1. Final Revision – Unit 1 You MUST know ALL of the keywords – you can then attempt EVERY question! Student Common Area AQA Revision Guide VLE Exercise Books AQA work books

2. Unit 1 – setting up a business ChapterStarting a Business 1.1Why start a business? Social enterprise (definitions/pros/cons) 1.2Gaps in the market, Market observation and market mapping 1.3Franchises (definition, advantages and disadvantages) 1.4/1.5Business objectives (examples) and measuring success 1.6Business objectives and stakeholders (examples) 1.7Business plans (contents and uses) 1.8Risk and uncertainty (examples, how to minimise risks) 1.9Legal Structures - Sole traders and partnerships (definitions, pros, cons) 1.10Limited companies and limited/unlimited liability (definition, pros, cons) 1.11Location (why?) and the internet as an option

3. Unit 1 – setting up a business ChapterMarketing 2.1Market research with limited budgets (benefits of MR, types) 2.2Market research methods – internet, phone survey, questionnaire, supplier feedback, customer feedback, focus group (pros and cons) 2.3The marketing mix (why?), links between 4 aspects, image 2.4Product – product range for small firms 2.5Price – decisions and demand 2.6Promotion – advertising, free publicity, word of mouth, direct mail, personal selling, website, banners (pros and cons) 2.7Place – channels of distribution, e commerce

4. Marketing on a small budget Market ResearchThe 4 Ps Primary researchPrice Secondary researchPlace Research on a budgetPromotion Product Make sure your strategies are right for the business in the question!

5. Unit 1 – setting up a business ChapterFinance 3.1Finance and support for small businesses – bank loan, loan from family and friends, overdrafts, mortgage, trade credit, grants – pros and cons, availability, short or long term (when to use different sources) 3.2Financial terms and basic calculations – revenue/costs/profit or loss 3.3Cash flow and survival – cash flow forecast and calculations, uses and importance 3.4Using cash flow forecasts – interpreting results and identifying solutions

6. Sources of Finance What for? Internal or external? Long term or short term? Repayment costs? Availability of finance? Important: Knowing enough advantages and disadvantages so that you can make the right choice!

7. Cash flow Is enough cash coming into the business to allow us to pay the bills? What to look for: Negative closing balances, large expenditures causing problems, seasonal changes. Possible Solutions: CUT COSTS - Overdraft, short term loan, delay payments, lease rather than buy, trade credit extended. RAISE REVENUE – Sales, chase debtors.

8. Unit 1 – setting up a business ChapterPeople in Business 4.1Recruitment – when to recruit, full or part time, recruitment methods (job description, person specification, advertisement, shortlisting, interviews) 4.2Rewarding employees – Deciding how much to pay employees, attracting and keeping the best employees (monetary and non monetary rewards) 4.3Motivating staff – why? Monetary techniques, (commission, bonuses) non monetary techniques (training, responsibility) – pros and cons 4.4Protecting staff through legislation – equal pay act, minimum wage act, discrimination laws, employment rights, health and safety act

9. Unit 1 – setting up a business ChapterOperations Management 5.1Production Methods – job and batch production (pros and cons) 5.2Operational efficiency – advantages and ways to be more efficient 5.3Production and technology – robots/ computerised stock control programs/ communications technology/ design technology (CAD) 5.4/Production and quality – why? Advantages of quality, how can quality be achieved? 5.5Customer Service – Reliability/pre-sales service, service at time of purchase, after sales service, benefits 5.6Consumer protection – Sale of goods act, consumer protection act, competition act – pros and cons of laws for a business 5.7Impact of ICT on customer service – pros and cons of internet to customers and the business, ecommerce and global markets

10. Operations Management Job or batch production – which fits best???

11. Read the question twice Underline key points and build a little mental picture of the business Answer for the business in the question when prompted Read each question carefully! Expect the unexpected – and don’t panic. If your finding a question tricky, everyone in the country probably is! Exam Technique

12. List, state or give – short answers Describe – need one point and a development point (or example) if for two marks Exam Technique (AO1)

