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Section outline
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This textbook is part of school curriculum reform in Rwanda in particular how the
curriculum is taught. It is hoped that this change will make what you learn in school
more useful both at school and when you leave school.
In the past, the main reason for schooling was to obtain knowledge – that is facts
and ideas about each subject. But nowadays, the main reason due to changes that
are happening in the environment and the job market is becoming more competitive.
Therefore, you should be able to use the knowledge you will obtain from this text
book to develop competencies. These competencies include, ability to think for
yourself, ability to communicate with others and to explain what you have learnt, as
well as being creative in developing your own ideas, not just following those of the
Teacher and the textbook. In this textbook, different approaches are used to help
you to develop competences and make this textbook user friendly. Among these
approaches are the following:Activity-based learning
These activities present you with instructions to follow that will help you to learn
and discover others for yourself. You already have knowledge and many ideas
based on the experiences you have had and your life within community. Some of
the activities, therefore, require you to use the knowledge and ideas you already
have.
In using this book, therefore, it is essential that you do all the activities and follow
all the instructions. You will not learn very well unless you complete these activities
provided. They are the most important part of the Textbook.
In some ways this makes learning more of a challenge. It is usually challenging
to think for yourself than to copy what the Teacher tells you. But if you take up
this challenge you will become a better person and become more productive and
successful in your life.Group work
You can also learn a lot from other people in your class. If you have a problem, it
can often be solved by sharing it with others. Many of the activities in the book,
therefore, involve discussion. Your teacher will help to form and organize these
groups in a conducive learning environment facing each other. You cannot discuss
properly unless you are facing each other.Research
One of the objectives of the new curriculum is to help you discover for yourself.
Some activities, therefore, require you to do research using Textbooks in the library,
the internet if your school has access, or any other source such as newspapers and
magazines etc. This means that you will develop skills of learning for yourself that
can help you both when still in school and after school. Your teacher will help in
case your school does not have a fully equipped library or internet.Skills lab
Entrepreneurship subject is more practical than theoretical. That is why it requires
time for skills lab which is a regular time on normal time table when students are
required to complete learning activities working in manageable groups.During skills lab activity students are given an opportunity to talk more and get
more involved in the lesson than teachers. Students receive constructive feedback
on work done (Teacher gives quality feedback on student presentations)The Skills Lab prepares students to complete portfolio assignments on their
own after classes. So, classroom activity should connect directly to the portfolio
assignment and during the skills lab the teacher makes sure that he/she links the
unit with the portfolio assignment, student’s business club and back home projects.Icons
To guide you, each activity in the book is marked by a symbol or icon to show you
what kind of activity it is. The icons are as follows:
Thinking icon/Introductory activityThis indicates thinking for yourself or groups discussion. You are expected to use
your own knowledge or experience, or think about what you have read in the book,
and answer questions individually or as a group activity..
This icon reminds you to link your previous knowledge with the topic you are going
to learn. As a student feel free to express what you already know about the topic.
What is most important is not giving the right answer but the contribution you are
making towards what you are going to learn.
Some activities require you to complete them in your exercise book or any other
book. It is time for you to show if you have understood the lesson by answering the
questions provided.
This icon indicates a practical activity, such as a role play to solve a problem or
complete an activity, participating in a debate and following the instructions
provided by the teacher. These activities will help you to obtain practical skills
which you can use even after school.
This icon requires you to write down the responses to activities including
experiments, case studies and other activities which assess the attainment of the
competences. Tutors are expected to observe the changes in you as a student
teacher..Activities: 0 -
Key Unit competence:
To be able to judge different ways of being entrepreneurs and create their own
journey for successful businesses
Starting a business is exciting and active experience. However, it requires one to
work hard, in return of rewards and enjoyment. There are some seven specific
steps/experiences you should think about before you start the business.
• Step 1: Inspiration – What is your motivation for becoming an entrepreneur?
• Step 2: Preparation – Do you have what it takes to be an entrepreneur?
• Step 3: Assessment – What idea do you plan to offer through your business?
• Step 4: Exploring resources – What resources and characteristics do you
need to start a business?
• Step 5: Business plan – What type of business structure and business
model will your business have?
• Step 6: Navigation – In what direction will you take your business? Where
will you go for guidance?
• Step 7: Launch – When and how will you launch your business?
The decision to become an entrepreneur is an act of courage. It is estimated
that 50-70% of entrepreneurial startups fail in the first five years. 90% of all new
businesses do not survive beyond the tenth year. And only three out of 100
companies are still prosperous after 40 years.While it is true that entrepreneurs are driven to make a difference in the world, the
entrepreneurial journey has five distinct stages namely:
• Survival
• Success
• Sustainability
• Significance
• Succession
Each of these stages has distinct characteristics:1. Survival:
The first stage is primarily focused on survival. The challenge is to find a success
pattern that will allow the business to survive and, ideally, prosper. This stage is
characterized by a lot of experimentation. It is a period of trial and error.
2. Success:
In this stage, the entrepreneur has identified a success pattern that allows
the business to grow in a more consistent manner. Often, this stage is initially
characterized by explosive growth. The ones that prosper are able to adapt and
move to the third stage.
3. Sustainability:
Successful businesses continually redefine themselves. In a constantly changing
and ever more complex environment, sustainability of the enterprise becomes the
challenge. For entrepreneurs, finding the right pattern of growth in work and life is
the key to sustainability. At this stage, refining the systems and processes in your
business is key. When the business is sustainable, it allows entrepreneurs to focus
on what is important to them.4. Significance:
Entrepreneurs are driven to make a difference in the world. Their business becomes
the means by which they can express what is important to them. it is only when
you have mastered the process of growing your business that you are able to fully
express what is significant or meaningful in your work.5. Succession:
At a point in time, the entrepreneur must plan for the transfer of the business to
others. This may involve the sale of the business to a third party or the transition
to family members or associates. The earlier an entrepreneur puts a succession
plan in place, the more likely the business will continue beyond the entrepreneur’s
involvement.
Your business stage says a lot about where your focus should be as an owner.
Understanding the business phase will help you identify how to act in order to
propel to the next stage though there is no universal guide to being a successful
Entrepreneur’s actions at each stage are discussed as below:
Stage 1: Hustler
When you first start your business, you’re a hustler. At this point, you’re managing
all aspects of the business, so it can be hard to pinpoint what should take priority
to elevate your business to the next phase.
Challenges: Nothing happens without you. It can feel like you’re constantly putting
out fires and you still haven’t identified a steady lead funnel.Challenges: Nothing happens without you. It can feel like you’re constantly putting
out fires and you still haven’t identified a steady lead funnel.Opportunity: Mastering sales is crucial. By aligning your time and goals with your
revenue needs, you will become more productive and generate more revenue to
gain the resources needed to scale.Stage 3: Visionary
As a visionary, you have grown your business organically which opens up the space
to allow you to start working on the business. You’re starting to delegate the sales
to someone else in your organization and instead you’re turning your attention to
hiring top talent to fill your organization.
Challenges: It can be uncomfortable as you continue to give up control because
when you have your hands in all aspects of the business, you prevent your team
from doing their job and create unnecessary bottlenecks.
Opportunity: Your leadership skills and ability to attract top talent will define your
success in this stage. Invest in yourself and invest in the people to help you lead the
company you have built.
Stage 4: Systemizer
As a systemizer, you are starting to build a leadership team that will enable you to
peel away from areas of the business. You will continue to grow the team but will
need to have protective measures in place to support the continued scale.
Challenges: With a desire to repeat your success, you will find it difficult to provide
the same product or experience at scale without turn-key systems in place.
Opportunity: As you navigate interim roles within the organization to support
the growth of the leadership team, you must build the systems with your newly
assigned leaders.Stage 5: Influencer
As an influencer, you have got the right people, systems, and product/service in
place. You have accomplished so much, but the road ahead has new challenges.
You will see bigger growth opportunities through external expansion tactics while
you continue to mitigate risks and threats.
Challenges: To continue pushing the limits of your people while driving to a
performance culture.Opportunity: To give your trusted leadership team the freedom to lead your people
and business to success.In nutshell, entrepreneurial stages with respective actions are summarized as
below:
In this unit, we are going to learn about entrepreneurial pathways of some of the
successful and impactful entrepreneurs in Rwanda.
i. SINA Gerard: A hard road to success
The following story is extracted and adapted from Hope magazine as posted on
13th November, 2012.
SINA Gerard is widely known as Rwanda’s foremost agri-business entrepreneur.
His interests are diverse spanning restaurants, bakeries, a juice and wine factory, a
school and extensive land holdings. Having started with practically nothing, his rise
to the top is a typical rag to riches story in Rwanda. Sina Gerard’s moving story is
the best example that opportunities in Rwanda’s agri-business sector can give real
entrepreneurs.
Started with a small bakery in 1983. His parents were farmers and he baked
products from the farm”, Sina recalls. After a while Sina Gerard ventured into
higher forms of value addition by making juices. “Agashya” is perhaps the best
known amongst the family of drinks by the entrepreneur while the “Akabanga”
hot sauce a very popular item is now set to break into export markets.
“With time my products become popular and that enabled my businesses to grow”,
he recalled during interview with Hope magazine. Once Sina Gerard’s company
known as Enterprise Urwibwutso was placed on a sound footing, he diversified his
portfolio to include new ones like manufacture of banana wines which he named
“Akarusho”. Sina Gerard is a true business visionary. One way of ascertaining
such a claim is his firm belief in what education can do to the sustainability of his
rapidly growing business. He believes that proper education for his employees is a
key driver of taking his growing empire to the next level. Sina Gerard Educational
Centre which is a modern educational institution that includes nursery, primary and
secondary sections should be seen in this light.
During his interview, he also revealed: “I finally thought it worthwhile to support the
school project since I saw the need to be responsible for my employees and their
families. They work for my company and I make a profit out of their work. The least
I can do for them is to give back something to them. That is what I am doing with
the school project. The schooling is free and the children can attend from nursery
to high school”. He added; “It benefits the children and parents but in a way it also
benefits me. Because, I would rather have educated staff than uneducated ones”.
If anything education is at the forefront of propelling Enteprise Urubwitso since
offering extension services to farmers that enables them to produce more for
less is a corner stone of the company’s success so far. Gerard continued saying
that there is increased capacity over time that gives room for exports somethingthey never thought of initially. But that is now very possible since they brought in
experiences from other countries that have enabled them to achieve the best results.
