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Study the information supplied and answer the questions which follow: Jim Ryan recently established a garage selling cars - Leaving Cert Business - Question 6 - 2009
Question 6
Study the information supplied and answer the questions which follow: Jim Ryan recently established a garage selling cars. His sale trader business trades under the... show full transcript
Worked Solution & Example Answer:Study the information supplied and answer the questions which follow: Jim Ryan recently established a garage selling cars - Leaving Cert Business - Question 6 - 2009
Step 1
Present the above information in the form of a bar chart.
Answer
To present the sales data in the form of a bar chart, plot the months on the x-axis and the number of cars sold on the y-axis. Each bar will represent the number of cars sold each month:
- January: 50
- February: 40
- March: 35
- April: 30
- May: 35
- June: 40
The final bar chart visually illustrates these figures, allowing for easy comparison between months.
Step 2
Explain the term 'Sole Trader'.
Answer
A sole trader is defined as an individual who owns and manages their own business. This type of business structure means that the person is responsible for all aspects of the business, including profits and risks. The owner has full control over the business decisions and retains all profits after taxes.
Step 3
Outline two disadvantages of a sole trader business.
Answer
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Unlimited Liability: The sole trader is personally liable for all debts incurred by the business, which means personal assets could be at risk if the business fails.
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Lack of Continuity: The business may face challenges in continuity if the owner becomes unable to operate due to illness or other reasons, as it is closely tied to the individual.
Step 4
Outline three advantages of conducting market research.
Answer
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Information on Target Market: Market research helps businesses understand their target demographic and their preferences, enabling tailored marketing strategies.
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Informed Decision Making: It provides data about potential customers and competitors which helps in making informed business decisions, like pricing and product development.
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Risk Reduction: Conducting research helps to foresee possible market challenges and minimize risks before launching a product or service.
Step 5
Explain the following terms and identify one example of each: (i) Field Research; (ii) Desk Research.
Answer
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Field Research: This involves gathering new data through direct methods like surveys, interviews, and observations. An example is conducting customer surveys to gauge satisfaction levels.
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Desk Research: This consists of utilizing existing information that is already available, such as reports and statistics. An example is analyzing financial records or industry reports to gather market insights.
Step 6
Outline three items of information that the bank manager would require in assessing Jim's loan application.
Answer
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Financial Projections: A detailed forecast of potential revenue and expenses, including a cash flow projection to demonstrate the ability to repay the loan.
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Business Plan: A comprehensive plan outlining the business model, market analysis, and marketing strategy, showing the viability of Jim's garage.
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Personal Financial Status: Information about Jim's personal financial situation, such as existing debts, assets, and income, to assess his overall creditworthiness.