1.1 Role of business enterprise and entrepreneurship

Entrepreneur: A person who takes the risk of starting and running a business

Three main purposes of business enterprise and entrepreneurship

• Spotting an opportunity This could involve them spotting a gap in the market, improving an existing product, or producing a product for a cheaper price (or service).

• Developing an idea This could involve designing the product (or service) and planning its production.

• Satisfying the needs of customers This could involve how the product is produced or how the service is provided and the marketing techniques used.

Characteristics of an entrepreneur

These are the skills and qualities a person should have to be a successful entrepreneur.

Creativity	Problem-solving and thinking of new ideas. This could be thinking of a new product that meets customer needs, or thinking of a better and cheaper way to provide a service
Risk-taking	Entrepreneurs have to be prepared to put money at risk for the sake of their business' growth. This could be their own money or somebody else's.
Confidence	Must believe in their ability to make things happen
Determination	Working hard to solve problems and not giving up when things become difficult.

Risks and rewards of being an entrepreneur

Although entrepreneurs hope to receive rewards, they are taking risks by doing this.

• Risks: Uncertainties and downsides associated with starting a business. This can include financial and non-financial risks.
• Rewards; Benefits the entrepreneur gains from starting their business. This can be financial and non-financial.

📝 EXAMPLES

Financial risks and rewards

• The potential to earn a high income.
• The risk of losing savings and other assets to pay off debt.
• Could end up in a worse financial position than you were in at the start.

Non-financial risks and rewards

• Independence – working when you choose to and not being told what to do by a boss.
• Creative freedom
• Building something meaningful
• Health – Running a business can be stressful and take a toll on your mental and physical health.
• Personal time sacrificed at the beginning, struggle with work-life balance.