Business Enterprise & Entrepreneurship (AQA GCSE Business)

An Introduction to Entrepreneurship

• An entrepreneur is a person who is willing and able to create a new business idea or invention and takes risks in pursuing success

  • These risks can be financial, personal or creative

  • Successful entrepreneurs can identify and pursue opportunities, create value for customers and build thriving businesses

• Entrepreneurs fulfil three main roles

They organise resources

• An entrepreneur must be able to gather and coordinate the resources necessary to start and operate a business

  • E.g. When Michael Dell started his computer company from his garage, he had to organise resources such as space, computers, software tools, and employees, and manage the finances

They make business decisions

• Entrepreneurs must be able to make decisions that will determine the success or failure of their business

  • E.g. A restaurant owner may need to decide what type of food to serve, where to locate the restaurant, and what prices to charge. These decisions require a combination of market research, creativity, and business skills

  • Making the wrong decisions can lead to wasted resources, lost opportunities, and ultimately business failure

They take risks

• Entrepreneurship involves taking financial, personal, or professional risks

  • E.g. An entrepreneur may invest their life savings into a new venture or quit a secure job to start their own business

  • They may also take risks by introducing new products or entering new markets

• These risks can pay off with great rewards, but they can also lead to failure and financial loss

• As their business grows, an entrepreneur may make the decision to employ staff to help with its day-to-day operations

  • The entrepreneur may take on the role of mentor, supporting new staff members to carry out their tasks in a particular way

Characteristics of Entrepreneurs

• Entrepreneurs often posses a valuable set of characteristics and skills

Diagram: Skills and Characteristics of Entrepreneurs  

The skills and characteristics commonly possessed by entrepreneurs

• Perhaps one of the most important skills of an entrepreneur is the ability to communicate persuasively

  • Persuade potential financial backers of the merits of their idea

  • Encourage people to join them in creating the product/service

  • Convince customers of the value of their product/service

• They should also be able to solve problems, be well-organised and possess key skills such as numeracy and competency in the use of IT

• Entrepreneurs should be prepared to work with others and build teams to improve the chances of business success

• A range of personal characteristics are particularly important for entrepreneurs

  • Being prepared to work hard, often for long hours, with little financial reward

  • Resilience and self-confidence are needed to recover quickly and move on from setbacks

  • Creativity and a willingness to embrace innovation

  • Being prepared to take the initiative in making decisions, pursuing opportunities and taking risks

• All of the skills work together to create and drive an innovative idea towards success

Objectives of Entrepreneurs

• Entrepreneurs set up and run businesses for a wide range of reasons

• In some cases, entrepreneurship is accidental

  • E.g. Many entrepreneurs discover that a side hustle has the potential for significant growth, whilst others invest their redundancy compensation in starting a business rather than seeking a new job

Diagram: Reasons Entrepreneurs Start a Business

Entrepreneurs set up businesses for a range of reasons, including the opportunity to be their own boss, for personal satisfaction and to support their local community

Be their own boss

• Instead of working for another business, entrepreneurs set up their own enterprise, allowing them to make all of the decisions

Personal satisfaction

• If the business becomes successful, entrepreneurs are likely to feel a sense of personal satisfaction, as they had the courage to take a risk in supplying products that customers want to buy

Pursue a great idea

• Entrepreneurs often set up businesses because they have identified a product that is not yet being satisfactorily provided by rivals, and feel strongly that they can fill this gap in the market

Support the community

• Some entrepreneurs want to make a difference in the area in which they live, to support other people or offer an under-provided service

Keep profits

• Profits are the financial reward for taking a risk in starting up a business, which, if successful, the entrepreneur can choose to keep for themselves

Change of lifestyle

• Entrepreneurs often set up a business to improve their quality of life, such as reducing the hours they work, working more locally or balancing their work with their personal commitments

Follow interests or passions

• Some entrepreneurs turn a hobby or interest into a business idea, bringing their passion, experience and knowledge to products that meet the needs of customers with similar preferences