further research led to the discovery of the following important scope of business
a. Demand Analysis and Forecasting: This assist business owners in maintaining and strengthening
market position and reduce wastage.

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b. Cost and Production Analysis: It helps in yielding significant cost estimates which are useful for
business decisions.
c. Price Decisions, Policies and Practices: It help in profit planning exercises.
d. Profit Maximization: It refers to sales level where profits are the highest
e. Capital Management: It ensures a business has sufficient cash flow in order to meet its short-term
debt obligations and operating expenses.
f. E-commerce (Electronic Commerce): This is the buying and selling of goods and services or
transmitting of funds or data, over an electronic network.
NOTE: (B2C) = business-to-consumer
(B2B) = business-to-business
(C2B) = consumer-to-business
(C2C) = consumer-to-consumer.

*Beneficiaries of Business
i. Business owners
ii. Employees
iii. Government
iv. Society
* The stakeholders of business are: Communities, Competitors, Customers and consumers, employees
and agents, families, government, Media and advocacy groups, Owners/shareholders, Society, Suppliers.

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CHAPTER 2
CONCEPT OF ENTREPENEURSHIP
* Entrepreneurship is the discovery, creation and exploitation of opportunities to bring into existence
future goods and services.
* The two main aspect of entrepreneurship are alertness and seizing opportunities by taking further
innovative actions.
* Schumpeter classified the entrepreneur as a sociologically distinct individual, who sees am
opportunity, seizes it and creates a new marketable process. He claimed INNOVATION as the sole
domain of the entrepreneur.
*The essential characteristics of an entrepreneur are:
- Confidence
- Possession of sense of ownership
- Ability to communicate
-Passionate about learning
- Team Player
- System Oriented
- Grateful
- Optimistic
- Gregarious
- Leader by example
- Not afraid of risk or success.

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CHAPTER 3
SMALL BUSINESS MANAGEMENT
* The sector is often referred to as engine of growth and development
* Characteristics of small business in Nigeria
I. Labour intensive purposely to generate employment
ii. Capital formation to speed up national development
iii. Affordability by most people
iv. Open opportunities for greater participation by many people
v. There is free exit from the market
vi. Effective use of local resources.
vii. Foreign exchange savings through import substitution
viii. Owner plan, organize, co-ordinate and control all the human and material resources to meet the
business objective
ix. Small business can be found in limited area
x. It can only serve a small part of the market.

* The process of establishing organization in Nigeria is listed as follows:

1. Identification of the need of consumers
2. Acquisition of productive resources
3. Registration with appropriate authorities
4. Installation of plant and machineries for the production of goods and services
5. Pricing, promotion, advertisement and distribution of goods and services to intending consumer.

* Classification of Business Organizations entails the cost of doing business excluding the cost of land
and the number of workers employed
S/N TYPES OF CLASSIFICATION TOTAL COST(excluding cost of land but NUMBER OF
including working capital) EMPLOYEES
1. Micro/cottage industry #1.5 million 1-10
2. Small Scale Industry #50 million 11-100
3. Medium Scale Industry Over #50 million but less than #200 million 101-300
4. Large Scale Industry Over #200 million Over 300

* The contribution of SMEs to economic development of the nation includes.

i. Provision of employment
ii. Reduction in poverty
iii. Income generation to individual/govt.
iv. Utilization of the abundant raw material
v. Provision of foreign exchange
vi. Availability of various kinds of goods
vii. Stimulation of indigenous entrepreneurship

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viii. Transformation of traditional/local industry

ix. Linking up the various sectors and subsectors of the economy
x. Greater innovation and creativity
xi. Mobilizing savings and investments
xii. Dispersal of business enterprise
xiii. Competing globally with similar enterprises across the globe

* The problems facing SMEs in Nigeria are:

1. Lack of Finance
2. Lack of infrastructural facilities
3. Corruption
4. Unconducive business environment
5. Dumping of foreign goods
6. Inefficient administrative skills/management.
* The Nigerian govt. assisted SMEs with the establishment of NBIC, SSICS, NIDB, NEXIM etc.

