Advantages and Disadvantages of being a sole trader

Sole traders are the most common form of business organizations. One person provides the permanent finance and, in return, has full control of the business. Sole traders have a variety of advantages and disadvantages. Firstly, sole traders have limited liability which means that their personal possessions and property can be taken to pay off the debts of the business if it fails. A sole trader organization is easy to set up, as there are hardly …

…The owner must be able to accept and deal with the disadvantages yet also use the advantages to their benefit. The advantages are that it is easy to set up, have complete control, keep all profits and can be based on interests of the owner. Conversely, the disadvantages are that there is unlimited liability, difficult to raise additional capital, long hours and lack of continuity. Becoming a sole trader is a rewarding yet challenging endeavour.