Sole traders

• Sole trader: a business owned and run by one person, who may have employees working for them
• Sole traders are usually start-ups or small businesses, such as photographers, electricians, hairdressers, graphic designers, social media influencers, bloggers, small online clothing brand owners, and beauty therapists
• Sole traders have unlimited liability, meaning the owner is personally responsible for the debts of the business
• Sole traders pay income tax on their earnings
• Advantages of sole trading:

  • Quick and easy to set up
  • Business owner(s) have a lot of control over the business and its money
  • Individuals have the opportunity to be their own boss and make all business decisions
  • Low set-up costs
• Disadvantages of sole trading:

  • Risk of unlimited liability
  • Involves long work hours and stressful conditions
  • High level of responsibility for the owner
  • Owner often performs many different roles in the business