How wisely have you used your time? Last lesson How wisely have you used your time?

Feedback from Dial a Dog! Your last chance to learn from exam practice technique

a) Analyse the possible factors that Paul Stamp should consider when looking for new premises for his business (10 marks) Content 3 marks Application Analysis 4 marks Level 3 Answer demonstrates thorough understanding of location influences Level 2 2 marks Answer demonstrates some understanding of location influences Answer makes good application to the case study 3 – 4 marks Thorough analysis of location influences Level 1 1 mark Answer demonstrates limited understanding of location influences 1 -2 marks Answer makes limited application to case study 1 – 2 marks Limited analysis of location influences

Relevant points of discussion could include: The costs of purchasing/renting the premises The availability of funds to purchase premises (own funds/bank loans etc) Where are the majority of his customers? Is there a need to locate near to them or is he more footloose? Rival companies – is there a need to locate near to them? Help from local authorities, eg financial help to locate somewhere, planning permission etc Impact upon his quality of life, eg travelling some distance to new premises etc

b) Paul was thinking of converting Dial a Dog Wash from a sole trader to a partnership. What advice would you give Paul to help him make a decision? (15 marks) Content 4 marks Application 5 marks Analysis 6 marks Level 3 3 - 4 marks Answer demonstrates thorough understanding of both legal structures 4 -5 marks Thorough application of answer to the case study 5 – 6 marks Thorough analysis of reasons for changing legal structure Level 2 2 marks Answer demonstrates good understanding of legal structures or thorough on one legal structure 3 marks Good attempt to apply answer to the case study 3 – 4 marks Good analysis of reasons for changing legal structure Level 1 1 mark Answer demonstrates some understanding of legal structures 1 -2 marks Limited attempt to apply answer to the case study 1 – 2 marks Limited analysis of reasons for changing legal structure

Relevant points of discussion could include: Define key terms 1st! Explanation of features of sole traders and partnerships Sharing of ideas/ responsibility Extra source of funds from partner Reduced pressure on Paul – has less to do on every day activities He could take more responsibility and let partner do menial jobs – depends how partnership is defined As business grows in size, it needs more organising, which he cannot do himself Could move to limited partnership with sleeping partner having limited liability which encourages investment

Relevant points of discussion could include: However…. Profits have to shared out – so could mean less for him Needs right person - so there is less chance of conflict Need to consult with partner so direction of business might change form what Paul wants Paul could be liable for actions of partner and could lose personal assets of he still has unlimited liability

c) To what extent would carrying out primary and secondary market research guarantee the success of Dial a Dog Wash (15 marks) Content 4 marks Application 5 marks Analysis 6 marks Level 3 3 - 4 marks Answer demonstrates thorough understanding of both primary and secondary research 4 -5 marks Thorough application of answer to the case study 5 – 6 marks Thorough analysis of carrying out market research plus other factors which influence business success Level 2 2 marks Answer demonstrates some understanding of primary and secondary research or thorough understanding of either 3 marks Good attempt to apply answer to the case study 3 – 4 marks Good analysis of importance of carrying out market research plus some analysis of other factors Level 1 1 mark Answer demonstrates limited understanding of primary or secondary research 1 -2 marks Limited attempt to apply answer to the case study 1 – 2 marks Limited analysis of importance of carrying out market research

Research will help with meeting customer needs, ie marketing mix Relevant points of discussion could include: Define key terms 1st! Explanation of features of primary and secondary research with examples of each Secondary research provides over view of market and quantitative analysis Primary research provides detailed information about local market and customers thoughts, ie qualitative analysis Research will help with meeting customer needs, ie marketing mix Research will help identity changes in market which Paul can respond to, ie could help give him a competitive advantage over rivals

However…. Quality of research could influence how good it was and impact it has upon the success of the business, eg poor quality research could lead to poor decision making which could affect performance Research findings could be accurate when collected, but changes to external environment could make data flawed, eg economic recession could lead to customers spending less on dog grooming Other factors influence business success, eg availability of funds, the desire of the entrepreneur to succeed, the USP of a product How competitors respond to a new company entering the market – if the market is growing they might feel that a new company poses little threat, but if markets are contracting competitive pressures become more acute and more difficult for a new firm to survive

Key skills to use in the extended mark Q

Having problems with ANALYSIS marks….? Try this as an example…. One of the key benefits of being a sole trader is that the owner has complete control and direction over the business. The sole trader can make his/ her own decisions such as .........................., therefore.....................

