Business plans

A fancy dress shop operates as a partnership. Its four partners have produced a business plan outlining their aim to grow the business.

The business plan will be useful to the partners because it will:

A help identify new costume suppliers and suitable markets

B help raise finance by persuading new investors to buy shares

C include an estimate of the dividends payable to shareholders

D include photographs of all their current fancy dress costumes

Text 1 _{Adapted from uk.linkedin.com/company/lidl-gb and www.google.com/search?q=how+many+new+stores+did+lidl+open+in+the+uk+in+2023&rlz=1C1GCEO_. Item removed due to third party copyright restrictions.} Lidl Ltd

Explain one purpose of planning business activity.

Explain three advantages for Lidl of operating as a private limited company.

Analyse on e likely reason why Lidl expands by using organic growth.

Other than pay, identify two financial methods of motivation.

Evaluate whether Lidl should continue to pay employees a higher wage rate than competitors.

Text 3 SJ Salon

SJ Salon is a hair salon owned by Sam and Jamila. The business partners met whilst studying hairdressing at college. The partners’ creativity has helped make the salon very successful. SJ Salon is currently the only salon in town and uses cost-plus pricing.

Sam and Jamila are qualified hairdressers who work full-time in the salon. Until recently, the partners employed one part-time and one full-time worker who works 40 hours per week. However, due to increasing customer demand, two additional part-time employees have recently been recruited.

Sam and Jamila have just found out that a national hairdressing chain is planning to open a new salon in their town. They are concerned about the impact of this competition. The partners asked 200 current customers to complete a short questionnaire. The results show that:

• 130 of the customers have used SJ Salon since 2019

• 104 of the customers were aware of the national hairdressing chain

• 84 of the customers would consider trying the new hair salon, if its prices were cheaper

• 66 of the customers consider quality of service to be more important than price.

When SJ Salon was set up in 2014, Sam wrote a business plan. He has not written another one since then, as the business has been profitable. However, Sam now thinks that a new business plan should be written to help the business succeed against any new competition. Jamila disagrees, as the original business plan took Sam 30 hours to write. She feels that his time would be better spent keeping current customers satisfied.

Creativity is one characteristic of an entrepreneur.

Identify one other characteristic of an entrepreneur.

Analyse two advantages for SJ Salon of using cost-plus pricing.

Sam and Jamila want to improve communication with their employees now that the size of the workforce has increased. They are considering two methods:

• a weekly team meeting which all employees will be expected to attend

• a weekly email sent to all employees.

* Evaluate, using the data in Text 3, whether Sam should write a new business plan.

A plumbing firm is struggling to keep up with demand.

What would help the business to succeed?

A Asking regular customers with blocked toilets to ring back another day

B Giving customers unrealistic appointment times

C Ignoring customer complaints about delays in fixing water leaks

D Planning all business activity and work schedules carefully

A mobile phone repairer, trading as Sundip & Sons, operates as a partnership. Its three partners have produced a business plan outlining their intentions to widen the services offered to include laptop and tablet repairs.

For which of the following might Sundip & Sons’ business plan be useful?

A Calculating the share of the profit due to each of the three partners

B Complying with current legislation relating to business planning

C Identifying the resources needed to expand into the new market

D Obtaining additional finance from shareholders

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Text 2

Greggs

Greggs is a modern ‘food-on-the-go’ retail brand. It specialises in selling sandwiches, cakes, pastries and pies. Most of these are made by Greggs, using raw materials such as flour, meat and yeast. The company opened its first bakery 80 years ago and has since grown significantly. It currently has 20 000 employees. Greggs’ aim is to become the customer’s favourite for ‘food-on-the-go’ in the UK. This sector is growing quickly and is forecast to be worth £23.4 billion by 2024 (up from £18.5 billion in 2019).

According to The Vegan Society, the number of people in the UK choosing a vegan diet has increased during recent years (see Fig. 1).

The number of vegans in the UK

Using the market data, Greggs responded to this change by launching vegan sausage rolls in January 2019. The publicity generated helped Greggs’ total sales to increase by 9.6% in its next seven weeks of trading. Following this success the business launched other products, including vegan doughnuts and vegan steak bakes, based on consumer demand.

Managers at Greggs constantly monitor changes in consumer tastes. Similarly, they keep up-to-date with changes in employment law. Greggs’ managers also take pride in the business being named one of the happiest places to work in the UK. Greggs offers many ways of working, including part-time roles.

Explain one way that employment law may affect Greggs’ employment of workers.

Other than the government, explain one external stakeholder’s influence on Greggs.

Explain the purpose of planning business activity for Greggs’ managers.

Part-time is one way of working.

State two other ways of working.

Analyse one benefit for Greggs of using market data to create new products.

The managers of Greggs are considering two options for business growth.

Analyse one benefit for Greggs of business growth using each of the following methods.

Merger with a flour producer

Takeover of a rival ‘food-on-the-go’ retail brand

Recommend which of the two methods of business growth Greggs should use. Give reasons for your answer.