Sole trader

Ads and Dads of Different types of Sole Traders

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  • Created by: BethanyM
  • Created on: 19-05-13 15:00

Sole trader

Advantages

  • Low start-up costs
  • Needs low start-up capital
  • Owner keeps all the profit
  • There are no legal documents, so it is very quick and easy
  • The owner has complete control
  • No financial info published
  • The owner can keep all profit
  • Decisions can be made quickly

Disadvantages

  • Unlimited liability means personal possessions can be taken
  • A sole-trader might lack particular skills
  • Hard to grow
  • Hard to gain bank loans
  • In illness of death the business is likely to cease
  • Long hours due to difficulty getting holiday or time off
  • Hard to gain large profit

Evaluation

   A sole trader is suitable for someone who wants to set up a business quickly and easily, and is good for a seller. If the individual is confident in other aspects of business such as finance, decisions can be made easily and there are no arguments. However, if this is not the case another individual can be employed. On the other hand, a sole-trader is likely to work long hours, with little holiday, so the individual needs to be committed, and they need to be aware that they are personally responsible for any debts the business has. (CONTEXT)

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