UNIT ASSESSMENT

Edexcel GCSE
Business (9-1)
Unit Assessment

1.4 Making the

Business Effective
(Edition 1)
h 30 minutes
h The maximum mark for this unit assessment is 30

Name

Centre Name
 Edexcel GCSE Business (9-1)
Unit Assessment – 1.4 Making the Business Effective

Section A
Answer ALL questions. Write your answers in the spaces provided.

1(a) Which of the following statements is true about business plans?

Select one answer:

A Every business that produces a business plan will be successful 
B Producing a business plan can help an entrepreneur secure finance from a bank 
C Business plans are always fully accurate 
D Once produced, business plans should be rarely referred to by the business owner 
(1)

1(b) Which two of the following are features of a private limited company?

Select two answers:

A It has unlimited liability 
B Its shares can be sold to the general public 
C Shareholders own the business 
D Accounts are kept fully private 
E The business exists in its own right and has a separate legal identity 
(2)

1(c) A new business start-up has produced a business plan and estimates that its profit in March
will equal £500. Its total costs are expected to amount to 45% of its profit. Calculate the
business’s forecast revenue for March. You are advised to show your workings.
(2)

£ _______________________

Page 2 GCSE Business (9-1) Unit Assessment www.tutor2u.net/business

1(d) Explain one benefit to an entrepreneur of choosing to operate as a franchise.
(3)

1(e) Explain one impact changing technology has on the marketing mix of a small business.
(3)

TOTAL FOR SECTION A = 11 MARKS

www.tutor2u.net/business GCSE Business (9-1) Unit Assessment Page 3

 Section B
Answer ALL questions.

Look at Figures 1 and 2, read the following extract carefully, then answer Questions 2a, 2b, 2c and 2d.
Write your answers in the spaces provided.

Alan Hickman lives on the Isle of Wight, in a town located

very close to the ferry port of Yarmouth on the west of the
island, shown in Figure 1. Alan moved to the island a few
years ago, after taking early retirement from a top position
in a very large IT firm in London. He had always loved the
Isle of Wight and visited this increasingly popular tourist
destination every summer. The island now has over 2
million people visiting each year.

Figure 1

Six months ago, Alan opened a bicycle hire shop. The shop is located next to a three mile section of disused train track,
which has been converted into a suitable path for cyclists and walkers only. There is restricted parking near to his shop, but
there is a large outdoor carpark situated in Yarmouth town centre which is a 10 minute walk away.

Alan stocks 100 different bicycles, which he hires out mainly to tourists on a drop in basis for either a half day, a full day or
at a weekly rate. Prices for the different bicycles are shown in Figure 2.

Prices
Half day £ Full day £ Weekly £
Child standard 8.00 10.00 40.00
Adult standard 12.00 16.00 70.00
Adult mountain 20.00 25.00 100.00
Figure 2

Alan made the decision to purchase all his bicycles new from leading cycle manufacturers, such as Peugeot and Moda, for
an average sales price of £350. Alan’s plan is to replace every bicycle after two years, to ensure that he provides his
customers with a good quality service. To ensure he had enough funds to cover his start-up costs of the bikes, the rent for
his small shop and other costs such as fixtures and fittings for his store and bicycle accessories, he decided to take out a
£25 000 bank loan to combine with his £20 000 personal savings to get the business started.

Despite the business opening at the start of the tourist season, during the Easter holidays, and the weather being dry and
warm, business to date has been slow. Although Alan faces indirect competition from other tourist attractions, such as
Carisbrooke Castle and the local theme park, his two direct competitors are located on the east of the island,
approximately 25 miles away. Alan feels these bicycle hire shops pose a minimal threat to his business, even though they
promote themselves extensively in local tourist magazines, as well as through their own websites. In addition, they offer an
online booking service, a facility that Alan does not offer. Alan currently relies only on word of mouth and TripAdvisor
reviews for promotion, in order to keep his costs to a minimum.

Page 4 GCSE Business (9-1) Unit Assessment www.tutor2u.net/business

2(a) Outline one impact on Alan of his choice of location for his bicycle hire business.
(2)

2(b) Alan records his total customer numbers electronically at the end of each day. Table 1 shows
the number of customers that chose his most popular full day bicycle hire service on 1st
August.

Daily number of customers

Full day hire
Child standard 10
Adult standard 3
Adult mountain 5
Table 1

Using Table 1 and Figure 2, calculate the revenue generated for the full day bicycle hire service
for 1st August. You are advised to show your workings.
(2)

£ _______________________

2(c) Alan chose to set up his business as a sole trader.

Analyse the impact on Alan of his choice of business ownership.

(6)

www.tutor2u.net/business GCSE Business (9-1) Unit Assessment Page 5

Page 6 GCSE Business (9-1) Unit Assessment www.tutor2u.net/business
2(d) Alan is considering two options to increase customer numbers.

Option 1: Promote his business more extensively

Option 2: Offer an online booking service for customers to reserve bicycles in advance

Justify which one of these two options Alan should choose.

(9)

TOTAL FOR SECTION B = 19 MARKS

TOTAL FOR ASSESSMENT 1.4 = 30 MARKS

www.tutor2u.net/business GCSE Business (9-1) Unit Assessment Page 7

More Business revision and support at:
www.tutor2u.net/business