Candidates should consider the role, importance and characteristics of an entrepreneur in establishing a new business. Entrepreneurship can take a number of forms including spotting a gap in the market or developing a new or innovative product or process.

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Enterprise & Entrepreneurs

Enterprise Definition: The process by which new businesses are formed and new products are brought to the market.

Entrepreneurs: Individuals who have an idea that they develop by setting up a new business & encouraging it to grow.

Characteristics of successful entrepreneurs: 

  • Determination & Persistance
  • Passion
  • The ability to spot & take advandtage of opportunities
  • Relevant skills & expertise
  • Vision, creativity & innovation
  • Motivation to succeed & not be daunted by failure
  • Willingness to take risks
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The importance of risk and rewards such as profit

Reasons for a start up business failing: 

  • lack of finance
  • skills shortages
  • poor infrastructure
  • complexity of regulations

Most entrepreneurs are happy to take risks if the rewards are great enough but this means they have to do considerable research in order to ensure that all reasonable steps are taken to minimise the probability of failure. 

The outcome of successful risk taking will be a profitable venture.

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The notion of opportunity cost/Motives for becomin

Opportunity cost definition: The "real cost" of taking a particular action or the next best alternative forgone.

Examples: By William Chase of Tyrrells taking a risk & choosing to remain independent, he missed out on guaranteed sales that he would've made if he had entered a contract with Tesco.  

Reasons for becoming an entrepreneur:

  • Long-term low interest rates that make it easier to borrow money to start a business
  • Change in political climate so the government supports enterprise and the entrepreneurial spirit
  • Increasing affluence, which means people looking for a meaning in their life and so that might be realising their dream of owning their own business.
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Government support for enterprise & entrepreneurs

Reasons why the Government supports enterprise & entrepreneurs:

  • Increases productivity; SMEs boost an economy's productivity by increasing competitive pressure, this forces existing businesses to increase their efficiency in order to stay in the market. Which leads to gains for the consumer such as lower prices & greater choice
  • A strong entrepreneurial base is essential for encouraging growth & prosperity in a modern economy

How The government has helped:

  • Reducing taxes & trying to establish & maintain a modern & competitive business tax system
  • Reducing regulatory burden on enterprises 
  • Reducing barriers to raising finance for small businesses 
  • Improving the support for small & new businesses
  • Promoting a change in the UK's enterprise culture
  • Encouraging business start-ups in economically deprived regions of the UK
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