NOTE THE FOLLOWING ACCRONYMS

UTC - United Trading Company
GNP - Gross National Product
NBIC – Nigerian Bank for commerce and industry
SSICS - Small Scale Industries Credit Scheme
NIDB- Nigerian Industrial Development Bank Ltd.
CMD - Centre for Management Development
NCI – National Council of Industry.

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CHAPTER 4
NIGERIAN BUSINESS ENVRONMENT
* Business environment is broadly categorized into two; 1. Internal Environment 2. External environ
* The internal environment is made up of factors that a firm can alter so as to improve the performance
of the firm e.g. Mission and objectives of the firms, value system etc.
* External environment consist of the factors that affect the performance of a business from the
outside. It is further sub-divided into the micro and macro environment
* Micro Environment are all the agents whose decision and activities have direct bearing on the
production and sale of business enterprise e.g. Suppliers of inputs, users of products & competing firms
* Macro environment consist of aggregate variable/factors which do not only affect the functioning of
the business but affect the entire economy
* Macro environment can be further classified into:
i. economic environment ii. Political and legal environment iii. Social-cultural environment
iv. Technological environment v. International environment and vi. Natural environment
* Indicators of economic environment includes, Per capita income, Interest rate, Inflation rate, Cost of
doing business, Credit to private sectors, etc.
* Exogenous factors include; Exchange rates, foreign direct investment, trade openness, foreign reserve
etc.
* The Nigerian business environment represents the largest market in Africa in terms of population
* Threats put forward by the N.B.E for businessmen to deal with are:
- Infrastructural Inadequacy - Insecurity - Frequent changes in Govt. Policies
- Difficulties of accessing funds - Lack of government Support.
* Polity 2 is a measure of the openness of the political system of a country.
* Nigeria runs an OPEN ANOCRACY business environment (meaning narrow group of people will be in
control of decision making)
* Regulatory quality is a measure of the ability of the govt. of a country to formulate and implement
sound policies and regulations that permit and promote private sector development.
* Rule of law captures the extent to which agents have confidence in and abide by the rules of the
society.
* Government effectiveness measures the quality of public service, civil service and the degree of its
independence from political pressures.
* Control of corruption is an indicator which measures the extent to which public power is exercised for
private gain.
* Political Stability and Absence of Violence/Terrorism captures the likelihood that the government will
be destabilized or overthrown by unconstitutional or violent means
* Voice and Accountability measures the extent to which a country’s citizen are able to participate in
selecting their government as well as freedom of expression, association and a free media
* The external environment is measured majorly by two indicators; Exchange rate and trade openness.
* The demand of capacity of an economy can be measured by GDP per capits
* In Africa Ghana has the lowest conversion rate of local currency to Us dollar
* South Africa’s economic environment is the most conducive in the understudied countries in Africa
* Nigeria has the highest market size in Africa

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CHAPTER 5
ENTREPRENEURSHIP OPPORTUNITIES IN NIGERIA THROUGH SMEs
* Entrepreneur is a French word which was first used by an Irish man named Cantillon, in the 18th
century.
* School of Entrepreneurial thought divided entrepreneurship into specific activities namely: Macro
views & Micro views-
* Macro views are the external processes beyond the control of the individual entrepreneur
* Micro views are factors specific to entrepreneurship and part of internal locus of control
* Characteristics peculiar to entrepreneurs are:
- Psychological Xteristics: 1. High need for achievement and success
2. Strong desire for responsibility and independence
3. High degree of self-confidence
4. Do not like routine work, they like to experiment

- Sociological Xteristics: 1. Goal- oriented

2. Capacity to adapt to changing conditions
3. Ability to organize men, materials, money and machines to achieve goals.

- Economic Xteristics: 1. Profit-Oriented

2. Risk taking ability
3. Ability to innovate and speculate
* The entrepreneur serves a prime mover of change in any economy, and the roles he plays include:
1. He identifies business opportunities, mobilizes and organizes the resources to tap the opportunities
2. He carefully implements his business plans to ensure achievement of his goals
3. He markets his products, services and ideas
4. Effective performance of the finance and production
5. Innovation through improvement of methods of production or technology
6. Monitors and responds to the environment.
* The attributes that should be present in the entrepreneurially inclined are: (MAD)
> Means: this is the capital or access to resource.
> Ability to materialize his vision
> Desire
* The risk of entrepreneurship can be classified into three viz. Financial, Career and Personal risk
* Rewards of entrepreneurship includes
- The chance of accumulating a lot of wealth
- Possibility of receiving a disproportionately high return on investments.
* The theories of entrepreneurship education are the;
- Management Theory and – Entrepreneurship Theory
* In the acronym SW-OT, (SW) stands for internal analysis and (OT) stands for external analysis.

