1.5

Question 1

advantages of sole trader

Answer 1

• simple set up
• retain all profits
• control over business decisions

Question 2

disadvantages of sole trader

Answer 2

unlimited liability
fewer sources of finance
need to be multiskilled

Question 3

adavantages of partnership

Answer 3

more finance potential
shared workload
different specialists

Question 4

adavantages of franchisee

Answer 4

provided with training and support
provided with a recognised brands
less risk associated
easier than starting from nothing

Question 5

disadvantages of franchisee

Answer 5

expensive set up fees
royalty payments-share of sales go back to the franchisor
limited freedom in decision making

Question 6

advantages of customer satisfaction

Answer 6

repeat purchase and customer loyalty
boost brand reputation
reduced marketing expenses

Question 7

disadvantages of customer satisfaction

Answer 7

pay for staff training

higher wages for hiring staff with expertise in customer service

Question 8

difficulties of becoming a leader

Answer 8

sharing ownership and control of the business
leaders need confidence’ compassion and entrepreneurial skills
stress

Question 9

what is opportunity cost

Answer 9

benefit lost from the next best alternative