Entrepreneurship - Additional Revision Questions (Certificate Level, Kenya)

Section A: Types of Entrepreneurs

  1. Which type of entrepreneur focuses on creating new products/services?
    1. Social entrepreneur
    2. Innovative entrepreneur
    3. Imitative entrepreneur
    4. Franchisee
      Answer: b) Innovative entrepreneur
  2. A person who buys the rights to operate a proven business model is called:
    1. Serial entrepreneur
    2. Franchisee
    3. Intrapreneur
    4. Scalable entrepreneur
      Answer: b) Franchisee
  3. Give one example of a social entrepreneur in Kenya and their initiative.
    Answer:
    • Example: Dr. Wandia Gichuru (Vivo Activewear) promoting ethical fashion.

Section B: Qualities of an Entrepreneur

  1. Which quality helps entrepreneurs persist despite failures?
    1. Resilience
    2. Procrastination
    3. Rigidity
    4. Indecisiveness
      Answer: a) Resilience
  2. List three personal qualities of a successful entrepreneur.
    Answer:
    • Creativity
    • Risk-taking
    • Self-discipline

Section C: Entrepreneurship Opportunity

  1. An entrepreneur opening a solar lamp business in a rural area is exploiting:
    1. Technological opportunity
    2. Market gap opportunity
    3. Regulatory opportunity
    4. Franchise opportunity
      Answer: b) Market gap opportunity
  2. How can population trends create business opportunities?
    Answer:
    • Growing youth population → Demand for tech services/education.

Section D: Sources of Business Ideas

  1. Which source involves improving existing products?
    1. Market research
    2. Invention
    3. Adaptation
    4. Franchising
      Answer: c) Adaptation
  2. Name two ways hobbies can generate business ideas.
    Answer:
    • Baking hobby → Home bakery business.
    • Craft-making → Online handicraft store.

Section E: Strategies for Generating Ideas

  1. Brainstorming with a team helps to:
    1. Limit creativity
    2. Generate diverse ideas
    3. Avoid market research
    4. Copy competitors
      Answer: b) Generate diverse ideas
  2. What is “problem-solving” as an idea-generation strategy?
    Answer:
    • Identifying pain points (e.g., poor waste management → Recycling business).

Section F: Entrepreneurial Motivation

  1. Which is a PULL factor for entrepreneurship?
    1. Job loss
    2. Desire for independence
    3. Economic recession
    4. Family pressure
      Answer: b) Desire for independence
  2. How does access to funding motivate entrepreneurs?
    Answer:
    • Enables them to start/expand businesses (e.g., loans, grants).

Section G: Starting a New Business

  1. The first step in starting a business is:
    1. Hiring employees
    2. Registering the business
    3. Identifying a business idea
    4. Buying equipment
      Answer: c) Identifying a business idea
  2. Why is a business license important?
    Answer:
    • Ensures legal operation and avoids penalties.

Section H: Business Plan

  1. Which section of a business plan outlines financial projections?
    1. Executive summary
    2. Marketing plan
    3. Financial plan
    4. Appendix
      Answer: c) Financial plan
  2. List three components of a business plan.
    Answer:
    • Market analysis
    • Operational plan
    • SWOT analysis

Section I: Enterprise Social Responsibility

  1. A company sponsoring local education programs is practicing:
    1. Profit maximization
    2. Corporate social responsibility (CSR)
    3. Exploitation
    4. Tax evasion
      Answer: b) Corporate social responsibility (CSR)
  2. Give two benefits of CSR to a business.
    Answer:
    • Enhances brand reputation.
    • Builds customer loyalty.

Section J: Case Study (15 Marks)

  1. Case Study:
    • Mwangi wants to start a clean-energy stove business in Kibera. Most residents use charcoal, causing health issues.
      a) Identify the entrepreneurship opportunity here.
      Answer:
    • Addressing health/environmental concerns with clean energy.
      b) Suggest two CSR activities Mwangi could adopt.
      Answer:
    • Free stove demonstrations to educate residents.
    • Partnering with clinics to highlight health benefits.

Bonus: Matching Exercise (5 Marks)

  1. Match the term to its definition:
    • i) Scalable entrepreneur
    • ii) Intrapreneur
    • iii) Imitative entrepreneur
      Definitions:
      1. Replicates existing business models.
      2. Grows business rapidly (e.g., tech startups).
      3. Innovates within an existing company.
        Answer:
    • i → b, ii → c, iii → a

Entrepreneurship - High-Weight Exam Questions (Certificate Level, Kenya)

Section A: Extended Essay Questions (15-20 Marks Each)

1. Types of Entrepreneurs

Question:
“Kenya has seen a rise in social entrepreneurs like Lorna Rutto (EcoPost) and James Mwangi (Dalberg). Compare and contrast social entrepreneurship with commercial entrepreneurship, using local examples. Discuss which type is more sustainable in Kenya’s context and justify your answer.”

