Year 12/13 BSO3
Task 1
Read and annotate the case study and answer the following questions – use and QUOTE the case study for evidence in your answers.
1. Identify the resources that Sheena will need to set up her business and run her business. Include
a. Financial: An airfield to use as her base, father buy shares, her inheritance, loan from the bank, money to maintain the helicopter, still has a job, an accountant for the business
b. Physical: The helicopter
c. Human: Skilled people for mechanical work, someone to fly the helicopter, someone to manage business while she’s in the air
d. Time: To promote the business
e. Systems and IT: Someone to create the website

2. What risks might Sheena be taking in minimising the use of resources?: Her business won’t be as appealing or she might not be able to maintain her helicopter
3. What is the capacity of her business per flight?: Seven passengers
4. What skills and experience does Sheena have that could make her a successful entrepreneur?: Commercial Pilot Licence and skilled in IT
5. What skills and experience does Sheena lack that could threaten her business start-up?: No entrepreneurial experience
6. What are the positive and negative implications for Sheena and her business of her Father offering 25% of the start-up capital?: She’ll be able to raise 25% of the capital she needs to run the business. She’ll be in her father’s debt
7. What are the positive and negative implications for Sheena and her business of her Father being a shareholder in Sheena’s business?: He’ll try get involved but she wants to be independent. He will be able to give her lots of advice and support including contacts with important people who could help her with business
8. What problems might Sheena face in the planning of her finances given that costs and prices in the market change?
a. Break-even: The selling prices for the experience change depending on the length of the flight or who the flight is being sold to. Variable costs such as fuel increase and decrease regularly, also fixed costs such as insurance can rise at any time. Showing that calculating her break-even will be tricky as costs to calculate break-even aren’t set and can change at any point, not giving her an accurate figure of break-even
b. Cash flow: She won’t be able to accurately calculate the cash going out of the business as costs rise and fall unexpectantly
c. Budgeting: Her budgets set for the business won’t be accurate as she will have to ensure that she has some extra budget left over as her costs could increase
9. How might the demand rising sharply in the summer affect Sheena’s business?: It will mean that her business will have high demand in the summer months which will mean she needs to ensure that s
10. What objectives might Sheena have in setting up her business: To make sure she sets up quickly to ensure she catches the end of the summer season
11. Should Sheena aim to make the largest possible profit in her first year? Identify arguments for and against USING the case study
(This means maximum revenue (how) and lowest costs (how)
For profit maximising
Against profit maximising

12. From the point of view of Roshan, Sheena’s Father, analyse whether it really is a good idea to invest in Sheena’s business
13. In the context of Sheena’s new business, identify and explain reasons why she should and should not select