Enterprise — the willingness to take risks and show initiative to create value
Entrepreneur — an individual who identifies opportunities, takes calculated risks, and organises resources to exploit them
Intrapreneur — an entrepreneur operating WITHIN an existing organisation (e.g. internal innovation teams)
Schumpeter: entrepreneurs are agents of "creative destruction" — they disrupt existing markets to create new ones
Characteristics and motivations of entrepreneurs
Opportunity recognition and the business planning process
Legal structures for new businesses
Why start-ups fail — and what increases survival chances
Risk tolerance — willingness to accept financial and personal uncertainty
Vision — seeing an opportunity others haven't spotted, or believing in a future others doubt
Resilience — ability to persist through failure; Dyson made 5,127 failed prototypes before success
Drive & self-motivation — internal locus of control; not waiting to be told what to do
Networking ability — building relationships with investors, customers, partners
Creative problem-solving — finding novel ways around obstacles
Financial reward — profit motive; building wealth
Autonomy — being own boss; control over decisions
Purpose — solving a meaningful problem; social impact
Challenge — the thrill of building something from nothing
Identifying an unmet customer need. e.g. Uber noticed taxi frustrations; Airbnb noticed spare rooms.
Every complaint is an opportunity. What frustrates people enough to pay for a solution?
New technology enables new solutions. Smartphones enabled an entire app economy.
Rising consumer values (sustainability, wellness) create new demand before incumbents notice.
Is the market large enough? — total addressable market (TAM)
Can you reach them cost-effectively? — customer acquisition economics
Can you build a defensible competitive advantage? — or will rivals copy immediately?
Minimum Viable Product (MVP): build the simplest version, test it, iterate
Forces structured thinking — tests whether the idea actually works on paper
Required by investors and banks — demonstrates understanding and credibility
Provides a roadmap — targets and milestones to manage progress against
Identifies risks early — better to discover problems in planning than after launch
One-page overview — what, why, how much, ask amount
Target market, market size, competitor analysis, customer profile
What you're selling and why it's better than alternatives
How you'll reach and convert customers; pricing strategy
How the business actually works day-to-day; supply chain
Revenue, costs, profit, cash flow for 3 years; break-even
Sole trader — simplest; no separate legal identity; unlimited personal liability; full control
Partnership — 2+ owners sharing profit and liability; more capital; risk of disagreement
Limited Liability Partnership (LLP) — partners have limited liability; common in professional services
Private Limited Company (Ltd) — separate legal entity; limited liability; shares can't be publicly traded; more admin
Public Limited Company (plc) — shares traded on stock exchange; access to large capital; disclosure obligations
Social Enterprise — business model with social/environmental mission; profits reinvested
Limited liability = shareholders can only lose what they invested — personal assets protected
Unlimited liability = personal assets (home, savings) at risk if business fails
Most start-ups incorporate as Ltd as soon as they have meaningful revenue/assets at stake
Personal savings / bootstrapping — retain full control; no dilution; limited capital
Friends and family — informal; quick; risks personal relationships
Bank loans — interest cost; requires collateral; no dilution of ownership
Crowdfunding — Kickstarter/Seedrs — validates demand AND raises capital; marketing benefit
Angel investors — HNW individuals; give capital + expertise; equity stake taken
Venture capital (VC) — institutional; large amounts; requires high growth potential; significant equity
Grants — government (Innovate UK); no repayment; highly competitive; often restricted
The "valley of death" — start-ups often run out of cash between idea and first revenue
Most small businesses fail within 5 years — cash flow problems are the #1 cause
#1 No market need (42%) — building a solution to a problem nobody has
#2 Ran out of cash (29%) — poor cash flow management, overestimated revenue
#3 Wrong team (23%) — missing key skills (often technical or sales expertise)
#4 Outcompeted (19%) — underestimated incumbent response or rival start-ups
#5 Pricing issues (18%) — price too high (no demand) or too low (no profit)
Validated customer demand BEFORE launch — talk to 100 potential customers first
Founding team with complementary skills — technical + commercial + operational
Clear unit economics: does the product make money at scale?
18+ months of runway — enough cash to reach the next milestone without needing emergency funding
Large firms can afford R&D but often lose the entrepreneurial spirit that creates breakthroughs
Intrapreneurs apply entrepreneurial mindset inside the corporate structure
Protected from full market risk — can experiment with company resources
Post-it Notes — Spencer Silver's accidental adhesive sat unused for years until Art Fry saw the opportunity (3M)
Gmail — Paul Buchheit's side project under Google's 20% time policy
PlayStation — Ken Kutaragi championed a gaming console against Sony's initial opposition
Benefits: drives innovation without spin-out risk; retains talent; can leverage existing distribution/brand
Challenges: corporate bureaucracy stifles speed; budget fights; success may threaten existing products
A sole trader decides to convert their business to a private limited company (Ltd). Which of the following is the PRIMARY benefit of this change?
Research shows the most common reason start-ups fail is "no market need." What does this suggest about the MOST important step in the entrepreneurial process?
An employee at a large corporation identifies a new product opportunity, uses company resources to develop a prototype, and champions it through to market launch — all while remaining employed by the company. This is an example of:
5.5 million small businesses in the UK (99.9% of all businesses)
Small businesses employ 61% of private sector workers
UK ranked 8th globally for ease of doing business (World Bank, 2020)
Innovate UK grants — competitive funding for innovative businesses
SEIS/EIS tax relief — gives angel investors tax breaks for investing in start-ups
British Business Bank — government-backed loans and guarantees
Enterprise zones — reduced business rates in designated areas
Government support helps with market failure (start-ups can't access capital efficiently), but risks misallocation — grants may fund unviable businesses that wouldn't survive market scrutiny
Culture matters as much as policy — attitudes to failure differ significantly across countries (US vs UK)