This makes him very proud. His dream is that Rwandan farmers should aspire to
deliver the best quality just the way others are doing it in the first world countries.
SINA said that the increased capacity of his contracted framers places them at a
vantage position of looking beyond his company for sustaining their livelihoods.
Enterprise Urubwitso has state of the art plant production capacity. The sky is the
limit for Enteprise Urubwitso. As a leader in the sector the deep reforms in Rwanda
are likely to give SINA and his company an added boost.ii. Story of Mukarubega: The woman who built a business empire with just
Rwf 5000
Hajati Zulfat Mukarubega, the founder and legal representative of Rwanda
University Tourism College (RTUC), in Kicukiro District. She is one of the remarkable
entrepreneurs in education sector. Read and learn from her told story during an
interview she had with The New times, and published on July 21, 2012Her journey is a fairy tale characterised by perseverance and patience. Zulfat
Mukarubega the founder of Rwanda Tourism University College (RTUC) has
changed the face of the hospitality industry. As the brain behind the first and only
tourism university in the country, her story is not only inspiring but extra-ordinary.
She has touched the lives of many who have had a chance to pass through her
gifted hands of entrepreneurship.At a time when women had limited opportunities and were confined to the kitchen,
Mukarubega defied the odds and ventured into entrepreneurship; with only Rwf
5000 she opened up a restaurant which later opened doors for success.The 56-year-old established RTUC in 2006 and though the journey wasn’t a bed
of roses, she managed to build it from scratch into a recognized and prestigious
institute it is today.
“Starting a business is full of ups and downs; things were tough in the beginning.
Friends discouraged me not to start up something which has never even existed in
the country but because I saw the need of what I intended to start, I never gave up.
I started with twelve students of which seven dropped out and I remained with five.
Getting lecturers wasn’t easy and making people understand the need to embrace
the importance of hospitality was the hardest thing then,” Mukarubega says.She travelled to South Africa and Kenya where she identified the customer care gap
that existed within hotels and restaurants in comparison to Rwanda. This instantlysparked off her need to enhance hotel management and with all the challenges
she faced, which of course being a woman and a mother was part of, Mukarubega
never gave up, but rather strived for excellence.
Starting a business at the tender age of 19 was what shaped her into a powerful
and extremely ambitious woman.In January 2012, Mukarubega was honoured as the woman entrepreneur of the year
by Rwanda Development Board (RDB). In addition, her business was recognised
as the best Small and Medium Enterprise (SME) in the tourism sector. Since its
inception, RTUC has blossomed into a successful college with over 3000 students
and now has a second branch in Gisenyi which attracts students from as far as
the Democratic Republic of the Congo, Burundi and Uganda. The college has had
graduations, and most of the graduates are employed while others have started
their own businesses.The love for her country is what drives her to give back to society. “Most young girls
finish secondary school and fail to continue to university. Out of desperation they
end up into prostitution. As a mother, I saw the need to save our children from such
misfortunes by equipping them with skills that will enable them survive,” she says.Besides RTUC, Mukarubega plans to open up a home care training centre where
house maids will be trained on how to raise children.“Women should believe in themselves; they should be innovative and think about
the future because in Rwanda women have a high potential to realise their dreams
and excel. The government has opened doors for us, we should use the opportunity,”
she says.
For further information about other successful and hustling Rwandan entrepreneurs’
pathways, watch the following videos:
1. Dr. Nyirinkwaya Jean, Owner of La Croix du sud Hospital:2. Origène IGIRANEZA, O’Genius Priority Ltd: https://www.youtube.com/
watch?v=liTmWLPJlFg/
3. Marc Rugenera, founder and owner of Insurance company: https://www.
youtube.com/watch?v=IPQ8c8t6k3o/
4. Charles MPORANYI, former owner of SORAS: https://www.youtube.com/
watch?v=0dl5GjthII4/Inspirational characteristics of local successful entrepreneurs
Activities: 0 -
Key Unit competence:
To be able to create sustainable investments that contribute towards socio-
economic development of the country
Case study
Mahoro is an associate nurse graduate. After her parents died in 2005, she
continued with the agricultural work that her parents used to do turning it into
agri-tourism business as one of the outstanding investment opportunities in
Rwanda. Mahoro had to assume all the responsibilities looking after her 3
siblings/brothers and sisters.
She started from one cow, sheep and angora rabbit for shearing and farms
in different kinds of petting-zoo or safaris, and a small farmland using her
knowledge in entrepreneurship obtained in O’level sought advice from her
immediate relatives. Her relatives advise her to apply for a loan in Umurenge
Sacco and luckily she was granted a loan after presenting a good business
plan, she had in mind expanding and while having a dream of being self employed.
Some of her friends discouraged her by advising her to apply for the job and
go to work at a health post but she kept deaf ear. Mahoro has secured a
contract from Everywhere Travel &Tours company Ltd to connect tourists
with her agri-tourism farm.Questions
1.
a) Identify ways in which Mahoro’s farming activity is different from other
farmers as usually done in your locality.
b) What motivated Mahoro to undertake the above activities?
c) Suggest the contribution of her investment to the economic
development of the country
d) How does the government of Rwanda assist the youth to benefit more
from available investment opportunities?
2. Discuss the contribution of youth employment.
3. Describe methods of ranking investment proposals.2.1. Meaning of investment and investment opportunities
Assume that you are invited by Rwanda Development Board to address the youths
in your home community. The organizer requires you to talk about prominent
investment sectors in Rwanda. Attempt the following questions which would be
entailed in your speech:
1. Explain the meaning of investment
2. Describe different prominent investment opportunities in your community2.1.1. Meaning of Investment
Investment is defined as the commitment of current financial resources in order
to achieve higher gains in the future. From an economic perspective, investment
and saving are different; saving is known as the total earnings that are not spent on
consumption, whether invested to achieve higher returns or not. An investment can
refer to any medium or mechanism used for generating future income, including
bonds, stocks, real estate property, or a business, among other examples. The
investment opportunities in Rwanda are numerous. Below are some of the
outstanding investment areas in Rwanda.2.1.2. Investment opportunities in Rwanda
In Rwanda, potential opportunities for investment abound, particularly in the sectors
of agriculture, education, health, and financial services.
a) Agriculture
Agriculture is a major economic sector for the people of Rwanda, employing about
70% of the total population. Rwanda’s principal crops include coffee, pyrethrum,
tea, flowers, beans, Irish potatoes, rice, wheat, sugarcane, among others. About 61%
of Rwandan soil is suitable for agriculture as the soils are fertile. The government
of Rwanda is tangibly committed to boosting the development of the country’s
agri-sector. It has invested considerably in infrastructure, responsive institutions,
inclusive markets, and innovation & extension while creating and enabling
environment for private sector investment. Meanwhile, investment opportunities
exist in Dairy, Poultry, Meat processing, Horticulrure, Aquaculture, Mechanization,
Crop sourcing, Blockchain, Agri-tourism, Manufacturing of irrigation equipment,
among others.b) Diary
According to Rwanda Agricultural Exports Development Board (NAEB), Rwanda
exports substantial quantities of milk and milk products to the region.The intraregional trade in dairy products within the EAC has continued to gain momentum
benefiting the Rwandan diary industry. The main products exported are milk and
yogurt.There is a call for more investment in dairy infrastructure, rural roads, processing
plants, as well as acquiring better animal breeds to increase productivity. The
quality of milk products for the dairy sector should also be improved to becomesustainable and improve livelihoods of farmers. Stakeholders are trained especially
in managerial and business skills.The government has been working on elimination of challenges like lack of access
to electricity, credit and market information to empower the private sector and help
it focus on the export market.c) Poultry
An entrepreneur in this type of agribusiness concentrates on the keeping and
selling of birds for meat, eggs, feathers and skins. The types of bird commonly kept
in Rwanda include: chicken, ducks, turkeys, Guinee fowls etc.
To feed a growing population with shifting tastes and food consumption habits, the
agriculture industry will need to evolve in the coming decades. Some predict that,
by the end of the century, 13 African cities will surpass New York City in population.
And as African economies grow and their citizens become more urbanized, they are
likely to increase their standards of living and meat consumption. In Rwanda, there
is a lot of meat produce. This is a great opportunity for entrepreneurs who are able
to add value on the meat produce so as it can be stored for so long and multi-serve.e) Horticulture
Entrepreneurs dealing in this business, grow fruits and vegetables. Rwanda’s
horticulture sector is characterized by an ideal climate, fertile soil and an abundant,
hardworking labor force.
The potential to develop a vibrant horticulture industry in Rwanda is undoubtedly on
the move. The country has a strong competitive base that hinges on its comparative
advantages such as fertile soils, abundant water resource, and abundant labor
force that are used to produce quality and competitive horticulture products sold
on the regional and international markets.There are several types of horticultural products that can be grown in Rwanda
which include:
– Vegetables: Tomatoes, green pepper, French beans, chilli pepper, carrots,
hot paper, onions among others.
– Fruits: Avocados, mangoes, pineapples, passion fruit, bananas, and
strawberry.
– Nuts: Macadamia and groundnuts.
– Spices: Parsley, Chilli, Lemongrass, Ginger, Garlic, processed pepper, Mixed
spices, Celery among others.
– Flowers: Roses, Zantedeschia flowers, Agapanthus, Calla lilies, Tuberoses,
Alstroemeria and Ornamental sunflowers.
f) Aquaculture
In this type of agribusiness, entrepreneurs can deal in fish farming, crocodile
farming, etc. Fishes are highly needed by hotels and restaurants in Rwanda. These
fishes can be rearing in fish ponds.
g) Mechanization
Lack of access to tilling tractors on both hilly and flat land, few investors importing the
equipment are still hampering the progress in embracing agricultural mechanization.
Agriculture mechanization in Rwanda consists of different farm machinery which
performs different farm operations from: land development and land preparation,
planting, crop treatment, harvesting, post-harvesting and Agro-processing. This is
an opportunity for investors who can invest in providing mechanization machinery
to farmers who need them.
h) Agri-tourism
Agri-tourism provides educational explorations that allow tourists to learn more
about agricultural practices and cultural values in Rwanda. Agri-tourism, as a form
of individual relaxation, satisfies the needs of various groups of the middle class.
For Rwandans that may have vast land on which to conduct agriculture activities,
can embrace this new cluster of agri-tourism and develop required products.
