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Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 4 - 2018
Question 4
Read the information supplied and answer the questions which follow. Local Enterprise Offices (LEOs) across Ireland, provide advice and assistance to potential star... show full transcript
Worked Solution & Example Answer:Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 4 - 2018
Step 1
Explain two differences between a Sole Trader and a Partnership as forms of business ownership.
Answer
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Ownership Structure: A Sole Trader is owned and controlled by one person, who makes all decisions and retains all profits. In contrast, a Partnership consists of 2 to 20 partners who share both responsibility and profits, allowing for collaborative decision-making.
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Liability: Sole Traders have unlimited liability, meaning they are personally responsible for all debts incurred by the business. Conversely, while Partnerships also have unlimited liability, the responsibility for debts and obligations is shared among the partners.
Step 2
Step 3
Explain two benefits of preparing a business plan.
Answer
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Objective Setting: A business plan helps to clearly outline objectives and targets, guiding the business's direction.
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Funding Acquisition: It serves as a tool to attract investors and secure funding from financial institutions by demonstrating a well-thought-out approach to achieving success.
Step 4
Explain any three of the following sources of finance: Share Capital/Equity Capital, Bank Overdraft, Leasing.
Answer
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Share Capital/Equity Capital: This source involves raising funds through the sale of shares to investors, who become part stakeholders in the business. Profits are distributed as dividends.
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Bank Overdraft: A bank overdraft allows businesses to withdraw more money from their bank than they currently have in their account, offering short-term liquidity. The bank charges interest on the overdrawn amount.
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Leasing: Leasing is an arrangement where a business pays to use an asset over a specified period without purchasing it outright. This can reduce upfront costs and provide access to necessary equipment.
Step 5
Explain two features of Job Production.
Answer
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Customization: Job production is often tailored to specific customer requirements, producing unique or one-off products according to individual specifications.
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Skilled Labor: This type of production typically requires highly skilled workers to execute the specialized work needed for each job, ensuring quality and craftsmanship.
Step 6
Outline two challenges for start-up businesses in Ireland.
Answer
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Access to Finance: Many start-ups face difficulties in securing funding, which can limit their ability to grow and scale operations effectively.
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Market Competition: New businesses often contend with established companies, making it challenging to capture market share and attract customers.