Thursday, 17 February 2022 13:39

Agricultural Entrepreneurship and Business Planning Questions and Answers

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QUESTIONS

  • Give yourself one hour.
  • Marks: 100
  1. Various options are provided as answers to the following questions. Choose the best answer and write only the number (i–iv) next to the question number (1.1–1.5).

1.1 A business plan is set up to provide all planning information needed for a specific farming operation. Which ONE of the following aspects is NOT normally part of a business plan?

  1. a farm budget
  2. marketing plan
  3. soil surveyance detail
  4. details of employees.

1.2 In an agricultural business, a _______ is an entrepreneur.

  1. production factor
  2. capital
  3. labourer
  4. farmer

1.3 The characteristic of an entrepreneur that has a bearing on strategic management is:

  1. team builder 
  2. technically knowledgeable
  3. visionary
  4. independent thinker.

1.4 The _______ indicates a condition where the quantity of a product required by consumers, is exactly equal to the quantity which producers wish to sell.

  1. market niche 
  2. market penetration
  3. market equilibrium
  4. market value

1.5 ONE of the following factors would influence the supply as well as the demand for a product:

  1. The possibility of increasing the supply of products
  2. The range of products available
  3. The price of the products
  4. The attitude and values of consumers (5 × 2 = 10)
  1. Match the items in column A with those in column B. Write only the correct numbers and letters. (5 × 2 = 10)
    Column A Column B
    2.1 start-up capital 
    2.2 entrepreneur 
    2.3 business plan 
    2.4 management team 
    2.5 financial details of a business plan
    A novel idea
    B Board of Directors
    C current balance sheet
    D how the business operates
    E takes a long time
    F fundraising
    G market analysis data
  2. Give ONE word/term/phrase for each of the following descriptions. Write only the word/term/phrase next to the question number. (2 × 2 = 4)
    3.1 A source of capital resulting from farming profits that have been allowed to accumulate in a bank
    3.2 The management function that encourages farm workers to do their best at all times
  3. Define the following:
    4.1 entrepreneur
    4.2 entrepreneurship
    4.3 start-up costs (3 × 2 = 6)
  4. The following statements are incorrect. Change the underlined words to make them correct.
    5.1 Threats are the external motivating factors that are needed for a farming business to prosper.
    5.2 The target entrepreneurs are the end users of the products. (2 × 2 = 4)
  5. List five personal characteristics of a successful entrepreneur. (5 × 1 =5)
  6. The entrepreneurial process involves the starting of a new business venture.
    7.1 Summarise the four phases of the entrepreneurial process using a mind map. (4 × 2 = 8)
    7.2 Describe the first phase of the entrepreneurial process. (1 × 5 = 5)
  7. A business plan is a plan that an entrepreneur develops to create an action plan for his or her business.
    8.1 State THREE reasons why an entrepreneur should develop a business plan. (3 × 2 = 6)
    8.2 List the FOUR main components of a good business plan, and briefly describe each one. (4 × 3 = 12)
  8. Read and analyse the case study about Nomakhosi and answer the following questions.
    9.1 Name the four different aspects of SWOT analysis and give two examples of each. (4 × 3 = 12)
    9.2 List TWO weaknesses that Nomakhosi has. (2 × 1 = 2)
    9.3 Select an opportunity and a challenge that Nomakhosi can exploit if she decides to pursue/take up this challenge. (1 × 2 = 2)
    9.4 Determine TWO managerial strategies that she could implement to take advantage of this opportunity. (2 × 1 = 2)
    9.5 Advise Nomakhosi with regard to where she can obtain financial assistance. (1 × 1 = 1)
    Nomakhosi owns three hectares of arable land with access to irrigation and has previously grown vegetables. She has heard that there is a strong demand for baby vegetables and for organic beef in Europe. The South African government supports Black Economic Empowerment initiatives and provides favourable loan arrangements.
    Nomakhosi does not have experience in the production of baby vegetables or the export of produce. She has access to technical expertise from her local extension officer. She also has to consider the fact that vegetable production is intensive and minimum wages are fairly high. Exchange rates are also very unstable.
    9.6 There are TWO important types of budgets that she must draw up as a farm manager. Name these budgets AND state how they differ from each other. (2 × 2 = 4)
    9.7 Indicate TWO types of records that must be kept by Nomakhosi as a farm manager. (2 × 1 = 2)
  9. Qinisani Mzimela has thought about starting a farming business to produce maize.
    He has spent many hours trying to write a business plan.
    10.1 Suggest TWO reasons why Qinisani may not being able to write a business plan. (2 × 1= 2)
    10.2 What advice can you give to Qinisani to solve his problem? (1 × 1 = 1)
    10.3 Motivate the advice that you provided in (10.2). (2 × 1 = 2)

