Alex started APB as a sole trader business 4 years ago. APB provide printing services for local businesses such as leaflets and brochures. Alex thinks having a good location is important to any business. All APB's 6 employees receive on-the-job training. Alex has a democratic leadership style and uses job rotation to help keep employees motivated. To meet an increase in demand, Alex plans to buy an additional printing machine. This will cost $1800. Alex has to decide on an appropriate source of finance.

Mark scheme

Marking points from the official mark scheme (May/June 2021). The mark or mark type is shown in brackets.

1. [2] Employees swapping around and doing each specific task for only a limited time
2. [2] Process of switching an employee between jobs over a period of time
3. [2] Increasing variety in the workplace by allowing workers to switch from one task to another
4. [1] Partial definition e.g. workers do a variety of tasks
5. [1] Customers / level of demand
6. [1] Cost of rent/taxes
7. [1] Availability of land/space/parking
8. [1] Government assistance
9. [1] Cost/availability of labour
10. [1] Legal controls
11. [1] Competitors / near to other business
12. [1] Transport / accessibility / technology / infrastructure or examples such as electricity, water, gas
13. [1] Personal preference of owners
14. [1] Climate
15. Advantage: [K] Some output produced while training [app] so able to still print some brochures
16. Advantage: [K] Costs less than off-the-job [app] and cost might be important issue as he is a sole trader
17. Advantage: [K] Specific to business / control what is taught [app] using the printing machines
18. Disadvantage: [K] Trainer may not produce as much output / potential disruption [app] when teaching the 6 employees
19. Disadvantage: [K] Trainer may not have the necessary skills / may not know up-to- date methods [app] for the new machine
20. Disadvantage: [K] Trainer may pass on bad habits / may be a poor-quality trainer
21. Disadvantage: [K] Employees make more mistakes when learning which increases waste
22. Advantage: [K] Improves motivation / sense of belonging [app] of his 6 employees [an] leading to increased output / productivity
23. Advantage: [K] Help keep worker loyalty [app] employees are motivated [an], so less time/money spent on recruiting new employees
24. Advantage: [K] Creates time for managers to do other work [an] leading to fewer mistakes
25. Advantage: [K] Better decisions could be made as can use employees experience and skills [app] such as deciding which is the best machine to buy
26. Disadvantage: [K] Some employees may not want / be able to cope with being consulted [app] slowing down the decision-making process [an] about what to print
27. Disadvantage: [K] Unpopular decisions less likely to be made
28. Disadvantage: [K] Mistakes can be made if workers are not skilled / lack experience [app] which can damage reputation [an] of this sole trader business
29. Disadvantage: [K] Time-consuming / disagreements may arise
30. [K] The business might not have sufficient funds [an] so would need to borrow
31. [K] A sole trader is likely to have access to fewer sources of finance
32. [K] Cost of finance / interest [an] would change expenses [an] altering profit margin
33. [K] Unlimited liability for sole traders [an] means that if the business cannot pay its debts the owner's personal assets would be at risk
34. [K] Amount of debt [an] if a business already has a high level of borrowing banks may not lend any more money
35. [K] Purpose (why money is needed) [an] if buying a non-current asset then a long-term source would be used [an] allowing sufficient time to repay
36. [Eval] The amount is important because a business might not have sufficient funds [k] so would need to borrow money [an]. This would involve interest [k] which would increase business expenses [an]. Unlimited liability is probably the most important factor for a sole trader because this reduces the finance options available [eval]. They are probably also seen as higher risk so whatever the amount finance is it is likely to be more expensive [eval].