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Questions and Answers
What is a characteristic of a sole trading business?
What is a characteristic of a sole trading business?
- It is a partnership business
- The owner has unlimited liability (correct)
- It requires significant capital investment
- Multiple owners share profits
A sole trader does not keep all the profits generated by their business.
A sole trader does not keep all the profits generated by their business.
False (B)
What is an example of a sole trading business?
What is an example of a sole trading business?
A plumber
In a sole trading business, the owner bears all __________ and keeps all profits.
In a sole trading business, the owner bears all __________ and keeps all profits.
Match the features of a sole trading business with their descriptions:
Match the features of a sole trading business with their descriptions:
Which of the following is not a source of business ideas?
Which of the following is not a source of business ideas?
A unique business idea is essential for attracting customers.
A unique business idea is essential for attracting customers.
Name one key characteristic of a business idea.
Name one key characteristic of a business idea.
The first step to set up an enterprise is to select a ________ idea.
The first step to set up an enterprise is to select a ________ idea.
Match the following steps to set up an enterprise with their descriptions:
Match the following steps to set up an enterprise with their descriptions:
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Study Notes
Business Organizations
- A business organization is a structure established by entrepreneurs to produce or trade in goods and services.
- A sole trading business is owned and controlled by one entrepreneur, also known as a sole proprietor. Examples include a dhool puri seller, plumber, or dentist.
- A sole trading business features one owner, single source of capital, owner bears all risks and keeps all profits, and unlimited liability.
- Unlimited liability means in case of bankruptcy, the owner’s personal belongings may be used to pay debts.
Advantages of a Sole Trading Business
- Easy setup and operation
- Little capital required
- All profits belong to the sole trader
- Decisions are made quickly
Disadvantages of a Sole Trading Business
- Limited capital for expansion
- Sole trader bears all risks and responsibilities
Sources of Business Ideas
- Family, friends, and relatives
- Internet and magazines
- Surrounding environment and locality
- Hobbies and activities
- Qualifications and experiences
Key Characteristics of a Business Idea
- Uniqueness: Attracts customers with a distinct offering.
- Innovation: Involves creating unique and valuable ideas.
- Attractiveness: Appeals to a large customer base.
Steps to Set Up an Enterprise
- Business Idea: Chosen individually or with partners.
- Type of Business: Determined based on legal structures and operations.
- Business Name: Appealing and engaging.
- Business Location: A designated physical address.
- Registration: Adherence to legal formalities.
- Sources of Funds: Owner's savings, bank loans, borrowing from friends.
- Organizing Resources: Careful management and organization of resources.
- Launching the Product: Choosing a suitable time and place, considering consumer preferences.
- Business Plan: A comprehensive document outlining the business's activities.
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