The products and services assigned to real agri-tourism are comprised of
observation of agricultural production process, plant production, animal production
and some processing, and guided or individual farm (ranch) tours.They also include; real participation in the process of plant production, animal
production and processing (e.g. help in cow milking, hay making, etc.), animal
demonstrations or shows, sheep shearing, angora rabbit shearing, direct contact
with domestic animals or the nature of farms in different kinds of petting-zoo or
safaris.
i) Manufacturing of irrigation equipment
As explained above, Rwandan agriculture mechanization needs the employment
of different machinery. Most of the machineries are imported, which makes
them expensive and not accessible to all agri-business people. Investment in
manufacturing irrigation equipment is one of the trending business opportunities
in Rwandan agriculture.2.1.3 Education
Education is one of the pillars of Rwandan socio-economic development. It is in
that regard that it has a lot of investment opportunities which include but are not
limited to the following;
i. Technical and Vocational education and Training (TVET):
– Infrastructure development and construction of TVET schools across the
country
– Introducing new programs that are closely connected to the labor market.
ii. ICT in education
– Smart classrooms
– E-learning
– Digital content development
– Teacher training in ICT at all levels
iii. Higher education and research:
– Foreign universities are encouraged to open campuses in Rwanda with
emphasis on STEM (Science, Technology, Engineering, and Mathematics)
– There are opportunities in constructing and managing student hostels in
private and government universities
– Supplement government effort in scholarship provision of student loan
schemes.
2.1.4 Health services
Rwanda plans to expand the provision of better health care and develop medical
tourism through the attraction of state-of-the-art and specialized medical facilities.
The following are some of the investment opportunities in this sector;
i. Manufacturing of health products and equipment:
– Production of pharmaceutical products and medical equipment
– Medical supply distribution companies to ensure that medical products are
accessible
ii. Provision of advanced health care services:
– Health facilities such as clinics, super-specialty hospitals, and diagnostic
centers are highly demanded,
– To pave the way for medical tourism, three niche sub-sectors have been
identified for Rwanda to focus on; Oncology, Cardiology, and Nephrology.
iii. Medical schools to generate skilled staff for the health sector:
– With just unsatisfied ratio of either physician or nurse per residents,
Rwanda has opportunities in medical education and training institutes such
as medical schools, nursing paramedical schools, medical engineering
schools, and e-learning platforms.
2.1.5 Financial services.
Rwanda aims to become a business and financial center of excellence. The country
has started to attract large-scale investment opportunities in new and upcoming
sectors, including green and sustainable financing and Fin Tech. financial services
investment opportunities include the following:i. International bank representative office
International banks can adopt a low-risk familiarization route into the Rwandan
market by establishing a representative office in Rwanda.
– An international/global bank represented in Rwanda will be in position to
support large projects initiated by both government and private sectors. This
will include financing through syndication or directly and also transaction
advisory services.
– The Rwandan economy presents various opportunities for the representative
bank office to introduce to the wider bank group. These opportunities range
from trade finance, investment management, corporate structuring, etc.ii. Agricultural financing
Increased credit in the agriculture sector is key to ensuring the development of the
industry in Rwanda. Several innovations/products (weather-based crop insurance,
warehouse receipt schemes, etc.) can be introduced to improve value chains within
the agriculture sector.iii. Small & Medium Enterprise financing
Small and Medium Enterprises are the lead drivers of job creation and economic
development in Rwanda. If the business environment for these firms can be
improved, they can become more profitable, increase in size, and tap into regional
and global markets. Financial institutions experienced in SME financing such as
private equity and venture capital funds will help to increase access to finance for
this category of enterprises.iv. Real estate investment trust
Commercial REITs present a massive opportunity for the Rwandan Market,
especially financing and supply options for affordable housing, shopping malls,
hotels, and offices.
Also, the Rwandan business and financial ecosystem offers access to products
and services that are conducive for activities such as Fund Management; Private
Equity Investments and Global Trading.
As a student in associate nurse program, advise someone who is willing to
invest in Rwanda about:
a) Sectors to invest in.
b) Incentives provided by the government to make Rwandan investment
climate friendly.2.2 Investment and youth employment
With clear examples, explain the meaning of youth employment.
2.2.1 Meaning of youth employment
There is no legal reference to define the term “youth”. Individuals are either under
aged, entirely dependent or adults and thoroughly responsible for what they do.According to the criteria on recognized by the United Nations, the youth comprises
of people that are between 15 and 19 years old (adolescents) and those who are
aged between 20 and 24 (young adults).Youth meaning varies from one society to another and has evolved depending on
political, economic and socio-cultural contexts. In that case, a young person is that
person who is considered as such by the society”. In Rwanda, the youth is made up
of persons aged between 14 and 35.Youth employment is the situation of young people who are looking for jobs, are
able to find jobs, with the age range being that defined by the United Nations as
15–24 years old.Note. Given that a third of Rwandans, about 3.7 million individuals are aged 15 to
34, and youth employment is a critical policy issue.A good entrepreneur who invests in area of agriculture should have in mind that,
Rwanda is in situation that 42 % of the youth aged between 14 and 35 are either
unemployed or only work on seasonal small scale agriculture.2.2.2 Benefits of youth employment
With youth underemployment rates the highest they have been in 40 years it is more
important now than ever to embrace and explore the benefits that young people
bring.
• New energy and perspective: Young employees can bring fresh perspective
and a different way of thinking to your business. Most young workers are
eager to learn, build their experience and apply their skills in the workforce.
This enthusiasm is great for team building, productivity and workplace moral.
Younger employees will also give you an advantage if you want to target the
millennial market as they understand how to reach and communicate with
their peers.• Workforce development: Young people are used for learning. If they have just
come out of school or tertiary education, they will still retain a mindset that will
help them absorb training more readily. As they don’t have a huge amount of
previous experience young people are essentially a ‘blank slate.’ This affords/
gives their employer an opportunity to develop a workforce of young people
specifically trained to meet their organization’s needs.• Affordability: More often than not, wages for a young employee are less
expensive than those for an older more experienced worker. There are also
options for formal trainee and apprenticeships which can be of great benefit to
both employers and young people.• Technology advancement & early adoption: Millennial have grown up around
technology. Their natural affinity for tech and their ability to apply and understand
different technologies quickly sets them apart from other generations in the workforce.Hiring young people has a positive and important impact in driving
business forward in the adoption and use of new software and technology• Adaptability & agility: When unexpected circumstances arise, younger people
are better equipped to respond to sudden change, this can be of great benefit
in the shifting landscape of the modern-day workplaces where process,
technology and priorities are constantly changing. With economic, social
and political boundaries in a state of flux, adaptability gives young people
an advantage in a work environment that is more agile, changeable and fast
paced than ever before.
• Youth employment builds young people’s self-esteem and self-confidence;
• It develops ability of the youth to manage personal and social relationships;
• Offering worthwhile and challenging new experiences at work and outside
work place;
• It provides learning opportunities to enable young people to gain knowledge
and develop new skills;
• Building young people’s capacity to consider risks and consequences and
make informed decisions and take responsibility
• Helps young people to develop social awareness and a sense of social
solidarity form their work environments.
• It gives young people a voice in decision-making which affect their lives;
• Enhances young people’s role as active citizens and preserving culture.
• When young people are employed, the crime rate is reduced, idle resources
are exploited and generally the living standard is improved.
As a student in associate nurse program, you are requested by your village
leader to address citizens in your village about the youth employment.
Describe the benefits of youth employment towards community development
that will be entailed in your speech.2.3 Some methods of ranking investment proposals
Assume that you have received a government grant. Describe any methods of
ranking investment you would use to select the best project to invest in.In comparing projects with equal lives, several key methods are used to rank them
and to decide whether or not they should be accepted for inclusion in the capital
budget. In this section, you are going to explore Payback period (PBP) and Return
on Investment (ROI) methods.2.3.1 Payback period (PBP)
• The payback period, defined as the expected number of years required to
recover the original investment. When net annual cash inflow is even (i.e.,
same cash flow every period), the payback period of the project can be
computed by applying the simple formula given below:
The Delta Company is planning to purchase a machine known as machine X.
Machine X would cost $25,000 and would have a useful life of 10 years with zero
salvage value. The expected annual cash inflow of the machine is $10,000.Required: Compute payback period of machine X and conclude whether or not
the machine would be purchased if the maximum desired payback period of Delta
Company is 3 years.Solution:
Payback period = $25,000/$10,000.According to payback period analysis, the purchase of machine X is desirable
because its payback period is 2.5 years which is shorter than the maximum payback
period of the company (3 years).• In the above examples we have assumed that the projects generate even cash
inflow but many projects usually generate uneven cash flow. When projects
generate inconsistent or uneven cash, the formula is stated below:
• An investment of $200,000 is expected to generate the following cash inflows
in six years:
Year 1: $70,000
Year 2: $60,000
Year 3: $55,000
Year 4: $40,000
Year 5: $30,000
Year 6: $25,000Solution:
Unrecovered investment at start of 4th year:
PBP= Initial cost – Cumulative cash inflow at the end of 3rd year = $200,000 –
$185,000 = $15,000• Payback period = 3 + (15,000*/40,000)
= 3 + 0.375 = 3.375 Years• Conclusion:
• The payback period for this project is 3.375 years which is longer than
the maximum desired payback period of the management (3 years). The
investment in this project is therefore not acceptable.DECISION CRITERIA:
• The shorter the payback period, the better.
• If the projects are mutually exclusive, the one with a shorter payback period
is preferred.Evaluating PBP
• Advantages:
• An investment project with a short payback period promises the quick inflow
of cash. It is therefore, a useful capital budgeting method for cash poor firms.
• A project with short payback period can improve the liquidity position of the
business quickly. The payback period is important for the firms for whichliquidity is very important.
• An investment with short payback period makes the funds available soon to
invest in another project.
• A short payback period reduces the risk of loss caused by changing economic
conditions and other unavoidable reasons.
• Payback period is very easy to compute.Disadvantages
• The payback method does not take into account the time value of money.
• It does not consider the useful life of the assets and inflow of cash after
payback period.2.3.2. Return on Investment (ROI)
Return on Investment or ROI shows you the return from your investments. It helps
you to choose the best investment across different investment options. You may
evaluate the investment based on your financial goals and risk tolerance.The return on investment is usually expressed as a percentage. In simple terms,
the return on investment is a financial ratio that helps you determine the benefit
of your investment against the costs. If you invest your money in mutual funds,
the return on investment shows you the gain from your mutual fund schemes. ROI
may be positive or negative. If the return on investment is negative, you are actually
losing money on the investment. You must pick an investment that may offer you
the maximum return over a period.
