1.1 Enterprise & Entrepreneurship Practice Questions

Read the following extract carefully and then answer the question.

Paws & Clippers is a mobile dog-grooming business based in Shrewsbury. The owner, Freya Nandra, worked as a veterinary nurse for six years before leaving in 2019 to set up on her own. She used £6 000 of her savings to buy a van and fit it out with a bath, a dryer and a grooming table.

Freya drives to customers' houses and grooms their dogs outside, which means owners do not have to travel or sit in a waiting room. A full groom costs £35. She offers appointments on Saturdays and Sundays, when the two high street grooming salons in the town are closed.

Freya decides which days she works and takes every booking herself. She says she would not go back to shift work at the veterinary practice.

Freya asked 200 regular customers why they chose Paws & Clippers. The results are shown in Table 1.

Table 1: Why customers chose Paws & Clippers

Extract A

Paddle Pod is a paddleboard hire and lesson business on Hollowmere Lake in Cumbria. It was started three years ago by Ryan Doherty, aged 31, who gave up a permanent job as a secondary school PE teacher. Ryan used £9 000 of his own savings to buy 20 boards, wetsuits and a lockable storage container beside the lake.

Paddle Pod charges £15 an hour to hire a board and £28 for a one-hour beginners' lesson taught by Ryan himself. Most customers are families on holiday and about 80% of bookings are taken between May and September. Bookings are cancelled when the weather is poor, and in winter the business earns very little; last January Paddle Pod made a loss of £1 400.

Ryan now employs two part-time instructors during the summer. He says that he enjoys deciding which days he opens and that he no longer has a manager telling him what to do. The business is now his only source of income.

Extract A

Looped is a small business in Nottingham, started in 2021 by Isla Nandra. Looped collects unwanted school uniforms from parents and schools and remakes the fabric into tote bags, pencil cases and lunch bags. Isla left a full-time job as a textiles technician and spent £4 500, borrowed from her uncle, on two industrial sewing machines and a market stall.

Every bag is finished with a hand-stitched Looped label and customers choose the colour of the strap when they order online. Each bag is sold with a small card giving the name of the school that the fabric came from. A plain tote bag in a supermarket costs about £3; Looped charges £22 for its tote bags and sells around 60% of them through its website.

Isla now employs one part-time machinist. She knows that other small businesses have begun to sell recycled bags and that she must keep giving customers a reason to pay a higher price.

Table 1: Tote bags sold by Looped

Extract A

Keyhole Print is a small photography shop in Bristol owned by Marcus Fenn. When the shop opened in 2004, most of its revenue came from developing and printing photographs taken on camera film. Customers now take almost all of their pictures on mobile phones and store them online, and fewer than five films a week are brought into the shop.

Rather than closing, Marcus has used the same printers and the same staff to offer two new services: personalised photo books, which customers design on the Keyhole Print website, and framed prints, mounted in frames made by a joiner two streets away. He has also kept the passport photo service.

Marcus did not need to buy new printing equipment and his three employees already knew how to edit and print images, so the change took less than four months to plan. Other print shops in Bristol now offer photo books as well, and Marcus knows that customers can order similar books from large online companies.

Table 2: Sales revenue at Keyhole Print

Read the following extract carefully and then answer the questions.

Pedal Fix is a mobile bicycle repair business in Norwich. Marcus Ellery, aged 28, set it up in 2021 after leaving his job as a warehouse supervisor, where he earned £26 000 a year. He spent £9 000 of his savings, plus a £4 000 loan from his family, on a van, tools and spare parts.

Marcus drives to the customer's home or workplace and repairs the bicycle there. Most repairs are completed within 24 hours of a telephone call. A basic service costs £45. The two bicycle shops in the city centre charge £35 for the same service, but customers must take the bicycle to the shop themselves and can wait up to a week to get it back.

Marcus also sells a monthly 'Ride Ready' subscription for £12, aimed at people who cycle to work every day. Subscribers get a free safety check each month and move to the front of the queue for repairs. Around 70 customers have signed up.

A national bicycle chain has recently opened a large store on the edge of Norwich. Marcus works alone and can complete up to six repairs a day.

Extract B

Nix & Nettle is a sole trader business in Carlisle that makes alcohol-free botanical drinks. Dana Whitfield, aged 34, started the business in her kitchen after leaving a permanent job as a laboratory technician. She invested £12 000 of her savings in a small bottling machine and rents a unit on an industrial estate for £650 a month.

Nix & Nettle sells one product, Nettle & Elderflower, in glass bottles priced at £4.50 each. The drink is stocked by 38 independent delicatessens and farm shops across Cumbria. Dana mixes every batch herself and employs one part-time worker.

At food festivals, customers often ask Dana for a drink they can carry around with them. She has also noticed that several large drinks companies have recently launched alcohol-free products in cans.

Dana wants to grow the business and is considering two options:

Option 1: develop an original range of three new flavours, using ingredients no other drinks business uses

Option 2: adapt the existing Nettle & Elderflower drink by also selling it in cans

Read the following extract carefully and then answer the questions.

Northfell Candles is a sole trader business in Kendal, Cumbria. Rosa Lindley, aged 31, started it in 2020 using £3 500 of her savings after four years working as a sales assistant.

Rosa hand-pours soy wax candles in a converted garage behind her house. She buys wax, wicks, scented oils and glass jars from a wholesaler in Lancaster, and the materials for one candle cost her £4. A candle sells for £14 and a wax melt sells for £5. Rosa sells at weekend craft markets across Cumbria and through her own website, which she built herself. She packs and posts every order in the evenings and employs no staff.

In the last year, several online sellers have begun offering machine-made scented candles of a similar size for £9. Rosa's sales have stopped growing and she had to cancel a market stall in February because takings did not cover the £60 pitch fee.

Rosa believes her candles are better made than the cheaper ones, but she knows that customers at a market cannot always tell the difference. She wants to add value to her products so that customers are willing to pay more than they would for a mass-produced candle.