Paper 1: Investigating small business

Which one of the following is a feature of limited liability?

Which one of the following is a method of primary market research?

Which one of the following describes opportunity cost?

Calculate the interest paid in one year on a loan of £8,000 at 5% per year.

Explain one benefit of a business plan to a new business.

Explain one risk of being an entrepreneur.

Which one of the following is part of the marketing mix?

State two ways a business can add value to a product.

Fixed costs are £24,000, selling price is £20 and variable cost per unit is £12. Calculate the break-even level of output.

Analyse the impact on a small business of an increase in interest rates.

Which document shows a business's expected cash inflows and outflows?

Calculate net cash flow when cash inflows are £14,500 and cash outflows are £16,200.

Explain one impact of the National Living Wage on a small business.

Analyse the impact of consumer law on a small food business.

Case study (fictional business written for this paper): Pip's Pantry is a zero-waste refill shop in Bristol, opened in 2023 by Pip Adeyemi as a sole trader. Customers bring their own containers to buy pasta, oils and cleaning products by weight. In 2024 revenue was £96,000 and total costs were £84,000. Most customers are aged 25–40 and find the shop through Instagram. Pip works six days a week and is thinking about how to grow. Explain one benefit to Pip of being a sole trader.

Calculate Pip's Pantry's profit as a percentage of revenue in 2024.

Analyse the benefits to Pip's Pantry of using social media.

Pip is considering two options. Option 1: buy a refill van to visit nearby villages. Option 2: sell online with local delivery. Justify which one of these options Pip should choose.

Pip is considering two options. Option 1: employ a part-time shop assistant. Option 2: reduce opening hours to five days a week. Justify which one of these options Pip should choose.

Case study (fictional business written for this paper): Sundial Dog Grooming is run by Jamie Cole from a converted van in Leicester. Demand is growing as more households own dogs. Jamie has been offered a franchise with a national grooming brand, which charges a £15,000 fee and 8% of revenue. State one feature of a franchise.

Explain one drawback to Jamie of becoming a franchisee.

Jamie is considering two options. Option 1: take the franchise. Option 2: stay independent and open a small salon. Justify which one of these options Jamie should choose.

Evaluate whether competition is the biggest risk facing Sundial Dog Grooming. You should use the information provided as well as your knowledge of business.