Entrepreneurs and business plans Cambridge IGCSE Business Studies revision
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In plain words
An entrepreneur is someone who sees an opportunity, gathers the resources to start a business and takes the risk that it may fail. If it works, the profit is theirs. If it doesn't, so is the loss.
Before lending money, a bank will want to see the idea on paper. That document is the business plan.
4 things to know
- Characteristics of successful entrepreneurs: risk-taking, hard-working, creative, self-confident, optimistic, independent, and good at communicating.
- A business plan sets out the business idea, its objectives, the market (customers and competitors), the marketing, the people needed, and the finance: the money required and a cash-flow forecast.
- A plan helps an entrepreneur to obtain a loan or investment, to think the idea through and spot problems early, and to have targets to check progress against.
- Governments support start-ups with grants, cheap loans, training and advice, and lower taxes, because new businesses create jobs, add competition and may grow into large firms.
Tips and tricks
- A business plan does not guarantee success. It reduces risk, because problems are thought about before money is spent.
- When asked for a characteristic of an entrepreneur, explain why it matters: "risk-taker, because their own savings may be lost if the business fails".
It lands in your notebook with its questions as flashcards.
Entrepreneurs and business plans: 5 questions and answers
These are the quiz’s questions. Do the quiz first, then come back here for the ones that got you.
Which is a characteristic of a successful entrepreneur?
Starting a business always carries the risk of losing the money invested.
What would a bank most want to see before lending to a new business?
It shows whether the loan is likely to be repaid.
Which is usually part of a business plan?
Financial forecasts show the money needed and when it will come in and go out.
Why do governments help business start-ups?
More businesses mean more employment and more tax revenue later.
How does a business plan reduce risk?
Planning cannot remove risk, but it brings problems to light early.
Quiz
5 questions
Tap an answer and you’ll see straight away whether it’s right, and why.
Worksheet
3 questions, 8 marks. Write your answers on paper, then check them.
Entrepreneurs and business plans
Cambridge IGCSE Business Studies 0450 · 8 marks · papermunch.org
Name ______________________________ Date ______________
State two characteristics of a successful entrepreneur.[2]
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Any two of: risk-taker, hard-working, creative, self-confident, optimistic, independent, good communicator.
Explain two reasons why an entrepreneur should write a business plan.[3]
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A bank or investor will want to see it before providing finance. Writing it makes the entrepreneur research the market and the costs, so that problems are found before the business starts.
Explain why a government might give grants to people starting new businesses.[3]
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New businesses create jobs, which reduces unemployment. They also increase competition and choice for consumers, and some will grow and pay more tax in future.
Answers: Entrepreneurs and business plans
- 1. Any two of: risk-taker, hard-working, creative, self-confident, optimistic, independent, good communicator.
- 2. A bank or investor will want to see it before providing finance. Writing it makes the entrepreneur research the market and the costs, so that problems are found before the business starts.
- 3. New businesses create jobs, which reduces unemployment. They also increase competition and choice for consumers, and some will grow and pay more tax in future.