AQA A-LEVEL BUSINESS PAPER 1
REVISION EXAM 2026
Why businesses exist - ANSWERSCan make you money and you can be your own
boss
Mission - ANSWERSa business aim expressed to make it seem especially purposeful
and motivating
Objectives - ANSWERSSMART Specific, Measurable, Achievable, Realistic, Time-
bound
Why businesses set objectives - ANSWERS- it is motivating to have a goal to aim
toward
- as a boss you can not make every decision
Profit - ANSWERSRevenue - total costs
What are the 5 types of business - ANSWERS-sole traders
-private limited companies (LTD)
-Public limited companies (PLC)
-Private and public sector organisations
- non-profit organisations (charities)
Sole traders - ANSWERSa business that is owned and operated by one person
Private Limited Company (Ltd) - ANSWERSA small to medium sized company, owned
by shareholders who have limited liability. The company cannot sell its shares to the
general public.
Private Limited Company Advantages - ANSWERS-Limited liability
-Additional capital can be raised by selling shares (not to the general public)
-Separate legal existence to the owner
-Higher business status to sole trader
Private limited company Disadvantages - ANSWERS-You have to publish the account
information
-You need two share of £1 each
Public limited company (plc) - ANSWERSA limited company with more that £50,000 of
share capital. Any member of the public can buy shares. Public companies must publish
more detailed accounts
,Public limited company Advantages - ANSWERS-Raising capital through public issue of
shares
-Offering shares to the public spreads risk
-Banks are more likely to lend money to PLC's
-More growth and expansion opportunities
-Having PLC at the end of your business name gives a better image
-Shares are more easily transferred so shareholders are happier
-Separate legal entity to the owner
public limited company Disadvantages - ANSWERS-More regulations that could
increase costs
-Higher level of transparency needed
-Must start with £50,000 share capital
Private sector organisations - ANSWERSOrganisations owned by individuals or
companies
Public sector organisations - ANSWERSBusinesses owned by the government.
Non-profit organisations - ANSWERSBusinesses with a motive other than profit, may be
to provide a social benefit or service to society or to support a cause.
Share capital - ANSWERSThe total value of capital raised from shareholders by the
issue of shares
Role of Shareholders - ANSWERSto raise important issues with the board directors and
raise funds
Why shareholders invest - ANSWERS-Annual dividend payments
-A rise in the value of shares
Market capitalisation - ANSWERSNumber of issued shares x current share price
Influences on the price of shares - ANSWERS-The profit after tax of the company x the
value investors place on on those earnings
Significance of share price changes - ANSWERSHigh = cheap and easy to obtain more
share capital
Low = unlikely to raise any extra share capital
What are the 6 external factors affecting businesses - ANSWERS-Market conditions
-Competition
-Changes in household incomes
-Changes in interest rates
-Demographic factors
-Environmental issues
, Market Conditions - ANSWERS-The number of competitors in a particular market
-The intensity of competitiveness
-Total market available
-The rate at which the market is growing
Competition - ANSWERSThe tighter the economic and market conditions, the greater
the competitive pressures tend to be
Factors that effect household incomes - ANSWERS-Changes in the real income of the
main income earner
-The number of people in the household that work
-The impact of government decisions on taxation and benefits
Changes in interest rates - ANSWERSIf interest rates go up, businesses and individuals
spend less. If interest rates go down, businesses and individuals spend more.
Demographic factors - ANSWERS-Population size
-Age
-Gender
-Ethnicity
Environmental issues and fair-trade - ANSWERSConcern for green issues and ethical
issues involved with business.
What do managers do - ANSWERSSet objectives, organize, motivate and
communicate, measure, develop people
What are the leadership styles - ANSWERS-Autocratic managers
-Democratic managers (laissez-faire)
-Paternalistic
Autocratic managers - ANSWERSManagers who centralise power and tell employees
what to do. They tend to use one-way, top-down communication.
Democratic managers (laissez-faire) - ANSWERSManagers that take the view of their
subordinates into account when making decisions as well as delegating authority.
Communication tends to be two-way. 'Laissez-faire' means 'Let it be"
Paternalistic managers - ANSWERSThey try to do what is best for their staff. There may
be consultations to find out the views but the boss always makes the final decision.
Blake and Mouton's Managerial Grid - ANSWERSlooks at 'concern for people' and
'concern for performance' then grades the people to see where they fall on the grid.
