Entrepreneurship as a Career

Lessons

Senior 4 · Entrepreneurship

Entrepreneurship as a Career

4 lessons

Lesson 4 of 4

The entrepreneurship career path

25 min

Case: fifteen years from a classroom to a factory floor

Nkurunziza left S6 with a physics combination and no clear plan. He took a one-year welding course at a vocational training centre, then worked for three years in a metal workshop in Muhanga, where he learned to price jobs and deal with customers. At weekends he made gates for neighbours with a borrowed machine. With his savings he bought his own welding machine and opened a small workshop with two apprentices. Four years later he registered a company that makes school desks and steel doors and employs twelve people. Now he is training a manager to run the workshop so that he can open a second one in Huye, and he advises two young welders who are starting out. (Illustrative case: the person and details are invented.)

Think about it: at which point in this story did Nkurunziza become an entrepreneur? Was everything before that point wasted time?

Definition

Entrepreneurship career path: the sequence of stages through which a person moves from preparing for business, through starting and growing ventures, to renewing them or moving on. Each stage builds the skills, savings and contacts needed for the next.

Career plan: a written plan that states a career goal, the gap between where the person is now and that goal, and the actions, time frame, resources and milestones for closing the gap.

The six stages

Stage	What the person does	In Nkurunziza's story
1. Explore and learn	Discovers interests; gains knowledge and a trade or profession; joins clubs and competitions	Physics at school; one-year welding course
2. Gain experience	Works as an employee, apprentice or intrapreneur; learns how a business runs; saves	Three years in a Muhanga workshop
3. Start small	Tests the idea part-time or on a small scale with little capital	Weekend gates on a borrowed machine
4. Establish and formalise	Commits full-time; buys equipment; registers the business; builds a customer base	Own machine and workshop; later a registered company
5. Grow and employ	Hires staff; adds products or outlets; manages rather than doing every task	Twelve employees; desks and doors
6. Renew or exit	Opens new ventures (a serial entrepreneur), invests in or mentors others, or sells or hands over	A second workshop; training a manager; advising young welders

Definition

Mentor: an experienced person who advises a less experienced one, without being paid as a consultant, from their own knowledge and contacts. Apprenticeship: learning a trade by working under a skilled worker, often combined with formal training. Serial entrepreneur: a person who starts several businesses one after another or at the same time.

Tip

Every stage counts. Experience as an employee is not a detour: it is where most entrepreneurs learn their trade, their market and how to manage money, and save the first capital. In an exam answer about the career path, show how each stage prepares for the next.

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Worked example 1: saving the first capital

While employed, Nkurunziza needs Frw 1,500,000 for a welding machine, tools and the first month's rent. He already has Frw 300,000 and wants to start in 20 months. His weekend jobs bring in a profit of about Frw 25,000 a month, all saved. How much must he save from his wage each month? (Illustrative figures.)

Amount still needed and total monthly saving:

1\,500\,000 - 300\,000 = 1\,200\,000 \ \text{Frw}, \qquad \frac{1\,200\,000}{20} = 60\,000 \ \text{Frw per month}

From his wage:

60\,000 - 25\,000 = 35\,000 \ \text{Frw per month}

Interpretation: starting small at weekends (stage 3) while still employed (stage 2) cuts the saving needed from his wage by more than 40%, because $\frac{25\,000}{60\,000} \approx 0.42$ . The stages overlap, and the overlap is useful.

Worked example 2: measuring growth (stage 5)

The company's sales were Frw 4.0 million in its first year as a registered company and Frw 9.0 million three years later. Find (a) the total percentage growth; (b) the average yearly growth rate. (Illustrative figures.)

(a)

\frac{9.0 - 4.0}{4.0} \times 100 = 125\%

(b) If sales grow by the same rate $r$ each year for 3 years, then $4.0 (1 + r)^{3} = 9.0$ , so

r = \left( \frac{9.0}{4.0} \right)^{\frac{1}{3}} - 1 \approx 1.310 - 1 = 0.310

Average growth was about 31% a year. Note that this is not $\frac{125\%}{3} \approx 41.7\%$ : growth compounds, because each year's increase is calculated on a larger base.

