What does an entrepreneur do, and what are the risks and rewards of enterprise?
Enterprise and entrepreneurship: the role of the entrepreneur, the characteristics and skills of a successful entrepreneur, the risks and rewards of starting a business, and the reasons people set up in business.
A focused answer to the WJEC GCSE Business content on enterprise and entrepreneurship, covering the role of the entrepreneur, the characteristics and skills they need, the risks and rewards of starting a business, and why people set up on their own.
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What this dot point is asking
WJEC wants you to understand enterprise and the entrepreneur who drives it. You need the role the entrepreneur plays, the characteristics and skills that make one likely to succeed, the risks and rewards of starting a business, and the reasons people choose to set up on their own. Enterprise is the fourth factor of production, the one that organises and risks the other three, and this topic explains who that person is and what motivates them.
The role of the entrepreneur
Characteristics and skills of an entrepreneur
Examiners often ask you to name and explain the qualities a successful entrepreneur needs.
No entrepreneur has every quality, but the more of them they have, the better their chances. These qualities link directly to why some new businesses succeed and others fail.
Risks and rewards
Enterprise is fundamentally about accepting risk in the hope of reward.
The entrepreneur weighs the two and takes a calculated risk, reducing it through market research and a business plan rather than gambling blindly.
Why people set up in business
People become entrepreneurs for several reasons: to make a profit and earn more than a wage, to turn a hobby or skill into an income, to gain independence and flexibility, because they cannot find suitable employment, or because they have spotted a gap in the market they want to fill. These motives explain the variety of small businesses that start each year in Wales and the rest of the UK.
Why this matters
Enterprise is the spark behind every business on the course, so this topic connects to ownership (the legal form the entrepreneur chooses), to aims and objectives (what they want the business to achieve), to finance (how they fund the start-up and manage cash), and to business plans (how they reduce the risk). When an exam question gives you a small start-up as its context, the entrepreneur's risks, rewards and motives are exactly the points that earn application marks.
Try this
Q1. State two rewards of being an entrepreneur. [2 marks]
- Cue. Any two of: keeping the profit, independence (being your own boss), and personal satisfaction.
Q2. Explain one reason a person might set up their own business. [2 marks]
- Cue. For example, to turn a hobby or skill into an income, developed by saying it lets them earn money doing something they are good at and enjoy.
Exam-style practice questions
Practice questions written in the style of WJEC exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
WJEC (Unit 1)4 marksDescribe two characteristics a successful entrepreneur is likely to need.Show worked answer →
A 4-mark AO1 and AO2 question: two characteristics, each developed for full marks.
Characteristic one, risk-taking: an entrepreneur is willing to risk their own money and time on a new idea that might fail, which is necessary because there is no guarantee a new product will sell.
Characteristic two, determination: starting a business is hard and early setbacks are common, so an entrepreneur needs the persistence to keep going when sales are slow or problems arise.
Other valid answers include creativity, organisation, confidence and the willingness to make decisions. Markers reward each characteristic named and explained for two marks.
WJEC (Unit 1)6 marksAnalyse the risks and rewards of starting a new business.Show worked answer →
A 6-mark AO1 and AO3 analyse question. Reward a developed chain on both sides.
Risk: the entrepreneur risks losing the money they invest if the business fails, and they give up the security of a regular wage, so there is real financial danger and stress.
Reward: if it succeeds they keep the profit, are their own boss with independence and control, and gain the satisfaction of building something of their own, which is why people accept the risk.
Chain and judgement: the rewards (profit, independence, satisfaction) have to be weighed against the risks (loss of savings, no guaranteed income), so an entrepreneur takes a calculated risk, often reducing it with research and a business plan. Markers reward developed points on both sides and a balanced comment.
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Sources & how we know this
- WJEC GCSE Business specification (Wales) — WJEC (2025)
- WJEC GCSE Business (Wales) specification (3510) — WJEC (2017)