Understanding Entrepreneurship
Senior 1 · Entrepreneurship
Understanding Entrepreneurship
Lesson 1 of 4
25 min
For five years Mukamana worked as a tailor in a shop near the Nyabugogo bus park in Kigali. She earned a fixed wage at the end of every month, whether the shop sold a lot or nothing at all.
Every January she watched the same scene: parents crowding the shops for school uniforms, and shops running out. In 2025 she took Frw 300,000 of her own savings, bought two second-hand sewing machines, rented a small stall and hired an assistant. Nobody promised her a single customer. If the uniforms did not sell, the savings were gone.
In January 2026 she sold 180 uniforms. (An illustrative case; the prices in this lesson are illustrative, 2026.)
Think about it: What did Mukamana notice that others ignored? What did she risk? Who, apart from Mukamana, gained from her decision?
Mukamana moved from being paid by someone else's business to running her own. Economists have precise words for what she became and for the thinking that got her there.
Definition
Entrepreneur: a person who spots an opportunity, brings together the resources needed (money, people, materials and equipment) to start and run a business, and accepts the risk of losing money in the hope of making a profit.
Example: Mukamana, who used her savings to open a uniform workshop.
Definition
Entrepreneurship: the process of finding an opportunity and creating and running a business to meet it. The entrepreneur is the person; entrepreneurship is the activity.
Example: noticing the January uniform shortage, planning, buying machines and selling uniforms are all parts of Mukamana's entrepreneurship.
Definition
Enterprising person: anyone who shows initiative, creativity and a willingness to take sensible risks to get something done, at school, at home or at work, whether or not they own a business.
Example: a Senior 1 student who organises classmates to collect and sell used bottles to raise money for the class.
Definition
Intrapreneur: an employee who behaves like an entrepreneur inside an organisation. The intrapreneur proposes and leads a new idea, but the employer provides the money and carries most of the risk.
Example: a loans officer at a savings and credit cooperative (SACCO) who proposes letting members repay loans by mobile money, and then runs the project.
Definition
Risk: the chance that a decision turns out worse than expected, for example that money put into a business is lost.
Example: Mukamana's risk was that parents would buy uniforms elsewhere and her Frw 300,000 would be lost.
Definition
Innovation: putting a new or improved idea into practice: a new product, a better way of producing it, or a new way of reaching customers.
Example: offering a free name label sewn inside every uniform is a small innovation; accepting mobile-money payment is another.
Every entrepreneur and every intrapreneur is an enterprising person, but not every enterprising person runs a business or leads a project at work. The diagram shows the three groups as sets.
| Entrepreneur | Intrapreneur | Ordinary employee | |
|---|---|---|---|
| Who owns the business? | The entrepreneur | The employer | The employer |
| Whose money is at risk? | Mostly the entrepreneur's | Mostly the employer's | The employer's |
| How is the person rewarded? | Profit (or loss) | Salary, and perhaps a bonus or promotion | Wage or salary |
| Freedom to decide | Full | Within the project the employer approves | Follows instructions |
| Rwandan example | A woman who opens a juice kiosk in Huye | A tea-factory technician who designs a faster sorting line | A cashier at the same tea factory |
Tip
Where the word comes from: entrepreneur comes from the French verb entreprendre, "to undertake". An entrepreneur is someone who undertakes a venture and answers for the result. An intrapreneur does it inside (Latin intra) someone else's organisation.
An employee's reward is agreed in advance. An entrepreneur's reward is whatever is left after every cost has been paid. That is why the first sum every entrepreneur learns is this one:
If the answer is negative, the business has made a loss.
Definition
Profit: the money left from a business's income after all its costs have been paid. When costs are greater than income, the difference is a loss.
Example: income Frw 50,000 and costs Frw 42,000 give a profit of Frw 8,000.
Worked example
Mukamana's January (illustrative figures)
She sold 180 uniforms at Frw 6,000 each. Her costs for the month were: fabric and thread Frw 540,000; her assistant's wage Frw 90,000; stall rent Frw 60,000; electricity and transport Frw 30,000.
Step 1: total income. , so income was Frw 1,080,000.
Step 2: total costs. , so costs were Frw 720,000.
Step 3: profit.
Mukamana made a profit of Frw 360,000 in January.
Worked example
The same month, if the risk had gone wrong
Suppose Mukamana had bought fabric for 180 uniforms but sold only 100. Her costs stay at Frw 720,000, because the fabric, wage, rent and transport were already paid.
Income:
Result:
A negative answer means a loss of Frw 120,000. She would keep the unsold fabric, but the cash would be gone until the uniforms sold. This is the risk an employee never carries.
Warning
Income is not profit. A common mistake is to say "Mukamana earned Frw 1,080,000." That is her income. What she actually gained was the profit, Frw 360,000. Always subtract every cost first.
CrashCourse, "Who Even Is An Entrepreneur?" (Crash Course Business: Entrepreneurship #1, 13 minutes). Watch for the host's definition of an entrepreneur and for the difference between a small business and a fast-growing start-up. The examples are American: think of a Rwandan business that fits each one.
Work in pairs. For each person, decide whether they are an entrepreneur, an intrapreneur, or an enterprising person who is neither. Give one reason each, then compare with another pair.
Practice
Sources and credits
Written by Ganzaa: the Nyabugogo case, the diagram, the table, the worked examples, the activity and the practice items. All prices are illustrative (2026).