Example: Kabatesi invested Rwf 90 into a business venture and spent an additional
Rwf 10 researching the venture. The investor’s total cost would be Rwf 100. If that
venture generated Rwf 300 in revenue but had Rwf 100 in personnel and regulatory
costs, then the net profits would be Rwf 200.Solution:
Total investment= Rwf 90+Rwf 10= Rwf 100
Let us compare the first example to another example where an investor put Rwf
10,000 into a venture without incurring any fees or associated costs. The company’s
net profits were Rwf 15,000. It is significantly more than the Rwf 200 in net profits
generated in the first example. However, the ROI offers a different view: Rwf 15,000
divided by Rwf 10,000 equals 1.5. Multiplying that by 100 yields an ROI of 150%.Note: Although the first investment strategy produced fewer dollars, the higher ROI
indicates a more productive investment.
Analyse the following data extracted from the books of KANYARWANDA and
attempt the questions thereafter.
Required:
Evaluate the investment projects presented above using Payback period
method and be precise on decision criteria.
1. After learning about different agribusiness activities in your community, you
are required to think and come up with different modern methods that can
be applied to improve on productivity of agribusiness products and promote
youth employment.2. Scan your home environment or elsewhere, and come up with possible
agribusiness activity that you can undertake after school and suggest its
role to your personal & family economic development.
Assume you are an associate nursing program leaver and you have been selected
as a district youth leader. During a campaign about “Youth and investment
opportunities”, you are requested to advise youths on scalable investment
sectors.Required:
1. Identify any two projects that you can invest in your home locality.
2. Describe the methods that you can use to make them real profitable
businesses than survival and discuss their contribution towards socioeconomic development.Activities: 0 -
Key Unit competence:
To be able to manage money responsibly and keep financial records.
Case study:
Elizabeth and Kabayiza are married with two children, aged three and five.
Kabayiza works full-time in manufacturing and Elizabeth works four days a
week as a nurse. When they got married, they were renting and maintained
two separate accounts as well as a joint account for bills. Now they own a
home and are paying off a mortgage and saving determinedly for the future
so that they can afford private education for their children by the time they
enter high school.
Referring to the story above and your knowledge about entrepreneurship
skills learnt and competences developed before, answer the questions below.a) Why do Elizabeth and Kabayiza need money?
b) What are the best ways of the couple to save money?
c) Why do they need to save money?
d) Explain the moral lesson that you learn from the above case study3.1. Meaning of money, savings and saving goals
Using the knowledge acquired in O’level, explain the meaning of the following
terms as used in entrepreneurship:
a) Money
b) Savings
c) Saving goal• Money
Money is anything that is generally accepted as a medium of exchange and
repayment of debts.Money is one of the most important inventions of modern times. It has undergone
a long process of historical evolution.
Stages in the evolution of money
1st Stage: Barter trade: Human beings passed through a stage when money was
not in use and goods and services were exchanged directly for goods and services.
Such exchange of goods or services for goods or services is called barter exchange.
2nd Stage: Commodity money: The inconveniences and drawbacks of barter trade
led to the gradual use of a medium of exchange. In the historical study of money,
it is found that all sorts of commodities like seashells, pearls, precious stones,
tea, tobacco, cow, leather, cloth, salt, wine, etc. have been used as a medium of
exchange (i.e. money).3rd Stage: Metallic money: Inadequacy of commodity money led to the evolution of
metallic money (gold and silver). The problem of uniformity of weight and purity of
precious metals led to private and public coinage.
4th Stage: Paper money: This process was finally taken over by the state as one of
its essential features and ultimately commodity money gave way to paper money
which means currency notes. Nowadays, the use of paper money has almost
become universal along with coins made of copper, bronze or nickel, etc.
5th Stage Bank money: The process of evolution of some better medium of exchange
still continues. As the volume of transactions increased, even paper money started
becoming inconvenient because of the time involved in its counting and space
required for its safe keeping. This led to bank money or credit money in the form of
cheques, drafts, bills of exchange, credit cards, etc.• Savings
Savings is the portion of income not spent on current expenditures. Because a
person does not know what will happen in the future, money should be saved to
pay for unexpected events or emergencies. An individual’s car may breakdown,
their dishwasher could begin to leak, or a medical emergency could occur. Without
savings, unexpected events can become large financial burdens. Therefore, savings
helps an individual, family or business become financially secure.• Saving goals
Money can also be saved to purchase expensive items that are too costly to buy
with monthly income. Buying a new house, clothes, purchasing an automobile, or
paying for a vacation, etc. can all be accomplished by saving a portion of income.
We usually save for:
– Basic needs,
– Household expenses,
– Education,
– Emergencies/safety,
– Retirement/security,
– Family wellbeing,
– Esteem,
– Self-actualization
Using the knowledge and skills acquired in year 1, Unit 3: Setting entrepreneurial
goals, set a SMART saving goal.3.2. Where to save
In your community, you have probably heard people and business people talking
about where they save a portion of their earnings. Identify where to save money
according to what you have heard normally people talking about.
Some savers place their money in a jar, coffee can or a piggy bank which all are not
safe and not encouraged. It is wise to store money in financial institutions like bank
depository institution. The following are examples of where to save money:
• Banks: Through opening up different savings account, one can save his/
her money. For instance, if you find a bank or credit union that offers a free
savings account, you can open up several savings accounts. Then every time
you get an income, you can put money into each of these accounts for every
specific thing that you are saving for. This way you can keep your money safe
from accidentally being spent, and it will be there when you need it.
• Assets: Individuals can save money through investing in fixed assets. A good
example can be when someone invests his/her money in rental houses (real
estates). The stock market may be down, but your tenants will still be paying
some rent every month.
• Securities: Securities are generally classified as either equity securities
such as stocks or debt securities such as bonds and debentures. The sale
of securities to investors is one of the primary ways that publicly-traded
companies drive new capital for operations. People or businesses can save
their money through buying available securities at the market.
• Small savings groups: This is when someone joins a group comprised of
15-25 self-selected individuals who save together and take small loans from
those savings. Savings groups provide members the opportunity to save
frequently in small amounts, access to credit on flexible terms, etc.• Starting a business: Saving can be through starting up a business that may
generate incomes and profits in future time.
KABASHA won entrepreneurship competition. He received a cheque of
5,000,000Rwf as a reward, but he doesn’t have a ready plan for that money won.Required:
Advise KABASHA to identify where to save his money to avoid needless
expenditure.3.3. Managing money
Read the following extract, and answer the questions thereafter.
Extract (Money Management-How to make your money go further)
The way you spend your money today will determine what you have in six months
from now, a year from now, five years from now, and in your lifetime. You control
your financial destiny. You are responsible for the amount of money you earn
and for the amount of money you spend. Successful money managers control
the way they spend their money. They use money to accomplish the things that
are important to them. Good money managers manage their money rather than
letting it dribble away from them.Required:
Do you have control of the way you spend your money? If yes, how do you do it?
Do you live within your income, or do you have to borrow money or use savings
to meet your regular monthly expenses? Yes/No. Explain your answerMoney management is the process of budgeting, saving, investing, spending or
otherwise overseeing the financial usage of an individual or group. The ability to
manage money has to be learned, developed, and practiced on a daily basis. There
are eight steps to successful money management:
1. Get organized.
2. Decide what you want to do with your money.
3. Look at all available resources.
4. Decide how much money you are worth.
5. Find out how much money you make.
6. Find out how much money you spend.
7. Set up a plan for spending your money and stick to it.
8. Evaluate your spending plan
The following are essentials for good money management:
• Keeping financial records
• A simple cash book
• Financial forecast
• A simple cash flow plan
• Practicing money management habits E. g. re-use, recycle, repair and reduce.KEEPING FINANCIAL RECORDS
Good financial recordkeeping enables business organizations to plan properly and
also check for misappropriations of resources. Everyone in business must keep
records. Keeping good records is very important to your business. A simple cash
book, financial forecast and a simple cash flow plan are very important for money
management.• A simple cash book
The simple cash book (also known as single column cash book) is a cash book
that is used to record only cash transactions of a business. It is very identical to
a traditional cash account in which all cash receipts are recorded on left hand
(debit) side and all cash payments are recorded on right hand (credit) side in a
chronological order.
The single column cash book has only one money column on both debit and credit
sides titled as “amount” which is periodically totaled and balanced like a T-account.
As stated earlier, a single column cash book records only cash related transactions.
The entries relating to checks issued, checks received, purchases discount, and
sales discounts are not recorded in single column cash book.Format of Simple Cash Book:
The purpose of four columns used on both sides of a single column cash book is
briefly explained below:
Date: The date column of the cash book is used to record the year, month and actual
date of each cash transaction. This column ensures the chronological record of
each business transaction involving receipt or payment of cash.
Details: The details column is used to record the account titles to be debited or
credited as a result of each cash transaction. This column is sometimes titled as
“particulars”.
Ledger Folio: This column is used to write the page number of each ledger account
named in the description column of the cash book.
Amount: The amount column of single column cash book is used to record the
money value of each cash transaction.
Note: The debit side (receipt side) of a single column cash book is always heavier
than the credit side (payment side) because we cannot pay more cash than what
we receive during a period.Example:
The Student business club at one of Associate nursing school uses a single
column cash book to record all cash transactions. It engaged in the following cash
transactions during the month of September 2019.
Sep.01: Cash in hand at the beginning of the month Rwf 4,654.
Sep.02: Paid salaries to employees for the last month Rwf 3,000.
Sep.05: Cash received from S & Co. for a previous credit sale Rwf 2,720.
Sep.06: Merchandise purchased for cash Rwf 1,400.
Sep.07: Merchandise sold for cash Rwf 4,700.
Sep.10: Office furniture purchased for cash Rwf 3,080.
Sep.12: Stationery purchased for cash Rwf 170.
Sep.15: Merchandise sold for cash Rwf 9,000.
Sep.17: Cash paid to A & Co. for a previous credit purchase Rwf 1,780.
Sep.20: Merchandise purchased for cash Rwf 2,460.
Sep.21: Merchandise sold for cash Rwf 4,680.
Sep.24: Cash received from S & Co. for a previous credit sale Rwf 2,400.
Sep.28: Cash paid for office rent Rwf 1,600.
