Betsy Phiri runs a business selling silk clothing. She is looking for ways to increase her turnover. She has seen the advertisement shown in Fig. 2. [Figure 2] Use Fig. 2 to help you answer the following questions.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2015). The mark or mark type is shown in brackets.

1. [1] One mark for sales/sales revenue
2. [2] $4500 × 52 (1 mark) = $234000 (1 mark)
3. OFR applies. If a candidate gives the correct answer without working, award full marks.
4. [4] Any two well-developed points × 2 marks
5. • Shopping malls consist of a group of shops (1) and so are likely to attract potential customers (1)
6. • Shopping malls undertake advertising for the shopping mall as a whole (1) so Betsy may save some advertising costs (1)
7. • Shopping malls provide additional services that Betsy can make use of (1) e.g. parking (1)
8. • Shopping malls provide a secure environment for shoppers (1) and for Betsy's business (1)
9. Any other relevant point
10. [3] Any three points and 1 mark each and up to 2 marks for a well-developed point –
11. • She may need to make an appointment quickly
12. • She may need to ask questions
13. • She may need to discuss the advertisement
14. • She may not have email available
15. • She may want to speak to Suleiman
16. • She may think that she will not receive a reply to her email
17. Any other relevant point
18. [6] Level 2 (4-6 marks)
19. Candidate has discussed several long-term sources of finance and has given a reasoned recommendation.
20. (If candidate has one long term source only, award 4 marks max.)
21. Betsy will probably operate as a sole trader if she buys the lease and so some sources of finance will not be available to her such as shares. She will need long-term finance. She might borrow from friends or relations who may offer favourable terms to her. She may consider taking a partner who would invest money. If she took an ordinary partner, the partner would share in the running of the business and share in the profits according to the partnership agreement. She might consider taking a sleeping partner who would invest but take no part in the running of the business. This partner would, however, want a share in the profits and would have limited liability unlike Betsy who would be liable for losses with her personal assets also at risk.
22. Betsy might consider approaching a bank for a loan. She would have to prepare a business plan setting out how she proposed to operate the business. If the bank granted a loan, there would be fixed interest payments and she would have to provide collateral – probably the lease document as security for the loan. Which source of finance she arranged might depend on interest to be paid, conditions attached and whether or not she would be able to obtain the finance for the venture. Borrowing from friends might be an attractive option but if this was not possible, the bank loan with its organised structure might be the best option to consider if she wished to be her own boss.
23. Level 1 (1-3 marks)
24. Candidate has commented on one or more long-term sources of finance with/without a recommendation.
25. Betsy will probably run the business as a sole trader. She will need long-term finance. She might borrow from friends or relations. She might consider taking a partner. The partner would invest money. Betsy might take a bank loan. She would have to pay interest. She would have to provide security against the loan. A bank loan might be a good idea.
26. [4] Any two ways explained × 2 marks each
27. • Offer special promotions (1) such as percentage off for a certain period (1)
28. • Introduce new lines that might appeal to customers (1)
29. • Reduce the prices of many of goods offered (1) so that stock is cleared more quickly (1)
30. • Improve the window display (1) so that passing trade is attracted to the shop (1)
31. • Undertake an advertising campaign (1) e.g. online, using local newspapers (1)
32. • Hold a special event (1) such as a fashion show (1)
33. • Improve the quality of the goods offered for sale (1) so that customers feel that they are receiving value for money (1)
34. • Develop online sales (1) so that she targets a different market (1)
35. Any other relevant way