Introduction to Entrepreneurship
Senior 4 · Entrepreneurship
Introduction to Entrepreneurship
Lesson 2 of 4
25 min
Every market day in her town in Huye District, Mutoni sees the same thing: the fresh fish are sold out by ten in the morning, and buyers who arrive later go home with dried fish or nothing. A valley near her family's land holds water all year. She wonders whether a fish pond could supply the stall.
Between that first thought and the first fish sold lies a chain of decisions. Should she check how many fish the market could take? How much will a pond, young fish and feed cost, and where will the money come from? Who will feed the fish when she is at school? And if the business works, what happens to it in ten years? (Illustrative case: the person and figures are invented.)
Think about it: put Mutoni's questions in the order in which she should answer them. Which question, answered badly, should stop the project before any money is spent?
Definition
Entrepreneurial process: the series of stages through which an entrepreneur turns an idea into a running enterprise and, in the end, takes value out of it: identifying an opportunity, evaluating it, planning, mobilising resources, launching and managing the venture, and harvesting or exiting.
Example: Mutoni going from "the fish stall empties early" to selling her own fish, and later deciding who will run the farm.
| Stage | Key question | Main activities | In Mutoni's case |
|---|---|---|---|
| 1. Identify the opportunity | What need is not being met? | Observe problems, changes and trends; generate ideas | Fresh fish sell out early; there is a valley that holds water |
| 2. Evaluate the opportunity | Is it worth doing, and can I do it? | Check demand, competition, costs, skills, risks; decide to go, change or stop | Count buyers, ask fish traders about prices, learn about pond farming |
| 3. Plan the venture | How exactly will it work? | Set goals; write a business plan or Business Model Canvas; budget | Pond size, type of fish, feeding schedule, sales plan, cash budget |
| 4. Mobilise resources | What do I need, and where will it come from? | Raise capital; find land, equipment, staff, suppliers; register and get permits | Savings, a SACCO loan, a pond builder, a supplier of young fish |
| 5. Launch and manage | Is it working, and how do we improve it? | Start operations; keep records; control costs and quality; grow | Stock the pond, feed and record, sell, compare results with the plan |
| 6. Harvest or exit | How will the owner take out the value created? | Reinvest, sell, merge, hand over to family or managers, or close in an orderly way | Hand the farm to a manager while she studies, or sell it to a cooperative |
At stage 4 the venture also becomes legal. In Rwanda a business is registered with the Office of the Registrar General at the Rwanda Development Board (RDB); RDB states that business registration is an online process and free of charge (RDB, 2026). Unit 5 covers the forms of business and registration in detail.
Tip
Memory hook: "I Eat Plenty of Mangoes, Leaving Half." Identify, Evaluate, Plan, Mobilise, Launch, Harvest. In an exam, name each stage and say what the entrepreneur does in it; a list of names alone earns few marks.
The arrows suggest one direction, but real entrepreneurs loop back. Evaluation often sends an idea back to stage 1 to be changed; results at stage 5 send the entrepreneur back to the plan. Changing a business's basic idea in response to evidence is called a pivot. The stages also overlap: Mutoni may start looking for a supplier of young fish (stage 4) while she is still writing her budget (stage 3).
Definition
Feasibility: whether an idea can work in practice: whether there are enough buyers, whether the entrepreneur can obtain the skills and resources, and whether it can make a profit. A feasibility study is the investigation that answers these questions before money is committed.
Definition
Harvesting: the stage at which the entrepreneur takes out the value the venture has created, by drawing profits, selling the business or part of it, merging it, or handing it over. An exit strategy is the owner's plan for how and when to do this.
Worked example 1: is the opportunity worth pursuing? (stage 2)
Mutoni plans to stock 2,000 young fish (fingerlings). She expects 80% to survive to harvest, at an average of 0.4 kg each, and to sell them at Frw 3,000 per kg. The costs of one growing cycle are: fingerlings Frw 200,000, feed Frw 350,000 and paid help Frw 150,000. Estimate the surplus from one cycle. (Illustrative figures.)
Fish surviving:
Mass and revenue:
Costs and surplus:
Decision: on these figures a cycle covers its running costs with Frw 1,220,000 to spare, which must still pay back the pond. But every input is an estimate. If survival were only 50%, the fish would weigh kg and earn Frw, and the surplus would fall to Frw 500,000. Evaluation means testing the weak assumptions (here, survival and price) before going on.
Worked example 2: how much start-up capital? (stage 4)
Mutoni's one-off costs are: digging and lining the pond Frw 450,000, a net and tools Frw 80,000, and a small store Frw 120,000. She also needs the first cycle's running costs, Frw 700,000, before any fish are sold. She adds 10% for costs she has not foreseen. She has Frw 400,000 in savings. How much must she borrow? (Illustrative figures.)
Total before contingency:
Contingency and total:
Amount to borrow:
Note: the running costs of the first cycle are part of start-up capital. A common reason new ventures fail at stage 5 is that the owner budgeted for equipment but not for the months before sales begin.
Warning
Do not skip stage 2. Excitement about an idea tempts people to go straight from "I have an idea" to "I have bought equipment". Evaluation is the cheapest stage at which to discover that an idea will fail. A second mistake is to forget stage 6: an owner with no exit plan may find that the business cannot run without them, so it cannot be sold or handed on.
Utrecht University, "Entrepreneurial process – Entrepreneurship". Watch for how the speaker describes the journey from a business idea to a company, and note where it matches the six stages above.
Practice
Key points
Sources and credits
Written by Ganzaa: the Huye fish-farm case, the flowchart, the tables, the worked examples and the practice items. The people and figures are illustrative (2026).
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
Quick check
Put the stages of the entrepreneurial process in order.
Tap the cards in the right order.