Sep.30: Merchandise sold for cash Rwf 7,200Required: Record the above transactions in a single column cash book (simple
cash book)
Solution:The Student business club’s simple cash book for the month of September 2019
• Financial forecast
“Forecast” means to form an opinion beforehand i.e. to make a prediction. Thus
financial forecasting means a systematic projection of the expected action of
finance through financial statements. It is a kind of plan which will be formulated at
a future date for a specified period.The merits of the financial forecasting are noted below:
– It can be used as a control device in order to fix the standard of performances
and evaluating the results thereof
– It helps to explain the requirement of funds for the firm together with the
funds of the suppliers
– It also helps to explain the proper requirements of cash and their optimum
utilization is possible and so surplus/excess cash, if any, invested otherwise.Elements of Financial Forecasting:
Financial forecasting involves preparation of proforma financial statements and
also the preparation of Cash Budget.
Therefore, it includes the preparation of:
a) Pro-forma income statement: Pro forma income statement is the statement
prepared by the business entity to prepare the projections of income
and expenses which they expect to have in the future by following certain
assumptions such as competition level in the market, size of the market,
growth rate
b) Pro-forma balance sheet: This summarizes the projected future status
of a company after a planned transaction, based on the current financial
statements.
c) Cash budget: A cash budget is an estimation of the cash flows for a business
over a specific period of time. This budget is used to assess whether the
entity has sufficient cash to operate• A simple cash flow plan
Cash flow plan is a statement that provides valuable information about a company’s
gross payments and receipts and allows insights into its future income needs. Cash
flow statement is important because:– Cash from operating activities can be compared to the company’s net income
to determine the quality of earnings. If cash from operating activities is higher
than net income, earnings are said to be of “high quality.”– This statement is useful to investors because, under the notion that cash is
king, it allows investors to get an overall sense of the company’s cash inflows
and outflows and obtain a general understanding of its overall performance.– If a company is funding losses from operations or financing investments by
raising money (debt or equity) it will quickly become clear on the statement
of cash flowsWhy is it necessary for an entrepreneur to make a Cash flow statement?
– It helps to identify the source of cash inflows in the business and also identify
how cash was used– It helps management in proper cash planning to avoid excess cash or cash
deficits in the business– It reports the total amount of cash used during a given period in long term
investment activities such as purchase of fixed assets– It shows the amount of cash received from various financing sources such as
long term loans and sale of shares
– It helps management to avoid liquidity problems by anticipating when cash is
expected to flow in and plan payments accordingly– It helps investors to understand how a company’s operations are running,
where its money is coming from and where it is spent.FORMAT OF CASH FLOW STATEMENT
At the end of that given period, the business will have a surplus if cash inflows
are more than the cash outflows or deficit if cash inflows are less than the cash
outflows.Example: Prepare Didi’s cash flow for the month of January, February, March and
April 2006, given the following information below:
Cash balance b/d or b/f in January was 15000,000Rwf
Monthly rent income was 5000,000Rwf
Monthly credit sales to be paid in the next month were 4000,000 Rwf
Sold a business van in February 14,500,000 Rwf
Monthly commission received was 3000,000Rwf
Monthly cash sales 10,000,000 Rwf
Monthly cash purchases 12,000,000Rwf
Bought a truck in January 800,000 Rwf
Monthly salaries and wages 5000,000Rwf
Bought machinery worth 15,000,000Rwf, payment of 8,000,000 Rwf was made in
January and the balance was paid in two equal installments during the month of
February and March.Solution
DIDI’S CASH FLOW STATEMENT FOR JANUARY, FEBRUARY, MARCH AND APRIL
PRACTICING MONEY MANAGEMENT HABITS
With the cost of goods and materials rising, using resources efficiently and
reducing your business’ waste makes good financial sense. It’s also better for the
environment. The cost of sending waste to landfill is increasing, and so are the
restrictions on what you can send. You can face penalties if you do not handle
waste appropriately or have the right paperwork before it leaves your premises.You can save money and make your business more efficient by focusing on how
you reduce, reuse, recycle or recover and repair in your business, and how you deal
with the waste that remains.1. Reducing waste
Cutting the amount of waste your business has to handle is the most cost-effective
and environmentally-friendly method of dealing with waste.
There are a number of areas you could focus on:
Procure carefully - buy only what you need, control stock and streamline processes
across departments. Buy equipment in bulk to reduce packaging and consider the
product›s durability and lifespan - replacing equipment less often will reduce the
waste you create.
• Look for easy wins - seemingly trivial changes can produce significant savings,
such as printing and photocopying double-sided, refilling printer cartridges,
switching off lights and electrical equipment, and using rechargeable
batteries.
• Review your processes - ensure that equipment and materials are used
efficiently and packaging is kept to a minimum.
• Product design - keep the amount of materials you use in products to a
minimum.
• Packaging design and use - make sure you use as little packaging as possible
to achieve an adequate level of protection for your products.
2. Reusing waste
You may be able to reuse materials and equipment in your own business or another
organization.For example, consumers can refill a purchased bottle of water with water from
home to minimize the number of plastic bottles being discarded.Reusing your own business waste can reduce your costs as you won’t need to buy
raw materials or pay to dispose of the waste. You may also be able to generate
income from materials and goods that are valuable to another organization.
3. Recycling waste
Recycling is the third-best waste management option for your business, after
reducing and reusing waste. Even so, recycling is important because it reduces the
amount of waste sent to landfill and reduces the need to use new raw materials.
Recyclables include glass, newspaper, aluminum, cardboard and a surprising array
of other materials.
4. Repair
The business can repair broken materials and equipment such as lamps instead
of buying new ones.
Discuss and suggest strategies or how you will cut costs/expenses using the
4Rs (reducing, recycling, repairing and reusing) in your student business club.
Prepare a new projected cash flow statement after applying the suggested
strategies.
Read the following dialogue and answer the questions that follow;
Peter: Does what you know now about money management affect your
future?
Peace: Of course what you know today affects tomorrow. You couldn’t drive a
car without a license, and that is why you need to begin learning about how to
spend your money wisely today.
Peter: How does your attitude towards money change as you age?
Peace: Five-Year-Old: Come On mom, can I have some money to buy that ring?
Fourteen-year-old: Mom, I want 10,000Frw to buy designer label top and those
cool pants.
Eighteen-Year-old: Shoot, I know how I can get money for college. I will ask
mom.
Forty-Year-Old: I need to save for my retirement. No excessive spending.
Questions
i. With examples explain how your money management affects your future
wellbeing.
ii. Where do you think a person can save?Activities: 0 -
Key Unit competence:
To be able to prepare a business plan for the business they are running or intend
to start.
Introductory activity
Mangada and Manuela are twin brothers and NURSING graduates they have
always had a dream of being self-employed. Mangada sought of starting
a restaurant and Manuela sought of starting a piggery project having both
knowledge of entrepreneurship from school, they both secured financing
from their parent as well as personal savings accumulated while at school.
Mangada starts immediately and after a few months the business started
doing well but later before the year ended, she was in a great loss and decided
to close down.Mangada starts immediately and after a few months the business started
doing well but later before the year ended, she was in a great loss and decided
to close down.
Manuela took her time to discover and learn about the business she intended
to start and devised/developed a plan as laying strategies on how to put
the plan in action, she starts later after five months a few challenges came
her way but she never gave up. She now has over 100 pigs and has recently
secured a sausage making machine and obtained enough market in Kigali to
supply her products as well as secured external market in Congo.
Questions
a) According to the case study what do you think is the secret of Manuela’s
success?
b) Why do you think it is important for a person to plan before undertaking
any action?
c) Suggest the elements that you would put into consideration while
preparing a business plan?4.1 Definition and Importance of the business plan
1. Using your previous knowledge obtained in O’level about business plan,
explain the meaning of a business plan.
2. Case studyMugabo had a business idea of buying and selling boiled eggs in his village where
all people in this village were doing poultry farming. Mugabo has got a loan of
30,000Frw from Umurenge Sacco Gatumba and bought eggs, boiled them and
started selling them but unfortunately, he didn’t find any consumers to buy eggs.
After two days, all eggs were damaged and lost his capital.
Through this case study answer the following questions:
a. What do you think is the source of the loss of Mugabo’s capital?
b. Advise Mugabo on the challenges faced by his business.
c. Show Mugabo the importance of writing a business plan for his business
4.1.1 Definition of a business plan
A plan is a proposed or tentative course of action worked out beforehand for the
purposes of accomplishing a goal. It can also be described as a thought-out journey
that would take you to your desired destination.Ideally, planning is looking into the future and putting in place the means to reach
that future. It is setting goals and how to achieve them, deciding on the end and
the means to the end. We should all be concerned about the future because we will
have to spend the rest of our lives there. Future outcomes are a function of today’s
decisions. For anyone starting a business, a business plan is a vital first step and
every business requires a well-developed business plan.The business plan is a planning tool that details the goals of the business and gives
the owner a path to follow. It is a written summary of an entrepreneur’s proposed
business venture highlighting its goals and objectives, and his skills, abilities and
requirements to implement it.
It helps the owner to make judgments and decisions on opportunities and threats
by providing a framework to assess the options. A business plan describes how the
business operates, how it is managed, how it interacts in the marketplace, how it
functions financially and what its strengths and weaknesses are.
The business plan should be an integral part of the management and oversight
of a financial institution/organization. It should therefore establish the institution’s
goals and objectives.4.1.2 Importance of the business plan
Business plan serves in the following ways:
• To attract investors. Whether you want to shop your business to venture
capitalists, or attract angel investors, you need to have a solid business
plan. A poor presentation may anger their interest, but they will need a wellwritten document they can take away and study before they will be prepared
to make any investment commitment. Be prepared for your business plan
to be scrutinized; both venture capitalists and angel investors will want to
conduct extensive background checks and competitive analysis to be certain
that what is written in your business plan is indeed the case.
• To test the feasibility of a business idea: Writing a business plan is the best
way to test whether or not an idea for starting a business is feasible, other
than going out and doing it without having a plan. In this sense, the business
plan is your safety net. Writing a business plan can save you a great deal
of time and money if working through the business plan reveals that your
business idea is unsustainable.
• To give your new business the best possible chance of success: Writing a
business plan will ensure that you pay attention to both the broad operational
and financial objectives of your new business and the details, such as
budgeting and market planning.
