Sole Trader Swot Analysis

Sole traders are business organizations which are commonly formed by one individual who obtained all of the benefits and risks of having total control and the ownership of their business. There is no legal difference between the properties and debit of a business and those of its owner, making it the most favored business structure for startups given its ease of development, minimumrecord-keeping and regulatory controls and avoidance of double taxation.

Of all business organizations, it has its own advantages and disadvantages. Firstly, the owner can keep the profit as there is no requirement for workers and assistants due to the small size of the firm. With it, the owner will be able to collect a considerable amount of money which will be

Lastly, it requires less capital to have a new business startup since the establishment of the startup business has been supported by the government as part of the effort to the contribution to the economy.

However, there are also disadvantages that could be counted as a loss. Firstly, the owner to keep all of losseswhen the business has made little profit, to the point that it cannot sustain itself due to high cost of maintenance as capital is required to pay the cost of electricity. If the business receives too many losses, the owner has to shut down the business.

Secondly, there will unlimited liability where the sole trader has to sell their personal assets in order to cover their business debts due to the damages toward customer accident within the property of the business

Thirdly, it has limited growth potential as despitethe sole trader has knowledge about their business product and services, they only have limited knowledge in other areas not in their expertise, resulting in the potential for slower

Fifthly, it has lack of job specialization for other services in the business such restaurant with no financial organization skill.

Lastly, it requires commitment as the proprietor has the sole right on profit from the business, hence he tries to work harder to earn more profit. Consequently, the owner becomes unmotivated. As a result, their health is severely affected along with poor social relations with the relatives.

A registered company is an association of persons that carry out a commercial or industrial enterprise. Companies have some advantages compared to sole traders. First among them, it has separate legal entities for which shareholders can’t be sued.

Secondly, it has limited liability as ifthe company gets sued and then loses the case in the court, they only lose some of their assets, thus saving most of their belonging from being used to pay the compensation after being sued by the consumer.

Thirdly, large amounts of capital can be raisedwhere they can make big profits through mass