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Rory Byrne, a trained chef, is considering setting up his own food business - Leaving Cert Business - Question 7 - 2012
Question 7
Rory Byrne, a trained chef, is considering setting up his own food business. He has no business experience so he approached his friend Sarah Dunne, a business gradua... show full transcript
Worked Solution & Example Answer:Rory Byrne, a trained chef, is considering setting up his own food business - Leaving Cert Business - Question 7 - 2012
Step 1
Outline two reasons why a Business Plan should be prepared.
Answer
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To set out clearly the objectives and targets of the firm: A Business Plan helps Rory identify what he wants to achieve with his food business, providing direction and clarity.
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To identify resources required: It allows Rory to understand what resources (financial, human, and physical) are necessary to launch and sustain his business.
Step 2
Explain three factors Rory should consider before choosing a source of finance.
Answer
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Purpose: Rory needs to determine whether the finance is short, medium, or long-term to align with his business needs.
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Cost of finance: He should assess the interest charged (APR) associated with different financing sources, as this will impact his overall costs.
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Risk involved: Rory must consider how manageable the repayments will be, especially in the current economic climate, and whether it could affect his business viability.
Step 3
Explain the following production options/processes and give one example in each case.
Answer
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Job Production:
- This involves producing one-off goods to order. It typically requires highly skilled employees and can be costly due to the bespoke nature of the products. For example, a tailored suit.
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Batch Production:
- This method produces a certain amount of a product at once. Work is completed on each stage of production, and then moves to the next batch. For example, baking a batch of cakes in a bakery.
Step 4
Outline two risks and two rewards of setting up a Sole Trader business.
Answer
Risks:
- Unlimited Liability: If the business fails, Rory could lose personal assets such as his house.
- Heavy workload/stress: As a Sole Trader, Rory would be responsible for all aspects of the business, potentially leading to burnout.
Rewards:
- Complete control: Rory can make all decisions regarding the business without needing to consult anyone else.
- Personal satisfaction: Successfully launching the business can provide a sense of achievement and validation.
Step 5
Step 6
Name two possible target markets that Rory might consider.
Answer
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Health-conscious individuals: This group may be interested in low-calorie foods or health-oriented meal options.
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Local schools: Catering to school lunch programs could provide a steady customer base while promoting healthy eating.