• To secure funding, such as bank loans: Having a business plan gives you a
much better chance of getting the money you need to keep operating or to
expand. You’re going to need both operating and start-up capital to start a
new business and you have no hope of getting any money from established
financial institutions such as banks without a well-developed business plan.• To make business planning manageable and effective: A business plan is
essential if you’re thinking of starting a business, but it is also an important
tool for established businesses. Viable businesses are dynamic; they change
and grow. The company’s original business plan needs to be revised as new
goals are set. etc.When to write a business plan
A business is not something static. The business can change over time as the
business develops, and any particular business may have multiple business plans
as its objectives change. Sometimes people often make the mistake of thinking of
a business plan as a single document that is just put together when someone is
first starting out and then set it aside.A business plan should be written when thinking of going into business, that is:
• Before starting a business
• When updating the business is required. For example, from plastic to metal
products.
• When new information is obtained. For example, changing colours and size
of the products as a result of consumer’s complaints.
• When new experiences are gained. Probably regarding new methods of
production.Users of a business plan and how they use it
Users of a business plan include but not limited to the following;
a. Business owners
As the owner, you already know the obvious reasons, but there are so many other
good reasons to create a business plan that many business owners don’t know
about.Such important reasons include:
– To create a new business. This helps the entrepreneur to mobilize and
coordinate resources.
– To better understand your competition.
– To better understand your customer.
– To assess the feasibility of your venture. How good is this opportunity?
– To document your revenue model. Documenting the revenue model helps to
address challenges and assumptions associated with the model.
– To determine your financial needs. This process is essential for raising capital
for business and for effectively employing the capital.
– To reduce the risk of pursuing the wrong opportunity. Writing the businessplan helps you assess the attractiveness of this particular opportunity, versus
other opportunities.
– To help you research and really know your market.
– To plot your course and focus your efforts. The business plan provides a
roadmap from which to operate, and to look for direction in times of doubt.
– To position your brand. Creating the business plan helps to define your
company’s role in the marketplace.
– To judge the success of your business. A formal business plan allows you to
compare actual operational results versus the business plan itself.b. The Government agents
– The business plan made by entrepreneur helps the government to assess the
viability of a business to determinate specific incentives like tax exemptions,
credit guarantees and subsidies that the government may give to the
entrepreneur.
– The business plan helps the government to plan for infrastructures and other
services that it may want to put up.
– With business plan, the government ensures which tax a business should be
taxed.
– In some cases, the entrepreneur may want to borrow money from financial
institutions like, banks; such loans require the government to guarantee
basing on how good a business plan is.c. The Managers
The importance of business plan to managers is as follows:
– Business planning is important to managers because the whole point of
management is to allow a business to operate more efficiently and to be able
to achieve its goals.
– Business plan helps managers allocate scarce resources appropriately.
– It enables managers to control the different aspects of their projects and
processes to ensure each task stays on course.
– Business plan also provides the framework for measuring the progress of the
different processes and tasks.
If there is no business plan, decisions will be taken each day based simply on
immediate needs. This will not allow the business to move forward in an organized
and purposeful way towards its future goals. Such a business is unlikely to succeed
because it would have long range plan.
d. EmployeesThe business plan is important to the employees of the business in the following
ways:
– The business plan helps the workers to determine production targets that
they have to achieve within set periods.
– The business plan gives the employees assurance about the duration of their
employment. It gives them job security because they know the expected life
cycle of the business.
– The organizational plan helps define tasks and responsibilities of each of the
workers and so helps reduce conflict.– The business plan helps employees to know the mission and vision of the
enterprise.
e. Financial institutionsA well-prepared business plan is vital when approaching any financial institution
for finance. It helps them to assess whether it is appropriate to lend money to
the business based on revenue projections and other information included in the
business plan. Almost all the banks expect you to submit a business plan along
with your loan application.The following are what most financial institutions look for:
– Most financiers will closely look and verify the following parts of your business
plan: The balance sheet is probably the first thing your loan officer will turn to.
The balance sheet records your assets, liabilities and capital.
– Along with the balance sheet, they will look very carefully at the profit or loss
and the cash flow, which should be very closely related to the balance sheet
and to each other.
– Bankers will also look for hard evidence of founders and managers who know
their business.f. Investors
– A business plan attracts investors. The business plan answers investors’
questions such as: Is there a need for this product/service (is there a target
market)? What are the financial projections? What is the company’s growth
or exit strategy?
1. Assuming that you have completed secondary studies:
a) Develop your personal plan for daily, weekly, monthly and yearly
activities.
b) What business do you plan to do after your studies and in your life?
c) How and when do you plan to achieve your goal?
2. Think of a feasible business of your interest and identify who will be the
users of your business plan and explain how it will be used.4.2. Elements of a business plan
Assume that you are selected by an NGO in Rwanda specializing in
entrepreneurship called Educate! to train youths on business planning.
Explain what will be entailed in your training presentation as the main elements
of a business plan.
Business plans vary in content according to their intended purposes, but the
basic format remains the same. It consists of three elements: First, discuss
the business model and describe your products and services. Then place the
business in its industry and discuss your intended marketplace, including your
target customers and how you will reach them, beating your competition. Last,
relate these plans to the real world, discussing your contingency plans and
finishing off with spreadsheets detailing your anticipated sales, costs of doing
business and resulting profits. Though, formats may vary, clarity is the most
important quality of any business plan.A successful business plan should have the following components:
a. Executive summary
The executive summary should be the first section of a business plan after the
table of contents, though it is typically written last after all the other sections.
Basically, an executive summary discusses the following items:
• Business name, address and contact person.
• Business idea and goals: This section provides an overview of the business
project, what product or service is being sold and what the entrepreneur’s
goals are. It also indicates where the business expects to be in a year’s time
and later.
• Legal form: e.g. sole proprietorship, partnership, company.
• Marketing: This part looks at how the products or services of business will
be sold. Who will be the main target markets (customer groups)? And what
are the main elements of the proposed advertising and promotion strategy
for the firm?
• Operations: This is concerned with where the business will be located. How
many staff will be needed and how they will be managed.• Finances: How much money is required to finance the plan, where will such
capital be obtained from and how it will be repaid. How much profit the firm
is expected to make by the end of the business plan time period?b. Business description
The business description section of a business plan is another section, coming
after the executive summary. The business description outlines vital details about
your company, such as:
i. The name of a business: This is the official name of your business as
registered in the country where you do business.
ii. Contact address: This is the contact anyone can use to ask some information
about your business. It may be a phone number, email, website, fax and the
location address of the business, etc.
iii. Legal form: A legal form of business refers to businesses allowed by the
government to be run by business entrepreneurs. The business owner
must choose the legal structure of his business. e. g. sole proprietorship,
partnership, company, cooperative, etc.
iv. Type of business: The type of business refers to the nature of business-like
agribusiness, manufacturing; trading, service, etc.
v. Description of the business idea and market:This section includes the following;
– Information about the owner: The first item in a plan should be written in the
description of business owner background, including name, address, email,
phone number, education, family status, sex etc.
– Mission statement: A clear mission statement that represent the purpose
of your business. E.g.: To provide uncompromised quality product to our
customers
– Objectives: An outline of what you want to accomplish in the mediate future
based on the data in the rest of the business plan as well as future growth
goals. E.g.: To increase the market share by 13% by the end of 2021
– Vision statement: About how you envision the future of the company, e.g.:
Transforming the livelihood of the population.
– Business location: Where is the business / company and its headquarters?
– Business history: When did the business start or when do you plan to start if
it is a new business. What inspires you to start the business?
– Products or services and target market: A brief overview of what you plan to
sell and to whom.– Description of market: Which include geographical area, type of customers,
size of total market, description of the competitors, market share for the new
business, etc.
– SWOT analysis: The analysis of strengths, weaknesses, opportunities and
threats (SWOT analysis).
• -S- STRENGTH OF THE BUSINESS: These are aspects within the business
that give it advantage over other businesses. These can include:
– Skilled and motivated staff.,
– Modern equipment.
– Strong research team.
– Sufficient working capital.
– Excess capacity.
– Wide distribution network
• -O- OPPORTUNITIES OF THE BUSINESS: Aspects outside the business
that are likely to be of benefit to the business: e.g.:
– Favorable government policy.
– Increasing dement of the product.
– Other industries that complement the business.
– Improved infrastructure.
– Reduced taxes on such product.
– New channels of distribution.
– Invention of better technology.
• T- THREATS OF THE BUSINESS: These are things outside the business
that are likely to affect the business negatively. E.g.: Possibility of entry of
new competitors.
– Change in government policy.
– Scarcity of raw materials.
– Declining of population (reduction in demand).
– Negative changes in customers’ testes and preferences.– Collapse of infrastructure.
– Raising costs of electricity.
– Economic depression.Note: You should assess the above factors along comparing with those of the
rivals. In case your favoring factors are not as big as those of the competitors, you
will need to be very cautious in planning and running for your business.
Moreover, the following can guide your decisions:
1. If your strength is greater than your weaknesses, then advance.
2. If you observe more opportunities coming your way added to your strengths,
please Invest more.
3. But if you mark weaknesses and you observe more threats ahead of you,
please flee.
4. Finally, if your strength and weaknesses are similar to those of the rivals
please compete.
c. Marketing plan
A marketing plan is a business document outlining market strategy and tactics. It
is often focused on a specific period of time (12 months) and covers a variety of
marketing related details, such as costs, goals and action steps. The marketing
plan is built from the results of the marketing research and the specific value
proposition of the product or a service.
For a business to grow it also needs a marketing plan, therefore, the right marketing
plan should identify the following:
– Who your target customers are.;
– How you will reach them, and finally.;
– How you will retain your customers so that they repeatedly buy from you.
– When done properly, the marketing plan will be the roadmap to follow in order
to get unlimited customers and dramatically improve the success of the
organization.
– How much are customers willing to pay?
– Product description, current production, distribution channel that will be
used.,
– What are competitors’ prices? Forms of advertisement and pricing strategies
to be used, how the price will be determined? and
– What is your price? What promotion strategies are you planning to use?d. Production plan
This consists of projected needs for manufacturing the proposed product. It is then
necessary to assess whether production at this scare is technically feasible.
The production plan mainly focuses on:
– A description of the product and what it does, manufacturing process.,
– Product innovation, suppliers of raw materials, quality control, nature of
packaging, production staff, …
– Machinery, equipment and techniques used.
– Product development and substitution.
– Intangible assets and protection.e. Financial plan
Financial plan is a statement that indicates the balance sheets, income statements
and cash flow statements for the previous three years, along with five years’ cash
flow, income statements and balance sheets forecasts. It indicates costs of your
business: seed capital, sales forecasting along with cost of operations, selling and
administrative costs.
Those financial statements found in this plan, can show where your business
was at a certain period in the past, where it is right now and provides you with the
information you need to make future decisions.
