so it's not far away now let's have a session on aqa paper 1 2022 gcse business so in this video i want to go through eight big topics and that's based on the advanced information the link for that is below in the description box please make sure you know your advanced information let's go topic number one partnerships versus private limited companies it looks like this is going to be important this year so let's go for it partnerships the key features two or more people own and run the business it's unincorporated unarmed so unlimited liability unincorporated unlimited liability and all the partners agree to a deed of partnership which legally sets out how the profits and control will be distributed now private limited companies the key features owned by shareholders remember private limited company has shareholders and managed by a director shareholders are not allowed to sell shares to the public via the stock exchange now that would be the case if it's a public limited company so sticking with private limited companies well shareholders losses are of course limited to how much they invested in the business and you would know that as limited liability now this question they may take it a bit further so let's go through the benefits on each side so partnerships the benefits there different partners have different skill sets you might be able to share the workload share the risk of course the financial risks financial records will not be published publicly because it's a partnership and it's an unincorporated organization now looking at private limited company the benefits there well firstly limited liability of course so if it mentions in the case study about personal assets well they will be protected through limited liability secondly extra finance extra finance because of the sale of shares because you're a company now so you can sell shares you could not sell shares if you were in a partnership and this might help finance the business maybe the business wants to expand maybe the business needs to invest in something and they otherwise can't do it and meet their business objectives without having that extra finance so maybe that's crucial to the organization to become a private limited company and if we're comparing private limited companies to public limited companies remember shares are not sold on the stock exchange and that might be beneficial as they're able to control who the shareholders are and that will be particularly important for a family business so partnerships versus private limited companies that's one to watch out for let's move on to number two so number two is dis economies of scale so diseconomies of scale may occur once economies of scale have been fully exhausted so you've exhausted your purchasing economies of scale or your technical economies of scale and now you're in that bad phase where you're getting dis economies of scale it's a bad thing this means as the business grows output increases leading to an increase bad thing increase in average unit cost and if your average unit costs are increasing it might need your might mean that your prices need to increase if your prices need to increase well that might make you less competitive so diseconomies of scale will occur due to employee coordination employee motivation employee communication and it's the fact that there's a lack of coordination there's a lack of motivation there's a lack of communication because the output of the business has grown the business got too big too clunky and it's led to the average unit cost increasing now please remember this could be used as a disadvantage or a limitation or a con of an expanding business maybe there's a longer question on expanding businesses and that if they were to expand maybe they get diseconomies of scale and that's potentially a problem will make them less competitive in the market that they are in so that's number two diseconomies of scale make sure you revise it let's go on to number three so number three impact of interest rate changes now remember with interest rate changes there's two impacts there's the impact on producers and the impact on consumers now we're gonna deal firstly with producers remember producers if you're confused by that word that's just simply the business the impact on the firm the impact on the business the organization so if interest rates increase i'm sticking with increase here because that's contemporary that's what's been happening in the uk over the last year so if interest rates increase it will make it more expensive to borrow money this will greatly impact those businesses that rely on overdrafts and loans for finance remember their two sources of finance this will lead to higher costs so if interest rates go up it means higher costs for businesses with overdrafts and loans and therefore lower profits so it's a bad thing additionally higher interest rates will make ex investments in capital in machinery more expensive if a loan is being used and this may reduce businesses investment levels maybe they look and think it's not worth investing right now in machinery in types of capital remember capitals one of those factors of production simply because interest rates are increasing now let's look at the impact on consumers so the impact on consumers if interest rates increase it makes it more expensive to borrow money but more rewarding to save money and this will encourage saving and discourage borrowing as a result consumers will have less disposable income so demand for goods and services will likely fall so consumers people that buy things if interest rates are increasing well that might put them off borrowing money it might think they might make them think well mayors will save more money now the interest rate is better and if you're saving money you can't be spending money and as a consequence it might mean demand for goods and services will fall and the profits for those businesses will fall so that's number three impact of interest rate changes don't forget to talk about the impacts on producers and the impacts on consumers if you are required to do so number four benefits of good customer service so with benefits of good customer service if it's a longer question then just make sure you're thinking about those chains of analysis here so let's go through some ones that might be useful providing good customer service is likely to increase customer satisfaction as they have a positive experience they become loyal to the business in the future increased loyalty may lead to customers spending more on the website or the outlet in the future and that's known as increased spend per head and this will lead to increased profitability so that's why good customer service is important to a business something to watch out