13. 4-6 Marks Command Words: Explain; Calculate Application crucial Problem - Need to read THE WHOLE QUESTION Example 1c: Identify two methods of market research and explain how each method might help Jenny make the business be more successful Exam Technique (AO2)

14. Analyse by comparing with alternative options or accepting the disadvantages/weaknesses of your choice. Consider what will happen if…. Make a clear recommendation and give reasons for your choice – why is it right in this situation. Don’t just repeat your analysis. Use the data in the case study and make sure your answer is about this business. Exam Technique – AO3 9 mark questions

15. Analysis and Evaluation Analysis can include:Evaluation: Advantages and disadvantages. Why is your choice right for this business. Comparison of differing options. Justifying your choice. Short run or long run impact. Consideration of impact on the business.

16. Make sure it’s analysis – you could Compare options Apply theory to this situation Bring in current market/economic knowledge Consider the likelihood of success What are the likely short term and long term impacts What impact will there be on costs/customers/ sales/profits/competitors/stakeholders Link two separate points together Make calculations based on data given Consider a what-if scenario

17. Recommendation Make a decision and give the reasons for your choice (without repeating a previous point!) Be consistent throughout your answer. Make sure you look to give at least two reasons for your choice (which might include a reason for rejecting the another option) You might try and point out how you would overcome a potential problem with your choice. Use the case study!

20. (6 marks)

21. STS will benefit from using e-commerce because it will allow them to expand their services and attract business from companies all over Europe. STS’s main strength is that both Magdi and Dimitri speak numerous languages and they can use the internet to advertise their services internationally, receive and return documents by email and make all billing through paypal. E- commerce is the best way to market a business internationally and is much cheaper than advertising in different business magazines across Europe.

23. Ultimately, if in doubt just answer the question! The next answer has the decision upfront, but still includes analysis and a reason for the decision!

24. I recommend that STS address the short term cash flow problem in September, October and November by seeing if they can get the web designer to offer them trade credit on the new website. This would allow STS to have the website straight away, but pay for it in December when their cash situation has recovered (E1 – 2). If the website payment was delayed for 90 days, their negative closing balance in October would be reduced to £200 and a small overdraft would cover this and the interest to be paid to the bank would be minimised. This is definitely the cheapest solution for STS (L3 – 3). (5 marks)

25. But there must be a decision!

26. To analyse, one way in which STS can address the short term cash flow problem in September, October and November by seeing if they can get the web designer to offer them trade credit on the new website. This would allow STS to have the website straight away, but pay for it in December when their cash situation has recovered. If the website payment was delayed for 90 days, their negative closing balance in October would be reduced to £200 and a small overdraft would cover this and the interest to be paid to the bank would be minimised. (L3 – 3) To conclude, I recommend trying to get trade credit on the website. This is because there will be no interest charged and it will mean they can use the website now to generate sales. (E1 – 2)

27. To analyse, one way in which STS can address the short term cash flow problem in September, October and November by seeing if they can get the web designer to offer them trade credit on the new website. This would allow STS to have the website straight away, but pay for it in December when their cash situation has recovered. If the website payment was delayed for 90 days, their negative closing balance in October would be reduced to £200 and a small overdraft would cover this and the interest to be paid to the bank would be minimised. This is definitely the cheapest solution for STS. The problem with asking the web designer for trade credit is that he may say no. In this situation, STS would need to either increase the size of their overdraft to £2 200 or consider delaying the new website – neither of which are ideal, so hopefully they will get 90 days trade credit from the designer. (L3 – 4) To conclude, I recommend trying to get trade credit on the website. This is because there will be no interest charged and it will mean they can use the website now to generate sales. (E1 – 2)