Key Points for Answer:
- Definitions: Social vs. commercial entrepreneurship.
- Examples: EcoPost (recycling) vs. Safaricom (profit-driven).
- Sustainability Factors:
- Social impact vs. profit motives.
- Access to funding (grants vs. investors).
- Kenyan Context: High unemployment, environmental issues → Social ventures may have longer-term impact.

2. Business Plan

Question:
“Your friend wants to start an agribusiness in Machakos County but has no business plan. Draft a detailed executive summary and marketing plan section for their business, highlighting how it will address food security challenges in the region. (Word limit: 500 words).”

Answer Guide:
- Executive Summary:
- Business name, mission (e.g., “Freshkate Farms: Sustainable Irrigation Solutions”).
- Goals: Increase crop yields, reduce post-harvest losses.
- Marketing Plan:
- Target Market: Smallholder farmers, local markets.
- Strategies:
- Mobile app for weather/price updates (leverage high phone penetration).
- Partnerships with county government for training.

3. Enterprise Social Responsibility (ESR)

Question:
“Critically evaluate the statement: ‘ESR is a waste of resources for small businesses in Kenya.’ Use examples from Kenyan companies to support your argument.”

Expected Response:
- Arguments For ESR:
- Example: Safaricom’s M-Pesa Academy improves education → brand loyalty.
- Small biz benefits: Customer trust (e.g., organic food startups).
- Arguments Against ESR:
- High costs for SMEs (e.g., Mama Mboga can’t afford CSR).
- Conclusion: ESR should be scaled to business size.

Section B: Case Study Analysis (25 Marks)

4. Starting a New Business

Case:
“Wanjiku runs a mitumba (second-hand clothes) business in Gikomba. She now wants to expand to online sales but lacks tech skills. Her competitors use Instagram and WhatsApp for orders.”

Tasks:
a) Analyze 3 challenges Wanjiku might face in digitizing her business. (9 marks)
- Answer:
1. Limited digital literacy.
2. High data costs for online marketing.
3. Logistics (delivery, payments).

  1. Propose a 6-month digital strategy for her, including tools and partnerships. (16 marks)
    • Answer:
      • Tools: WhatsApp Business, simple website (Jumia Partner).
      • Training: Free workshops at Kenya National Library.
      • Partnerships: Collaborate with boda boda riders for deliveries.

Section C: Policy and Innovation (20 Marks)

5. Entrepreneurial Motivation

Question:
“Kenya’s Youth Enterprise Development Fund (YEDF) has been criticized for low uptake. Design a 10-point action plan to motivate more young entrepreneurs to apply, addressing:
- Awareness
- Accessibility
- Post-funding support”

Sample Plan:
1. Awareness: Roadshows in universities + TikTok campaigns.
2. Accessibility: Reduce paperwork; use USSD code applications.
3. Support: Mandatory mentorship pairing with successful fund beneficiaries.

Section D: Practical Scenario (30 Marks)

6. Business Idea Generation

Scenario:
“You are tasked with creating a business to reduce plastic waste in Nairobi’s informal settlements. Your budget is Ksh 500,000.”

Deliverables:
a) Develop a business concept using the “problem-solving” strategy. (10 marks)
- Example: “TakaSmart Recycling Hub” – pays residents for plastic waste.

  1. Create a SWOT analysis for your idea. (10 marks)
    • Strengths: High demand for waste solutions.
    • Weaknesses: Limited initial capital.
    • Opportunities: Partnerships with county government.
    • Threats: Competition from informal waste pickers.
  2. Outline a 1-year implementation timeline. (10 marks)
    • Months 1-3: Community sensitization, buy collection tools.
    • Months 4-6: Pilot in Mathare slum.
    • Months 7-12: Scale to other estates.