for well that's number four let's go on to number five number five stock management this is a big one i can smell it it's important so just in time the definition a stock management approach aimed at ensuring the amount of products a business intends to produce in a given time period is matched with the amount of raw materials or components they order from the suppliers so just in time is one of those stock management approaches and the other one is just in case and the definition for that a stock management approach aimed at ensuring the business holds a very large amount of stock this means they are less likely less likely less likely to run out of stock now if you stick to the end of the video i've got a special treat for you on this question and something will help you to prepare for the forthcoming exams but firstly let's go through the benefits of just in time and just in case so the benefits of just in time hold limited stock so lower storage cost that's a good thing the next thing is because you're just holding a small amount of stock just in time it's just arriving in time products won't perish or they won't become obsolete so there's no waste there and remember just in time is a type of lean production and it's got a focus on efficiency and efficiency of course is great for a business on the other side just in case the benefits of just in case well you're buying huge you're buying very large amounts of stock in one go so you are likely to get purchasing economies of scale and that will mean lower average cost per units which is a great thing for a business additionally if you're holding large amounts of stock then you'll be able to meet sudden demand changes or fluctuating demand so if there's huge orders that come for you you're holding loads of stock you can fulfill those orders there's no reputational issues off of that also you can meet sudden supply changes maybe there's suddenly you can't order those supplies in as you previously could but you hold loads of stock so you'll be able to get through that period and we've seen that with brexit coronavirus boat stuck in the suites canal the third point with just in case less reliance on suppliers so there's less risk there so that's why it's a good thing in comparison to just in time as i said stick to the end of this video there's something special a model answer on just in time and just in case let's move on to the next one the importance of motivation so why is it important to motivate your workforce could be a longer question could be a cheeky sex marker need those chains of analysis so improve productivity lower absenteeism improve staff retention that means your staff stay with you longer if they stay with you longer they grow with your business they become more experienced with your business and that's a good thing because it might lead to improved quality of your products or your services or your customer service and additionally if they're staying with you longer because of improved staff retention that will mean reduced recruitment costs because you don't need to replace staff that aren't leaving that's number six let's go on to number seven motivation methods so motivation methods remember it's going to be financial methods or non-financial methods let's go through financial methods increase salary increase wages offer commission on sales profit sharing with employees and on the non-financial side remember you can adjust those management styles you could be more authoritarian more democratic or you could offer training extra responsibility or fringe benefits which is a non-financial method of motivation for aqa let's go on to number eight types of trading that's a big one i can smell it so off-the-job training off-the-job training is training that occurs outside the workplace but during paid hours an example would be college courses or online training meanwhile on the job training on the job training is training that occurs inside the workplace this is the most common form of training it is usually more practical for example demonstrating to an employee how to do a particular task know the difference between off and on the job training let's go through the benefits in case it comes up as a longer i can smell it so continuing with the benefits of off the job training and on the job training so off the job training means workers are removed from the usual work environment so they can be focused on the training they will not be distracted by other work commitments as a result they are more likely to learn the skill well and maybe that skills vital to the business succeeding in the future additionally it is likely they will be trained by an expert who has knowledge expertise and is practiced in the content of the training and furthermore off-the-job training will give the employee time and space to fully grasp the skill they're trying to learn and there's no pressure to be productive in that moment as opposed to on the job training and the benefits of on the job training is number one it's cheaper it's cheaper because you don't need to pay for that off the job training you don't need to pay for that expert maybe that expert's miles away needs to pay travel for your employees hotels for your employees you don't have to pay for any of that with on-the-job training so it's much likely to be cheaper because the employee can learn from other employees essentially mentors and moreover it will be hands-on kinesthetic practical training relevant to the employee to their precise job this will mean even in the short term so even initially as they're learning that skill they're likely to still be productive they're going to produce some output albeit slowly they're producing something and with supervision from mentors in the long term they could become very productive for that skill and furthermore they're building relationships they're working closely with other employees helping to build relationships which will aid communication in the future and perhaps increase productivity so that's the eight big topic so the first thing to think about is smelling those longer questions out let's smell them out well looking through that advanced information i'm sure you've looked at it there seems to be classic questions that they appear to be very likely to feature of course i don't know what's going to be in the exams i'm not writing the exams i don't know but these are my thoughts based on my experience of teaching business ownerships is an absolute classic for a gcse paper and given they've said partnerships and private limited companies will feature i think it's pretty pragmatic for you to be revising partnerships pros and cons private limited companies pros and cons and for that there's been a question a few years ago 2019 on that