Business studies double award James Cadman 10NT
TO:
Mrs. Cowern
FROM:
James Cadman 10NT
DATE:
17th September 2004
TERMS OF REFERENCE:
This report is about the advantages and disadvantages
of different types of
business ownerships.
I am going to write about the advantages and disadvantages of different business ownerships including:
- Sole Trader
- Partnership
- Franchise
I will include the definitions of some of the business ownerships.
SOLE TRADER
Sole trader, as the name suggests, is where an individual is the sole owner of a business. The business is often quite small in terms of size (as measured, for example, by sales generated, or number of staff employed) however the number of these businesses is very large indeed. Examples of these businesses can be found in most industrial sectors but particularly in most service sectors. Hence services such as electrical repair, picture framing, photography, diving instruction, retail shops, and hotels have a large proportion of sole trade business
Advantages
- A sole trade business is easy to set up. No formal procedures are required and operations can often commence immediately (unless special permission is required because of the nature of the trade or service, such as running licensed premises).
- The owner of a sole trader business can decide the way in which the business is to be conducted and has the flexibility to restructure or dissolve the business whenever it suits. The law does not recognise the sole trader as being separate from the owner and so the business will cease on the death of the owner.
- Other advantages include having complete control over the business and its profits; you are able to use any money the business brings as you deem fit without having to justify you’re spending. However, as the expansion of the business depends on the amount of capital you are personally able to inject, you may find as a sole trader that investing in the growth of the business very difficult, as capital is often not easy to find.
