pm/06/03nqbm - bics1 sole trader a business which is owned and controlled by one person. most small...
TRANSCRIPT
PM/06/03 NQBM - BICS 1
SOLE TRADERA business which is owned
and controlled by one person. Most small local
businesses are sole traders.
PM/06/03 NQBM - BICS 2
TASK
What, in your opinion, could be the benefits of being a sole trader? Give 3 benefits.
What, in your opinion, could be the drawbacks of being a sole trader? Give 2 drawbacks.
PM/06/03 NQBM - BICS 3
ADVANTAGES• Easy to set up• Less capital required• Speedy decisions• Personal attention• Cater for local
people• No profit sharing• Business affairs
private
DISADVANTAGES• Unlimited liability• Finance restricted• Limited discounts• Higher prices• Sole responsibility• Heavy workload
PM/06/03 NQBM - BICS 4
UNLIMITED LIABILITY
If a sole trader business falls into debt, the owner Is held personally responsible for the money owed.
This means that the sole trader may have to sell his/her personal possessions in order to pay off the business debts
PM/06/03 NQBM - BICS 5
FINANCE
• Owner’s savings• Retained profits• Bank loan• Overdraft• Government grants• Trade credit
Sole trader’s often find it difficult to raise finance to start or develop their business. Common sources of finance are:
PM/06/03 NQBM - BICS 6
OBJECTIVESPossible objectives of a sole trader
business:
• To survive• To maximise profits• To improve owner’s personal status• To have a good image in the community
PM/06/03 NQBM - BICS 7
Sole Trader - Questions1. Describe the term “sole trader”.2. Explain the term “Unlimited Liability”.3. Outline 3 advantages of being a sole trader4. Outline 3 disadvantages of being a sole trader.5. Suggest 3 possible objectives a sole trader might
have.6. Suggest 3 sources of finance for a sole trader.7. Design a poster outlining what you know about a
Sole Trader, including the advantages and disadvantages.
PM/06/03 NQBM - BICS 8
TASK
You have £20,000 of personal savings and you intend to start up your own business from a hobby/idea that you think you could take further.
Using the words which you jotted down from the video, write a short report stating what qualities etc you think are necessary for success