02 Analyse the possible disadvantages of being a sole trader for an expanding chain of Grocery Stores. [6]
Please read the answer of the previous student & if the answer seems well developed don't use the same KN in your answer, try to give new one.
02 Analyse the possible disadvantages of being a sole trader for an expanding chain of Grocery Stores. [6]
-
Sir Afzal Shad
- Grand Commerce Guru
- Posts: 163
- Joined: Sun Oct 22, 2023 10:10 pm
-
Muzamil Ahmed
- Wealth Wizard
- Posts: 15
- Joined: Tue Nov 18, 2025 7:01 pm
Re: 02 Analyse the possible disadvantages of being a sole trader for an expanding chain of Grocery Stores. [6]
[KN] a sole trader does not have much money to invest.
[APP] am expanding grocery store needs a lot of money for more branches and stock and staff.
[AN] the owner has limited money and he might struggle to open new stores. he might take loans with high interest which can reduce his profits and this also means they can fall behind bigger competitors who can invest more money.
[KN] A sole trader has to take all the risk
[APP] Grocery stores face risks like food going bad. There can be cases of theft and high daily costs. It also means one problem in any store can hurt the owner's business.
[AN] Since the owner takes all the risk they might lose their own money if a store doesn't do good and this can make them unsure if opening new branches is a good idea which can slow expansion and it can make growth harder and more stressful.
Examiner Comments: Concept is 100%, need to improve choice of words.
[APP] am expanding grocery store needs a lot of money for more branches and stock and staff.
[AN] the owner has limited money and he might struggle to open new stores. he might take loans with high interest which can reduce his profits and this also means they can fall behind bigger competitors who can invest more money.
[KN] A sole trader has to take all the risk
[APP] Grocery stores face risks like food going bad. There can be cases of theft and high daily costs. It also means one problem in any store can hurt the owner's business.
[AN] Since the owner takes all the risk they might lose their own money if a store doesn't do good and this can make them unsure if opening new branches is a good idea which can slow expansion and it can make growth harder and more stressful.
Examiner Comments: Concept is 100%, need to improve choice of words.
Re: 02 Analyse the possible disadvantages of being a sole trader for an expanding chain of Grocery Stores. [6]
[KN]More stress due to increased work load
[APP]since the owner is alone dealing with the expansion of the grocery stores, it is very possible that he'll be incredibly stressed leading to mental breakdowns, possible distractions and not being able to implement proper strategies.
[AN+]this can further lead to the grocery stores not being operated well, customers will find other places to buy from and hence, this will lead to the downfall for the stores instead of an expansion
[KN]limited funds leading to limited growth
[APP]the owner is the only one investing for the expansion of the grocery stores, leading towards the business not being able to expand too much, not being able to earn more profit and hence, this may give way to the competitors having an edge.
[AN+]this will further lead to the owner taking loans which will increase his dept and hence if the expansion fails, he may struggle to repay the loans
Moderator comment:
well attempt ,but add 1 more element
[APP]since the owner is alone dealing with the expansion of the grocery stores, it is very possible that he'll be incredibly stressed leading to mental breakdowns, possible distractions and not being able to implement proper strategies.
[AN+]this can further lead to the grocery stores not being operated well, customers will find other places to buy from and hence, this will lead to the downfall for the stores instead of an expansion
[KN]limited funds leading to limited growth
[APP]the owner is the only one investing for the expansion of the grocery stores, leading towards the business not being able to expand too much, not being able to earn more profit and hence, this may give way to the competitors having an edge.
[AN+]this will further lead to the owner taking loans which will increase his dept and hence if the expansion fails, he may struggle to repay the loans
Moderator comment:
well attempt ,but add 1 more element
-
Shahmir Arshad
- Wealth Wizard
- Posts: 14
- Joined: Wed Nov 19, 2025 6:30 pm
Re: 02 Analyse the possible disadvantages of being a sole trader for an expanding chain of Grocery Stores. [6]
KN:Unlimited liability
APP:A sole trader has unlimited liability, meaning the owner is personally responsible for all business debts.
AN:As the grocery chain expands, it will need more stock, stores, and staff, which increases costs and risk. If the business fails or sales fall, the owner could lose personal assets such as their house or savings. This risk may discourage expansion.
KN: Lack of continuity
APP:A sole trader business may end if the owner becomes ill or dies.
AN:For a growing chain with several stores and employees, this creates uncertainty. Suppliers and workers may lose confidence, which could reduce sales and make expansion difficult.
APP:A sole trader has unlimited liability, meaning the owner is personally responsible for all business debts.
AN:As the grocery chain expands, it will need more stock, stores, and staff, which increases costs and risk. If the business fails or sales fall, the owner could lose personal assets such as their house or savings. This risk may discourage expansion.
KN: Lack of continuity
APP:A sole trader business may end if the owner becomes ill or dies.
AN:For a growing chain with several stores and employees, this creates uncertainty. Suppliers and workers may lose confidence, which could reduce sales and make expansion difficult.