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Business Failure

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  • Which of the following could help a business handle unexpected costs better?
    Reducing the number of employees
    Increasing prices for all customers
    Saving money for emergencies
  • How can changing customer tastes affect a business?
    It can help increase sales
    It does not have any impact on a business
    It can hurt cash flow if not adapted to
  • What happens if a business takes out too many loans?
    Increased sales
    More profits
    Paying more in interest
  • What might happen if a business owner does not manage money properly?
    They will always have enough money
    They can easily expand their business
    They may spend more than they have leading to cash flow issu
  • What can happen to a business if it overtrades?
    It may spend more than it can handle leading to financial tr
    It will never have cash flow issues
    It can easily make more profits
  • Which of the following is an example of an external factor that could harm a business?
    Increased staff training
    New laws
    A new marketing campaign
  • What can seasonal businesses do to survive in off-seasons?
    Stop selling products during the off-season
    Plan carefully to manage costs
    Increase their marketing budget
  • What might happen if a business faces unexpected expenses like broken equipment?
    The business will immediately make a profit
    They will be able to continue business as usual
    They could run into financial trouble
  • What does "overtrading" mean for a business?
    Having too many employees
    Staying small to keep costs low
    Growing too fast without enough cash to support it
  • What is a risk of giving customers too much credit (letting them pay later)?
    Customers might pay sooner than expected
    The business may run out of cash if payments are delayed
    The business might lose less money
  • To avoid over-borrowing what could a business owner do instead of taking too many loans?
    Cut employee wages
    Lower product prices
    Sell shares
  • Instead of investing too much in equipment what can a business do to save money?
    Lease equipment
    Hire more employees
    Stop buying any equipment
  • What is a key part of good financial management?
    Ignoring financial records
    Spending as much as possible on advertising
    Understanding money flow in and out of the business
  • How can a business avoid the risks of giving too much credit?
    Increase credit limits for everyone
    Require immediate payment
    Offer discounts for delayed payments
  • Which of the following is an example of an unexpected expense?
    Routine office supplies
    Regular staff salaries
    Emergency equipment repairs
  • Why is it important for businesses to plan for the off-season?
    To make sure they earn money all year
    To avoid running into financial trouble
    To increase the cost of products
  • What should a business do if customer preferences suddenly change?
    Stick to the old products and services
    Adapt to the new trends to stay relevant
    Increase prices immediately
  • What is the main reason businesses need to manage their finances carefully?
    To avoid paying taxes
    To spend as much as possible
    To make sure they have enough cash for operations
  • What might happen if a business invests too much in fixed assets (e.g. equipment)?
    It may drain cash reserves
    It will make immediate profits
    It will have more cash flow
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