Entrepreneurship Exam Questions (Certificate Level, Kenya)

Section A: Business Fundamentals (20 Marks)

1. Business Planning

Question: Explain FIVE essential components of a business plan and their importance to a new entrepreneur. (10 marks)

Detailed Answer: 1. Executive Summary - Brief overview of the business (1 mark) - Importance: Helps investors quickly understand the business concept (1 mark)

  1. Market Analysis - Study of target customers and competition (1 mark)
    • Importance: Identifies business opportunities and risks (1 mark)
  2. Products/Services Description - Details what the business offers (1 mark)
    • Importance: Clarifies the value proposition to customers (1 mark)
  3. Marketing Strategy - Plan to attract and retain customers (1 mark)
    • Importance: Ensures the business can generate sales (1 mark)
  4. Financial Plan - Projections of income, expenses and profitability (1 mark)
    • Importance: Demonstrates business viability to lenders (1 mark)

2. Business Registration

Question: Outline the step-by-step process of registering a sole proprietorship business in Kenya. (10 marks)

Detailed Answer: 1. Conduct a business name search at eCitizen (1 mark) 2. Reserve the business name with Registrar of Businesses (1 mark) 3. Obtain a KRA PIN certificate (1 mark) 4. Register for VAT if applicable (1 mark) 5. Obtain necessary county government licenses (1 mark) 6. Register with NSSF and NHIF if hiring employees (1 mark) 7. Display business registration certificate at premises (1 mark) 8. Renew business license annually (1 mark) 9. Keep proper financial records (1 mark) 10. File annual tax returns (1 mark)

Section B: Entrepreneurial Skills (30 Marks)

3. Entrepreneurial Traits

Question: Discuss FIVE personal characteristics of successful entrepreneurs and how each contributes to business success. (15 marks)

Detailed Answer: 1. Innovation (3 marks) - Ability to create new solutions to problems - Example: M-Pesa revolutionizing mobile banking

  1. Risk-taking (3 marks)
    • Willingness to try new ventures despite uncertainty
    • Example: Starting business in new market segments
  2. Persistence (3 marks)
    • Continuing despite challenges and failures
    • Example: Trying multiple business ideas before succeeding
  3. Leadership (3 marks)
    • Ability to guide and motivate employees
    • Example: Creating strong company culture
  4. Financial Literacy (3 marks)
    • Understanding money management
    • Example: Proper budgeting and cash flow management

4. Business Ethics

Question: Explain the concept of “ethical business practices” and give THREE examples of unethical behavior that entrepreneurs should avoid. (15 marks)

Detailed Answer: Definition: (5 marks) Ethical business practices refer to conducting business in a morally responsible way that considers: - Fair treatment of employees - Honest dealings with customers - Environmental responsibility - Compliance with laws and regulations

Unethical Practices to Avoid: (10 marks) 1. False Advertising (3 marks) - Misrepresenting product capabilities - Example: Claiming a product cures diseases without proof

  1. Exploitation of Workers (3 marks)
    • Paying below minimum wage
    • Example: Forcing overtime without compensation
  2. Tax Evasion (4 marks)
    • Underreporting income to avoid taxes
    • Example: Keeping two sets of financial records

Section C: Business Operations (30 Marks)

5. Financial Management

Question: Describe the importance of financial records and explain THREE types of records a small business should maintain. (15 marks)

Detailed Answer: Importance: (6 marks) - Track business performance - Required for tax compliance - Helps in securing loans - Enables better decision making

Types of Records: (9 marks) 1. Sales Records - Daily transactions and invoices (3 marks) 2. Expense Records - Receipts for all business purchases (3 marks) 3. Payroll Records - Employee salaries and deductions (3 marks)

6. Marketing Strategies

Question: Compare traditional and digital marketing methods, giving TWO advantages of each for small businesses in Kenya. (15 marks)

Detailed Answer: Traditional Marketing: (7 marks) 1. Advantage: Reaches local customers effectively (3 marks) - Example: Posters in community areas 2. Advantage: Doesn’t require technical skills (4 marks) - Example: Word-of-mouth referrals

Digital Marketing: (8 marks) 1. Advantage: Lower cost than traditional methods (4 marks) - Example: Social media ads 2. Advantage: Wider reach beyond local area (4 marks) - Example: Selling countrywide via Jumia

Section D: Case Study (20 Marks)

7. Business Challenges

Case: “Mama Nia runs a small restaurant in Nakuru. Recently, her costs have increased while customers have decreased. She’s considering closing down.”

Tasks: a) Identify FOUR possible causes of Mama Nia’s business problems (8 marks)

Detailed Answer: 1. Rising food prices due to inflation (2 marks) 2. Increased competition from new restaurants (2 marks) 3. Poor customer service driving away clients (2 marks) 4. Lack of proper marketing to attract customers (2 marks)

  1. Suggest THREE strategies she could use to revive the business (12 marks)

Detailed Answer: 1. Cost Control (4 marks) - Negotiate with suppliers for better prices - Reduce food waste through better inventory management

  1. Marketing Improvements (4 marks)
    • Create social media presence
    • Offer loyalty program for repeat customers
  2. Menu Innovation (4 marks)
    • Introduce new affordable meal options
    • Offer daily specials to attract customers