28. To analyse, one way in which STS can address the short term cash flow problem in September, October and November by seeing if they can get the web designer to offer them trade credit on the new website. This would allow STS to have the website straight away, but pay for it in December when their cash situation has recovered. If the website payment was delayed for 90 days, their negative closing balance in October would be reduced to £200 and a small overdraft would cover this and the interest to be paid to the bank would be minimised. This is definitely the cheapest solution for STS. The problem with asking the web designer for trade credit is that he may say no. In this situation, STS would need to either increase the size of their overdraft to £2 200 or consider delaying the new website – neither of which are ideal, so hopefully they will get 90 days trade credit from the designer. (L3 – 4) To conclude, I recommend trying to get trade credit on the website. This is because there will be no interest charged and it will mean they can use the website now to generate sales. (E1 – 2) Encouraging their customers to pay earlier might be the best long term solution to their cash flow problems, but, this is probably not the best way to deal with their current problems because it will take too long to persuade their customers to pay up what they owe. (E2 – 4)

29. Final Revision – Unit 2 You MUST know ALL of the keywords – you can then attempt EVERY question! Student Common Area AQA Revision Guide VLE Exercise Books AQA work books

30. Unit 2 – growing as a business ChapterThe Business Organisation 6.1Expanding a business – reasons for growth, benefits and risks, reasons for not expanding 6.2Methods of expansion – organic, inorganic, franchises – pros and cons 6.3Conflict between stakeholders – benefits and drawbacks of expansion to different groups, ways they protect their interests 6.4Choosing the right legal structure – private limited and public limited companies – pros and cons 6.5Changing aims and objectives – examples and explanation of where appropriate 6.6Social costs and benefits – ethics and the environment – why? How being ethical can reduce short term profit and increase long term profit 6.7Location – factors to consider and features of an ideal location 6.8Global location – benefits and problems of locating abroad

31. Unit 6 Benefits of expandingReasons not to expand

32. Conflict between stakeholders

33. Unit 2 – growing as a business ChapterMarketing 7.1Product – product portfolio benefits, product life cycle (diagram and stages), extension strategies – how can these impact on other departments? 7.2Price – factors that affect pricing, pricing strategies and appropriateness 7.3Promotion – factors affecting the choice of promotion, promotion types for growing businesses (pros and cons) 7.4Place – channels of distribution (producer-retailer-consumer, producer- wholesaler-retailer-consumer, telesales, mail order, internet selling)

34. Unit 7 - Marketing ProductPricePromotionPlace Product Portfolio How much competition? Advertising Producer- retailer- consumer Product Life Cycle Price skimming Sales promotions Producer- wholesaler- retailer-consumer Extension Strategies Price penetration Directing marketing Telesales Cost-plus pricing SponsorshipMail order Loss leaderCost v Impact Internet selling

35. Unit 2 – growing as a business ChapterFinance 8.1Finance for large businesses – retained profit, selling unwanted assets, new share issue, loan, mortgage, sale and leaseback – pros and cons. Which is best? 8.2Profit and loss accounts – purpose, what is included, calculations, gross and net profit and profit margins, interpreting the figures Balance sheets – purpose, what is included, calculations, current and acid test ratios, interpreting the figures

36. Sources of Finance What for? Internal or external? Long term or short term? Repayment costs? Availability of finance? Important: Knowing enough advantages and disadvantages so that you can make the right choice!

37. Profit and Loss Key words – revenue, cost of sales, gross profit, overheads, net profit. Understanding the format – what goes where? Sales revenue – cost of materials = gross profit Gross profit – all overheads = net profit Calculating gross profit margin and net profit margin Gross profit margin – the percentage of sales revenue that is gross profit Net profit margin – the percentage of sales revenue that is net profit Is profitability improving (our ability to make profit over a period of time)? Is it better than our competitors? What can we do if it is not good enough? LOOK FOR KEY FIGURES

38. Balance Sheets What is our business worth (net assets) and is it solvent (can we pay the bills? – net current assets) Ratio analysis – current ratio and acid test ratio – understand the results…. Current ratio = How many £ assets to each £ liabilities? – 1.5 ideal (1 is risky, 2 is too high!) Acid test ratio = Same as above except stock is taken from assets – A MORE REALISTIC PICTURE – 1 is fine!

