1.4.1 Business Ownership

Question 1

Give a Advantage Of a Business Operating as a Sole Trader ( 3 Marker)

Answer 1

They are their own boss (P) This means they get to make all the decisions themselves (S) and as a result can choose the hours they work (S) They are therefore more motivated and happy in their work (S)

Question 2

Give a Disadvantage Of a Business Operating as a Sole Trader ( 3 Marker)

Answer 2

They have unlimited liability (P) As a result they are responsible for the business debt (S) This could lead to them losing personal possessions if the business gets into trouble (S)

Question 3

Give a Disadvantage Of a Business Operating as a Partnership (3 Marker)

Answer 3

Partners may disagree on business decision (P) This is because it can lead conflict which slow down decision making (S) As a result it may affect overall efficiency and success of the Business (S)

Question 4

Give a Advantage Of a Business Operating as a Partnership ( 3 Marker)

Answer 4

The Workload can be shared (P) This means both partners will have more time for friends and family (S) As a result they are likely to be happier in their jobs.

Question 5

Give a Advantage Of A Business Setting Up as a Private Limited Company (3 Marker)

Answer 5

Easier to raise finance as the company sells shares to family and friends (P) This means they will not have to pay interest on this source of finance (S) As a Result the Business costs will be lower (S)

Question 6

Give a Disadvantage Of a Business Setting Up as Private Limited Company ( 3 Marker)

Answer 6

Private limited companies must publish their financial accounts (P) This is because competitors can see how the business is Performing (S) This leads to less privacy and could give rivals a competitive advantage (S)

Question 7

Give a Advantage Of A Business Setting Up as a Franchise (6 Marker)

Answer 7

Franchisee’s are provided with advice, support, training (P) This means staff are highly skilled (S) This results in high levels of customer service (S) This leads to a good reputation for the business (S) They are then likely to gain repeat customers to the franchise (S)

Question 8

Give a Disadvantage Of Setting Up as a Franchise (3 Marker)

Answer 8

Franchises are expensive (P)This is because the franchisee has to pay substantial initial fees and ongoing royalties and commission (S) This means the franchisee will not keep all of the revenue earned by the business (S) This could lead to the franchisee earning lower profit margins.