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CHAPTER 6
CREATIVITY AND INNOVATION IN ENTREPRENEURSHIP
* Creativity is the ability to make or otherwise bring into existence something new.
* Two important aspect of creativity exist; Process and Goal
* Individual’s level of creativity is a function of 3 components
- Expertise: what a person know and can do in the broad domain of his/her work
- Creative Thinking: refers to how an individual approach problems and solutions
- Motivation: the drive and desire to do something.
* Expertise and creative thinking are the entrepreneur’s raw materials or natural resources.
* The creative process involves 7 stages – preparation, investigation, transformation, incubation,
illumination, verification and implementation.
* According to Buzan the human brain develops asymmetrically, and each hemisphere tends to
specialize in certain functions.
* The left-brain is guided by linear, vertical thinking (from one logical conclusion to another)
* The right-brain relies on kaleidoscopic, lateral thinking (considering a problem from all sides)
* The left-brain processes information in a stepwise fashion, but the right-brain processes it intuitively-
all at once, relying heavily on images.
* The Right-brain driven lateral thinking lies at the heart of creative process
* LB thinking counts on convergent reasoning
* RB thinking draws on the power of divergent reasoning
* Creative thinking is the act of generating solution to problems by the force of imagination and
reasoning.
* Creative thinking must lead to articulation of a strategy
* Strategy is a way of organizing available resources to achieve results.
* Individuals in organization can channel their creativity into 7 different areas namely:
i. Idea creativity ii. Material Creativity iii. Organization creativity
iv. Relationship creativity v. Event Creativity VI. Inner Creativity
vii. Spontaneous creativity
* There are two aspects of creativity, Process and People
* Process is the particular goal(s) intended to be achieved
* People are the resources that are used to achieve the goals.
* The blocks and barrier to creative thinking are: Personal blocks, Problem Solving blocks, and
environmental blocks
* Creativity tools for overcoming barriers can be classified into 3 namely:
- Paradigm Preserving: where neither new elements nor relationship between the elements of the
problems are introduced
- Paradigm Stretching: where either new elements or relationships are introduced
- Paradigm breaking: where both new elements and relationships between the elements are
introduced.
* Problem refers to any discrepancy between the current situation and a desired future future situation.
* Creative problem solving (CPS) technique is one that approach a problem in an imaginative manner
* Solution is a man-made resolution to a problem. It is of 2 types; Bad or Good

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* Creative Solution can be of 2 forms; Innovation and Invention

* The Creativity and innovation technique is shown below

CREATIVITY INNOVATION
Imagination  Implementation
Process  Product
Generating  Developing
Novelty  Usefulness
Soft  Hard
* The 4 techniques used in improving quality of creative ideas area
> Brainstorming > Mind mapping > Theory of Inventive Problem solving (TRIZ) and
> Rapid prototyping.
* Brain storming and minding mapping are right-brained while TRIZ is left brained
* The 3 principles of rapid prototyping are the 3 R’s; Rough, Rapid and Right.
* Innovation is the implementation of creative inspiration. It is gotten from the Latin word “Innovare”
Which means to make something new
* An idea doesn’t become innovation until it is widely adopted and incorporated into people’s daily
lives.
* The elements of innovation are; (9c)
1. Challenge 2. Customer focus 3. Creativity 4. Communication
5. Collaboration 6. Completion 7. Contemplation 8. Culture
9. Context.
* There are 4 basic types of innovation which are: (SIDE)
- Invention - Extension - Duplication - Synthesis
* The major innovation principles are:
- Action Oriented - Make Product, process or services simple and understandable
- Start small - Aim high - Try/test/revise - Learn from failure
- Follow a milestone schedule.
* The sources of innovation are:
- Trends
- Unexpected Occurrence
- Incongruities
- Process needs
- Industry and market structure
- Demographic
- Changes in perception

*The diffusion theory of innovation states that “once innovation occurs, it may be spread from the
innovator to the other individuals and groups.

