Nicky wants to be a successful entrepreneur. She plans to start up a travel business specialising in walking holidays. Nicky will be operating in a niche market. She is preparing a business plan to help with her decision-making. Nicky has been told government support is available for business start-ups. She knows building customer relationships will be important. Identify two reasons why a government might support business start-ups. Reason 1: Reason 2: Identify two ways a business can build customer relationships. Way 1: Way 2: Outline one benefit and one limitation to Nicky’s business of operating in a niche market. Benefit: Limitation: 1 1 Explain one way each of the following sections in the business plan might be helpful to Nicky. Business objectives: Explanation: Data about the market: Explanation: Explain two characteristics of a successful entrepreneur. Which characteristic is likely to be the most important? Justify your answer. [ 1 1

7115_s24_qp_12

THEORY

2024

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Desmond wants to be a successful entrepreneur. He has decided to leave his office job to start up a gardening business cutting grass and planting flowers. It will be an unincorporated business. Desmond is aware that a new business is at greater risk of failure than an established business. He has identified his business objectives for the first year. Desmond has calculated he will need $750 for his start-up capital. Define ‘unincorporated business’. Identify two objectives a new business might have. Objective 1: Objective 2: Identify four characteristics of a successful entrepreneur. Characteristic 1: Characteristic 2: Characteristic 3: Characteristic 4: 1 1 Explain two reasons (other than lack of finance) why Desmond’s new business might be at greater risk of failure than an established business. Reason 1: Explanation: Reason 2: Explanation: Do you think owner’s savings are the most suitable source of finance for a start-up business? Justify your answer. [ 1 1

7115_w23_qp_11

THEORY

2023

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Kate is an entrepreneur. Two years ago she left her job as a fashion designer at a multinational company. She started up BBB, a women’s sportswear clothing business. BBB targets a market segment of high income consumers. BBB’s products are sold in 3 retail shops and also through its website. Kate said: ‘I saw a gap in the market and took the risk. Obtaining the finance I needed from the bank was not easy. I enjoy making decisions such as using leaflets to promote the clothes.’ BBB’s revenue target for next year is $500000. What is meant by ‘entrepreneur’? Identify two reasons why obtaining finance may not be easy for a new business. Reason 1: Reason 2: Identify and explain two possible reasons why Kate decided to start up her own business. Reason 1: Explanation: Reason 2: Explanation: 1 1 Identify and explain two reasons why segmenting the market might help BBB. Reason 1: Explanation: Reason 2: Explanation: Do you think that using leaflets is the best way for Kate to promote her products? Justify your answer. [ 1 1

7115_s19_qp_11

THEORY

2019

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Kala always wanted to be an entrepreneur. She used to work for a business which downsized its workforce 5 years ago. She then decided to start up CHL. She produced a business plan which helped her obtain finance. Kala now designs customised sports clothes for women. Kala sells these products directly to customers using e-commerce. She has a loyal customer base of 25-40 year olds. However, Kala is worried about increased competition in this niche market. One idea she has is to target different market segments. Define ‘business plan’. Identify two reasons why a business might downsize its workforce. Reason 1: Reason 2: Outline two reasons why Kala’s business might need finance. Reason 1: Reason 2: 1 3 Explain one advantage and one disadvantage to Kala of using e-commerce to sell her products. Advantage: Explanation: Disadvantage: Explanation: Do you think selling to different market segments is the best way for a small business to respond to increased competition? Justify your answer. [ 1 3

7115_s20_qp_12

THEORY

2020

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Tom wants to leave his job to become an entrepreneur. He and his sister plan to start a window cleaning business. Tom has been told that new businesses are at a greater risk of failure than established businesses. Tom has to decide whether a partnership is a suitable form of business organisation for the new business. He has calculated the business will need $700 as start-up capital. Tom knows that every decision he makes will have an opportunity cost. Define ‘entrepreneur’. Define ‘opportunity cost’. Identify four reasons why a new business might be at greater risk of failure than an established business. Reason 1: Reason 2: Reason 3: Reason 4: 1 1 Explain two suitable sources of start-up capital Tom’s business might use. Source 1: Explanation: Source 2: Explanation: Do you think a partnership is the best form of business organisation for a new business? Justify your answer. 1 1

