1.4.1 Business Ownership

Question 1

Give a Advantage Of a Business Operating as a Sole Trader ( 3 Marker)

Answer 1

They are their own boss (P) This means they get to make all the decisions themselves (S) and as a result can choose the hours they work (S) They are therefore more motivated and happy in their work (S)

Question 2

Give a Disadvantage Of a Business Operating as a Sole Trader ( 3 Marker)

Answer 2

They have unlimited liability (P) As a result they are responsible for the business debt (S) This could lead to them losing personal possessions if the business gets into trouble (S)

Question 3

Give a Disadvantage Of a Business Operating as a Partnership (3 Marker)

Answer 3

The Profit Is Split (P) This Is Because 2 or More People Are In a Partnership (S) This Leads To Them Being Less Motivated In Their Workplace (S)

Question 4

Give a Advantage Of a Business Operating as a Partnership ( 3 Marker)

Answer 4

Partners can provide specialist knowledge and skills (P)This means that decisions can be made using the experience of both partners (S) Therefore the business has more chance of being successful (S)

Question 5

Give a Advantage Of A Business Setting Up as a Private Limited Company (3 Marker)

Answer 5

Limited liability (P) This Is Because they are not responsible for the business debt (S) This means they only lose what they have invested into the business and not their personal possessions (S)

Question 6

Give a Disadvantage Of a Business Setting Up as Private Limited Company ( 3 Marker)

Answer 6

It Can’t Sell Shares To The Public (S) This Is Because Its Private and The Public Doesn’t Know About It (S) This Leads To Them Not Raising Lots Of Capital (S)

Question 7

Give a Advantage Of A Business Setting Up as a Franchise (6 Marker)

Answer 7

Franchisee’s are provided with advice, support, training (P) This means staff are highly skilled (S) This results in high levels of customer service (S) This leads to a good reputation for the business (S) They are then likely to gain repeat customers to the franchise (S)

Question 8

Give a Disadvantage Of Setting Up as a Franchise (3 Marker)

Answer 8

Franchises are expensive (P)This is because the franchisee has to pay substantial initial fees and ongoing royalties and commission (S) This means the franchisee will not keep all of the revenue earned by the business (S) This could lead to the franchisee earning lower profit margins.