39. Finance Sources of Finance Profit and Loss Account Balance Sheet Retained profitSales revenueAssets Selling unwanted assets Gross profit or net profit Liabilities Sale and Lease back Gross profit margin Liquidity New share issueNet profit marginCurrent ratio Loan or mortgageProfitabilityAcid test ratio

40. Unit 2 – growing as a business ChapterPeople in Business 9.1Organisation structures – Benefits of structure, tall and flat structures and wide and narrow spans of control, centralisation and decentralisation 9.2Recruitment – 4 stage process (job analysis, job description, person specification, internal or external recruitment) – how to select new workers 9.3Training and appraisal – benefits of training, induction, on the job, off the job (pros and cons) Appraisal – definition and benefits 9.4 Motivating and retaining staff – benefits of motivated workers, styles of management (autocratic and democratic), methods of pay (remuneration) – piece rate pay, hourly wage, salary, profit sharing (pros and cons)

41. Human resources Organisational charts Line managers, spans of control, flat and tall structures, delegation, motivation, chain of command Decentralisation or centralisation

42. Recruitment of staff Staff trainingMotivating and retaining staff Job analysisInduction trainingBenefits of motivating staff Job descriptionOn-the-job and off-the-job Staff training Person specification AppraisalAutocratic or democratic Application form, interview, testing. Piece rate, salary, profit sharing Internal or external Bonus or commission

43. Unit 2 – growing as a business ChapterOperations Management 10.1Production methods for growing businesses – FLOW production (key features, advantages and limitations) Lean production – Kaizen, Just in time, Lean design, Cell production (definitions, pros and cons) 10.2 Recognising challenges of growth – benefits of growth, main economies of scales (bulk buying, technical economies, specialist managers, financial economies), possible disadvantages of growth (poor communication, poor motivation, poor coordination) 10.3 Quality assurance in growing businesses – main causes of quality problems (poorly motivated workers, no clear responsibility, lack of consistency, outsourcing, inspection costs), main methods of maintaining quality (setting agreed standards (examples), total quality management TQM – features)

44. Operations Management Flow Production and reducing cost per units Lean production, Kaizen, JIT, Lean design, cell production

45. Challenges of growth Economies of scaleDiseconomies of scale Buying in bulkPoor communication Managerial economiesPoor motivation Technical economiesPoor coordination Financial economies All lower the cost per unit…

46. Quality Assurance Causes of Poor QualityMaintaining quality Poor motivationAgreed standards No clear responsibilityTotal quality management Outsourcing Inspection costs

47. Read the question twice Underline key points and build a little mental picture of the business Answer for the business in the question when prompted Read each question carefully! Expect the unexpected – and don’t panic. If your finding a question tricky, everyone in the country probably is! Exam Technique

48. List, state or give – short answers Describe – need one point and a development point (or example) if for two marks Exam Technique (AO1)

49. 4-6 Marks Command Words: Explain; Calculate Application crucial Problem - Need to read THE WHOLE QUESTION Example 1c: Identify two methods of market research and explain how each method might help Jenny make the business be more successful Exam Technique (AO2)

50. Analyse by comparing with alternative options or accepting the disadvantages/weaknesses of your choice. Consider what will happen if…. Make a clear recommendation and give reasons for your choice – why is it right in this situation. Don’t just repeat your analysis. Use the data in the case study and make sure your answer is about this business. Exam Technique – AO3 9 mark questions

51. Analysis and Evaluation Analysis can include:Evaluation: Advantages and disadvantages. Why is your choice right for this business. Comparison of differing options. Justifying your choice. Short run or long run impact. Consideration of impact on the business.

52. Make sure it’s analysis – you could Compare options Apply theory to this situation Bring in current market/economic knowledge Consider the likelihood of success What are the likely short term and long term impacts What impact will there be on costs/customers/ sales/profits/competitors/stakeholders Link two separate points together Make calculations based on data given Consider a what-if scenario

53. Recommendation Make a decision and give the reasons for your choice (without repeating a previous point!) Be consistent throughout your answer. Make sure you look to give at least two reasons for your choice (which might include a reason for rejecting the another option) You might try and point out how you would overcome a potential problem with your choice. Use the case study!