Sole Trader - Advantages and disadvantages table in A Level and IB Business

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Created by: Howzat
Created on: 30-07-18 16:17

Sole Traders

Advantages

Cheap and easy to set up
All profits go to the sole trader
Autonomy in decision making (freedom)
Financial records remain private
Motivation is high as the success of the individual and the business are one and the same.

Disadvantages

Unlimited liability (liable for business debts and therefore can lose personal assets if the business goes into debt)
Limited capital for investment (not much money to spend e.g Profits
Little specialist skills as he owner is a 'jack of all trades' or will have to buy in specialists
Difficult to find cover when ill- although sole traders often do employ people

Evaluation

Huge risk while being a Sole Trader but the fact that it is easy to set up and have that feeling of freedom can sway it both ways. Good for start up or smaller businesses.

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