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Andrew Roche, a qualified plumber, has recently set up his own business - Leaving Cert Business - Question Question 1 - 2007
Question Question 1
Andrew Roche, a qualified plumber, has recently set up his own business. He provides services for households and small businesses in his local area. He has rented pr... show full transcript
Worked Solution & Example Answer:Andrew Roche, a qualified plumber, has recently set up his own business - Leaving Cert Business - Question Question 1 - 2007
Step 1
Describe three enterprising skills/characteristics that Andrew has as an entrepreneur.
Answer
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Innovation: Andrew demonstrates creativity by providing plumbing services tailored to the needs of households and small businesses. His ability to innovate allows him to adapt and offer unique solutions to his clients.
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Risk-taking: Starting his own business involves financial and operational risks. Andrew's willingness to take calculated risks showcases his entrepreneurial spirit and readiness to face challenges.
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Decision-making: As an entrepreneur, Andrew must make key decisions regarding his business operations, including hiring staff and purchasing a van. His decisiveness and ability to weigh pros and cons are critical to his success.
Step 2
Explain two appropriate sources of finance that Andrew may use to purchase the van.
Answer
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Hire-purchase: This financing option allows Andrew to use the van while paying for it in installments. Initially, he pays a deposit and then makes regular payments, which makes it easier to manage cash flow while gaining access to the vehicle.
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Term Loan: Andrew could take a loan from a bank with a set repayment schedule. This would provide him with the lump sum needed to buy the van outright, and he would repay the bank over a fixed period, usually at a predetermined interest rate.
Step 3
Outline three disadvantages of Andrew setting up his own business.
Answer
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Unlimited liability: As a sole trader, Andrew is personally responsible for all debts incurred by the business. This means his personal assets could be at risk if the business fails.
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Excessive workload/stress: Running a business can lead to long hours and high stress. Andrew may find himself overwhelmed with numerous responsibilities, affecting his work-life balance.
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Difficult to get all the capital: Securing enough funding to start and maintain the business can be a challenge. Limited access to capital may hinder Andrew's ability to expand or invest in necessary resources.
Step 4
Outline two suitable methods that Andrew could use to promote his new business.
Answer
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Local radio: Advertising on local radio can effectively reach potential customers in the community, raising awareness of Andrew's services and attracting new clients.
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Flyers: Distributing flyers in the local area is a low-cost promotion method. It allows Andrew to directly inform potential customers about his services while showcasing special offers or discounts.
Step 5
Explain the term 'human resource management'.
Answer
Human resource management (HRM) refers to the strategic approach to managing a company’s workforce. It involves recruiting, training, and developing employees to ensure that the organization achieves its objectives. HRM focuses on optimizing employee performance and fostering a positive work environment.
Step 6
Identify and explain two functions of a Human Resources Manager.
Answer
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Human Resource Planning: This function involves forecasting the organization’s future human resource needs and ensuring that the right number of people, with the right skills, are in place to meet business goals. This includes workforce analysis and planning for staff recruitment.
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Recruitment and Selection: The HR Manager is responsible for attracting, screening, and selecting qualified candidates for job openings. This process ensures that the organization hires individuals who fit the company culture and contribute positively to its objectives.