Sole Traders Flashcards
What is a sole trader?
A sole trader is a business operated by one individual. They are small businesses, and they have limited resources.
Advantages of a sole trader are…. (4 points)
It is easy to set up.
It is easy to run, as the owner has full responsibility for the decision-making process
They can have a break whenever they want as they are the owner and don’t have to ask for permission
It is cheap to set up, and all profits are kept by the owner
Disadvantages of a sole trader are… (4 points)
They have unlimited liability, meaning that they will have to pay off all of their debts, which might even mean that they might have to sell some of their possessions.
No one is there to take over if the sole trader takes time off of work, or is sick
They normally have to work very long hours for their business to be successful
They will find it hard to expand, as it is so small.