Writing your own career plan

Part of the plan	Question it answers	Example for a student who wants a fashion business
Career goal	Where do I want to be, and by when?	Own a registered tailoring and design business by age 27
Where I am now	What skills, qualifications and resources do I have?	S4; can sew simple items; Frw 40,000 saved
The gap	What is missing?	Pattern cutting, business records, a machine, customers
Actions and time frame	What will I do, and when?	Holiday apprenticeship; TVET course after S6; two years' work in a tailoring shop
Resources and support	Who and what can help?	A mentor tailor, a savings group, family
Milestones and review	How will I know I am on track?	First paid order by end of S6; review the plan every year

Unit 4 shows how to make each goal in the plan SMART.

Warning

A plan is a map, not a cage. Markets, technology and your own interests will change. Review the plan at fixed times and adjust it, but change it for a reason (new evidence), not because a step became difficult.

CareerAddict, "How to Build an Effective Career Plan (Top 5 Tips)". The five steps (assess your goals, weigh strengths and weaknesses, identify options, set a timeline and milestones, monitor progress) match the parts of the career plan above.

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Practice

List the six stages of the entrepreneurship career path and describe one activity in each.
Explain why experience as an employee is valuable to a future entrepreneur. Give three reasons.
Define mentor and serial entrepreneur.
A student needs Frw 900,000 to start a business in 18 months and has Frw 180,000. How much must she save each month?
A business's sales grew from Frw 2.0 million to Frw 3.2 million over 2 years. Calculate (a) the total percentage growth; (b) the average yearly growth rate.
Write a career plan, using the six parts in the table, for a career you are interested in.
"Starting a business straight after school is better than first working for someone else." Discuss, using the career path.

Show answersHide answers

Explore and learn (study a trade); gain experience (work as an employee); start small (weekend jobs); establish and formalise (register, buy equipment); grow and employ (hire staff, add products); renew or exit (open a new venture, mentor, sell or hand over).
Any three: learning the trade and how a business runs; learning the market and customers; saving capital; building contacts with suppliers and customers; learning from the employer's mistakes at no personal cost.
Mentor: an experienced person who advises a less experienced one from their knowledge and contacts. Serial entrepreneur: a person who starts several businesses, one after another or at the same time.
$\frac{900\,000 - 180\,000}{18} = \frac{720\,000}{18} = 40\,000$ Frw a month.
(a) $\frac{3.2 - 2.0}{2.0} \times 100 = 60\%$ . (b) $r = \left( \frac{3.2}{2.0} \right)^{\frac{1}{2}} - 1 = \sqrt{1.6} - 1 \approx 1.265 - 1 = 0.265$ , about 26.5% a year.
Answers vary; a good plan has a clear, dated goal, an honest picture of the present, a specific gap, actions with dates, named resources and milestones.
For starting at once: energy, few family responsibilities, an early start, and youth unemployment that makes jobs hard to find. For working first: skills, savings, contacts and lower risk. A good answer shows that the stages can overlap (a part-time business while employed) and reaches a reasoned judgement.

Quick check

Put the stages of the entrepreneurship career path in order.

Tap the cards in the right order.

Key points

The entrepreneurship career path: explore and learn, gain experience, start small, establish and formalise, grow and employ, renew or exit.
Stages overlap; employment and apprenticeship build the skills, savings and contacts that a business needs.
Monthly saving needed $= \frac{\text{target} - \text{savings now}}{\text{months}}$ ; average growth compounds.
A career plan states the goal, the present position, the gap, actions with dates, resources and milestones, and is reviewed regularly.

1Case: fifteen years from a classroom to a factory floor

2The six stages

3Writing your own career plan

Case: fifteen years from a classroom to a factory floor

The six stages

Writing your own career plan