Shipra plans to set up a small hairdressing business.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2012). The mark or mark type is shown in brackets.

1. [6] (a) Level 2 (4-6 marks) Has discussed whether or not Shipra should set up her business as a franchise and has given a reasoned recommendation. (If a candidate has discussed only one side of the argument, award 4 marks max.)
2. Shipra may decide to take a franchise, and if there are hairdressing franchises available, she will be joining an already established business and many kinds of assistance will be provided. She will have help setting up the business, supplies of hairdressing materials will be available and she will be part of a well-known brand with plenty of support and national advertising.
3. She will, however, have to abide by the regulations laid down by the parent company and probably have to invest a lump sum of her own money in order to obtain the franchise. She will have to make royalty payments to the company from the income she makes. She will not be entirely her own boss and must maintain the quality of the brand otherwise the franchise might not be renewed.
4. If she is keen to open a well-equipped hairdressing salon in a busy shopping area, I would recommend that she takes a franchise with a franchise company. Otherwise she may have to start a business on her own as a sole trader with all the risks this might entail.
5. Level 1 (1-3 marks) Has commented on setting up as a franchise with/without a recommendation.
6. Shipra could set up her business as a franchise. It will cost a lot. She will receive help. She might receive training. She will have the benefit of national advertising. She may succeed.
7. NB If a candidate considers setting up as a sole trader, give credit.
8. [6] (b) Any three services explained x 2 marks:
9. • payment services such as cheques, credit transfer, direct debit, standing order, debit card (If a candidate has described methods of payment award 4 marks max.)
10. • advice on setting up in business
11. • finance such as loans and overdrafts (If a candidate has described forms of finance award 4 marks max.)
12. • bank accounts – current account and savings account (4 marks max.)
13. • savings services – accounts, bonds, interest
14. • night safe - for banking takings after hours
15. • bank statements – to provide a detailed record of transactions
16. • internet/telephone banking – instant access to bank accounts
17. • insurance services
18. • credit services such as credit card
19. • ATM.
20. [2] (c) Any two points related to storage on her premises x 1 mark each:
21. • to keep all her hairdressing materials e.g. shampoos, lotions, colourings
22. • so that she has the supplies she works with close to hand
23. • so that she does not run out of essential supplies
24. • so that her supplies are protected from damage, being spoiled, theft (1 mark max.)
25. • so that she can continue her work without having to worry about purchasing supplies daily
26. • so that she can prepare her treatments
27. • so she is more organised in her shop
28. • so she can store hairdressing materials.
29. [6] (d) Two advertising media x 1 mark each and two reasons to support the choice in context x 1 mark each:
30. • local newspapers – cheap, targeted at her likely customers, can show special offer
31. • posters - cheap, colourful, may last some time, can be positioned where people are likely to see them
32. • local radio likely to be listened to by possible customers, advert can be repeated, moderately priced.
33. any other relevant reason in context (allow negative reasoning in context)
34. a valid reason in context would be that there is no need to undertake much advertising as the franchise company would undertake much of the advertising.
35. trade fairs and television = 0 marks as not appropriate.
36. NB if more than two media are considered without a choice being made, award no marks for the choice and up to four marks for reasons