Having problems with Evaluation marks….? Try this as an example…. Paul was thinking of converting Dial a Dog Wash from a sole trader to a partnership. What advice would you give Paul to help him make a decision? Need to explain one point… Plus Minus It depends on….

Did you try the other Q’s? Mark your own work…

What is meant by the term primary market research? (2 marks) Primary market research involves the collection of original/first hand information for a specific purpose

b) What is meant by the term sales budget? (2 marks) A sales budget shows the planned income for a business over a set future time period

Someone who is prepared to take risks Someone who is innovative two characteristics of a successful entrepreneur such as Paul Stamp ( 1 mark each) Someone who is prepared to take risks Someone who is innovative Someone who is determined Someone who can spot a business opportunity Someone who is not afraid of failure

d) Explain one reason why it was important for Paul Stamp to carry out secondary market research when setting up his business (4 marks)

d) Explain one reason why it was important for Paul Stamp to carry out secondary market research when setting up his business (4 marks) Secondary research is information which has already been collected by some one else Secondary data would give information about the market as a whole, eg value of sales Secondary data could show what has happened in the market over time, ie identify trends, eg growth of sales Secondary data might help him make a decision on whether it was worthwhile setting up in the dog grooming market

e) Use information in the text and Table 1 to calculate Dial a Dog’s budget sales revenue for June, July and August (6 marks) Content 2 marks Application 4 marks Level 3 Calculations are completed correctly Level 2 Answer shows good understanding of meaning of sales budget with formula for calculating sales budget Some errors in calculations Level 1 1 marks Answer shows limited understanding of meaning of sales budget 1 mark Limited attempt to calculate sales budget

e) Use information in the text and Table 1 to calculate Dial a Dog’s budget sales revenue for June, July and August (6 marks) Sales revenue budget – a plan for how much income Dial a Dog Wash will generate between June and August 2007

f) Calculate the percentage growth in the UK market for dog grooming sales between 2005 and 2006 (4 marks) Content 2 marks Application Level 2 Answer shows good understanding of meaning of market growth by providing definition or formula Answer successfully calculates market growth Level 1 1 mark Answer shows limited understanding of meaning of market growth or formula is wrong Limited attempt to calculate market growth figures

f) Calculate the percentage growth in the UK market for dog grooming sales between 2005 and 2006 (4 marks) Market growth measures the increase in the value of sales in the dog grooming industry between 2005 and 2006 Market growth = change in sales between 2005 and 2006 / sales on 2005 * 100 = 5/35 * 100 = 14.28%

Last chance for questions… Use your post-it notes…. Let the students have the rest of the lesson to work through a worksheet of ‘revisions questions’ – taken from AQA BS endorsed book – Foden! While they work through this – they can ‘post’ their notes onto the white board – or for teacher to collect and put onto whiteboard – for last 5 mins of lesson…

Local markets A market is anywhere where buyers and sellers come together to transact with each other Types of market National markets Physical markets Electronic markets

Factors that affect demand

Factors that affect demand Prices Incomes Tastes & fashions Competitor actions Social & demographic Seasonal Government action

Market segmentation Segment B Segment C Segment D Segment A

Attractions of niche for a start up Smaller & fewer big competitors Chance to add value = better profit margin Easier to reach customers Often higher growth of market

Analysing the market There are three calculations you need to be able to complete in order to analyse market data in Unit 1 Market size (volume and value) Market growth (percentage growth) Market share (percentage of the market owned by each product or competitor)

Motives for being an entrepreneur Financial Capital gains Making a living Personal Proving people wrong Gaining control Building something Social Giving something back

Different Types of Start-up Aims & Objectives Part-time businesses Social enterprises Lifestyle businesses Ambitious businesses Different Types of Start-up

So what can go wrong with a business plan? Business planning Two main purposes: A detailed plan for success A tool to raise finance So what can go wrong with a business plan?

Over to you!

Why Business Plans go wrong No market in the gap Poor market research & unrealistic plan Competitor response Good idea, poor execution Wrong people; poor management Growth is too quick (overtrading) or too slow Failure to manage cash flow External shocks Economic change (credit crunch, oil prices) Legal & social change

Exam on Tuesday 13th January Just in case you’ve forgotten! Exam on Tuesday 13th January In the afternoon….. So you can have the morning for revision if you want to…. At home or in the work room/study centre, but cannot just ‘skive’ lessons…. the time is given to you for revision work!