1. Section 4
Define a fixed-term contract? (2)
Explain the risks of Nathan entering a more specialised niche market. (4)
A fixed term contract is a contract that only lasts for a given amount of time before it ends. (1) For example Nathan may take a new worker on for a 3 month period over the busy summer months. (1)
One mark for correct point; one mark for the development of the point (must be in context related to the case study)
Fewer consumers (1) – there may not be enough local customers in the local area to support a business specialising in tree surgery. (1)
This could result in NTC not generating sufficient funds to pay Nathan a salary, to pay the loan to buy all the equipment and to pay his staff. (1) NTC may therefore be at greater risk of failing (1)
If a new competitor entered the market (1), it may be risky for NTC as due to the specialised nature of the business, there may not be enough trees that need pruning (1)

2. Outline the differences between a wage and a salary. (4)
List 3 advantages of Nathan becoming his own boss. (3)
20. State 3 disadvantages of Nathan becoming his own boss. (3)
Nathan is going to pay his mum and sister a wage which means they will receive a set amount of money (the minimum wage) for each hour they work. (1) The more hours they work the more they will earn. (1)
Nathan is going to pay himself a salary; a salary is a set amount per year paid in 12 equal payments (1). It will not vary with the number of hours he works. (1)
One mark per advantage:
Keeps the profit of NTS
May be able to sell NTS in the future/leave it to his children in the future
He gets to make all his own decisions
Self fulfilling being his own boss
One mark per disadvantage:
No one to support him with decision making
Needs to finance the setting up of NTS himself
No one to spread the risk of setting up a new business with
No one to take over the running of the business if Nathan is unwell or on holiday

3. Section 5
Identify the 3 initial aims of Nathan’s business. (3)
Define on the job training. (2)
23. Explain the advantages and disadvantages of Nathan deciding to go on a specialist ‘fast-track’ training course. (6)
One mark each
> to start his business as a limited company without too much borrowing
> run it profitably as soon as possible
> maintain his ethical values.
On the job training is training given whilst doing the job (1). Nathan could teach his new employees how to trim trees whilst they were on an actual job. (1)
One mark for an undeveloped point and 2 marks for a developed point (maximum 4 if only a one sided argument).
The course is a specialist tree cutting course. This should ensure that he does a better job cutting down the trees meaning that he will get satisfied customers who are more likely to repeat purchase from NTS. (2)
The specialist course should reduce the risk of Nathan having an accident in what is a risky job. This should both reduce his insurance payments and prevent serious injury that could threaten the future of NTS. (2)
Being a certified tree surgeon is going to give his customers confidence, particularly the parks and local council, and should generate as a result more sales.
The course costs £2,600 which Nathan may not be able to afford and will take 3 weeks when he will be missing out on potential revenue. (2)
Nathan has already got a lot of experience in the gardening business and therefore, the benefits of such a course may be quite limited and hard to measure. (2)

4. Explain how best Nathan could promote his new business. (6)
25. Outline two advantages to Nathan of targeting the Park’s Department and local councils. (4)
Any of the following points (up to a maximum of 3) may be used for 1 mark each. If fully explained and related to the case study then a second mark should be awarded for development. Note: the type of promotion must be relevant for a small business.
Fliers
Social media
Adverts in local papers
Direct representation made to the council/Parks department
Adverts on website such a Yell.com
The Park’s Department will give out very large contracts due to the number of trees they have (1), this will potentially generate much larger revenues than small private contracts if he wishes to scale his business. (1)
Most private contracts who have trees removed will be single ‘one off contracts’ and therefore Nathan will constantly have to promote NTS to gain the contracts (1), where as the Park’s Department offer the possibility of repeat purchase and a steady income for Nathan. (1)

5. Section 6
1. Explain two reasons why Nathan might draw up a cash flow forecast before starting his business. (4)
2. State two types of insurance that Nathan may decide to take out after setting up his new business. (2)
3. Explain the reasons Nathan may have decided to take out insurance. (4)
4. As Nathan moves from doing all the jobs himself to employing people, explain how the skills he will require to be successful will change. (6)
5. Describe the types of training that Nathan’s new employees may require in order to successfully work on short term contracts as part of a small team. (4)