GCSE Business Short Paper A
Covers Enterprise and Entrepreneurship, Spotting a Business Opportunity, Business Aims and Objectives and 3 more.
Questions
Question 1 [3 marks]
Enterprise and Entrepreneurship
Explain one reason why having a genuine passion for a product or service can help an entrepreneur succeed.
Question 2 [3 marks]
Break-even Analysis
A market stall sells scented candles for 9 pounds each. Each candle costs 3 pounds to make.
The stall's fixed costs are 180 pounds per week. Calculate the contribution per candle, and the number of candles the stall must sell each week to break even.
Question 3 [3 marks]
Business Aims and Objectives
Explain one reason why a social enterprise might set a social objective alongside making a profit.
Question 4 [4 marks]
Enterprise and Entrepreneurship
Priya is deciding whether to leave her salaried job, which pays 28000 pounds a year, to set up a mobile dog-grooming business.
Explain two risks Priya faces by giving up her job to become self-employed.
Question 5 [5 marks]
Profit and Financial Performance
A bicycle shop's figures for the year are: sales revenue of 180000 pounds, cost of sales of 108000 pounds, and net profit of 27000 pounds.
Calculate the shop's gross profit margin and its net profit margin, both to one decimal place, and explain what the gap between the two margins shows.
Question 6 [5 marks]
Spotting a Business Opportunity
In a small town, three plumbing firms share a market worth 500000 pounds a year.
Firm A has annual revenue of 175000 pounds and Firm B has annual revenue of 235000 pounds.
Calculate Firm A's market share and Firm B's market share as percentages, and state which firm has the larger share.
Question 7 [5 marks]
Cash Flow
A tattoo studio forecasts cash inflows of 7400 pounds and cash outflows of 6100 pounds for November, with an opening balance of negative 200 pounds, already overdrawn, at the start of the month.
Calculate the net cash flow for November and the closing balance at the end of November, and state whether the studio is still overdrawn at the end of the month.
Question 8 [6 marks]
Enterprise and Entrepreneurship
A new entrepreneur is planning to launch a business selling handmade greetings cards only through a physical market stall, with no online presence.
Evaluate whether the entrepreneur should also sell online through a website and social media, given how technology is changing the way small businesses reach customers.
Question 9 [6 marks]
Cash Flow
A building supplies merchant is considering offering 60 days' credit to trade customers for the first time, to compete with a rival merchant who already offers credit, even though the merchant currently sells everything for cash on collection.
Evaluate whether the merchant should start offering 60 days' credit to trade customers.
Model solutions
| Question 1[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that a passionate entrepreneur is strongly motivated by the product or service itself | B1 |
| developing this, such as being more likely to keep working hard through the difficult early months of trading | B1 |
| concluding that this increases the chance the business survives long enough to succeed | B1 |
| Final answer: Genuine passion motivates an entrepreneur to keep working hard through the difficult early months, increasing the chance the business survives | |
| Question 2[3 marks] | |
|---|---|
| Answer or working | Marks |
| contribution per candle = 9 minus 3 | M1 |
| dividing the fixed costs of 180 by the contribution per candle | M1 |
| 30 candles per week | A1 |
| Final answer: Contribution = 6 pounds per candle; break-even output = 30 candles per week | |
| Question 3[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that part of the business's purpose is a social or environmental cause, not just profit | B1 |
| developing this, such as profit being reinvested to fund the cause, for example providing training to disadvantaged people | B1 |
| concluding that pursuing the social objective can also attract customers who want to support that cause, helping sales | B1 |
| Final answer: A social enterprise sets a social objective because part of its purpose is a cause, not just profit; achieving it can also attract customers who want to support that cause | |
| Question 4[4 marks] | |
|---|---|
| Answer or working | Marks |
| identifying a risk, such as losing her guaranteed income | B1 |
| developing it, such as earning less than 28000 pounds while she builds a client base | B1 |
| identifying a second risk, such as losing her employment benefits | B1 |
| developing it, such as having no sick pay, holiday pay or pension contributions, which she must now fund herself | B1 |
| Final answer: Two developed risks, such as losing her guaranteed 28000-pound salary and losing employment benefits such as sick pay and pension contributions | |
| Question 5[5 marks] | |
|---|---|
| Answer or working | Marks |
| gross profit = 180000 minus 108000 = 72000 pounds | M1 |
| a gross profit margin of 40.0 percent | A1 |
| net profit margin = 27000 divided by 180000, multiplied by 100 | M1 |
| a net profit margin of 15.0 percent | A1 |
| explaining that the 25.0 percentage point gap represents the shop's other expenses, such as wages, rent and other overheads, deducted between gross and net profit | B1 |
| Final answer: Gross profit margin = 40.0 percent; net profit margin = 15.0 percent; the 25.0 percentage point gap represents the shop's overheads, such as wages and rent, deducted after gross profit | |
| Question 6[5 marks] | |
|---|---|
| Answer or working | Marks |
| Firm A's share = 175000 divided by 500000, multiplied by 100 | M1 |
| 35 percent | A1 |
| Firm B's share = 235000 divided by 500000, multiplied by 100 | M1 |
| 47 percent | A1 |
| correctly concluding that Firm B has the larger market share | B1 |
| Final answer: Firm A's market share = 35 percent; Firm B's market share = 47 percent; Firm B has the larger share | |
| Question 7[5 marks] | |
|---|---|
| Answer or working | Marks |
| net cash flow = 7400 minus 6100 | M1 |
| a net cash flow of 1300 pounds | A1 |
| closing balance = negative 200 plus 1300 | M1 |
| a closing balance of 1100 pounds | A1 |
| correctly stating that the studio is no longer overdrawn, since the closing balance is positive | B1 |
| Final answer: Net cash flow = 1300 pounds; closing balance = 1100 pounds; the studio is no longer overdrawn | |
| Question 8[6 marks] | |
|---|---|
| Answer or working | Marks |
| a point in favour of selling online, such as reaching many more potential customers beyond those who visit the market | B1 |
| developing it, such as being able to sell at any time of day rather than only during market hours | B1 |
| a point against, such as the cost and time needed to build and maintain a website or social media presence | B1 |
| developing it, such as this being a significant burden for a brand-new, one-person business with limited time and money | B1 |
| a further factor, such as whether handmade cards benefit from being seen and touched in person, which selling online cannot replicate | B1 |
| a justified conclusion on whether the extra reach from selling online is likely to outweigh the extra cost and time, related to the entrepreneur's resources | B1 |
| Final answer: A justified judgement weighing the wider reach and flexibility of selling online against the cost, time and loss of the in-person experience, related to the entrepreneur's limited resources as a new, one-person business | |
| Question 9[6 marks] | |
|---|---|
| Answer or working | Marks |
| a point in favour, such as attracting trade customers who need credit terms and currently buy from the rival merchant instead | B1 |
| developing it, such as this potentially increasing sales revenue and market share | B1 |
| a point against, such as cash coming in much more slowly, since payment is delayed by up to 60 days | B1 |
| developing it, such as this risking a cash flow shortfall if the merchant still has to pay its own suppliers quickly | B1 |
| a further factor, such as checking the creditworthiness of trade customers before offering credit, to reduce the risk of late or non-payment | B1 |
| a justified conclusion on whether the extra sales from offering credit are likely to outweigh the cash flow risk, related to the merchant's own cash position | B1 |
| Final answer: A justified judgement weighing the extra sales and competitiveness of offering 60 days' credit against the cash flow risk of delayed payment, related to checking customer creditworthiness and the merchant's own cash position | |