AQA GCSE · Question 03.1 · Business in the real world
Read Item C and Table 1. Using Item C, explain one benefit to Eve of being a sole trader.
How to approach this question
1. **Identify a benefit:** State a known benefit of being a sole trader (e.g., keep all profit, full control).
2. **Find evidence:** Look in Item C for a sentence or data that supports this benefit.
3. **Explain the link:** Write a sentence that connects the benefit to the evidence you found.
4. **Develop the point:** Explain why this is an advantage for Eve and her business, STC.
Full Answer
One benefit is that Eve gets to keep all the profits made by the business. As a sole trader, she does not have to share the profits with any partners or shareholders. Item C states the business made a profit of £450,000 last year, all of which belongs to her. This provides a huge financial incentive and reward for the risks she has taken.\n\nAnother benefit is that Eve has complete control over the business. Item C states that "Eve makes all the major decisions in the business". This allows her to implement her vision and make decisions quickly without needing to consult with anyone else, which can make the business more agile and responsive to fashion trends.
A sole trader is a business owned and run by one person. There is no legal distinction between the owner and the business.\n\n**Benefits:**\n* **Full Control:** The owner makes all decisions. Item C states, "Eve makes all the major decisions in the business." This allows for speed and clear direction.\n* **Keep all Profits:** The owner is entitled to 100% of the profits. Item C states the business made "a profit of £450 000 last year." This is a direct reward for her efforts.\n* **Easy to Set Up:** Fewer legal formalities and lower start-up costs compared to a limited company.\n\n**Drawbacks (not asked for, but good to know):**\n* **Unlimited Liability:** The owner is personally responsible for all business debts.\n* **Difficult to Raise Finance:** Banks may be more reluctant to lend to sole traders.\n* **Heavy Workload:** The owner is responsible for all aspects of the business.
Common mistakes
✗ Not using the information from Item C. A generic answer about sole traders will score low marks.\n✗ Stating a benefit but not explaining *why* it is a benefit. For example, just saying "She made £450,000 profit" isn't a full explanation.
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