1. Assessment Details
1 Hour Exam Section A – Multiple choice questions Section B – Written explanations of concepts and terms Section C – Case study with written responses required Read the learning objectives; this is what will be tested on the exam. Use this as a checklist. There are some revision notes to help with each section

2. Question command words
Type of question
What you are expected to do?
Multiple Choice
Simply selecting the answer you think is correct. A good technique is to use process of elimination as well
Identify
Recognise, list, name or otherwise characterise
Explain
To give account of the purposes or reasons. You can use State Link Impact or Point Evidence Explain here to help you build an answer
Analyse
Giving the benefits or drawbacks
Advise
Make a qualitative judgement taking into account different factors and using available knowledge/experience/evidence.
You should analyse (advantages and disadvantages) Then make a decision to what extent the factor will affect the business. Do you agree? Strongly disagree?
You might rank what is important in you decision

3. 1.1 Purpose and nature of businesses
Learning objective
Tick
To give a simple definition of a business
State and describe at least five reasons why businesses are created
Determine the different types of businesses; goods, services, distribution
Able to explain the difference between a good and a service -
Identify what products/ services are needed and wanted and why

5. Product
Service
A physical item that can be touched and sold to the customer e.g phone, car
A business will do something for the customer for money e.g car wash, hair cut

6. Learning Objectives Learning objective Tick
Identify the four factors of production
Explain the four factors of production
Define the three sectors of businesses; primary, secondary and tertiary
Identify which sector a business operates in

7. C apital E nterprise L and abour FACTORS OF PRODUCTION
Resources can be divided into four different groups C
apital
Man-made items that are used to make other goods/services – e.g. Factories, machinery E
nterprise
Entrepreneurs are people who take risks by setting up/running business, e.g. Richard Branson L
and
Land itself and all natural resources above and below land, e.g. Oil, sun light, water, etc.
abour
Human input into production process(human capital)

8. Learning objectives Learning objective Tick
Understand the term enterprise
What is an entrepreneur
Explain the characteristics of an entrepreneur; hard working, innovative organised and willing to take a risk
The objectives of why an entrepreneur start a business; own boss, flexible working hours, pursue an interest

11. Learning objectives Learning objective Tick
To explain that businesses face a constantly changing environment (things not under their control)
To briefly understand how technology has affected businesses
To briefly understand how the economy has affected businesses
To briefly understand how legalisation has affected businesses
To briefly understand how the environment has affected businesses

12. Business have to adapt to the changing environment of the world (TEEL)
Factor
Technology
Economy
Environment
Legalisation (laws)

13. Technology How has smartphones changed our lives…
Technology How has smartphones changed our lives…..now think how businesses have reacted to this?

14. Environmental issue
How businesses have to adapt
Waste
Minimise packaging and can be recycled
Carbon emissions
Make sure smoke not near housing/ lower carbon emissions
Using up land resources
Use renewable resources e.g solar panels, wind turbine
Carbon footprint
Minimising travel distances

15. Trading laws – e.g. must be fit for purpose
Legalisation
The government will set business laws and if laws are not met then businesses face large fines or even jail
Examples of laws
Pay..– Minimum wage laws
Environmental laws
Trading laws – e.g. must be fit for purpose

16. Learning objectives Learning objective Tick
Benefits of a sole trade ownership
Negatives of a sole trader
How a sole trader is managed and controlled
How a sole trader can raise sources of finance
The type of liability a sole trader has
Which type of businesses would suit a sole trader?

18. Learning objectives Learning objective Tick
Benefits of partners ownership
Negatives of a partnership
How a partnership is managed and controlled
How a partnership can raise sources of finance
The type of liability a partnership has?
Which type of businesses would suit a partnership?

20. Learning objectives Learning objective Tick
Benefits of Private limited company ownership
Negatives of a Private limited company
How a Private limited company is managed and controlled
How a Private limited company can raise sources of finance
The type of liability a Private limited company has?
Which type of businesses would suit a Private limited company ?

21. PRIVATE LIMITED COMPANY
Companies with Ltd behind them.
PRIVATE LIMITED COMPANY
How is a limited company set up? Register with companies house. Will need at least one shareholder, director. Will fill out a ‘memorandum of association’ detailing shares and ownership. Register for corporation tax.
DIRECTORS
Benefits
Limited liability
Easier to raise finance – both through the sale of shares and also easier to raise debt Stable form of structure – business continues to exist even when shareholders change Provides more privacy than a PLC
Drawbacks
Greater admin costs (though much cheaper than being a public company)
Public disclosure of company information (annual report & accounts + annual return)
Directors’ legal duties (set out by Companies Act)
BUSINESS
SHAREHOLDERS
What is limited liability?
Limited liability protects the personal wealth of the shareholders

22. Key Points……Private Limited Company LTD
Question
Answer
Who controls the business and makes the decisions?
Directors
Where can the business get money from to start the business?
Selling shares privately or still getting a loan
What type of liability does the business have? What does this mean?
Limited liability
How are the profits shared?
Between shareholders

23. Learning objectives Learning objective Tick
Benefits of a Public Limited Company (PLC)
Negatives of a Public Limited Company (PLC)
How a Public Limited Company (PLC) is managed and controlled
How a Public Limited Company (PLC) can raise sources of finance
The type of liability a Public Limited Company (PLC) has?
Which type of businesses would suit a Public Limited Company (PLC)

24. PUBLIC LIMITED COMPANY
How is a Public limited company set up?
A company that can list itself on the stock exchange and sell shares to anyone
Board of DIRECTORS
Benefits
Raise large amounts of capital from selling shares
Increase reputation as well know business
Drawbacks
Accounts have to be made public
Ownership of original owners can go down as more people buy shares
Pay dividends to shareholders
BUSINESS
SHAREHOLDERS
Can be anyone
What is limited liability?
Limited liability protects the personal wealth of the shareholders

25. Key Points……Public Limited Company (PLC)
Question
Answer
Who controls the business and makes the decisions?
Board of Directors
Where can the business get money from to start the business?
Share capital – by listing the business on the stock exchange the business can raise large amounts of capital this way
What type of liability does the business have? What does this mean?
Limited liability – the business has its own identity and has to pay any debts not the shareholders
How are the profits shared?
Profits are shared between shareholders – paid a dividend at the end of the year if profits are made

26. Learning objectives Learning objective Tick
Benefits of a Social Enterprise
Negatives of a Social Enterprise
How a Social Enterprise is managed and controlled
How a Social Enterprise can raise sources of finance
The type of liability a Social Enterprise has?
Which type of businesses would suit a Social Enterprise?

27. Key Points……Not-for-profit organizations (Social enterprises)
Question
Answer
What a social enterprise
A business set up not just for profit. They have social or environmental objectives
Where can the business get money from to start the business?
Government usually give Grants to social enterprises because they help the community or environment
What type of liability does the business have? What does this mean?
Usuall set up as a private limited company
How are the profits shared?
Profits might be given away e.g Charity