Business Objectives Flashcards
What is a Sole Trader?
A Sole Trader is a business that is owned and ran by a single person and can hire others to work for their business. Benefits of being a Sole Trader is that Sole Traders get to keep all of the profits that their business makes and also controls all of the decisions that happens within the business. Downsides of being a sole trader is that Sole Traders have unlimited liability which means that they are responsible for any business debt that the business receives and the business will die along with the initial owner if they pass away.
What is a Partnership?
A Partnership is a business that is ran from between 2-20 people that earn and share all of the profits around evenly between them. Benefits of a Partnership is that there’s more people working for the business which will lead to more work being done and more ideas being made. Work will also be done more efficiently and the work will be shared amongst the owners so that it’s fair for everyone and so none of them are too stressed out and overwhelmed with work. Downsides of a Partnership is that potential fallouts can occur between the owners which will create a toxic environment and can possibly lead to the business come crashing down. Due to the profits being shared can lead to owners being dissatisfied with their earnings and can also put people off from committing to being part of a potential Partnership.
What is a Stakeholder?
A Stakeholder is a person that has invested into the business and interacts with it. Stakeholders can be a group as well.
