Explain four ways a business plan can be useful.

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

1. Award 1 mark for each relevant way (maximum of four ways):
2. Relevant ways might include:
3. Helps gain a bank loan – shows the business is likely to be profitable and repay the loan
4. Organises thoughts about resources needed – identify types of workers need to recruit
5. Can plan and budget for resources needed- e.g. to budget for new production machinery
6. Financial documents will help to show expected returns – to see if it will bring the return expected by shareholders
7. Award a maximum of 1 additional mark for each explanation of the way a business plan can be used.
8. For example:
9. Forecast financial documents will show potential profit to be made (1) can see if it will give a satisfactory return on the investment. (1)
10. Level Description Marks
11. 3 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology.
12. Detailed discussion of two or more methods to promote ES’products.
13. Well-justified recommendation.
14. Candidates discussing the three methods in detail, in context and with well-justified recommendation including why the alternative methods were rejected should be rewarded with the top marks in the band.
15. 2 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology.
16. Detailed discussion of at least one method.
17. Judgement with some justification/some evaluation of choice made.
18. Candidates discussing two or more methods in detail and applying it to the case should be rewarded with the top marks in the band.
19. 1 Limited application of knowledge and understanding of relevant business concepts.
20. Limited ability to discuss the methods to promote the products with little/no explanation.
21. Simple judgement with limited justification/limited evaluation of choice made.
22. Candidates outlining the three methods to promote the products in context should be rewarded with the top marks in the band.
23. 0 No creditable response.
24. Relevant points might include:
25. Advertise on national television
26. Advert for scooters will go out to millions of people
27. Scooters can be shown in very favourable way
28. Can reach a target audience for scooters if shown during programmes likely to be watched by these target customers e.g. sports programmes
29. Very expensive form of advertising
30. Younger consumers may not watch as much TV as older people so may not reach these consumers
31. Advertise on ES website
32. Large amount of information can be posted
33. Cheap way to advertise
34. Can include videos of the scooters
35. Internet searches may not highlight the website at the start of the search list and therefore it is missed
36. Internet access may be limited in some countries where scooters are being exported
37. Display its products in shopping malls
38. Provides a lot of information
39. Can also be persuasive with scooter to look at and sit on
40. Restricted to a relatively small number of consumers in the mall
41. Recommendation:
42. Justification might include:
43. National TV as the scooters will be seen by the mass market and will not be seen by many people in shopping mall displays.
44. Website useful for advertising when other forms of advertising have raised awareness of the scooters such as after the scooter has been seen in a mall display.
45. Displays in shopping malls will be most useful as potential customers can sit on the scooters and see how comfortable they are. This may make people who have not even thought about buying a scooter consider them whereas advertisements in television and on websites may be ignored.