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CHAPTER 7
FEASIBILITY STUDY AND REPORT WRITING
* Feasibility analysis is the process of determining if a business idea is viable
* Feasibility study is primarily an investigative tool, it also serves as a filter
* For an entrepreneur to conduct a reliable FS he/she must possess the following skills
- Economic skill
-Market skill
- Technical skill
- Financial skill
- Managerial skill
* Benefits of feasibility studies includes:
- It serves as am aid to business planning
- It serves as an evaluation tool to determine the feasibility and profitability of new venture
- It serves a decision tool
- It helps to ascertain whether or not a proposed venture is worth undertaking
- it serves as implementation guide to the venture it relates to
- it guides operators on the project in allocation to resources.
- it Is used for post-audit review at the end of the project
- it is used to invite co-sponsors to participate in the project.
* The six key areas of feasibility studies are:
- Business concept
- Industry/market feasibility: *an industry is a group of firms producing a similar product/service.
-product/service feasibility
- Organizational feasibility
- manufacturing or operations, and
- Financial feasibility
* A gumshoe is a detective or an investigator that scrounges around for information or clues wherever
they can be found.
* Note the following acronyms
- Net Present Value (NPV)
- Return on investment (ROI)
- Internal rate of return (IRR)

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CHAPTER 8
VALIDATION OF PRODUCTS AND SERVICES
*Idea validation is the process of achieving increased certainty that a product idea will indeed be
successfully adopted in market.
* The sources of venture ideas are
1. Entrepreneur social network
2. Prior experience
3. Existence of a similar business
4. Hobby/personal interest
5. Market research
6. Electronic and print media
* Business opportunity scanning is the study and interpretation of the political, economic, social and
technological event and trends which influence a business.
* Scanning for business opportunities cover the following among others; Technology, Govt. regulation,
Financial factors, Economic factors, Social and cultural factors, Political factors and Climatic
conditions.
* The 5 steps to idea validation are:
Step 1: Brainstorm Internally
Step 2: Do not ask family and friends
Step 3: Choose your interviewees
Step 4: Conduct your internal interview
Step 5: Review and decide

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CHAPTER 9
BUSINESS PLANNING AND CONTROL
*Planning is the process of deciding what to do and how to do it
* The planning principle is outlined below
- It should be comprehensive
- It should be efficient
- The process should be inclusive
- It should be informative
- It should be integrated
- It should be logical and transparent.
* The types of planning are: Strategic and Business/action/operational planning
* Control is the process of comparing actual results with planned or budgeted results and reporting
upon variations.
* The purpose of control is to identify unfavourable business performance so appropriate actions can be
taken.
* Activities involved in business control are:
- Establishing performance standards
- Reporting or monitoring performance
- Comparing performance against standards
- Identifying unsatisfactory performance and
- Pursuing appropriate actions to correct significant deviations in performance
* Control of business activities can take place at 2 levels
- Internal Control: from within the organization
- External Control: from outside the organization
* Business plan is a document that details the business objectives and means of achieving them.
* Business plan may be externally or internally focused
* The content and format of the business plan is determined by the goals and audience
* The check list for a business plan preparation is as listed below:
- Background of the business
- Products/services
- Personnel for running the business
- Business market
- Financial consideration
* Break-even is the level of business activity at which a company is making neither a profit nor a loss
* Contribution = Less direct cost – (Purchases + Labour cost)
* Actual Turnover = Overhead / Contribution Margin
* A hypothetical cash flow forecast should be completed following the note below:
1. Two columns are provided for each period
2. Receipt of cash sales appears in the same month as the projected sales.
3. Where you allow credit terms, show your receipt from debtors in the actual month of receipt, not
month of sales
4. Payment of cash purchase should be shown in the same month as purchases

