SOLE TRADERS

OBJECTIVES

• What is a sole trader?
• Why are sole trader businesses common?
• Advantages of a sole trader
• Disadvantages of a sole trader

WHAT IS A SOLE TRADER

• Sole traders are the most common form of business in the world, and take up as much as 90% of all business in a country.
• The business is owned and run by one person only.
• Even though he can employ people, he is still the sole proprietor of the business.

WHY ARE THEY SO COMMON

• These businesses are so common since there are so little legal requirements to set up:
• The owner must register with and send annual accounts to the government Tax Office.
• They must register their business names with the Registrars of Business names.
• They must obey all basic laws for trading and commerce

ADVANTAGES

• There are so few legal formalities are required to operate the business.
• The owner is his own boss, and has total control over the business.
• The owner gets 100% of profits.
• Motivation because he gets all the profits.
• The owner has freedom to change working hours or whom to employ, etc.

DISADVANTAGES

• Nobody to discuss problems
• Unlimited liability
• Limited finance/capital, business will remain small.
• The owner normally spends long hours working.
• Some parts of the business can be inefficient because of lack of specialists.
• Does not benefit from economies of scale.

THANKS FOR WATCHING