REVISION EXAM 2026
Why businesses exist - ANSWERSCan make you money and you can be your own
boss
Mission - ANSWERSa business aim expressed to make it seem especially purposeful
and motivating
Objectives - ANSWERSSMART Specific, Measurable, Achievable, Realistic, Time-
bound
Why businesses set objectives - ANSWERS- it is motivating to have a goal to aim
toward
- as a boss you can not make every decision
Profit - ANSWERSRevenue - total costs
What are the 5 types of business - ANSWERS-sole traders
-private limited companies (LTD)
-Public limited companies (PLC)
-Private and public sector organisations
- non-profit organisations (charities)
Sole traders - ANSWERSa business that is owned and operated by one person
Private Limited Company (Ltd) - ANSWERSA small to medium sized company, owned
by shareholders who have limited liability. The company cannot sell its shares to the
general public.
Private Limited Company Advantages - ANSWERS-Limited liability
-Additional capital can be raised by selling shares (not to the general public)
-Separate legal existence to the owner
-Higher business status to sole trader
Private limited company Disadvantages - ANSWERS-You have to publish the account
information
-You need two share of £1 each
Public limited company (plc) - ANSWERSA limited company with more that £50,000 of
share capital. Any member of the public can buy shares. Public companies must publish
more detailed accounts
,Public limited company Advantages - ANSWERS-Raising capital through public issue of
shares
-Offering shares to the public spreads risk
-Banks are more likely to lend money to PLC's
-More growth and expansion opportunities
-Having PLC at the end of your business name gives a better image
-Shares are more easily transferred so shareholders are happier
-Separate legal entity to the owner
public limited company Disadvantages - ANSWERS-More regulations that could
increase costs
-Higher level of transparency needed
-Must start with £50,000 share capital
Private sector organisations - ANSWERSOrganisations owned by individuals or
companies
Public sector organisations - ANSWERSBusinesses owned by the government.
Non-profit organisations - ANSWERSBusinesses with a motive other than profit, may be
to provide a social benefit or service to society or to support a cause.
Share capital - ANSWERSThe total value of capital raised from shareholders by the
issue of shares
Role of Shareholders - ANSWERSto raise important issues with the board directors and
raise funds
Why shareholders invest - ANSWERS-Annual dividend payments
-A rise in the value of shares
Market capitalisation - ANSWERSNumber of issued shares x current share price
Influences on the price of shares - ANSWERS-The profit after tax of the company x the
value investors place on on those earnings
Significance of share price changes - ANSWERSHigh = cheap and easy to obtain more
share capital
Low = unlikely to raise any extra share capital
What are the 6 external factors affecting businesses - ANSWERS-Market conditions
-Competition
-Changes in household incomes
-Changes in interest rates
-Demographic factors
-Environmental issues
, Market Conditions - ANSWERS-The number of competitors in a particular market
-The intensity of competitiveness
-Total market available
-The rate at which the market is growing
Competition - ANSWERSThe tighter the economic and market conditions, the greater
the competitive pressures tend to be
Factors that effect household incomes - ANSWERS-Changes in the real income of the
main income earner
-The number of people in the household that work
-The impact of government decisions on taxation and benefits
Changes in interest rates - ANSWERSIf interest rates go up, businesses and individuals
spend less. If interest rates go down, businesses and individuals spend more.
Demographic factors - ANSWERS-Population size
-Age
-Gender
-Ethnicity
Environmental issues and fair-trade - ANSWERSConcern for green issues and ethical
issues involved with business.
What do managers do - ANSWERSSet objectives, organize, motivate and
communicate, measure, develop people
What are the leadership styles - ANSWERS-Autocratic managers
-Democratic managers (laissez-faire)
-Paternalistic
Autocratic managers - ANSWERSManagers who centralise power and tell employees
what to do. They tend to use one-way, top-down communication.
Democratic managers (laissez-faire) - ANSWERSManagers that take the view of their
subordinates into account when making decisions as well as delegating authority.
Communication tends to be two-way. 'Laissez-faire' means 'Let it be"
Paternalistic managers - ANSWERSThey try to do what is best for their staff. There may
be consultations to find out the views but the boss always makes the final decision.
Blake and Mouton's Managerial Grid - ANSWERSlooks at 'concern for people' and
'concern for performance' then grades the people to see where they fall on the grid.
