Business paper 1 Exam Questions with Complete Solutions for latest updates

1. Explain one benefit to an entrepreneur of buying a franchise to start a business (3) - AnsAn entrepreneur could receive support and training (1). This means they are less likely to make poor business decisions (1), which reduces the chance of business failure 2. Explain one way a small business could use market segmentation to target customers. - AnsA small business could use market segmentation by using gender (1). Different products can be targeted to customers depending on if they are male or female (1). This will lead to a business being able to meet the needs of those particular customers (1). 3. Which two of the following areas are covered by employment law? - AnsDiscrimination Health and safety 4. Explain one possible non-financial aim an entrepreneur may have when starting a small business.(3) - AnsA non-financial aim could be independence (1). An entrepreneur is able to make their own decisions when running a business (1) instead of being told what to do as an employee (1). 5. Explain one disadvantage to a small business of using qualitative data for market research.(3) - AnsResponses are based on a person's opinions (1). This means they can be very varied (1) therefore making it difficult to make a judgement on customer preferences (1) 6. Explain one benefit to a small business of understanding customer needs.(3) - AnsThe small business can develop the quality of the product to meet customer needs (1). This means the business can gain a competitive advantage (1), which allows the business to gain a larger market share 7. Discuss the importance of cash to the survival of a small business(6) - AnsHaving access to cash will allow the business to pay its suppliers on time (AO1b). • Having a positive net cash flow will prevent insolvency in a small business (AO1b). • If a business fails to pay its suppliers on time then they will lose trust and will not allow the business to purchase goods using credit (AO3a). • Without cash a business will struggle to pay running costs such as wages and rent. This could cause the business to close down (AO3a). 8. Which one of the following is an example of a reward from business activity?(1) - AnsIndependence 9. Explain one advantage to a small business of using trade credit as a source of finance.(3) - AnsTrade credit is a low-cost source of finance (1). If credit terms are met then no interest is charged (1). This will reduce the costs of the small business (1). 10. Which two of the following are examp