IB Business Management Topic 1.2.2 Sole Traders Revision Notes (SL/HL)

IB Business Management Topic 1.2.2 Sole Traders Revision Notes (SL/HL) | RevisionDojo

Written by official IB examiners

Sole Traders: The Simplest Form of Business Ownership

Imagine you're passionate about baking and decide to start a small bakery in your neighborhood.
You're the owner, the baker, the cashier, and the marketer, all rolled into one.

This is the essence of a sole trader: a business owned and operated by a single individual.

What is a Sole Trader?

Definition

Sole trader

A sole trader is a business structure where one person owns and manages the entire operation.

This individual is responsible for all decisions, profits, and losses.

Example

Freelancers, consultants, small retailers, and tradespeople like plumbers or electricians.

Advantages of Being a Sole Trader

1. Simplicity and Ease of Setup

Starting as a sole trader is straightforward.
There's minimal paperwork, and in most cases, you can begin trading almost immediately.

Example

A graphic designer can start offering services without needing to register a company.

Tip

Sole traders must still comply with local regulations, such as registering for taxes or obtaining necessary licenses.

2. Autonomy and Control

As a sole trader, you have complete control over your business.
You make all the decisions, from pricing to marketing strategies, without needing approval from others.

Example

A hairdresser can decide to offer discounts or introduce new services without consulting partners or shareholders.

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Definition

Paywall

(on a website) an arrangement whereby access is restricted to users who have paid to subscribe to the site.

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

Duis aute irure dolor in reprehenderit

Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

Note

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam quis nostrud exercitation.

Excepteur sint occaecat cupidatat non proident

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit.

Tip

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris.
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum.

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Sole Traders: The Simplest Form of Business Ownership

Imagine you're passionate about baking and decide to start a small bakery in your neighborhood.
You're the owner, the baker, the cashier, and the marketer, all rolled into one.

This is the essence of a sole trader: a business owned and operated by a single individual.

What is a Sole Trader?

Definition

Sole trader

A sole trader is a business structure where one person owns and manages the entire operation.

This individual is responsible for all decisions, profits, and losses.

Example

Freelancers, consultants, small retailers, and tradespeople like plumbers or electricians.

Advantages of Being a Sole Trader

1. Simplicity and Ease of Setup

Starting as a sole trader is straightforward.
There's minimal paperwork, and in most cases, you can begin trading almost immediately.

Example

A graphic designer can start offering services without needing to register a company.

Tip

Sole traders must still comply with local regulations, such as registering for taxes or obtaining necessary licenses.

2. Autonomy and Control

As a sole trader, you have complete control over your business.
You make all the decisions, from pricing to marketing strategies, without needing approval from others.

Example

A hairdresser can decide to offer discounts or introduce new services without consulting partners or shareholders.

Definition

Paywall

(on a website) an arrangement whereby access is restricted to users who have paid to subscribe to the site.

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Note

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam quis nostrud exercitation.

Excepteur sint occaecat cupidatat non proident

Tip

Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris.
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum.

Unit 1: Introduction to Business Management - Core operational components and business functions6 subtopics

Unit 2: HR Management - Motivation, Structure, Hierarchy7 subtopics

Unit 3: Financial Management - Accounting, Ratio evaluation, Core Financial Documents9 subtopics

Unit 4: Marketing Management - The 7 P's, strategies and forecasting6 subtopics

Unit 5: Operations Management - Production Methods, Production planning and management9 subtopics

BM Toolkit - Core business frameworks and tools15 subtopics

IB Business Management 1.2.2 Sole Traders Notes

Unit 1: Introduction to Business Management - Core operational components and business functions6 subtopics

Unit 2: HR Management - Motivation, Structure, Hierarchy7 subtopics

Unit 3: Financial Management - Accounting, Ratio evaluation, Core Financial Documents9 subtopics

Unit 4: Marketing Management - The 7 P's, strategies and forecasting6 subtopics

Unit 5: Operations Management - Production Methods, Production planning and management9 subtopics

BM Toolkit - Core business frameworks and tools15 subtopics

Sole Traders: The Simplest Form of Business Ownership

What is a Sole Trader?

Advantages of Being a Sole Trader

1. Simplicity and Ease of Setup

2. Autonomy and Control

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account

Sole Traders: The Simplest Form of Business Ownership

What is a Sole Trader?

Advantages of Being a Sole Trader

1. Simplicity and Ease of Setup

2. Autonomy and Control

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account