If the owner becomes ill or goes on holiday the business may suffer. This can be less of a problem if the sole trader employs a manager or managers. How often the sole trader is prepared to leave the manager in charge will depend upon how much they trust them.
Many sole traders work very long hours, as they may be the only ones who work for the business.
It may be the case that they are motivated to work long hours because they are working for themselves and they will get the extra profits from their extra work.
Money can be difficult to raise as many banks and other lending institutions might be reluctant to lend to sole traders because they have a higher rate of bankruptcy.
Their prices are often higher than those of larger organisations. This is because sole traders tend to be small and are unable to buy materials in bulk and benefit from the lower prices this offers. Sole traders often join voluntary groups in order to be able to buy in bulk.
The biggest disadvantage for the sole trader is that s/he has complete responsibility for all the debts of the business. This is called unlimited liability. This means the owners might lose all of their personal possessions if they cannot pay the debts of the business, for example, if it goes bankrupt.
Many sole traders work very long hours, as they may be the only ones who work for the business.
It may be the case that they are motivated to work long hours because they are working for themselves and they will get the extra profits from their extra work.
Money can be difficult to raise as many banks and other lending institutions might be reluctant to lend to sole traders because they have a higher rate of bankruptcy.
Their prices are often higher than those of larger organisations. This is because sole traders tend to be small and are unable to buy materials in bulk and benefit from the lower prices this offers. Sole traders often join voluntary groups in order to be able to buy in bulk.
The biggest disadvantage for the sole trader is that s/he has complete responsibility for all the debts of the business. This is called unlimited liability. This means the owners might lose all of their personal possessions if they cannot pay the debts of the business, for example, if it goes bankrupt.