PM/06/03NQBM - BICS1 SOLE TRADER A business which is owned and controlled by one person. Most small local businesses are sole traders.

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Presentation transcript:

PM/06/03NQBM - BICS1 SOLE TRADER A business which is owned and controlled by one person. Most small local businesses are sole traders.

PM/06/03NQBM - BICS2 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/06/03NQBM - BICS3 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/06/03NQBM - BICS4 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/06/03NQBM - BICS5 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/06/03NQBM - BICS6 OBJECTIVES Possible 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/06/03NQBM - BICS7 Sole Trader - Questions 1.Describe the term “sole trader”. 2.Explain the term “Unlimited Liability”. 3.Outline 3 advantages of being a sole trader 4.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/06/03NQBM - BICS8 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