Question 1: Define the term 'business activity'. What are some common types of business activities?

Answer: Business activity is any action that involves producing, selling, or providing goods and services to customers. Common types include manufacturing, retail, and service provision.

Question 2: List three reasons why a business needs to create a business plan.

Answer: To set goals, secure funding, and provide direction for the business's future activities.

Question 3: Explain the difference between a product and a service. Provide an example of each.

Answer: A product is a tangible item that can be touched and stored, such as a smartphone. A service is an intangible act or performance, like a haircut.

Question 4: Describe what a start-up business is and give two examples of start-up businesses.

Answer: A start-up business is a new company that is in the early stages of operation. Examples include a new online clothing store or a local bakery opening for the first time.

Question 5: Imagine you want to open a new lemonade stand in your neighborhood. List five things you would include in your business plan.

Answer: Location of the stand, start-up costs, pricing strategy, target customers, and how to promote the stand.

Question 6: Sketch a simple layout plan for a small bakery. Make sure to include areas for baking, customer seating, and a counter.

Answer: A correct sketch would show a clear division of spaces with labels for baking area, customer seating area, and a counter for orders. The layout should be functional and organized.

Question 7: What are the main factors a business should consider when choosing a location for their shop?

Answer: Foot traffic, competition, accessibility, rent costs, and proximity to suppliers or customers.

Question 8: Explain why market research is important for a new business. How can it help in the planning process?

Answer: Market research helps understand customer needs, identify competitors, and assess demand, allowing the business to plan effectively and reduce risks.

Question 9: Identify and explain two potential risks that a new business might face during its first year.

Answer: Low sales due to poor marketing, and high costs that exceed income, which could lead to financial losses.

Question 10: Describe what a 'target market' is and why it is important for a business to identify one.

Answer: A target market is the specific group of customers a business aims to sell to. It helps the business tailor its products and marketing strategies effectively.