1.3.1a Financial aims and objectives when starting up Quiz: Pearson Edexcel Business, Unit 3

The 20 questions

1. Which of these is a financial aim for a business starting up?

   • Social objectives, meaning helping the local community through its activities
   • Survival, meaning staying in business in the first few years
   • Independence and control, meaning the owner makes all of the key decisions
   • Personal satisfaction, meaning enjoying the work and the sense of achievement

2. A new business aims to win 15% of the local market within two years. Which financial aim is this?

   • Personal satisfaction
   • Market share
   • Independence
   • Social objectives

3. Which of these is a financial aim that a business might set when starting up?

   • Social objectives, meaning giving back to a local charity through donations
   • Financial security, meaning having reserves to cope with unexpected costs
   • Personal satisfaction, meaning doing work that the owner finds enjoyable
   • Challenge, meaning taking on work that tests the owner's abilities and skills

4. Why might a business starting up aim for sales growth in its early years?

   • Higher sales mean the business is automatically exempt from paying tax
   • Higher sales always reduce the need for the business to pay any costs at all
   • Higher sales can build revenue and help the business become established
   • Higher sales are only relevant to businesses that are already well established

5. A business aims to make a profit of £20,000 in its first year. Which type of aim is this?

   • A non-financial aim, because it is about the owner's personal satisfaction
   • A financial aim, because it is a measurable money target
   • A social aim, because it is about benefiting the local community directly
   • A personal aim, because it is set by the owner for their own enjoyment

6. Which of these is the most likely priority for a start-up that has little cash behind it?

   • Market leadership, so the business can dominate the industry in its first year
   • Personal challenge, so the owner can test their skills against new competitors
   • Survival, so the business can keep trading while it builds sales
   • Social objectives, so the business can reach a large number of local charities

7. Which financial aim relates to the amount of business a firm does compared with its rivals?

   • Survival
   • Market share
   • Profit
   • Financial security

8. Why is profit an important financial aim for a business?

   • Profit is always the same as cash, so the business never needs to track it
   • Profit is only required by law for businesses that have more than 100 staff
   • Profit is the reward that justifies the risk of running the business
   • Profit is needed only to satisfy the expectations of the business's suppliers

9. Which of these is a financial objective set to measure progress towards a financial aim?

   • Making a positive contribution to the community through local volunteering
   • Gaining the satisfaction of knowing the owner has built something of their own
   • Having control over the firm's direction without needing to report to others
   • Achieving sales of 500 units a month within the first six months of trading

10. A start-up aims to reach break-even within 12 months. Which type of aim is this?

    • A financial aim, because break-even is about covering costs with revenue
    • A social aim, because break-even helps the business support local causes
    • A personal aim, because break-even relates to the owner's time commitment
    • A non-financial aim, because break-even is about the owner's personal wellbeing

11. Which of these is a financial aim rather than a non-financial aim?

    • Gaining independence by running the firm without an external boss
    • Building a business that serves a valued local purpose in the community
    • Achieving a good work-life balance for the owner and their family
    • Increasing sales revenue by 10% over the next year

12. Which financial aim best describes a business wanting to protect itself from sudden cash shortages?

    • Profit maximisation, through raising prices as high as customers will accept
    • Sales growth, through selling as many products as possible in the first month
    • Financial security, through keeping cash reserves and managing costs carefully
    • Market share, through increasing the number of competitors in the market

13. Why might a start-up set a sales target rather than a profit target in its first year?

    • Profit targets can never be measured in money terms by any business
    • Sales are easier to measure early on, while profit may take longer to reach
    • Sales targets remove the need for the business to think about its costs at all
    • Sales targets are always legally required, while profit targets are optional

14. Which financial aim describes keeping the business trading for its first few years?

    • Personal satisfaction
    • Survival
    • Independence
    • Social objectives

15. A start-up aims to hold 5% of its local market within a year. Which aim is this?

    • A financial aim measured by market share
    • A non-financial aim measured by the time the owner works each week
    • A non-financial aim measured by personal satisfaction levels
    • A social aim measured by the number of volunteer hours given

16. Why do start-ups often set a sales target before a profit target?

    • Profit targets cannot be measured in money by any business at all
    • Sales targets are required by law while profit targets are always optional
    • Sales are easier to track early on, while profit usually takes time to build
    • Sales targets remove the need for a start-up to consider its costs

17. Which of these is a financial aim that a start-up might set for its first year?

    • Reaching break-even, where revenue covers all costs
    • Gaining personal satisfaction from creating a product the owner is proud of
    • Making a social impact by donating a share of profits to a local cause
    • Gaining independence by avoiding any contact with outside investors and banks

18. A business sets a target of £50,000 revenue in its first year. Which type of aim is this?

    • A personal aim, because the target depends on the owner's free time
    • A non-financial aim, because the target reflects the owner's personal goals
    • A financial aim, because the target is a measurable money figure
    • A social aim, because the target benefits the local community directly

19. Which of these is a financial objective linked to financial security?

    • Recruiting a volunteer team to support a local charity each season
    • Working fewer hours each week to improve the owner's wellbeing
    • Winning an award for personal achievement in the trade association
    • Building a cash reserve equal to three months of fixed costs

20. What is the main link between financial aims and business survival?

    • Financial aims are only needed by businesses that have more than fifty staff
    • Financial aims set the money targets that keep the business able to pay its bills
    • Financial aims are set by the government and cannot be changed by the owner
    • Financial aims have no effect on whether a business can keep trading

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