Business 0450 · IGCSE · Enterprise, business growth and size
Enterprise, business growth and size — practice question
Five years ago, Adele set up a dance school. Each year, Adele pays herself a salary and earns $1000 profit. The school provides children with a selection of dance and exercise classes. It operates as a sole trader business. Adele thinks choosing the correct pricing method is very important. She plans to grow the business by launching a second dance school. Her business plan predicts that this expansion will require $8000. Adele is unsure whether a bank loan is the most suitable source of finance for this growth.
(a)[2]
Identify two characteristics of a sole trader.
(b)[2]
Identify two of the principal sections of a business plan.
(c)[4]
Identify and explain two reasons why choosing the correct pricing method matters for Adele’s business.
(d)[6]
Identify and explain two location factors that Adele should think about when choosing a second school.
(e)[6]
Do you think that a bank loan is the best source of finance for Adele to use in order to expand the business? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Retains all profits” …