IB Business Paper 1 November 2026 Lemon Magic Breakdown 1

Today we're going to be talking about the IB Business Paper 1 November 2026 Lemon Magic case study. Follow along to see everything that you need to know to do the best you can on the exam. First key term is privately held business. First tip, understand the advantages and disadvantages of this type of business.

Ask yourself, why did Yiannos and Athena choose this structure specifically rather than something like a partnership? What does it give them that a partnership wouldn't? Second, think about sources of finance. A privately held business has access to most financing option, bank loans, retained profits, trade credit, including share capital. But remember, because it's a privately held company,

those shares cannot be sold on the stock exchange. That's a key distinction that you could maybe use for context in your answer. Third, sector classification. Yiannos and Athena's business is both manufacturing and design, which means it actually spans two sectors, secondary manufacturing, and tertiary design or service. A possible question here could ask you for other examples of businesses

that operate in these sectors. So, have two or three ready for both secondary and tertiary just in case. So, we know that Lemon Magic is located in the third largest city. Think about what that actually means. A smaller city means a smaller population than the capital and possibly a smaller target market to sell to.

But on the plus side, rent is likely to be cheaper here compared to a bigger city. But there's something important to note. There are three public universities in the city, and Lemon Magic's target market is students. So, even though the city is smaller, they've got a solid group of potential customers to sell to.