MODULE CODE: PST311L STUDENT NO: 60238518

ASSIGNMENT: 01 UNIQUE NUMBER: 885765

QUESTION 1

How the following factors influence profit.

1.1 Kind of Business

The kind of business determines how much profit an entrepreneur is going to get after selling their
goods. The profit is determined by whether the goods are in constant demand or not. For example,
a grocery shop and a fashion shop. The demand for groceries and essential household goods is
constant as opposed to the demand for fashion items.

1.2 The element of risk

Because of the uncertainty of economic life, there can be no question of a general rate of profit. The
profits of different industries will differ according to the degree of uncertainty which exists in every
production area. In well- established industries, which are subject to fewer fluctuations, uncertainty
is small and pure profits are inclined to below. The greater the uncertainty, the greater the
expectations of profit but also the expectation of loss. The element of risk is always high when new
products are launched, but expectations of the high profits often move people to invest capital in
those production areas.

1.3 The competence of the entrepreneur

The profits of similar businesses which produce under similar conditions (e.g established businesses)
do not normally differ much from each other. When differences do exist, they are due to the
competent and efficient running of individual businesses, which includes good organization,
optimizing the use of manpower and materials, keeping unit costs down.

1.4 Turnover and market size

The entrepreneur’s total profit is determined by his turnover. If the market is large, a lower profit
can be made on each unit. This will increase the turnover and lead to a larger total profit. A high
turnover usually leads to a lowering of unit costs.

1.5 New production techniques

Strong competition and striving towards maximum profits encourage entrepreneurs to develop and
apply new production techniques to improve the efficiency of their businesses. Applying new and
improved production techniques often results in much higher profits while businesses which
continue to use antiquated methods and equipment are left with lower profits. A business which
employs the best combination of methods is likely to make more profit than a business which clings
to old and outdated ways.

1.6 Business cycles

Business cycles are some of the important factors which influence profits. During times of prosperity
profits are usually high, and during depressions losses are the order of the day. The reason for this,
among other things, that prices usually rise and drop faster than costs.
MODULE CODE: PST311L STUDENT NO: 60238518
ASSIGNMENT: 01 UNIQUE NUMBER: 885765

QUESTION 2
2.1 Cash flow plan
A cash flow plan is a forecast which shows how much cash you can expect to come into your
business and how much cash you can expect to go out of your business each mother. It also helps to
ensure that a business does not run out of cash which is how it ensures that a business runs
successfully.
How does one draw up a cash flow plan?
❖ One should forecast the following:
1. How much cash will come into the business each month.
2. How much cash will go out of the business each month.

What steps can one take to help one compile a cash flow plan?

❖ One should determine the following:

1. Cash at the beginning of the month – this is the amount of expected to be in the cash
box (petty cash) plus the amount of cash in the bank account at the beginning of the
month.
2. Cash in from sales – This is the amount that the business forecasts for sales
remembering cash that comes in from previous credit sales is part of this amount. A
sales and cost plan can be helpful, this the sales, costs (salaries/wages, rent, electricity,
water, stationery, transport etc.) and profit the business is likely to have during the next
month/year.
3. Any other cash in – This is the amount of cash the business forecasts will get during the
month from other sources such as interest from the bank account or donation from an
outside sponsor.
4. Total cash in – Adding up cash from 1 to 3, this the total cash amount the business
expects to come in the specific month.
5. Cash out for costs – This is the amount of cash the business forecasts and expects to pay
in the specific month for goods/ materials, wages etc.
6. Cash out for planned investment in equipment – Will the business buy any equipment
during the specific month?
7. Any other cash out – This is any other amount of cash the business forecasts and expect
to pay during that specific month.
8. Total cash out – Adding up all cash paid from step 5 to 7
9. Cash at the end of the month – Subtract the total cash out from the total cash in to get
the amount left at the end of the month which is also cash at the beginning of the next
month.
MODULE CODE: PST311L STUDENT NO: 60238518
ASSIGNMENT: 01 UNIQUE NUMBER: 885765

2.2 Cash budget

The cash budget is an essential instrument in the hands of the management of a business, enabling
them to ensure that funds are available to meet the obligations of the business. The budgeting period is
normally one year, divided into periods of one month each. The cash budget indicates the financial
implications of the planned activities for the budgeting period and therefore serves as a good indication
of whether the available cash will be too little or too much.

(a) Information needed to compile a cash budget

• The balance sheet
• The bank balance at the beginning of the budgeting period
• Expected cash and credit
• Payments from debtors
• Credit conditions for debtors
• Expected cash and credit purchases of trading stock
• Payments to creditors
• Credit conditions for creditors and credit purchases
• Other specified payments and receipts.
(b) Information contained in the cash budget
• Estimated cash to be received mainly from debtors for cash sales and collections for
credit sales during a month.
• Estimated cash to be paid for cash purchases and the payment of credit purchases to
creditors for aparticular month.
• The bank balance at the beginning of the month.
• The estimated bank balance at the end of the month.

