Kaia left university with a degree in textile design. Using her entrepreneurial qualities, Kaia set up PB as a sole trader. Her current objective is to break even. Kaia uses job production to make blankets which are personalised with a picture. Each customer logs into the PB website and chooses the size of blanket. The customer then uploads a picture that they want printed onto the blanket. Many of Kaia's customers buy the blankets as gifts for special occasions. Kaia has employed a social media influencer to promote her blankets. The influencer will be paid a salary of $250 a week and a 5% commission on revenue that comes directly from the influencer. Fig 2.1 shows the revenue that came directly from the social media influencer in February. [Figure 2.1] Kaia would like to relocate PB to larger premises. She is applying for external sources of finance, and she has written a five-year business plan to support her applications.

Mark scheme

Marking points from the official mark scheme (May/June 2025). The mark or mark type is shown in brackets.

1. [1] Knowledge of an external source of finance (e.g., share capital; debentures; new partners; venture capital; (bank) overdrafts; leasing; hire purchase; (bank) loans; mortgages; debt factoring; trade credit; micro-finance; crowd funding; government grants; peer to peer)
2. [1] Knowledge of a business plan (e.g., formal written document containing the goals of a business; the methods for attaining business goals/objectives/targets etc.; a written document that describes a business and its objectives; a document outlining the direction of the business and how to get there.)
3. [2] Explanation of a business plan relevant to context (e.g., Any example of a section from a business plan (HRM plan, marketing plan, operations plan, finance plan); Any other relevant data which might be included in a business plan; Examples of potential uses of a business; gain finance, find investors etc.; A business plan may have a specific timeframe for achieving its objectives; May include internal and external influence data. For PB: applying for external sources of finance; relocating PB to larger premises; a five-year business plan)
4. [1] Total payment = salary + commission (% of sales) OR Correct calculation of revenue that comes directly from the influencer in Feb = Total sales in four weeks – $4000 + $3000 + $500 + $3000 = $10 500 OR Correct calculation of total salary for influencer for Feb = $250 + $250 + $250 + $250 = $1000
5. [1] 5% of $10 500 = $525
6. [1] Total payment = $1000 (salary) + $525 (commission) = $1525 (OFR applies)
7. [1] Knowledge of a disadvantage of using commission (e.g., Increases business costs; Reduces profit/ profit margin; Difficult to predict / forecast; May lead to aggressive sales techniques; May cause anxiety/stress/demotivation (for the employee); May prioritise short-term gains, over long-term business objectives; May be difficult to recruit new workers; May cause employees to compete with one another; Paid from revenue, not profit (may need to be paid even if PB does not make a profit))
8. [1] Explanation of a disadvantage of using commission payment method (e.g., Increases business costs as the business increases revenue, commission also increases; Difficult to predict / forecast – which can mean that PB may not be able to calculate the break-even point; May lead to aggressive sales techniques – as salespeople push to increase their own income)
9. [1] Context applied to PB (e.g., 5% commission on direct sales; Social media influencer gets a salary as well ($250 a week); Use of data in chart 2.1; Kaia is a sole trader; Current objective to break even; Relocating PB to larger premises)
10. [1] Knowledge of an advantage of using job production (e.g., High quality; High price; Flexibility; Customisation / customer satisfaction; All finished products are sold)
11. [1] Application of an advantage to PB (e.g., Kaia has a university degree in textile designs; Kaia thinks she has entrepreneurial qualities; Sole trader; Current objective to break even; Blankets personalised with a picture; Picture supplied by customer; Customers design their own blanket (customisable size and picture); Many customers buy the blankets as gifts for special occasions (birthdays, holidays etc.); Being promoted by a social media influencer; Use of data in Chart 2.1)
12. [2] Developed analysis of an advantage that identifies connections between causes, impacts and/or consequences of job production (e.g., High quality: increases customer satisfaction and leads to sales – increases profit; Customisation / customer satisfaction; likely to lead to increased sales – increased profit; All finished products are sold; more likely to have costs lower than revenue increased profitability.)
13. [1] Knowledge of a disadvantage of using job production (e.g., High production costs; Long lead time; Requires specialist equipment)
14. [1] Application of a disadvantage to PB
15. [2] Developed analysis of a disadvantage that identifies connections between causes, impacts and/or consequences of job production (e.g., High production costs: may need to increase price to cover costs – less chance to break even and make a profit; Long lead time; may irritate customers leading to bad reviews – lower sales and profit; Requires specialist equipment; may need to purchase expensive capital equipment increasing costs – reducing profitability.)
16. [2] Knowledge of why business objectives may change over time (e.g., As the business grows; If the previous objective has been met; As the business declines; As the business maintains; As the market changes; As competitors act / react; When aims / vision / mission changes; As the business environment changes (not required at AS level, but rewarded) – SLEEPT)
17. [2] Application to PB (e.g., Kaia has a university degree in textile designs; Kaia thinks she has entrepreneurial qualities; Sole trader; Current objective to break even; Blankets personalised with a picture; Picture supplied by customer; Customers design their own blanket (customisable size and picture); Many customers buy the blankets as gifts for special occasions (birthdays, holidays etc.); Being promoted by a social media influencer; Use of data in Chart 2.1; Thinking of relocating PB)
18. [2] Analysis of how the objectives change (e.g., As the business grows; objectives may change to profit maximisation – so that the owners can start to receive an income for their risk; As the business declines, objectives may change to survival – and the business may reduce prices in an effort to gain a new market of customers; As the business maintains; the business owner may decide not to continue the business – leading to trying to recover as much of the capital invested as possible; As the market changes, the business will need to adapt to the changing market, perhaps by making significant changes to the type of product being sold or doing some expensive market research into the new customer preferences – leading to an increase in costs and a reduction in profitability; As competitors act / react; the business may become a price taker and change their marketing mix so that they can maintain and grow their market share; When aims / vision / mission changes; if the owner decides to change the mission of the business, then all the functions of the business may also need to be changed. For example, buying new capital items that allow it to make a different product – leading to an increase in business costs and reduced profit; As the business environment changes (not required at AS level, but rewarded); for example, if the economy goes into recession, then luxury items may not be demanded, reducing customers – leading to a decrease in sales revenue and profit.)
19. [6] Evaluation criteria (e.g., A judgement of the most likely reason for Kaia's objectives to change over the next five years; What the judgement may depend upon; the owners desire to continue / grow the business, the market research, dynamism of the market, competitors' actions / reactions etc.; Kaia has only just started the PB, so the objectives may change significantly over the next five years. Does she have the knowledge / research / experience to judge how the objectives might change over such a long period of time?; To what extent is PB in a growing or declining market and how many of her customers choose to repeat purchase?; Kaia's own objectives – she thinks she has entrepreneurial qualities, so will she be looking for new products / business ideas over the next five years, which may mean that PB might not even exist, or be in a very different format to what it is today. Is it sensible to try and plan for five years with such limited experience?; A judgement about likeliness of the business objectives needing to change over five years.)