If the Defendant does not respond to your claim within 14 days of the date of service, you can ask the court to enter 'Judgment in Default'.
When the court deals with your request for Judgment they will first check to see if the Defendant has entered a defence or admission etc.: if not, they will 'enter Judgment in Default', you will be sent a copy of the Judgment within two weeks. When you have the Judgment you can decide on what form of enforcement you will deploy.
Defended Action and Counterclaim
Defended Action
When a Defendant denies all of your claim, and returns the forms to the court stating what they deny and why, the court will (should) asses whether to 'strike out the defence' (this does happen, but not often enough).
At this stage the court will send out an Allocation Questionnaire. The questionnaire will ask in more detail the nature and circumstances of the debt. The answer to these questions will influence the judge's handling of the claim.
The judge, in a small claim, will look for the amount of effort both parties have expended in trying to resolve the 'issue' prior to court action. For example, if you turned down an offer of 70% of your debt prior to taking court action, and the judge thinks that was a fair offer, the judge will probably award you 70% of your claim, with no costs.
You will then return the questionnaire: with a fee of around £80 if your claim is over £1,000 and/or NOT for money (i.e. is not for an un-paid invoice).
On receipt of the questionnaire the judge will allocate where your case will continue. The case will automatically be sent to the Defendants local court if the Defendant is an 'individual'. A sole trader is an 'individual'.
If the defence clearly has no merit you may request summary judgment (as well as returning the questionnaire, not instead of...).
The matter of what happens at court is best explained in the County Court Forms leaflets. All I will add is that the small claims court has been (believe it or not) geared towards litigants (you) representing themselves: going to court is your right, try it!
Counterclaim (Defence and Counterclaim)
When undertaking a claim you are always open to a counterclaim. To start a counterclaim, the Defendant returns the court forms, in which they deny your claim, and that they seek damages from you. The Defendant pays a fee relevant to the amount they counterclaim (this fee being based on the fee payable on a standard claim). At this stage, you need to decide whether to represent yourself or consult a solicitor. Look at the counterclaim carefully: could you see yourself entering such a counterclaim in similar circumstances? If you would, you should consider professional advice or attempt an out of court settlement.
An undefended case is about administration. As long as you know the process of a court action (being a lot less difficult than completing your personal tax assessment) you can achieve all that an external solicitor can. In an undefended case you do not need to attend court. 
