a) Describe three reasons why business location is an important consideration to an investor. [6 marks] b) Explain seven factors to consider when selecting a suitable location for a retail outlet. [14 marks] c) Explain TEN problems faced by co-operatives in Kenya. [10 marks] QUESTION TWO a) Explain FIVE elements of the external environment of a business. [10 marks] b) Describe FIVE parts of a business plan. [10 marks] QUESTION THREE a) Explain any THREE factors that a business owner needs to consider when choosing the most appropriate legal structure for a business. (6 marks) b) Explain any SEVEN qualities required of an effective businessman. (14 marks) QUESTION FOUR a) Discuss THREE advantages and TWO disadvantages of companies as forms of businesses. (10 marks) b) Explain FIVE differences between debentures and shares (10 marks) Page 1 of 2 QUESTION FIVE a) Highlight FOUR differences between goods and services (4 marks) b) Using local examples in Kenya, explain e-commerce business (6 marks) c) Explain FIVE challenges that local businesses experience. (10 marks)

QUESTION ONE<br />a) Three reasons why business location is an important consideration to an investor are:<br />1. Accessibility: A business located in a convenient and easily accessible location will attract more customers and facilitate smooth operations.<br />2. Market proximity: Being close to the target market allows for better understanding of customer needs and preferences, leading to improved product or service offerings.<br />3. Infrastructure availability: A location with well-developed infrastructure, such as transportation, utilities, and communication networks, will support efficient business operations and growth.<br /><br />b) Seven factors to consider when selecting a suitable location for a retail outlet are:<br />1. Demographic factors: Consider the population size, age distribution, income levels, and lifestyle of the local community.<br />2. Accessibility: Ensure the location is easily accessible through various modes of transportation and has ample parking facilities.<br />3. Competition: Analyze the presence of competing businesses in the area to avoid direct competition and identify potential market gaps.<br />4. Visibility: Choose a location with high foot traffic and good visibility to attract potential customers.<br />5. Zoning regulations: Verify that the chosen location complies with local zoning laws and regulations.<br />6. Rent or lease terms: Evaluate the cost of rent or lease and ensure it aligns with the business's budget and projected revenue.<br />7. Future growth potential: Consider the area's potential for future development and expansion.<br /><br />c) Ten problems faced by co-operatives in Kenya are:<br />1. Lack of capital<br />2. Inadequate management skills<br />3. Limited access to markets<br />4. Inefficient decision-making processes<br />5. Insufficient training and education for members<br />6. Dependence on government support<br />7. Legal and regulatory challenges<br />8. Limited access to credit and financial services<br />9. Inadequate infrastructure<br />10. Competition from other business structures<br /><br />QUESTION TWO<br />a) Five elements of the external environment of a business are:<br />1. Economic factors: Economic conditions, inflation rates, and exchange rates can impact a business's operations and profitability.<br />2. Social and cultural factors: Societal trends, cultural norms, and consumer attitudes influence consumer behavior and demand for products or services.<br />3. Political and legal factors: Government policies, regulations, and legal frameworks affect business operations and compliance requirements.<br />4. Technological factors: Technological advancements and innovations can create new opportunities or disrupt existing business models.<br />5. Environmental factors: Environmental conditions, such as climate change and resource availability, can impact business operations and supply chains.<br /><br />b) Five parts of a business plan are:<br />1. Executive summary: A brief overview of the business idea, goals, and key points of the plan.<br />2. Market analysis: Detailed analysis of the target market, including size, trends, and competition.<br />3. Organization and management: Information about the business structure, ownership, and management team.<br />4. Products or services: Description of the products or services offered, including features, benefits, and life cycle.<br />5. Financial projections: Projections of revenue, expenses, and cash flow, along with funding requirements and potential sources of financing.<br /><br />QUESTION THREE<br />a) Three factors that a business owner needs to consider when choosing the most appropriate legal structure for a business are:<br />1. Liability: The level of personal liability the owner is willing to assume for the business's debts and obligations.<br />2. Tax implications: The tax treatment of different legal structures and how it aligns with the owner's financial goals.<br />3. Control and ownership: The level of control and ownership the owner desires, as well as the ability to transfer ownership or bring in additional investors.<br /><br />b) Seven qualities required of an effective businessman are:<br />1. Vision and strategic thinking<br />2. Adaptability and resilience<br />3. Strong communication and interpersonal skills<br />4. Leadership and management abilities<br />5. Financial acumen and decision-making skills<br />6. Creativity and innovation<br />7. Ethical and moral integrity<br /><br />QUESTION FOUR<br />a) Three advantages of companies as forms of businesses are:<br />1. Limited liability: Shareholders' personal assets are protected from the company's debts and liabilities.<br />2. Access to capital: Companies can raise funds through the sale of shares or issuing debentures.<br />3. Perpetual existence: Companies have an indefinite lifespan and can continue to operate even if ownership changes.<br /><br />Two disadvantages of companies as forms of businesses are:<br />1. Complex and costly to establish and maintain.<br />2. Increased regulatory compliance and reporting requirements.<br /><br />b) Five differences between debentures and shares are:<br />1. Ownership: Shares represent ownership in a company, while debentures are debt instruments.<br />2. Dividends: Shareholders receive dividends based on profitability, while debenture holders receive fixed interest payments.<br />3. Voting rights: Shareholders have voting rights in company decisions, while debenture holders do not.<br />4. Risk: Shares are riskier investments as their value is influenced by market conditions, while debentures are generally considered safer investments.<br />5. Taxation: Dividends from shares may be subject to double taxation, while interest from debentures is taxed as income.<br /><br />