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What does an entrepreneur do, and why do most start-ups need a business plan?

Enterprise and entrepreneurship: the role and characteristics of an entrepreneur, the rewards and risks of starting a business, the reasons businesses start up, and the purpose and contents of a business plan.

A focused answer to the Eduqas GCSE Business C510 content on enterprise and entrepreneurship, covering the role and characteristics of an entrepreneur, the risks and rewards of starting a business, reasons for starting up, and the purpose and contents of a business plan.

Generated by Claude Opus 4.811 min answerUpdated 2026-06-02

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An entrepreneur is a person who takes the risk of setting up and running a business, combining the factors of production and making the key decisions. Successful entrepreneurs tend to be risk-takers, determined and resilient, creative and innovative, confident, organised and good at making decisions under pressure. Starting a business is risky: the owner can lose the money they invest, work long hours, and face the stress of an uncertain income. The rewards are profit, independence (being your own boss), the chance to pursue an idea, and personal satisfaction. People start businesses for many reasons: to be independent, to spot and fill a gap in the market, to turn a hobby into income, to make more money, or because they have lost a job. A business plan is a document that sets out the business idea, its aims, the market, the marketing, the operations and the finances (including a cash flow forecast). Its purpose is to clarify the owner's thinking, reduce risk, and persuade lenders or investors to provide finance.

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What this topic is asking
The role of the entrepreneur
Characteristics of a successful entrepreneur
The risks and rewards of starting a business
Why businesses start up
The business plan
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What this topic is asking

Eduqas C510 wants you to understand enterprise and entrepreneurship: what an entrepreneur does, the characteristics that help them succeed, the risks and rewards of starting a business, the reasons people start up, and the purpose and contents of a business plan. The exam often sets someone considering a start-up, so you must be able to weigh the decision for a specific person and business.

The role of the entrepreneur

The entrepreneur is the enterprise factor of production. Without someone willing to organise resources and take the risk, no new business is created. Entrepreneurs drive the economy by creating products, jobs and competition.

Characteristics of a successful entrepreneur

No entrepreneur has every quality in full, and these are tendencies rather than rules. The exam rewards you for applying a quality to the situation, for example explaining why resilience matters to someone whose first month of trading is slow.

The risks and rewards of starting a business

Starting a business is a trade-off between risk and reward.

Why businesses start up

People start businesses for a mix of reasons:

To be independent: to be their own boss rather than work for someone else.
To fill a gap in the market: they spot an unmet customer need or a better way to meet one.
To turn a hobby or skill into income: baking, photography, fitness coaching.
To make more money: the chance of a higher income than employment.
Necessity: redundancy or a lack of local jobs pushes them into self-employment.

The business plan

The plan has two purposes. First, it clarifies the owner's thinking and forces them to research the market and the numbers, which reduces risk. Second, it is the document a bank or investor asks to see before providing finance, because the cash flow forecast shows whether the business can survive. A plan is a living document: its forecasts rest on assumptions that must be updated as the business learns.

Judging start-up costs against a sales forecast

Set out the figures

An entrepreneur plans to open a market stall. Start-up costs (stall hire deposit, stock, equipment) come to $3{,}000$ . They forecast selling $120$ items a week at an average price of $5$ , with bought-in costs of $2$ per item, and fixed weekly costs (pitch fee) of $150$ .

Weekly revenue and contribution

\text{Weekly revenue} = 120 \times 5 = 600.

\text{Contribution per item} = 5 - 2 = 3, \quad \text{total weekly contribution} = 120 \times 3 = 360.

Weekly profit

\text{Weekly profit} = 360 - 150 = 210.

Time to recover the start-up cost

\text{Weeks to recover } 3{,}000 = \frac{3{,}000}{210} \approx 14.3 \text{ weeks}.

Interpret the result

On these forecasts the stall makes $210$ profit a week and recovers its $3{,}000$ start-up cost in about $14$ weeks, roughly three and a half months. That is the kind of number a business plan exists to produce: it tells the entrepreneur whether the venture pays back quickly enough to be worth the risk, and it is exactly what a lender would want to see before agreeing finance. The figure is only as reliable as the forecast of $120$ sales a week, which is why the plan must be revisited once real trading begins.

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Q1. State two rewards of being an entrepreneur. [2 marks]

Cue. Profit, independence (being your own boss), satisfaction.

Q2. Explain one reason a bank would want to see a business plan before lending. [3 marks]

Cue. The cash flow forecast shows whether the business can repay the loan and survive its early months.

Exam-style practice questions

Practice questions written in the style of WJEC Eduqas exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.

Eduqas 20182 marksState two characteristics of a successful entrepreneur. (Component 1)

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A 2-mark AO1 recall question, one mark per valid characteristic. Acceptable answers include: a willingness to take risks, determination and resilience, creativity and innovation, confidence, the ability to make decisions, leadership, and good organisation. Markers want recognised entrepreneurial qualities rather than vague praise such as "hard-working" alone; pairing a quality with a brief reason (for example "risk-taking, because they invest their own money with no guarantee of success") makes the answer secure.

Eduqas 20229 marksA person is thinking about leaving their job to start a mobile coffee van. Evaluate whether writing a detailed business plan is worthwhile before they start. (Component 2)

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A 9-mark Evaluate question needing both sides and a judgement applied to the coffee van. For the plan: it forces the owner to research demand, costs and pitch locations, sets out a cash flow forecast so they can see whether the van will survive its early months, and is usually required to secure a bank loan or overdraft to buy the van and stock. Against, or its limits: a plan is only as good as its assumptions, the market for street food changes quickly so figures can date fast, and time spent planning is time not spent trading. Judgement: for a venture with real start-up costs (a van is a large outlay) and a need for outside finance, a business plan is worthwhile because it reduces the risk of running out of cash and is needed to convince a lender, even though it must be treated as a living document and updated as the business learns. Markers reward two-sided analysis applied to the coffee van and a supported conclusion, not a list of plan contents.

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Sources & how we know this

WJEC Eduqas GCSE Business specification (C510) — WJEC Eduqas (2017)