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5. Where you have been allowed credit, payment should be shown in the month payment is made, not
the month of purchase.
6. Once completed, the form will reflect projected inflow and out-flow of cash through your business.
7. A separate line is provided for the purchase of capital items e.g. Machinery, Building etc. to be shown
* Errors that can undermine business plan are:
- Submitting a rough copy
- Outdated historical financial information or unrealistic industry
- Unsubstantiated assumptions
- Too much “blue sky” (failure to consider prospective pitfalls)
- Lack pf understanding of financial information
- Lack of specific, detailed strategies
- Unwillingness to personally guarantee any loans
- Starting the plan with unrealistic loan amounts or terms

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CHAPTER 10
ENTREPRENEURSHIP APPROACH TO MARKETING OF PRODUCTS AND SERVICES
* Marketing according to the American Marketing Association is defined as the activity, set of
institutions, and processes for creating, communicating, delivering and exchanging offerings that have
value for customers and society at large.
* Marketing has 4 important elements namely;
i. Creating ii. Communicating iii. Delivering iv. Exchanging
* Need are basic human requirements e.g. food, water, shelter …
* Needs become want when it is directed to specific objects that might satisfy the need
* Demands are wants for specific products backed by an ability to pay.
* Marketing starts with the needs of the customers and ends with his satisfaction.
* Examples of market are:
- Need markets - Product markets - Demographic market - Geographic market
- Voter market - Labour markets - Donor markets
* The 4 key customer markets are:
- Customer markets
- Business Markets
- Global Markets
- Non- Profit and Governmental Markets
* The following are the marketable entities available;
- Goods - Services - Events - Experiences
- Persons - Places - Properties - Organizations
- Information - Ideas.
* Marketing functions are the activities involved in bringing the goods produced from the place of
production to the point of consumption. It is classified into 3 broad categories namely:
- Exchange Functions
- Physical functions
- Facilitating functions
* A product is anything that can be offered to a market to satisfy need or want
* Products are classified on the basis of their characteristics, durability, tangibility and use.
* Non-durable goods are tangible goods consumed quickly and frequently purchased
* Services are intangible
* Impulse goods are purchased without planning or search effort.
Homogeneous shopping goods are similar In quality with differences in prices
* Service is any act or performance that one party can offer to another that is essentially intangible and
do not result in ownership of anything.
*Marketing tools are classified into 4 broad groups which are called the 4Ps of marketing namely;
- Product - Price - Place and - Promotion
* Marketing mix is designed to meet customer’s needs and these need are grouped into 4 Cs namely:
- Customer solution - Cost - Convenience - Communication
* A winning company is one that can meet customer needs economically, conveniently and with
effective communication

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* Lovelock & Wirtz suggested the 8Ps of marketing mix stated below:
- Price
- Place
- Products
- Promotion
- People
- Process
- Physical evidence
- Productivity and Quality
* There are 4 levels of micro marketing namely
- Segments - Niches - Local areas - Individuals
* Marketing research is the systematic design, collection, analysis and reporting of data and findings
relevant to a specific marketing situation facing the company.
* There are 3 categories of marketing research firms which are:
- Syndicated Service Research firms
- Custom marketing research firms
- Specialty- line marketing Research firms
* Marketing Research Process involves the following steps:
- Definition of the problem
- Develop the research plan
- Collect the information
- Analyze the information
- Making the decision
* Sources of data are basically divided into primary and secondary data. Primary data are those gathered
afresh for a specific purpose while secondary data are those collected for another purpose or are
already existing somewhere.
* 5 means through which primary data can be collected are:
- Observation - Focus groups - Surveys - Behavioural - Experimentation
* Research instruments are grouped into 3 main instruments namely;
- Questionnaires - Qualitative measures, and - Mechanical devices
* Qualitative techniques employed to understand customer experience are:
i. Shadowing - Behaviour mapping - Consumer Journey
- Camera journals - Extreme interviews - Storytelling
- Un-focus groups - Mechanical devices
* The following are contact methods used by marketing researchers;
i. Mail Questionnaire
ii. Telephone Interview
iii. Personal Interview
iv. Online interview

