Question 1: Define the term 'business activity' and explain its importance in the context of a new business.

Answer: Business activity refers to the actions involved in producing goods or providing services to satisfy customer needs. It is important because it determines the purpose of a business and influences its operations and success.

Question 2: Identify and explain three key components that should be included in a business plan.

Answer: Three key components are: 1) Executive summary – an overview of the business idea and goals; 2) Marketing plan – how the business will attract and retain customers; 3) Financial plan – projected income, expenses, and profitability.

Question 3: Describe two reasons why a new business needs a detailed business plan before launching.

Answer: A detailed business plan helps secure funding from investors or banks and provides a clear roadmap for operations and growth, reducing the risk of failure.

Question 4: List three sources of information a business owner might use when conducting market research.

Answer: Sources include: 1) Customer surveys and questionnaires; 2) Competitor analysis; 3) Industry reports and government statistics.

Question 5: Explain the difference between a 'product' and a 'service' in business activity.

Answer: A product is a tangible item that can be touched and stored, like a shirt or a computer. A service is an intangible activity provided to customers, like hairdressing or consulting.

Question 6: Sketch a simple layout of a business plan page, including space for a business name, objectives, and target market. (Draw a rectangular box divided into three sections).

Answer: A rectangular box divided into three horizontal sections labeled from top to bottom: 1) Business Name, 2) Objectives, 3) Target Market. Each section should be large enough for brief descriptions.

Question 7: Identify two potential risks a new business might face during its startup phase and suggest ways to mitigate them.

Answer: Risks include: 1) Insufficient funding – mitigated by thorough financial planning and securing extra capital; 2) Poor market demand – mitigated by conducting detailed market research and testing the product/service.

Question 8: Describe the role of market research in the business planning process.

Answer: Market research helps a business understand customer needs, preferences, and competitors, enabling better decision-making and reducing the risk of failure.

Question 9: Draw a flowchart showing the steps involved in developing a business plan, starting from idea generation to the final plan.

Answer: A flowchart with the following steps: 1) Business idea generation, 2) Market research, 3) Setting objectives, 4) Developing marketing strategies, 5) Financial planning, 6) Writing the business plan, 7) Reviewing and finalizing the plan.