Chapter 3 - Practice SAC

Question 1

What are the three resources [Business Owner] will use in the operation of the [Business]? Give an example of each.

Answer 1

The resources they will use are Capital, Labour, Natural Materials.
- Definitions + Examples of Each

Question 2

Discuss (advantages and disadvantages) of the location of Owner’s shop on [Street Name]?

Answer 2

2 Disadvantages + 2 Advantages

Question 3

Explain a source of finance that would be suitable for the Owner if they want to buy a shop? (2 marks)

Answer 3

• Enough money, with enough time to pay off the loan

- A Secured Loan like Mortgage Loans

Question 4

Explain two factors the Owner would have considered when deciding on whether to purchase an existing shop or choosing to start one from scratch?

Answer 4

Do 3.5 for advantages and disadvantages of buying vs. setting up
- List dis/advantages of each.

Question 5

Outline a legal structure that would be appropriate for Josh’s barber shop to use and why? In your
response discuss (advantages and disadvantages) of your selected legal structure

Answer 5

Select Legal Structure (Sole Trader, Partnership, Company [public/private])

List disadvantages + advantages

Question 6

Name a professional that the Owner would seek advice from and what are two questions he might ask that professional?

Answer 6

Accountant:

• What tax requirements need to be met
• What’s the best system to track income + costs of the business

Lawyer / Solicitor:

• What legal processes do they need to do to set up the legal structure
• What Regulations they would need to meet
• Can the lawyer look over a legal document

HR Manager:

• Is the business paying their staff fairly
• Are the staff provided with a safe environment

IT Person:

• Is the website up-to-date and easy to navigate through
• Are the servers and the website well protected against hackers/malware

Question 7

Explain what SWOT analysis is and how it could assist B.Owner in planning their business. In your response include one threat and one opportunity that Josh would have.

Answer 7

A SWOT analysis is a planning tool that identifies the business’s internal strengths and weaknesses, as well as any opportunities and threats from the external environment. Completing a SWOT analysis allows the business owner to become more familiar with the business as they are making planning decisions.

Example of Threat + Opportunity (EXTERNAL)