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CHAPTER 11
HUMAN RESOURCES MANAGEMENT PRACTICES FOR ENTREPRENEURSHIP
* The goal of human resource management (HRM) is to maximize employees’ contributions In order to
achieve optimal productivity and effectiveness, while simultaneously attaining individual objectives.
* The basic goal of human resource planning is to predict the future and based on these predictions,
implement programmes to avoid anticipated problems.
* Steps in selection process include:
- Application pool
- Preliminary screening and interview - Application bank/form - Selection test
- Interview - Background investigation - Physical examination
- Approval by appropriate authority - Final employment decision - Evaluation
* Training refers to a planned effort by a company to facilitate employees’ learning of job related
competencies.
* The importance of employee training includes
- It improves morale of employees
- It lessen the burden of supervision
- It helps to reduce accidents
- Chances of Promotion is increased
- it leads to increased productivity
* The types of employee training are
- On-the-job training: which takes place in a normal working situation
- Off-the-job training: which takes place away from the normal working conditions
* Compensation is the gain that peoples get for working in an organization in exchange for their time
and contributions they have made to the organization.
* Factors affecting compensation are
- Supply and demand of labour
-Ability to pay
- Management’s Philosophy
- Legislation
* The modes of compensation are
-Wages and salary - Incentives - Fringe Benefit and -Non-monetary benefits
* Performance appraisal is the systematic assessment of an individual with respect to his/her
performance.
* Succession plan is a deliberate and conscious act of placing a man or woman in a position of authority
to take over the affairs of another senior person.
* Succession planning process is outlined below
- Identify critical position - Identify competences -Identify succession management strategies
- Document and implement succession plan - Evaluate effectiveness

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CHAPTER 12
SOURCES OF FINANCE
*There are 2 major sources of finance which are; Internal and external sources of finance
* Internal source of finance is a situation where funds are raised from within the organization
* Internal funds can be sourced from the following
- Owner’s investment: This is a long-term source of finance
- Retained profit: This is undistributed profit arising from the organization’s activities.
- Provision for taxation
- Debt collection: this is a short term internal sources of finance
- Sales of fixed asset: this is a medium term internal sources of finance
* External sources of finance is a situation where funds are generated from outside the organization
* It could be short, medium and long term
* Short term refers to financial obligations that have a period of less than or equal to 1 year. It is used to
finance account receivables and not current assets
* Medium term are financial obligation that have a period of beyond 1year up to 7 years
* Long term are beyond 7 years up to 30 years and they are used to finance fixed assets
* Short term external sources of finance include;
- Borrowing from friends and relatives
- Borrowing from cooperatives
- Trade credits - Bank borrowing
- Factoring of debts: a factor is an agent that manages trade debts
- Accruals
- Acceptance credits
* Medium-term external sources of finance are:
- Term loans
- Hire purchase
- Lease agreement
* A lease is a contract between the owner of an asset(lessor) and the user of the asset (lessee) granting
the lessee the exclusive right to use the asset for an agreed period in return for the rental payment.
* Long-term external source of finance is generally divided into Bonds and Shares
* Bond represent a long-term borrowing by corporation or government agencies. The different classes
of bonds are
- Mortgage bond - Debenture bond - Convertible bond
- Callable bond - Serial bond.
* Share are generally of 2 types
- Ordinary share/common share/ stocks
- Preference/preferred stock : P.s are generally callable
* Preference shares can be classified into
- Cumulative P.S - Participating P.S - Convertible P.S
* Government specialized finance programmes and schemes in Nigeria includes the following
- Agricultural Credit Guarantee Scheme Fund (ACGSF)
- Small and Medium Enterprise Equity Investment Scheme (SMEEIS)
- Rural finance institution- Building programme (RUFIN)

