Entrepreneurship - Revision Exam Questions (Certificate Level, Kenya)

Section A: Multiple Choice Questions (10 Marks)

  1. What is the primary goal of entrepreneurship?
    1. To maximize profits at all costs
    2. To identify opportunities and create value
    3. To avoid all business risks
    4. To work alone without employees
      Answer: b) To identify opportunities and create value
  2. Which of these is NOT a characteristic of a successful entrepreneur?
    1. Risk-taking
    2. Procrastination
    3. Innovation
    4. Persistence
      Answer: b) Procrastination
  3. What does SWOT stand for in business analysis?
    1. Strengths, Weaknesses, Opportunities, Threats
    2. Sales, Workforce, Operations, Technology
    3. Strategy, Workflow, Organization, Training
    4. None of the above
      Answer: a) Strengths, Weaknesses, Opportunities, Threats
  4. Which document outlines a business’s goals and strategies?
    1. Invoice
    2. Business plan
    3. Receipt
    4. Memorandum
      Answer: b) Business plan
  5. What is the main purpose of market research?
    1. To increase product prices
    2. To understand customer needs and preferences
    3. To reduce production costs
    4. To ignore competition
      Answer: b) To understand customer needs and preferences

Section B: Short Answer Questions (20 Marks)

  1. Define the term “entrepreneur” and give one example of a famous entrepreneur in Kenya.
    Answer:
    • Definition: An entrepreneur is someone who starts and manages a business, taking on financial risks to make a profit.
    • Example: Chris Kirubi (investor and industrialist) or Tabitha Karanja (founder of Keroche Breweries).
  2. List three sources of business ideas.
    Answer:
    • Personal hobbies or skills
    • Market gaps (unmet customer needs)
    • Technological advancements
  3. What is the importance of a business plan?
    Answer:
    • Guides the business operations and strategy.
    • Helps secure funding from investors or banks.
    • Provides a roadmap for growth and decision-making.
  4. Name two types of business ownership structures in Kenya.
    Answer:
    • Sole proprietorship
    • Limited liability company (LLC)
  5. Explain the term “target market.”
    Answer:
    • A specific group of customers a business aims to serve, based on factors like age, income, or location.

Section C: Case Study Questions (20 Marks)

  1. Case Study: Jane wants to start a bakery in her local town. She has Ksh 200,000 in savings but no experience in baking.
  • a) What are two challenges Jane might face?
    Answer:
    • Lack of baking skills/experience.
    • Competition from established bakeries.
  • b) Suggest two solutions to help her succeed.
    Answer:
    • Take baking classes or hire a skilled baker.
    • Offer unique products (e.g., gluten-free cakes) to stand out.
  1. Your friend wants to start a mobile money agency but doesn’t know how to attract customers. Advise them.
    Answer:
  • Offer promotions (e.g., “Zero withdrawal fees for the first month”).
  • Use social media (WhatsApp, Facebook) to advertise.
  • Provide excellent customer service to build loyalty.

Section D: Essay Questions (30 Marks)

  1. Discuss five reasons why small businesses fail in Kenya and suggest solutions.
    Answer:
    • Poor management: Lack of skills → Offer training programs.
    • Insufficient capital: Secure loans or partnerships.
    • Competition: Differentiate with unique products/services.
    • Poor location: Research high-traffic areas before starting.
    • Ignoring customer feedback: Adapt based on client needs.
  2. Explain the role of innovation in entrepreneurship, with examples from Kenya.
    Answer:
    • Definition: Innovation means introducing new ideas, products, or methods.
    • Examples:
      • M-Pesa revolutionized mobile banking.
      • Twiga Foods uses tech to connect farmers and vendors.
  3. Describe the steps involved in starting a successful business in Kenya.
    Answer:
    1. Idea generation: Identify a market need.
    2. Market research: Analyze competitors and customers.
    3. Business plan: Outline goals, strategies, and finances.
    4. Legal registration: Register with KRA and obtain licenses.
    5. Launch and marketing: Promote the business effectively.

Bonus: True or False (5 Marks)

  1. Indicate whether these statements are True (T) or False (F):
    1. Entrepreneurs must always avoid risks. (F)
    1. A target market is a specific group of customers. (T)
    1. A business plan is unnecessary for small businesses. (F)
    1. Innovation can give a business a competitive edge. (T)
    1. Profit is the only measure of business success. (F)