Study Notes

Starting a Business: Qualities of an Entrepreneur (GCSE)

Level:
GCSE
Board:
AQA, Edexcel, OCR, IB

Last updated 22 Mar 2021

There are many definitions of what is meant by an entrepreneur, but they tend to say the same thing, which is that an entrepreneur is…

Someone who takes a risk by starting a business

An entrepreneur is someone who is enterprising. In other words he/she:

  • Takes the initiative in trying to exploit a business opportunity
  • Takes time to understand and calculate the risks involved
  • Makes an investment to set up the business
  • Goes ahead, despite the risk that the business venture might fail

When deciding whether or not to take the risk of starting a business, an entrepreneur asks questions such as:

  • Do I have a clear idea about the vision for the business?
  • Am I really determined and committed to making the business work?
  • Do I appreciate and accept the personal challenges and sacrifices that I will have to make?
  • Can I handle the inevitable feeling of isolation and insecurity that a start-up brings?
  • Can I afford to fail? What are the financial implications if the business does not succeed?
  • Will customers really buy the product, assuming that I get it right?
  • Who already provides this product (or something similar) and can I do it better or cheaper?
  • How will I know if the business is succeeding or failing?
  • Is my business plan sufficiently realistic, particularly in terms of cash flows and likely start-up losses?
  • Can I access the resources (cash, supplies, distribution) that are needed to make the idea work?
  • Do I need to obtain legal protection for the idea?

In recent years the media have glamorised the challenge of starting and growing a business. A quick search on Amazon.co.uk will display many books by entrepreneurs and other "business experts" describing "how they made it", "my first million" etc. Prime-time television shows such as Dragons Den, Risking it All and The Apprentice have proved hugely popular by showcasing the challenges faced in setting up a business. Entrepreneurs such as Lord Sugar, Sir Richard Branson and Sir James Dyson have earned enormous fortunes and provide inspiration for the next generation of budding business leaders.

Entrepreneurs play an important role in society. They make a major contribution to economic activity. Imagine how many jobs are created by the thousands of new businesses that are set up every year and by the small businesses that prosper and take on more staff.

Entrepreneurs encourage innovation through investment and risk-taking. Many of the products and services you use every day have been developed through entrepreneurial activity rather than in the research laboratories or board-rooms of large multinationals.

However, it is important to realise that starting a business is rarely glamorous. In fact it is nearly always very hard work. For every success story there are almost certainly many more business failures or businesses that don't meet the expectations of the people who set them up.

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