Understanding Entrepreneurship
Senior 1 · Entrepreneurship
Understanding Entrepreneurship
Lesson 3 of 4
25 min
Until 2022, families in one village in Rwamagana District walked about 5 km to town to buy soap, sugar or airtime, or to withdraw money sent by relatives. Then Habimana opened a shop at the village trading centre.
Today his shop sells everyday goods, is an agent for two mobile-money networks, and charges phones. He employs two young people from the village, buys eggs and bananas from nearby farmers, and pays his taxes every year. When he added mobile money, he trained both workers to serve customers safely. (An illustrative case.)
Think about it: Make a list of everyone who is better off because Habimana opened his shop.
A business needs land or premises, workers, and money and equipment. None of them produces anything until someone brings them together and decides what to do with them. That someone is the entrepreneur.
Definition
Factors of production: the resources used to produce goods and services. They are land (natural resources and premises), labour (human effort), capital (money, tools, machines and buildings), and entrepreneurship, which organises the other three.
Example: Habimana's rented shop (land), his two workers (labour), his shelves, stock and phone chargers (capital), and his own planning (entrepreneurship).
| Role in the business | What the entrepreneur does | In Habimana's shop |
|---|---|---|
| Organiser | Brings land, labour and capital together | Rents the shop, hires two workers, buys stock |
| Decision-maker | Decides what to sell, how much, and at what price | Chooses which goods to stock each week |
| Risk-bearer | Carries any loss if the business fails | His savings paid for the first stock |
| Innovator | Introduces new products or methods | Added mobile money and phone charging |
| Manager | Keeps records, supervises and trains staff | Trained both workers in mobile-money safety |
The diagram shows the groups who gain when an entrepreneur succeeds. Each arrow is one role.
Definition
Tax: money that people and businesses must pay to the government, which uses it to provide public services. In Rwanda taxes are collected by the Rwanda Revenue Authority (RRA).
Example: a shop pays tax on its business every year.
The money a business pays to workers in a year is:
Worked example
Jobs and local purchases (illustrative figures)
Habimana pays each of his 2 workers Frw 60,000 a month. Every week he buys 30 trays of eggs from local farmers at Frw 4,500 a tray.
Step 1: wages in a year.
Step 2: eggs in a week.
Step 3: eggs in a year of 52 weeks.
One small shop puts Frw 1,440,000 a year into workers' hands and Frw 7,020,000 a year into farmers' hands, most of it spent again in the village.
Worked example
Tax paid (illustrative rate)
Suppose a business pays tax equal to 3% of its sales. (Real rates depend on the type and size of the business.) Habimana's sales for the year are Frw 9,600,000.
The shop pays Frw 288,000 in tax: a share of the country's schools, roads and health centres.
Tip
Exam hook: ask "who benefits?" When a question asks for the roles of an entrepreneur in society, walk round the diagram: customers, workers, government, suppliers, community, country. Each one gives you a role.
UNHCR, "Refugee entrepreneurs create jobs in Rwanda" (2019, under 2 minutes). Inkomoko, a business-training organisation in Rwanda, trains refugees to run businesses. Watch for the people, other than the owners, who gain from each business.
Choose one business near your school or home: a shop, a salon, a mill or a garage.
Practice
Sources and credits
Written by Ganzaa: the Rwamagana case, the tables, the diagram, the worked examples, the activity and the practice items. Figures and the tax rate are illustrative (2026).