• It is important to keep your statements current and to refer to them on a
monthly basis.
• You should include the following financial forms with projections for three to
five years:
– Income statement
– Cash-flow projections
– Balance sheetOther elements of the financial plan include:
– Expected source of finance
– Start-up budget: Capital and Expenditure
– Financial forecast / cash flow plan
– Opening Balance sheet
– A breakeven point analysis
– Payback period.
– Return on Investment.
– When making financial projections, it is important to explain any assumptions
– how you determined the figures you used.
– If you are looking for financial assistance, lenders will want to know where
you will get financing for your business and how you will spend the money.
They will also want to see historical records for the past three to five years.f. Organizational plan
This part describes the form of business ownership, the lines of authority and
accountability for members of the new venture.
It includes items such as:
– Form of ownership.
– Identification of business partners or principal shareholders.
– Authority of principals.
– Management team and background.
– Roles and responsibilities of members of the organization.
– Decisions on the numbers or types of workers that are required to operate the
proposed business.
– Compensation i.e. salary, bonuses... that you offer to the key members of the
management team.g. Action plan for implementing the business plan.
An action plan is the careful lay out of the sequenced steps towards achieving
the business goals. This is the most crucial aspect for starting any business. The
main purpose of the action plan is to guide the entrepreneur as a time table for
implementing the business plan and to help him/her become and remain focused
in the implementation of his/her business.
The action plan in particular will help the entrepreneur to:
• Find road blocks in advance or expected challenges so as to take appropriate
steps to solve them.
• Locate sources of information and resources needed for the business.
• Obtain feedback on the progress towards enterprise established.
• An action plan co-ordinates efficient use of resources for the business.
• An action plan is used in implementation of planned activities.
• An action plan specifies how workers’ responsibilities and tasks are traced
and allocated.
• An action plan helps to monitor and evaluate work progress.
• It helps to discover business challenges and how to solve them.
Summary on the steps in preparing a Business plan
Business plan preparation is a step by step process which requires the
Entrepreneur to thoroughly follow and check through a number of steps that
are critical. These steps include the following;
• Select a business opportunity like service, trading or manufacturing business.
• Conduct a market survey to assess the business opportunity in terms of
feasibility and viability.
• Gather the necessary relevant data like cost of machinery and equipment,
environmental protection regulations and selling requirements, etc.
• Draft a business plan.
• Discuss the draft business plan with knowledgeable or experienced personnel
in a similar business.• Finalize the plan and prepare an action plan for implementation of the
business.
1. Suppose you have a dream to start a small business after your studies.
Describe that small business you wish to start.
2. Suppose you want to open a restaurant in your home area,
a) Set the mission and vision statement of that restaurant
b) Set any three objectives of your business4.3 Preparation of a business plan
A SAMPLE OF A BUSINESS PLAN
EXECUTIVE SUMMARY
This is a poultry Project specifically designed for eggs production. It is planned
to start with 2015 layer birds. The Total project cost for the poultry project alone
shall be 1, 456,041 Frw broken down as; 12,600 Frw for construction, 1,400,000
Frw for purchase of the chicks, 43,441 Frw for poultry feeds, vaccines and drugs
and other poultry accessories for 18 months. For capacity building, water and
electric installation, administrative costs and labor cost for 18 months. It is
assumed that only 80% production shall be realized, which means 1,620 trays
of eggs shall be realized per month for 12 months on average. The primary
customers for the eggs shall be prominent egg traders within and around Kigali
City. The minor customers shall be the egg venders who usually boil 10 to 15
trays of eggs and vend it at pubs, market places and streets. The reason for the
target market is that egg production in Rubirizi and Nyacyonga cannot meet
market demands.To increase the sustainability of XYZ Poultry enabling it to continuously support
its mission, helping to improve the social economic welfare and vulnerability of
the Youths in Ndera Sector, Gasabo District. In order to realize the above results,
the following main activities must be implemented:
i. Contract the services of a builder to construct a chicken house
ii. Select and train youths, especially those out of school, to support the
project
iii. Procure and rear chickens to lay eggs to be sold for consumption
iv. Continuously monitor and evaluate activities to ensure objectives are met.
If these activities are implemented, it will create a great impact in the lives of the
project beneficiaries. In the first place, the project will create employment for
at least 30 youngsters currently not employed in any productive venture. This
employment will give them an alternative way to generate income and thereby
decreasing their risk of transmitting and contracting HIV/STDs especially girls.
In the second place, it will provide XYZ Poultry a secure source of funding for
its program activities, allowing it to continuously sustain 20% of its current
activities
In spite of these goals, XYZ Poultry lacks the financial resources necessary to
realize this project. The project seeks 1, 050,000 Frw to aid in the start-up of this
income generating project.2. INTRODUCTION
Project Profile
XYZ Poultry is a project not affiliated/related to any religious, political, or social
grouping, but born out of the need to work with teenage youth(s). It seeks to
facilitate the youths to initiate and create income generating projects, and as we
all as creating development initiatives to employ them. It was started by AKEZA
R. Elsie & MUNEZERO D. Purity in February 2018 to respond to the needs of
Youths who were destitute because of the various socio-economic reasons.3. PROBLEM STATEMENT / PROJECT LOCATION
The problem at hand is that in many cases the project finds itself in financial
needs particularly in addressing the physical, material and educational needs
of the youth despite the fact that the project has a land (3 hectares), with
water storage facilities. These locally available resources could be turned
into a viable income generating project. In addition, some of the youth out of
school are unemployed in productive venture so as to support themselves.
This has not only put the project at a high risk of relying on donor funds to
meet its basic needs, but also it will put some of the youth especially girls at
an extremely high risk for contracting HIV and other STDs.Against this background, we consultatively came up with the poultry project
as income generating project as supplementary sources of income to XYZ
Poultry. Furthermore, the project seeks to provide income generation projects
for the youth, giving them an alternate way to support themselves and their
dependents.4. VISION
To be a passionate people extending God’s grace and hope in every community.
The XYZ Poultry aims at becoming a reference of quality in food for future
generations, working as a team in a socially responsible manner and using all
our resources to respond correctly to the new demands raised by the market.
Our work is focused on the constant development of new products and
services, including all the processes that lead us to achieve an end product
with functional capacity and a high nutritional standard, without incurring any
extra expense for consumers.Our aim is to continue to consolidate our market positioning through the
growth of our customer portfolio, offering customized service and anticipating
their demands. Continuous research, the development of new lines of work
and new product presentations will allow us to improve our competitiveness
and continue to be a company of reference in terms of quality and food
safety. We intend to optimize our business results by promoting teamwork
and professionalism, and upholding our social commitment to the ongoing
development of our products and services in a sustainable manner, and with
greater guarantees for the end user.5. MISSION STATEMENT/GOAL:
Its mission is to promote an environment in which the youths are cared for,
supported, bodily, mentally, socially, morally, spiritually and with an emphasis
on education, nutrition and social support to facilitate a meaningful life.
We will provide quality products for human consumption, certified in
accordance with the strictest quality and food safety standards. Our
commitment to continual development and innovation has allowed us
to maintain a high competitive level and satisfy the needs of our final
consumers. We strive to ensure that our customers grow with us in a
setting of ongoing improvement, through joint efforts and by establishing
bidirectional communications between them and our staff. We exert a
proactive attitude, seeking the consolidation and recognition of our business
project and maintaining our commitment to the sustainable development of
our environment and a respect for nature.6. VALUES
For sustainability, XYZ Poultry has adopted a series of values and undertakings
which are shown in its day-to-day operations, and are defined through the
following aspects:
7. OBJECTIVES
General Objective
To increase the sustainability of XYZ Poultry to continuously support its
mission, promoting educational and health programs within the youths.Specific Objectives
i. To establish a business, raising and selling chicken and eggs (poultry
products) and use its profits to help support the activities of XYZ Poultry
ii. To improve the economic welfare of the youths employing them to run
and support the “poultry farming project”.
iii. To train the youths who have no opportunities to continue for secondary
education in business and management so that they may successfully
support their needs.8. ACTIVITIES
• Procure materials for constructing a permanent poultry house
with favorable conditions for raising chickens and eggs
• Contract builders to build a structure (poultry house) for raising
chicken and eggs
• Contract the services needed for the installation of electricity
• Contract the services needed to install a water system
• Procure 2,000 chicks and the necessary food and supplies needed
to support them
• Recruit and hire the agriculture extension officer to provide
veterinary services to layer birds and to support the needs of the
project
• Train selected the Youth, with the help of partner projects, in
business, management and poultry farming
• Monitor and evaluate the activities of the poultry farm and its
overall impact to its target group and XYZ Poultry as a project,
reviewing the management of the project and the sale of poultry
products9. JUSTIFICATION OF THE PROJECT:
The project is a three-fold strategy, in that it seeks to create a viable income
generation project for XYZ Poultry, giving it an alternate way to support its
daily activities and to improve the welfare of the Youth. The project will
produce poultry products for sale and the proceeds will not only assist the
project to meet the basic necessities of life for the youths such as medical
care and scholastic materials, but also reduce the financial costs the project
spends on buying these products for daily consumption. And it has been
proved that poultry products are a cheap source of the protein which is vital
in maintaining the immune system of HIV positive persons for as long as
possible. This will be a great help to some of our youths who are living with
HIV aids.Second, the project seeks to create employment opportunities to some of the
youth so that they cater for themselves and to some extent their dependents.
With respect to multiplier effect, the activities of this project will be scaled up
by non-members. Or the project will be a model for future income generation
projects within the community and will be replicated by both XYZ Poultry and
other indigenous Non-Government Project too in other localities.
