Mitchell is an entrepreneur who plans to launch a business selling books. As part of his business plan, Mitchell has completed some market research. An extract is shown in Fig. 2.1. Mitchell will use microfinance as a source of finance. He wants to find out whether the opportunities from using ecommerce for a new business are greater than the threats.
Fig. 2.1 Extract from Mitchell’s market research data for 2023.
Chart 1: Kinds of people who read books. The figures are: Children 35%, Older people 27%, Adults 20%, Students 18%.
Chart 2: Book sales by type (million). Approximate sales are: Electronic books 20 million, Audio books 10 million, Paperbacks 50 million, Hardbacks 15 million.
(a)[2]
Define the term ‘entrepreneur’.
(b)[2]
Define the term ‘business plan’.
(c)[4]
Outline one advantage and one disadvantage for Mitchell of using microfinance as a source of finance.
(d)[6]
Explain how the market research data in Chart 1 and Chart 2 in Fig. 2.1 might assist Mitchell when he is making decisions.
(e)[6]
Do you think ecommerce offers more opportunities than threats for a new 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: “A person who organises, runs and bears the risk of a new business venture” …