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Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 8 - 2010
Question 8
Read the information supplied and answer the questions which follow. Jack Sullivan, a sole trader employing five staff, runs a small bakery and coffee shop in Ennis... show full transcript
Worked Solution & Example Answer:Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 8 - 2010
Step 1
State (i) two advantages AND (ii) two disadvantages of a sole trader business.
Answer
Advantages:
- Formation: It is easy to set up, as it requires minimal legislative obligations.
- Control: The sole trader has complete control over business decisions and operations.
Disadvantages:
- Risk: Sole traders bear all the risks and responsibilities of the business.
- Liability: There is unlimited liability, which means personal assets can be at risk if the business fails.
Step 2
(i) Name three types of insurance Jack should have for his business.
Answer
- Public Liability Insurance: Protects against claims from members of the public.
- Employers Liability Insurance: Covers claims from employees for work-related injuries.
- Motor Insurance: Required by law for the vehicle used for business purposes.
Step 3
(ii) Give one reason for having each type of insurance.
Answer
- Public Liability Insurance: To safeguard against legal claims from customers or clients for accidents that occur on business premises.
- Employers Liability Insurance: To fulfill legal obligations and protect against claims made by employees.
- Motor Insurance: To comply with legal requirements and protect the business from financial losses from vehicle incidents.
Step 4
Outline three advertising media that Jack could use to promote his business.
Answer
- Radio: Can reach a wide audience and create awareness.
- Newspaper: Allows detailed listings and can illustrate all aspects of the business.
- Flyers/Posters: Directly target local customers and are relatively inexpensive.
Step 5
Apart from price reductions, outline two other methods of sales promotion Jack could use to increase sales.
Answer
- Competitions: Offering customers a chance to win prizes can attract attention and encourage purchases.
- Loyalty Programs: Encouraging repeat business through rewards for returning customers.
Step 6