11. PROJECT EXPECTED RESULTS
a) In the first year, the project will have 2,000 laying hens that will produce
eggs for sale. At the end of the first year, the project will earn 25,480
Frw from the sale of eggs to be used to assist in the costs of sustaining
the project
b) At the end of the second year, the project will earn 30,579,500 Frw from
the sale of eggs, enabling it to sustain itself and realize a profit
c) At the end of each hen’s egg-producing life, each hen will be put the
market. Profits realized from this will be reinvested into the project, as
a part of ensuring its sustainability and assisting project in running of its
daily activities.
d) The project will create employment for at least 30 youth who are currently
not employed in meaningful activities. This employment will give them
an alternative way to generate income, decreasing their dependency
on hand-outs, and thereby decreasing their risk of transmitting and
contracting HIV/STDs.
e) The project will provide the youth with practical skills in poultry keeping,
business, marketing, and management. These skills can be used in
future jobs or income generation activities of their own accord.
f) After the first year, the project will reduce the Project (XYZ Poultry)
dependence on donor funding, enabling it to sustain 50% of its current
activities after.
g) The project will be a model for future income generation projects within
the community and will be replicated by AKEZA R. Elsie & MUNEZERO
D. Purity in other localities.12. MANAGEMENT AND IMPLEMENTATION OF THE PROJECT
Project capacity
The project has the capacity to run the proposed project effectively. In the
first place, it has some experience in poultry keeping for about 1.5 years,
and it can collaborate with the District agricultural officer to conduct more
training to its staff so that they gain more skills and knowledge on how to rear
chicken on a large scale. The project has a perennial source of water where it
can obtain water during dry spell. It has its pick-up vehicle which will beused to access its products to markets in Ndera Sector, Kigali City, and other
busy commercial centers like “Quartier Commercial, Quartier Matheus” and
in modern Hotels.Institutional framework and linkages
In the first place, XYZ Poultry will partner with the Department of Agriculture
in Rwanda Agricultural Board (RAB) which has expatriates in agriculture and
animal husbandry. The project will partner with poultry projects in Rubirizi in
Kanombe Sector, Kicukiro District which are also involved in poultry farming
activities. The project will draw on the experiences of these people to help
in the training and development of this project as it progresses. These
relationships will help to ensure this project is successful.Implementation
The project will be executed by the AKEZA. R. Elsie & MUNEZERO D. Purity.
However, it will set up a separate project committee which will be responsible
for the day to day coordination and implementation of the project activities.
It will also be responsible for planning, supervising, monitoring and reviewing
all project activities.Implementation of the project activities will call for close collaboration with
a wide range of partners such as potential buyers of poultry products, sellers
of animal feeds, agricultural District department, Rwanda Agricultural Board
(RAB) and the project funders.This will enhance the opportunities for the realization of the broad goals and
objectives of this project.Monitoring and evaluation
General Monitoring and evaluation will be an on-going activity throughout
the project life. Monitoring will be routinely done through meetings monthly
reports, check lists, surprise visits and support supervision visits. These
reports shall indicate the constraints and challenges in the implementations
and necessary adjustments that had been taken. Progress evaluation will
be done through use of monthly quarterly reports, steering committee
meetings, annual report, registry records, work plans indicating planned
and accomplished activities, functional accountability for project resources
including equipment, facilities, assets and activities.Progress monitoring and evaluation will help the project team to assess the
extent to which implementation is meeting the set objectives. This will enable
the project team to revisit the objectives and priorities and to find ways and
means of improving the performance and better resource used.Financial Management of the project
Finances accruing to this project will be entered into the proper books of
accounts when received. A special Account in the name of the project
will be opened to cater for only project funds. To ensure effective control,
management and monitoring of project funds, no single signatory will be
allowed to access project funds, and the signatories of this account will be
three. Under the consent of the three and approval of the committee funds
will be withdrawn from the bank and utilized for the intended purpose.Books of accounts will be audited regularly through external auditors. After
auditing the project accounts, the auditors will submit an audit report, which
will satisfy the donors and the stakeholders that correct and proper books of
accounts have been be maintained.
There will be the project committee which exercises budgetary control over
project finances. This will be exercised through the comparison of expenses
estimated in the budget with actual expenses incurred during the period.Project Profit Projection
It is assumed that only 80% production shall be realized, which means 374
trays of eggs shall be realized per week for 12 months. That is to say 54 trays
X 30 days X 12 Months = 19.440 trays of eggs in one year. A tray of eggs goes
at 1540 Frw. This means gross revenue of 29,937,600 Frw shall be realized
from the sale of eggs.
The off layers at the end of production shall be sold at 2800 Frw each, raising
additional revenue 5600 Frw. This implies that total gross revenue of 35537.6
Frw shall be realized at the end of the production cycle in 18 months, and this
implies a net profit of 12417.3 Frw shall be made at the end of 18 Months.Project sustainability
In the initial stage, the project will be sustained by the founder’s and a loan
funds. However, in the long run the project will finance itself. Part of the
funds will be used to execute the project while another percentage will be
re-invested in the poultry business to expand the project, hence increasing
sales and profits.
Through a capacity building workshops, the project staff will be empowered
with skills in treatment of layers and have appropriate knowledge on feeds.13. THE POULTRY BUDGET
14. CONCLUSION
Now poultry business is a very popular business in Rwanda and in Gasabo
District in particular. This business does not require huge capital and
it requires small amount of investment needed to start it. Although the
business has many existing competitors in the market, but more still, we have
a high chance to succeed because the existing competitors can`t fulfill the
customers demand. They are also failing to meet the customers need in the
perspective of service care. So, we believe that choosing this business is our
right decision.
Suppose your friend wants to start a business of selling eggs, prepare for him
a business plan which he will present to Umurenge Sacco-Kabeza in order to
borrow money.
Prepare the business description and marketing plan sections of a business
plan for business activity of your choice.
1. In your opinion, explain the meaning of business plan.
2. After your studies you have a dream to start a small business and
you have just started writing your business plan. Explain how Rwanda
Revenue Authority can use that business plan.
3. You have just established a mushroom growing business in your home
area. You intend to launch your business to create community awareness,
4. Prepare your launch program for the above-mentioned business.
5. Describe three challenges that a new enterprise might face.
6. A business that fails to plan will plan to fail, Discuss.
7. Explain the term “marketing mix” as used in business planningActivities: 0 -
Key Unit competence:
To be able to maintain effective quality compliance system in business
Quality assurance and compliance case study:
The government of Rwanda through Rwanda Standards Board is mandated
to provide National standards and conformity assessment guidelines that
entrepreneurs/traders ought to follow during production and selling of their
goods and services. These guidelines help entrepreneurs to be cautious and
careful with the quality and measurements of raw materials used, goods
produced and the technology used. If your business conforms to the required
quality management, assurance and compliance standards, it reduces
mistakes and inconsistencies that could make these goods unsafe. If you
manufacture a food product, your quality control processes should monitor
temperature and foreign bodies to decrease the likelihood that you will make
someone sick. Ensuring customer safety saves your business money and
averts damage to your reputation.One of the ways that the business can strengthen its quality is by listening to
its customers and incorporating their feedback in the business processes and
production systems. Product quality issues that customers normally report
should be tracked and managed through a rigorous process of investigation
and resolution. These and more processes help the business to continually
enhance customer satisfaction. It’s also important that businesses are
genuine in their measurements of goods produced and sold.Questions
i. Referring to the above case study, answer the following questions
below;
ii. What does the National Standards and conformity assessment
guidelines expect entrepreneurs to do?
iii. What are likely negative effects the business may face if customers are
not satisfied as a result of wrong measurements of the goods bought?
iv. What strategies would you propose to the entrepreneurs to implement
and ensure the safety of their customers?
v. Design a simple quality management system of the business idea you
intend to start in your community.5.1 Quality assurance and quality compliance
Explain the meaning of:
i. Quality assurance,
ii. Quality compliance and
iii. Quality management5.1.1 Meaning of quality assurance
Quality assurance (QA) is any systematic process of determining whether a product
or service meets specified requirements. It is also referred to as the maintenance
of a desired level of quality in a product or service, especially by means of attention
to every stage of the production process or delivery.A quality assurance system is meant to increase customer confidence and a
company’s credibility, while also improving work processes and efficiency, and it
enables a company to better compete with others.Quality assurance is very important because it helps a company create products
and services that meet the needs, expectations and requirements of customers. It
yields high-quality product offerings that build trust and loyalty with customers. The
standards and procedures defined by a quality assurance program help to prevent
product defects before they arise. Quality assurance includes two principles:“Fit for purpose” (the product should be suitable for the intended purpose);
and “Right first time” (mistakes should be eliminated).
It includes management of the quality of raw materials, assemblies, products
and components, services related to production, and management, production
and inspection processes5.1.2 Meaning of quality compliance
Quality compliance means acting in accordance with systematic processes
of determining whether a product or service meets specified requirements
at every stage of the production process or delivery. Complying with the
quality requirements helps the business in different ways such as satisfying
customers’ needs, increasing the level of sales due to a large number of
customers attached to the product or service, complying with the state’s
quality requirements among others.
Using typical examples, differentiate quality assurance from quality compliance.
5.2. Measurement standards
1. Study the illustrations below and answer the questions thereafter.
Measurements are often made using instruments such as measuring tapes,
weighing scale, rulers, clocks, etc. Measurement is a comparison process. It
involves comparison of the quantity to be measured with a chosen standard or
unit. In the past, for example, the length of an object was compared with familiar
lengths: strides, length of a man’s foot, arm and fingers. Ancient people also used
stones or seeds as their standards or units to measure weight. The position of
the sun and the moon were used to tell time and seasons, the dimensions of the
human body. Below are some of measurement standards that are used in business
activities.The base quantities according to the International System of Quantities (ISQ) are
listed in the following table:
Other quantities are derived from the base quantities and some of them are
listed in the table below.
For the business you intend to start in your community, analyse different
measurement standards you would emphasize, and why?5.3. Role of quality compliance in business
Why is it important to comply with quality requirements in business?
Compliance means meeting the regulatory requirements.
1) Quality compliance in business ensures that the product satisfy their
intended use.
2) It also reduces the risk of fines, penalties and closure of businesses. When
a business does not meet some compliance requirements it faces the law.3) It leads to improved health and safety.
4) It leads to improved health and safety quality improvement.
5) Quality compliance maintains or increase market share for the
businesspeople.
6) There is fair competition among businesses hence increasing customers’
satisfaction from the products.
1) Research on the Rwanda Standards Board website about the requirements
needed to get an ‘S’ mark for the products in the school business club.
2) use the link below and explain the importance of the program
“Zamukana Ubuziranenge
“http://ryaf.rw/?p=2333
For any product you produce in the school business club: Discuss and write
down the steps, measurements and procedures of making that product to
ensure standardization of practices in your business, align with the acceptable
RSB standards and make an action plan to acquire RSB certification for services
or products that your business club produce or offer. Then, share with the class.
1. James and Rosset intend to start a business of making Chapati and
mandazi, but they have a challenge of ensuring consistency in quality
(maintaining the same test, size and thickness). With your knowledge on
quality assurance and standardisation;
a) Advise James and Rosset on how they can set quality standards in
their business.
b) What measurement tools could they use to achieve the quality
standards?
2. Explain the importance of accreditation for certification services and
testing laboratories.References
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