2.3 Human resources

The human resources plan is a description of how many staff you intend employing, and where, why and
how you intend recruiting them. It helps with conflict resolution and employee benefits. Human
resource is taking those responsibilities and making sure they meet the goals, mission and future needs
of the business. Human resources key performance areas are:

• Recruitment and selection.

• Education, training and development of staff.
• Employment equity and diversity of management.
• Occupational health and safety.
• Individual performance management.
• Labor relations.
• Employee wellness.
• Workforce planning and personnel administration.
MODULE CODE: PST311L STUDENT NO: 60238518
ASSIGNMENT: 01 UNIQUE NUMBER: 885765

QUESTION 3

Entrepreneurship Class

3.2.1 Story telling technique

As telling a story immediately captures the attention of learners, I as an experienced teach will
encourage this to serve the advantage that difficult concepts can be explained by means of gesture,
body language, pictures and real-life examples. I will use this technique to introduce learners to the life
of entrepreneurs, this is important for them to realize that many successful entrepreneurs did not start
off as millionaires. I will allow the learners to each tell a story about an entrepreneur of their choice. This
way learners hear different stories and become more familiar with the entrepreneurial world. I will also
invite entrepreneurs to class to come and tell their stories. During these visits, learners will be exposed
to different role models and become encouraged and motivated to organize their own lives.

3.2.2 Game technique

As learners are exposed to entrepreneurship from a very early age by playing games. I as an experienced
teacher will introduce games with strong elements of excitement and competition to stimulate the
interest of players. Remembering that a playing learner is actively involved in the learning content, I will
use this technique to introduce games that feature in entrepreneurial programmes for example an
activity game with entails learners engaging in activities and doing duties that entrepreneurs face
everyday like planning, buying resources and materials for their products/ services, ensuring the
manufacturing process runs smoothly and that the final products are of good quality and finally selling
and delivering their products to consumers. I will task learners to plan and create their own businesses
considering all these entrepreneurial activities to produce the final product.

3.2.3 Role play technique

Role play means acting out a situation to make it seem real. I as an experience teacher will use this
technique to expose learners to the practice of entrepreneurship in play which will allow learners to
take part in decision making processes and teach them to take risks without venturing into reality.
Learners will learn that their decisions actually have consequences as it happens in real businesses. I will
use this technique to also mimic reality as it is daily experienced by entrepreneurs ensuring that every
learner is actively involved in order for them to acquire entrepreneurial skills and knowledge.

3.2.4 Mentoring programme as a technique

This programme involves apprenticing a learner to an existing enterprise which enables them to gain
experience in the business world without taking any risks. I as an experience teacher will implement this
programme according to the needs of the learners by allowing the young aspirant entrepreneurs to take
part in all activities and decision making of the business. I believe learners learn more easily from each
other, so this grants an opportunity for senior learners who have established and run their own small
successful businesses like selling sweets to mentor the junior aspirant entrepreneurs, closely supervised
of course. This way learners learn what being an entrepreneur really entails.
MODULE CODE: PST311L STUDENT NO: 60238518
ASSIGNMENT: 01 UNIQUE NUMBER: 885765

3.4.5 Brainstorming as a technique

Brainstorming teaches learners to work together. I as an experienced teacher will apply this fruitfully
aiming to generate as many ideas as possible from learners in a short time. I will divide learners into
groups and give them the same instruction which is to describe the kind of person who would make a
good entrepreneur. Allow learners 15 minutes to brainstorm and give them flash cards which would
particularly be useful in this context and it allows learners to express their ideas, to put them in order
and to visualize them. I will also need to set rules for brainstorming like never criticizing or evaluating
ideas and remind learners that they should all participate, and every idea is acceptable. A vast
improvement in the quality of answers will prove that this technique helps leaners stimulate one
another mentally.

3.4.6 A case study as a technique

Case studies involve real life situations and are usually taken from newspapers or books. I as a teacher
regard case studies useful to me in evaluating learners. I will present case studies to learners to not only
test their knowledge but also their insight. Thereafter I will frame questions in such a way that learners
have an opportunity to argue and to make choices. An example case study would be about previously
disadvantaged learners becoming successful entrepreneurs. The following would be a set of questions
after reading the case study: 1. Name two characteristics displayed by the entrepreneurs that are typical
from young aspirant entrepreneurs; 2. What role are these entrepreneurs playing in the economy; 3.
Name a skill that counted in their favor.

3.4.7 Active participation and experience as a technique

As all the other techniques require active participation from learners, I as a teacher have to try to
determine how the learners experience the content of the lessons. For example, to determine howthey
felt when they succeeded or failed at carrying out their activities as practical experience is the most
important in entrepreneurial education for learners to experience what they think and talk about it. An
example of active participation is organizing a flea market at school and ask all learners to participate.