Edexcel GCSE (9-1) Business (1BS0) · Spec 1.1.1, 1.1.2 and 1.1.3

Enterprise and entrepreneurship

Read the notes, then try the questions. Each one is marked the moment you press Check, and shows the right answer and why.

Key ideas

New business ideas come from changes in technology, changes in what consumers want, products becoming obsolete, and from adapting an existing product or having an original idea.
Starting a business has risks (financial loss, lack of security, business failure) and rewards (profit, independence).
An entrepreneur organises the resources, makes the decisions and takes the risk.
A business adds value by making its product worth more to customers than it cost to make. A unique selling point (USP) is one way to do this.

Entrepreneur: Someone who takes the risk of setting up and running a business and organises its resources.
Obsolete: No longer wanted because something newer has replaced it.
Risk: The chance of losing something, such as the money put into a business.
Reward: What an owner hopes to gain, such as profit or independence.
Added value: The difference between what a product costs to make and what customers will pay for it.

Thinking every new idea must be completely original. Many successful ideas adapt something that already exists.
Calling profit a risk. Profit is the reward; losing your money is the risk.
Saying an entrepreneur never works for anyone else. They can be an employee elsewhere and still start a business.

A 'State' or 'Identify' question is worth 1 mark. Give one clear point and stop. Extra explanation earns nothing more.

6 questions, 15 marks. Answer, then press Check. The marking guide explains how the marks are worked out. Nothing is saved.

Question 1 · Multiple choice[1 mark]
A café owner sees that more customers now ask for dairy-free drinks. Which reason for a new business idea does this show?
Question 2 · Matching[4 marks]
Match each situation to the reason the new business idea came about.
A delivery app launched once smartphones became commonA snack range launched as more people avoid meatA phone case made from recycled materialsA drink that nobody has ever sold before
Question 3 · Multiple choice[1 mark]
Sana leaves a permanent job to open her own bakery. Which one of these is a risk she takes?
Question 4 · True or false[4 marks]
State whether each statement about risk and reward is True or False.
1. A business owner has a guaranteed income each month.
2. Profit is a reward for taking a risk.
3. Lack of security is a risk of running your own business.
4. Business failure is a reward for a hard-working owner.
Question 5 · Multiple choice[1 mark]
Which one of the following is a way in which a business can add value to its product?
Question 6 · True or false[4 marks]
State whether each statement about the entrepreneur is True or False.
1. An entrepreneur organises the resources of a business.
2. An entrepreneur takes the risk of business failure.
3. An entrepreneur makes business decisions.
4. An entrepreneur is never an employee of another firm.