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CHAPTER 13
BASIC ACCOUNTING RECORDS FOR ENTREPREURS
*Basic accounting records for entrepreneurs are the necessary records that must be kept to ensure that
business assets are well managed and protected with a view to achieve business objectives.
* Financial statements are the accounts prepared to render the stewardship responsibility of the
management to the owners or by the owners to himself.
* The laws/regulation guiding financial statements are:
- Companies and Allied matters Act (CAMA)
- Generally Accepted Accounting principles ( GAAP)
- International Financial Reporting Standards (IFRS)
* Accounting concepts include:
- Cost concept
- Accrual concept: This states that revenue and expenses are taken into account when they occur and
not when cash is received or paid out.
- Going Concern Concept: assumes that business entity is solvent and will continue to be in business for
the foreseeable future.
- Prudence/Realization concept: states that revenue or profit is included in the statement of financiap
position only when they are realized, but liabilities are included when there is reasonable possibility of
incurring them.
- Entity Concept: States that accounting records should reflect the financial activities of a specific
business or organization and not those of its owners or employees
- Matching concept: holds that transaction affecting both revenue and expenses should be recognized in
the same accounting period with a view to determining the performance of that period.
* Accounting conventions helps in interpreting conflicting concepts. They include:
- Conservation convention
- Consistency Convention
- Materiality convention
* The most important types of account are: Statement of profit or loss and other Comprehensive
Income (Profit or loss account) and Statement of Financial Position (Balance Sheet)
* Accounting equations are given as
Assets = Capital (for a business that owes no liabilities)
Assets = Capital + Liabilities (for a business that owes liabilities)
*Items in the statement of financial position are
- Assets: Current and non-current assets
- Liabilities: Long-term and current liabilities
* Item in Statement of profit or loss and other Comprehensive incomes
- Revenue
- Expenses
* Profit/loss = Total revenue – Total expenses incurred in generating the revenue
* The overriding principle in book keeping and account is called DOUBLE ENTRY PRINCIPLE
* To debit an account means to enter the transaction figure on the L.H.S (debit side) and to credit an
account means to enter the figures on the R.H.S (credit side)
* The account that gives values is credited and the account that receives value is debited.

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* Prime entry books includes:

- Cash book: Used to record transactions that are conducted both in cash and through the issue of
cheques.
- Sales Day book: records credit sales
- Purchase day book: records credit purchases
- Return Inward book: used to account for goods/inventories earlier sold but later returned into the
business due to defective items.
- Return Outward book: This book records goods/inventories earlier purchased by the business but later
returned to the suppliers
- Journal: this is a record into which all transactions are entered
* Journal is used for the following
- Purchase and sales of assets on credit
- Opening and Closing entries
- Correction of errors
- Transfer between accounts; and
- Any other items not entered in another book of original entry.
* The cash book has the same format as an account format. 2 types exist namely;
- Two column cash book; and
- Three- column cash book
* Trial balance shows the arithmetical accuracy of the double entry principle as the debit and credit
balance totals in the trial balance must agree
* The type of accounts/ financial statement to be prepared depends on the type of business one is
doing. They include:
- Trading business and
-Manufacturing business

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CHAPTER 14
APPLICATION OF ENGINEERING INVENTION AND INNOVATION TO ENTREPRENEURSHIP
* Invention is the new and obvious improvement to a process, object or project
* Engineering id deduced from 2 Latin words “ingenium” (cleverness) and “Ingeniare”
(to devise/contrive)
* Education is the driving force for entrepreneurship development
*In taking invention to a product, Applied or Commercial Research (Context-based research) or Basic
Research (Context-free research) is used.
* Technology readiness levels (TRLs) are a systematic metric/measurement system that supports
assessments of the maturity of a particular technology and the consistent comparison of maturity
between different types of technology.
* Mankins summarized TRLs as follows:
TRL1: Basic principles observed and reported
TRL2: Technology concept and/or application formulated
TRL3: Analytical and experimental critical function and/or characteristic proof-of concept
TRL4: Component and/or breadboard validation in laboratory environment
TRL5: Component and/or breadboard validation in relevant environment
TRL6: System/subsystem model or prototype demonstration in a relevant environment
TRL7: System prototype demonstration in a space environment
TRL 8: Actual system completed and “flight qualified” through test and demonstration
TRL9: Actual System “flight proven” through successful mission operations