and i'm going to show a model answer that later in this video the next thing to look at is just in case versus just in time again that's a classic it's a classic and it feels like that could well feature this year in those longer questions and once again i've got a model answer for that because it featured a few years ago of course they're gonna change the case study change the people but it's important to just have practice those two types of questions so there's a model answer coming on that at the end of this video the third thing is on the job training versus off-the-job training could well feature as a nine certainly suits a nine marker and maybe a curveball could be something on expansion methods maybe a business it could be should they grow or should they not grow there could be a nine marker there additionally if we think about that 12 marker if i'm going to have a pump and remember it's only a pump got to revise everything lean production tqm they feel important and also customer service certainly feels important so that's smelling those longer questions out of course you've got to revise everything particularly those things that are on that advanced information now let's move on to those model answers as promised so 2019 paper two section b question two paper free business ownership model answer so here's my model answer for that question i advise that jay changes the legal structure of sts to a private limited company this will mean sds becomes an incorporated business therefore as a shareholder she would benefit from limited liability this is important to jade because she owns a house and the existing business loan is secured against it limited liability will ensure sts and jay's personal assets for example the house are classed as separate legal entities as a consequence if the business faced financial difficulties and her debt levels became unmanageable she will still have protection of her house furthermore the limited liability will extend to the new shareholders that jade aims to attract to sts to enable her to raise finance this is especially important given the existing levels of debt and the recent bank announcement that the cost of servicing these debts will increase however the extent of the debt issue is not clear from the information provided it depends on the size of her initial bank loan and how much of the loan she has left to repay if it is a smaller amount the interest rate increase may have a negligible impact on finances so that's the first of the three paragraphs the second one is coming up on the other hand becoming a private limited company will mean jade will be selling a share of the company as a consequence she will lose some control of the decision-making process and this is poignant because jade is determined to make key business decisions herself such as the prospective expansion as a private limited company jade may need to satisfy shareholders aims and objectives which could be different to hers however it depends on the share of sts jade needs to sell in order to get the finance to resolve the potential debt issue as well as fund the future expansion of sts if she only needs to give up a small percentage of the business it is very likely she will still retain majority control moving on to the third and final paragraph in conclusion jay clearly has ambitions plans for sts to expand but she needs investment and therefore she needs to become a private limited company the finance she receives from shareholders will not need to be repaid so will allow her to expand the business quicker than as a sole trader saddled by debt although she will have to now pay the shareholders dividends it is extremely likely the expansion will result in higher overall profits in the long term moreover this is jade's first business venture providing her with majority control but with ongoing business support from shareholders who may have the business experience could be an added bonus to enable sts to expand swiftly and profitably so that's the business ownership question it's well worth looking back at that i showed the details to how you can find the question the case study for that earlier on and now let's move on to the second and the final model answer to help you get ready and absolutely smash those exams so this is 2019 paper one section b question two part seven and it's the just in time model answer again feeling it smelling it let's get to the model answer paragraph one i recommend that fleet bikes should change to just in time stock control because it will allow costs to be lowered they should use just in time because it means that less space in the warehouse will be taken up with materials just in time management means that the business will have no or very little excess stock as a result they would not need the storage space at the moment fleet bikes stock is taking up all the space in the warehouse and they need to take out a loan in order to extend the factory as this space would not be used fleet bikes would not need to get alone or expand so can keep its costs low this would result in lower costs allowing for higher profit and profit margin if they keep their prices the same this may have an effect on the logistics and procurement teams as they would need to make sure that the supply chain is efficient however just in time would depend on the suppliers reliability moving on to the second of the three paragraphs however if they carried on with just in case stock management fleet bikes would be able to receive purchasing economies of scale from the larger orders by using just in case the business will have greater volume orders and so would be more likely to be able to negotiate with the supplier to get economies of scale so cheaper unit costs on the orders this can be seen as they already have 10 discount on their orders and could risk losing this with just in time as a result the variable costs would be kept lower and so profit will increase however it depends on the space they have for more stock the final paragraph overall i think that fleet bikes should use just in time because it would lower the business fixed costs they would no longer need to pay rent for storage of the excess stock however they would not be able to respond to sudden fluctuations in orders and so would risk losing potential customers nevertheless in the long term just in time would keep costs low as a result of lower fixed costs this could mean their break-even output would fall leading to a higher margin of safety so i hope that helps and the last thing i need to say to all of you is thank you thank you for your support this year thank you for your comments and i hope you go out there paper one and do an absolute demolition job on that exam best of luck thank you very much