ANSWERS

  1. Choose the best answer:
    1.1 soil surveyance detail (iii)
    1.2 farmer (iv)
    1.3 visionary (iii)
    1.4 market equilibrium (iii)
    1.5 The price of the products (iii) (5 × 2 = 10)
  2. Match the items:
    2.1 F
    2.2 A
    2.3 D
    2.4 B
    2.5 C (5 × 2 = 10)
  3. Give ONE word/term/phrase:
    3.1 Land
    3.2 Productivity (2 × 2 = 4)
  4. Define the following:
    4.1 An entrepreneur is a person who takes a novel idea, sees an opportunity and converts it into a successful business.
    4.2 Entrepreneurship is the capacity and practice of starting, running and growing a business.
    4.3 These are the costs incurred to start and enterprise (e.g. to buy or rent land and equipment; to buy inputs; to pay overheads) (3 × 2 = 6)
  5. Change the underlined words to make them correct:
    5.1 Opportunties
    5.2 market (2 × 2 = 4)
  6. Creative and innovative; achievement-orientated; independent thinker; well educated in the field; experienced in the field (lengthy and quality work experience); technically knowledgeable; risk taker; good leader; good at working with people; committed; perseverant; team builder (any five) (5 × 1 =5)
  7. The entrepreneurial process:
    7.1 The following should go in the mind map: Phase 1: identifying and evaluating a business; Phase 2: Developing a business plan; Phase 3: Determining the required resources; Phase 4: Managing the entrepreneurial process.. (4 × 2 = 8)
    7.2 Identification of a business idea; (ii) sources of a business opportunity; (iii) evaluation of a business opportunity. (1 × 5 = 5)
  8. A business plan:
    8.1 To document your novel idea; To fundraise; To advertise the farming business; To attract partners; To assess and improve it (any three) (3 × 2 = 6)
    8.2 General overview of the business; Market information; Management and staff details; Financial details. (4 × 3 = 12)
  9. Read and analyse the case study:
    9.1 Strengths; Weaknesses; Opportunities; Threats. (Any valid examples: remember that strengths and weaknesses are internal to the business and opportunities and threats are external). (4 × 3 = 12)
    9.2 Does not have experience in the production of baby vegetables or the export of products. (2 × 1 = 2)
    9.3 South African government supports Black Economic Empowerment initiatives and provides favourable loan arrangements ; Access to technical expertise from her local extension officer. (any one) (1 × 2 = 2)
    9.4 Develop a vision; Develop a mission statement; Develop a business strategy; Develop an enterprise strategy (any two) (2 × 1 = 2)
    9.5 Land Bank; Development Bank of SA; she could approach any financial institution (any one) (1 × 1 = 1)
    9.6 Enterprise budget; Whole-farm budget. Enterprise budget is a budget of one particular enterprise on a farm whereas the whole-farm budget combines all the farm enterprises to show the net returns on the farm business (2 × 2 = 4)
    9.7 Crop records; labour records (2 × 1 = 2)
  10. Qinisani Mzimela:
    10.1 He does not know what to write; he does not know how to structure the content; it might take a long time to write; it might contain too much/too little detail; he might over-estimate and be overly optimistic in terms of figures; it might be difficult to translate a novel thought into a business plan; any sensible points (any two) (2 × 1= 2)
    10.2 He should use an electronic template. (1 × 1 = 1)
    10.3 It is easy to fill in; it is easily accessible; it guides you about what to write; many are free; the structure and format, including headings, are standardised to business norms; any other sensible points (any two)
Last modified on Friday, 18 February 2022 11:01