7115_s22_qp_12

THEORY

2022

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Gloria is a sole trader. Her business provides house-cleaning services. Gloria uses telephone calls to communicate with her 4 employees. She wants to expand the business by offering a repair service. Gloria plans to carry out some market research. She has been told producing a business plan can help to reduce risk. Gloria would also like to reduce her workload and is considering taking on a business partner. Identify two ways a business plan can help a business to reduce risk. Way 1: Way 2: Identify two possible reasons why a business might want to expand. Reason 1: Reason 2: Outline one advantage and one disadvantage to Gloria of using telephone calls as a method of communication with her employees. Advantage: Disadvantage: [ 1 3 Explain two factors Gloria should consider when deciding whether to take on a business partner. Factor 1: Explanation: Factor 2: Explanation: Explain two methods of primary market research a business could use to find out the demand for a new product or service. Which would be the best method to use? Justify your answer. 1 3

7115_s23_qp_12

THEORY

2023

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Mitchell is an entrepreneur. He wants to start up a business selling books. As part of his business plan Mitchell has carried out some market research. An extract is shown in . Mitchell will use microfinance as a source of finance. He wants to know whether the opportunities of using ecommerce for a new business are greater than the threats. Chart 1: Type of people reading books Extract from Mitchell’s market research data for 2023 Chart 2: Book sales by type Adults 20% Older people 27% Students 18% Children 35% Electronic books Audio books Paperbacks Hardbacks Define ‘entrepreneur’. Define ‘business plan’. Outline one advantage and one disadvantage to Mitchell of using microfinance as a source of finance. Advantage: Disadvantage: Explain how the market research data in Chart 1 and Chart 2 in could help Mitchell when making decisions. Chart 1: Explanation: Chart 2: Explanation: Do you think the opportunities of ecommerce for a new business are greater than the threats? Justify your answer.

7115_w24_qp_11

THEORY

2024

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ALB is a large bank. It has 300 branches and 5000 employees. ALB provides a range of financial services to its business customers. As it operates in a competitive market, ALB aims to maintain customer loyalty. Last year ALB’s profit decreased to $3000m. The Managing Director is analysing ways to reduce ALB’s costs. She also has to decide how new legal controls over employment issues might affect the business. The Government plans to improve protection of employees by changing laws on the minimum wage and health and safety. Define ‘profit’. State two problems of using the number of employees to measure the size of a business. Problem 1: Problem 2: Outline two possible ways ALB can try to reduce its costs. Way 1: Way 2: 1 3 Explain two ways ALB could improve customer loyalty. Way 1: Explanation: Way 2: Explanation: Do you think changes in legal controls over employment issues will always reduce business profits? Justify your answer. 1 3

7115_s20_qp_12

THEORY

2020

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Moeen and Ali plan to start up a small luxury hotel in the centre of a city in country R. They have a budget of $30000 to pay for all costs. After researching different types of business organisation, as shown in Table 2, Moeen thinks the hotel should be a private limited company. If the business is to be successful, Ali knows choosing the right location will be important. He cannot decide whether to recruit full-time or part-time employees. Table 2: Private sector business organisations in country R 3.0 Sole trader 0.5 Partnership 1.2 Private limited company 0.3 Other types of business organisation Identify two ways to measure the size of a business. Way 1: Way 2: Calculate the percentage (%) of businesses in country R which are partnerships. Identify and explain two advantages to Moeen and Ali of forming a private limited company. Advantage 1: Explanation: Advantage 2: Explanation: 1 3 Identify and explain two factors that might influence Ali’s choice of location for the business. Factor 1: Explanation: Factor 2: Explanation: Do you think it would be better for the business to use full-time or part-time employees? Justify your answer. 1 3

7115_w16_qp_12

THEORY

2016

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TRB is a small business in the secondary sector. TRB assembles computers. All components, except for the battery and glass for the screen, are imported from other countries. 40% of its products are exported. Many of its competitors are relocating to low cost countries. TRB’s Operations Director thinks the opportunities of globalisation may be greater than the threats for TRB. She is looking at ways to improve efficiency in the factory. One option is to introduce lean production methods. TRB is in the secondary sector. Identify the other two classifications of business sector activity. Classification 1: Classification 2: Identify two ways to measure the size of a business. Way 1: Way 2: Identify and explain two methods of lean production that TRB might use. Method 1: Explanation: Method 2: Explanation: 1 1 Identify and explain two possible benefits to TRB of improving efficiency. Benefit 1: Explanation: Benefit 2: Explanation: [ 1 1 Do you think there are more opportunities than threats from globalisation for TRB? Justify your answer. 1 1

7115_w18_qp_12

THEORY

2018

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