Salesmanship WASSCE (SC), 2017

Question 2

 

  • Distinguish between entrepreneur and entrepreneurship.
  • State six sources of finance to an entrepreneur.
  •  

    Observation

    Some candidates attempted and did well in the question while others could not distinguish between entrepreneur and entrepreneurship.

    The responses expected from candidates are:

    2(a)      Difference between entrepreneur and entrepreneurship:

    An entrepreneur is a person who organizes and manages a business undertaking,
    assuming the risk for the sake of profit while entrepreneurship is a process/act/practice of organizing the factors of production and taking risk to create wealth.         

                 (b)       The sources of finance to an entrepreneur:

    (i)         Personal savings - Finance could be obtained from personal savings of the
    owner of a business;
    (ii)        Loans from friends and relations - The business owner can obtain finance
    from friends and relations;
    (iii)       Retained profit - Undistributed profits can be ploughed back into the enterprise;
    (iv)       Loans from Banks - Funding of firms is possible by seeking for loans from
    commercial banks;
    (v)        Debt factoring - This is the process where the entrepreneur engages a factor to sell his/her debts at a discount;
    (vi)       Bank overdraft - This is a situation where firms could withdraw over and
    above the balance in the current account;
    (vii)      Trade credits - The entrepreneur either buy raw materials or lease equipment
    and pays for it later;
    (viii)     Grants and subsidies – an entrepreneur could raise finance through government grants and subsidies;
    (ix)       Family inheritance – An entrepreneur could raise finance from sales of family assets;

    (x)        Prepayments – An entrepreneur could raise finance through advance payments from customers.