CXC Principles of Business Exam guide: Section 3: Establishing a Business

CXC CSEC Principles of Business Exam guide: Section 3: Establishing a Business

CXC CSEC Principles of Business Exam Guide

Profile 1: Organizational Principles

Section 3: Establishing a Business


The students should be able to:


Define the term entrepreneur;

The concept of entrepreneurship

2. Explain the role of an entrepreneur;

The role of the entrepreneur in conceptualizing, planning, accessing funds, organizing, operating and evaluating the performance of a business.

Attention should be paid to the bearing of risks and the entitlement to the profits and losses of the business.


Identify the characteristics of the the typical entrepreneur;

Personal traits and leadership qualities:

(a) creative

(b) innovative

(c) flexible

(d) goal-oriented

(e) persistent

(f) persevering

(g) propensity to take calculated risks


Outline reasons why persons may want to establish their own business;

Reasons for wanting to start a business:

(a) desire for financial independence

(b) self-fulfillment

(c) self-actualization

5. Outline the essential steps that should be taken in establishing a business;

Steps for establishing a business:

(a) conceptualization

(b) research (market probe)

(c) identification of resources

(d) creation of a business plan

(e) acquisition of funds

(f) operation of the business

6. Describe the role of key functional areas in the operation of diferent types of business.

Role of the production, marketing and finance, legal, Research and Development (R and D) departments in a business.


Identify sources of information for conducting research into the establishment of a business;

Primary and secondary sources of information for conducting research.

8. Explain the relationship between planning and the operation of a business;

The necessity for short-term, medium-term and long-term planning in a business.


Identify regulatory practices instituted by governments for the establishment of different types of businesses;

Local regional and global rules for conducting business, including local government (municipal, village council, parish council regulations)


Outline the advantages and disadvantages of different types of business organizations;

Opportunities and challenges encountered by different types of organizations.

Identify sources of captial for the setting up of a business;

Sources of capital including venture capital.

Explain the significance of collateral in accessing capital to establish a business;


(a) concept;

(b) evaluation of different types;

(c) the value of collateral.

13. Outline the features of a business plan;

Analysis of all the elements of a business plan, including the executive summary and the operational, marketing and financial plans.

14. Explain the purposes of a feasibility study; The purpose of a feasibility study.

Identify ethical and legal issues in the establishment and operation of a business;

Ethical and legal issues, for example advertising, taxation and environmental issues.

16. Explain the consequences of ethical and illegal practices in business.

Consequences of unethical and illegal practices in business:

(a) misleading advertisements-unfair and fraudulent practice on the population

(b) witholding of tax - cheating the government of revenue

(c) unethical disposal of waster pollution

(d) money laundering - distortions in the national economy


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