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Unit 1 Exam Jan 2011. Learning exam technique. Edexcel Unit 1. Marks: ____ Time: ____ No of supported multi-choice Qs: _____ When reading the text, identify: 2 distinctive features of the Business 2 distinctive features of the People 2 distinctive features of the Start-Up.

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unit 1 exam jan 2011

Unit 1 Exam Jan 2011

Learning exam technique

edexcel unit 1
Edexcel Unit 1
  • Marks: ____
  • Time: ____
  • No of supported multi-choice Qs: _____
  • When reading the text, identify:
  • 2 distinctive features of the Business
  • 2 distinctive features of the People
  • 2 distinctive features of the Start-Up
section b summary of text
Section B, summary of text
  • A Community Learning Centre (CLC) wants to open a ‘Leisure Library’ offering sports equipment for hire to local groups
  • Primary market research has been used to assess demand and identify the most necessary types of equipment
  • Launch funding is from a grant; regular operations must be funded by charges
section b what s distinctive
Section B, what’s distinctive?
  • It’s a business plan based on a social objective; the only financial objective is (probably) to break even
  • Although no profit motive, it seems professional, e.g. ‘robust procedure to control lending & recovery of equipment’
  • There’s a contingency plan in case demand proves disappointing
10 why may the primary research evidence b be inadequate 4
10. Why may the primary research (Evidence B) be inadequate? (4)
  • Primary research asks potential users specific questions relating to the needs of a specific business/organisation (1 mark)
  • Here, the research question asked ‘what’s lacking?’ but didn’t ask whether people would pay to hire equipment – so effective demand is uncertain (2 marks)
  • The sample might be biased (schools?)
slide6
13. Assess the likely implications for a private sector leisure business of changes in any two economic influences. (12)
  • NB they are marked as 6 x 2; one third of the marks are for evaluation (‘balance’)
  • Rising unemployment could have quite an impact on demand; in some towns, a large factory or business closure might have a huge effect on non-necessity spending; so a locally-based independent leisure business might be hit hard (or, in a posh area, might be affected minimally)
quick question be quick
Quick Question – be quick
  • Cardel Ltd sells 50 units a day. Price is £80 and variable costs are £20 per unit. Fixed costs are £1,200 per day
    • A) Calculate current daily profit
    • B) Calculate the daily break-even point
    • C) Calculate the daily margin of safety
    • D) Calculate the new profit if sales volume doubles
evaluating a business plan

Evaluating a Business Plan

Ian Marcouse, 2010

the keys to start up success
The keys to start-up success
  • Full understanding of ‘the market’ …
  • …i.e. consumers, competitors and retailers (who buys, who competes & who sells)
  • A clear idea of where the business or product fits into the market (the gap – perhaps new, or perhaps replacement)
  • A real commitment to providing customers with what they really want.
personal qualities required
Personal qualities required
  • Confidence without arrogance
  • Hard-working – see Scoop (B Rev Nov 08)
  • Resilient (things will go wrong; are you strong enough to cope?)
  • Understands risk should be calculated, not shied away from
  • Can show initiative and creativity
being prepared financially
Being prepared financially
  • Has saved enough to provide the bulk of the funding (most start with no external finance)
  • Knows the need for funds to finance the early, loss-making months
  • Is willing to make short-term sacrifices
  • Always keeps the cash balances high enough to cope with crisis
having or finding a plan b
Having (or finding) a Plan B
  • i.e. willing to rethink the business plan when needed (e.g. in winter 2008/9)
  • The estate agent switches from sales to managing rented property … or the new café switches from £2 lattes to £1 white coffees
  • If you understand the market, you’ll understand how and why it’s changing
what s in a good business plan
What’s in a good business plan?
  • A convincing case for the product’s distinctiveness and how it can be protected
  • Consistent logic backed by figures; see how the Dragons demand ‘Yr 3 projections’
  • Contingency plans and budgets, i.e. a numerical look at What if? possibilities. What if sales are 20% below target? Or what if our planned high prices wont stick?
part of gf ltd business plan1
Part of GF Ltd. business plan

£65,000 of long-term finance

£30,000 of agreed overdraft facility

what s in a good business plan1
What’s in a good business plan?
  • The people: their passion, their planning and their commitment
  • The ‘exit strategy’ for the investor
  • The practical detail on how the great idea is to be turned into a consistently good customer experience
  • Understanding of now.
what s in a bad plan
What’s in a bad plan?
  • Nothing convincing about what makes this business/product stand out
  • Lots of figures with too little justification
  • Based on a fad, not a trend
  • Overly dependent on the entrepreneur’s dreams rather than passions
  • Good(ish) idea but bad timing
economy 2010 for unit 1

Economy 2010 for Unit 1

Economic context for start-up

key 2010 economic topics
Key 2010 Economic Topics
  • Starting a business when in recession
  • Which business might be suitable? (99p stores; seaside camping/caravan site etc)
  • Which opportunities arise? High Street locations become available; business closures may open new opportunities
  • 2010 start-up is different: bank finance harder than ever; be willing to start poor
key 2010 economic topics 2
Key 2010 Economic Topics (2)
  • The £ has been weak for more than a year; many predict it’ll get weaker; so it’s a good time to start a manufacturing business; or a retail business selling UK goods overseas
  • The expectation is for several years of tough ‘public’ (govt) spending; perhaps govt may switch to smaller suppliers
questions true or false
Questions – True or False?
  • A fall in the £ makes UK imports cheaper
  • A rise in interest rates makes people keen to spend more in the shops
  • A rise in inflation makes people better off
  • A rise in the £ makes UK exports more expensive
  • Rising unemployment leads to lower govt revenue and higher government spending
unit 1 exam evaluation

Unit 1 Exam - Evaluation

Mastering a key exam technique

what is good evaluation
What is good evaluation?
  • Judgements rooted in own argument …
  • … and in answering the question set
  • Clear sense of what is important and what is less so; well weighted conclusions
  • Based upon the case, not on prepared cliches, stock phrases or kneejerk Crunch
show your judgement
Show your judgement
  • After a 300% rise in the world oil price in the past 5 years, Kamal decided it was time to launch his ‘Fuelite’TM product. One Fuelite capsule dropped into a car fuel tank could cut fuel consumption by up to 15%. For a price of £49.99, the average UK driver would save £20 a month. The capsule would keep working for 5 years – well beyond the average ownership timespan for a car.
  • Launching the product would cost £500,000, but the world market of 1,000 million drivers made the market potential as high as £49,990 million – enough to buy out Richard Branson many times over! If you had the money, would you invest in Kamal’s business?