IGCSE, A Level Business Student Forum

Kumail Alvi wrote: ↑Wed Nov 01, 2023 1:09 am [KN] Lack of resources.
[AN] Sole traders often face an issue of lack of financial resources to be spent on business.
[AN+] Businesses often go short on capital due to this reason and often face a shortage of capital.

[KN] Extra working hours.
[AN] Sole traders have to work multiple extra hours to make sure business is going on the right track.
[AN+] This can over-exert them leading to health issues of the owner and their lack of focus on the business.

both analysis points arent giving much of an impact, rather its an explanation for its knowledge points

[Kn]Unlimited Liability:
[An] As a sole trader, you're personally liable for any debts or legal issues of the business. This means your personal assets could be at risk if the business runs into trouble.
[An+]thus there will be a higher debt burden on single enterpreneur


[Kn]Workload
[An]As the sole operator, you're responsible for all aspects of the business, leading to potentially long working hours and a heavy workload.
[An+] this may lead to frustration due to single person managing all aspect

[KN]Unlimited liability
[AN]This means personal property of the owner would be at stake to repay debts in case of failure
[AN]therefore it involves high risk


[KN]There is no other to discuss matters with
[AN] Therefore there are limited ideas and opinions on a decisions which may poor decision making
[AN] hence,this may lead to inefficiency

[kn] unlimited liability
[an] there is no separation between private and company assets 
[an+] meaning paying debts off would harm the owners private property

[kn] burden of responsibilities
[an] they are solely responsible for making day-to-day company decisions
[an+] leading to inefficient decisions made and mismanagement

KN: Unlimited Liability
AN: As a sole trader, you have unlimited personal liability for the business debts
AN+: This means personal assets could be at risk to cover business liabilities
KN: Limited Capital
AN: Sole traders may find it challenging to raise capital compared to larger business structures
AN+: potentially limiting expansion opportunities

(Kn) work load (an) As being a sole trader the owner will have a lot of work load in him/her self like decision making etc (an+) this can decrease the chances of growth or expansion in the business or inefficient decisions.
(Kn) long working hours (an) As there’s only one owner it may have to stay back or work longer hours to complete all work. (An+) this decreases leisure time and can increase stress and decrease productivity.

[KN] lack of generation of ideas
[AN] Hence there might be little to no innovation
[AN+] Hence the business may lose its market share if the market dynamic

[KN] lack of issues being resolved as there is no one to discuss the matters with
[AN] thus operations might halt
[AN+] reducing the productivity of the buisness

(KN) have no one to discuss business matters with
(AN) thus because of this the sole trader is left to make even the hard decision by themselves,
(AN+) hence this causes stress and inefficiency in the work space of the business as there is no one to help the sole trader to make decisions.

(KN) No benefit of limited liability
(AN) as the sole trader doesn't have this benefit, he is fully responsible for any of the debts the business may have,
(AN+)thus due to this, if the sole trader is not able to pay his/her debts due to unlimited liability, this will cause the creditors to forcibly take possessions from the business as compensation, negatively impacting it.