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6(c) Explain one way a small business could reduce its variable costs - Edexcel - GCSE Business - Question 7 - 2022 - Paper 1
Question 7
6(c) Explain one way a small business could reduce its variable costs. 6(d) Explain one advantage to a small business of meeting all employment legislation.
Worked Solution & Example Answer:6(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 a small business could reduce its variable costs is by optimizing its supply chain management. By negotiating better terms with suppliers to secure bulk purchasing discounts, the business can decrease the cost per unit of materials. Additionally, leveraging technology to forecast inventory needs accurately can minimize excess stock and reduce costs associated with storage and waste. This approach not only lowers variable costs but also enhances overall operational efficiency.
Step 2
Explain one advantage to a small business of meeting all employment legislation.
Answer
One significant advantage to a small business of meeting all employment legislation is the enhancement of its reputation. Adhering to legal requirements ensures that the business is viewed as fair and responsible by both employees and the public. This positive perception can lead to increased employee morale and retention, as well as attract potential customers who are more likely to support ethically compliant businesses. Furthermore, compliance reduces the risk of legal disputes and potential fines, allowing the business to focus on growth and profitability.