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(c) Explain one way a small business could reduce its variable costs - Edexcel - GCSE Business - Question 7 - 2022 - Paper 1
Question 7
(c) Explain one way a small business could reduce its variable costs. (d) Explain one advantage to a small business of meeting all employment legislation.
Worked Solution & Example Answer:(c) Explain one way a small business could reduce its variable costs - Edexcel - GCSE Business - Question 7 - 2022 - Paper 1
Step 1
Explain one way a small business could reduce its variable costs.
Answer
One effective way for a small business to reduce its variable costs is by leveraging technology to improve efficiency. For instance, a business might adopt automated systems for inventory management, which would minimize the need for manual stock checks and reduce the likelihood of over-ordering materials. By using software that tracks usage patterns, a small business can optimize their purchasing decisions and reduce waste, ultimately decreasing variable costs.
Step 2
Explain one advantage to a small business of meeting all employment legislation.
Answer
One significant advantage for a small business that meets all employment legislation is the enhancement of its reputation. Complying with legal requirements not only protects the business from potential lawsuits but also creates a positive work environment, which can attract and retain talent. A good reputation for fair treatment can lead to higher employee morale and productivity, fostering loyalty and improving customer service as satisfied employees are likely to provide better experiences for clients.