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CHAPTER 15
ENTREPRENEURSHIP AND LAW
* Regulatory agencies established by the govt. to facilitate the supervision of entrepreneurship in
Nigeria include:
- Standard Organization of Nigeria (SON)
- National Agency for Food and Drug Administration Control (NAFDAC)
- National Drug Law Enforcement Agency (NDLEA)
- Federal Environmental Protection Agency (FEPA)
- State Environmental Protection Agency (SEPA)
* Corporate Affairs Commission (CAC) is a major innovation of the companies and allied matters act
(CAMA) in 1990
* The CAC has 15members appointed from various professions.
* To be eligible for appointment as a Registrar General of CAC, an individual must have been qualified
to practice law in Nigeria for not less than 10years, he must have had experience in the company law
practice or administration for not less than 8years
* The Registrar General is Chief Executive Officer (C.E.O) of the commission

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CHAPTER 16
WORKSHOP PRACTICE FOR ENTREPRENEURS
* Measurement is the assignment of numbers to material things to represent the relations among them
with respect to particular properties.
* “Metro” and “Logy” and Greek words meaning Measurement and Science
* Areas of metrology includes
- Dimensional Metrology: deals with measurement of length and angle
- Mass Metrology: deals with mass measurement
- Illumination Metrology: Deals with measurement of light
- Chemical Metrology: deals with all types of measurement in Chemistry
- Legal Metrology: deals with mandatory measurement in a community to ensure that correct quantities
are given against their monetary values in everyday trade. It relates in particular to volume,mass and
length.
QUANTITY UNITS SYMBOLS MEASURING TOOLS SKILL
Length Metre, inch, Feet M Metre Rule, Tape, Yardstick Fashion designing,
Yard Fabrication, Plumbing etc.
Time Second S Stopwatch, Timer Bakery, Vehicle
Maintenance etc.
Volume Litre L Volumetric Flask, Vegetable oil Production,
Measuring Cylinder. Paint production, etc.
Area Square metre M2 Tape Rule, Steel Rule… Brick Making, Ceramics
and Tiles making.
Mass Kilogram Kg Weighing balance Soap, detergent,
toothpaste making…
Temperature Degree Celsius/ oC/o F Thermometer, Food Processing,
Fahrenheit Thermocouple etc. Refrigeration and air
conditioning…

Electric Ampere A Multimetre Vehicle Maintenance,

Current Radio/TV/Computer etc.
Viscosity Poise Rheometre Vegetable oil making,
Paint making, Soap and
Toothpaste.

* Characteristics of data reliability include

- Accuracy
- Precision
- Reproducibility.
* FID (Factory of Inspectorate Department of Nigeria) has the permission to ensure safety, health and
welfare of persons employed in factory and similar engineering establishment.
* Lubrication is the process of reducing friction between moving/sliding surfaces

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*Lubricant is a substance applied between moving/sliding surfaces to reduce the friction between the
surfaces.
* Functions of lubricants include:
-It reduces wear and tear of the surfaces applied
- It reduces expansion of metal
- It reduces power loss in internal combustion energy
- it acts as coolant of metal due to heat transfer media
- It reduce maintenance cost
* Types of lubricants are
- Liquid lubricants e.g. Engine Oil
- Semi-Liquid lubricant e.g. Grease
- Solid Lubricant e.g. Crankshaft journal bearing
* Properties of lubricants include;
- Viscosity
- Flash/fire point
- Cloud/pour point
- Aniline point
- Corrosion Stability.
* Quality assurance are the planned and systematic activities implemented within the quality system
that can be demonstrated to provide confidence that a product or service will fulfil requirements for
quality.
* Quality Control is the operational techniques and activities used to fulfil requirements of quality.

WE WISH YOU ALL SUCCESS AT THE VERY BEST…

Note: Flee from examination malpractice and all forms of immoralities before, during and after
examination.

Remember the Optimum success is for man to be reconciled to God on earth and in heaven, and Jesus is
the only way to achieving that, do not miss out on these great offer whilst settling down for the menial
offer that the world presents. Come to Jesus Today and Be saved. Jesus Loves You.

Shalom!

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ECWA STUDENTS’ MINISTRY UNILORIN PS CHAPTER ACADEMIC UNIT