Entrepreneurship and business planning
What the exam tests
You must explain entrepreneurial behaviour, test an idea for feasibility, and outline a business plan that connects market, operations, finance and risk.
Core rules
- Entrepreneurship creates and grows a venture by spotting opportunities, taking calculated risks and organising resources. Traits often cited include initiative, resilience, opportunity focus and willingness to learn; no single trait guarantees success.
- An idea is not an opportunity until there is customer demand, a feasible solution and a viable route to profit.
- Feasibility analysis tests the market (who will buy?), operations (can we deliver?), finance (can we fund it and break even?) and risk (what could stop us?).
- A business plan typically contains: executive summary; business description and objectives; market analysis and competition; marketing plan; operations plan; management and organisation; financial forecasts; risk assessment; appendices.
- SMART objectives give direction. Financial forecasts include cash flow, profit projection and break-even. Funding may come from own savings, family, loans, grants, equity or crowdfunding.
- Risk should be identified, assessed and mitigated; a plan is a living document, not a guarantee.
Worked example
A student plans a mobile bicycle repair service in Nicosia. Outline the feasibility test. Reasoning: market - survey cyclists, clubs and shops; identify demand for home repair and willingness to pay. Operations - one van, tools, booking system, part-time mechanic; can it cover peak summer demand? Finance - startup cost for van and tools, fixed monthly costs, price per repair, break-even volume; cash flow matters because customers may pay after service. Risk - seasonality, competitors, accident liability; mitigate with insurance, winter servicing contracts and a waiting list. The plan should state measurable targets, such as 120 repairs per month by month six, not vague hopes.
Traps that cost marks
- Treating a good idea as automatically a viable opportunity.
- Producing a plan with no cash-flow forecast or break-even figure.
- Listing risks without any mitigation.
- Assuming a bank loan is the only source of finance.
- Writing vague objectives such as “make a lot of money”.