What is enterprise, and what does it take to be self-employed?
Self-employment and enterprise: what self-employment and entrepreneurship are, the qualities of an entrepreneur, the steps and planning a new business needs, and the risks and rewards involved.
A CCEA GCSE Learning for Life and Work guide to self-employment and enterprise. Covers the meaning of self-employment and entrepreneurship, the qualities of an entrepreneur, what a business plan needs, and the risks and rewards of running your own business.
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What this dot point is asking
This dot point asks you to explain what self-employment and enterprise are, the qualities of an entrepreneur, what a new business needs to plan, and the risks and rewards of working for yourself. The marked skill is defining the key terms, naming entrepreneurial qualities and explaining why they matter, and weighing the risks against the rewards.
Self-employment and enterprise
Understanding that self-employment trades the security of employment for independence and the chance of profit is the foundation for the rest of this dot point.
The qualities of an entrepreneur
Running your own business takes particular qualities, which you should be able to name and explain:
- Willingness to take risks: investing time and money with no guarantee of success.
- Determination and hard work: keeping going through difficulties.
- Creativity: spotting opportunities and new ideas.
- Confidence: believing in the idea and making decisions.
- Good organisation: managing money, time and the work.
- Problem solving: dealing with the challenges that arise.
Naming a quality is the start; explaining why it helps an entrepreneur succeed is what earns marks.
Planning a new business
A new business needs a business plan: a document setting out the business idea, the market and customers, how the business will operate, and the money needed and expected. The plan guides the owner and is used to persuade banks or investors to lend. Before starting, an entrepreneur also needs to research the market to check there is demand, work out costs and prices, and arrange finance. Good planning reduces the risk of failure, which is why it matters.
Risks and rewards
Self-employment carries both risks and rewards, and a balanced answer weighs them.
Risks include:
- Financial risk: the owner may lose the money they invest, and income is not guaranteed.
- Long hours and pressure: being responsible for everything, often with no sick pay or paid holiday.
- Uncertainty: the business may not succeed.
Rewards include:
- Independence: being your own boss and making your own decisions.
- Potential profit: keeping the profits if the business does well.
- Job satisfaction: building something of your own.
The key skill is weighing risks against rewards rather than listing only one side.
Try this
Q1. What is the difference between being self-employed and being an employee? [2 marks]
- Cue. Self-employed means working for yourself and being responsible for the business; an employee works for an employer.
Q2. Name two qualities of a successful entrepreneur. [2 marks]
- Cue. Any two of: risk-taking, determination, creativity, confidence, organisation, problem solving.
Q3. Give one risk and one reward of self-employment. [2 marks]
- Cue. A risk such as financial risk or long hours; a reward such as independence or potential profit.
Exam-style practice questions
Practice questions written in the style of CCEA exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
CCEA Unit 3 (style)4 marksIdentify two qualities of a successful entrepreneur and explain why each is important.Show worked answer →
A four-mark question. One mark for naming a quality, one for why it matters, for two qualities.
Quality one: willingness to take risks. Starting a business means investing time and money with no guarantee of success, so an entrepreneur must be prepared to take a calculated risk.
Quality two: determination and hard work. Running a business is demanding, so an entrepreneur needs to keep going through difficulties to make it succeed.
Other valid qualities include creativity, confidence, good organisation and problem solving. A strong answer names a quality and explains why it helps an entrepreneur succeed.
CCEA Unit 3 (style)6 marksExplain what a business plan is and describe two risks and one reward of self-employment.Show worked answer →
A six-mark question. Reward a clear explanation of a business plan and developed risks and a reward.
Business plan: a document setting out the business idea, the market and customers, how it will operate, and the money needed and expected, used to guide the business and to persuade banks or investors to lend.
Risk one: financial risk. The owner may lose the money they invest if the business fails, and income is not guaranteed.
Risk two: long hours and pressure. Being responsible for everything can mean working long hours with no sick pay or paid holiday.
Reward: independence and potential profit. The owner is their own boss and keeps the profits if the business does well. A top answer explains the plan and develops the risks and reward, rather than listing them.
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Sources & how we know this
- CCEA GCSE Learning for Life and Work specification — CCEA (2017)