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Explain the term sole trader - Leaving Cert Business - Question A - 2016
Question A
Explain the term sole trader. A sole trader is a person who owns and runs his/her own business. Sole traders are responsible for all aspects of the business, includi... show full transcript
Worked Solution & Example Answer:Explain the term sole trader - Leaving Cert Business - Question A - 2016
Step 1
Explain the term sole trader.
Answer
A sole trader is a person who owns and runs his/her own business. Sole traders are responsible for all aspects of the business, including profits and losses. They have the authority to make decisions independently without needing to consult with others, ensuring flexibility in their business operations.
Step 2
Outline two benefits for Dolly of being a sole trader.
Answer
- Profits: As the sole owner, Dolly keeps all the profit after taxes are paid. This direct financial incentive can be motivating for a sole trader.
- Control: Dolly has complete control over her business activities, as her decisions are not diluted or shared with partners or shareholders. This allows her to shape her business in accordance with her vision.
Step 3
Outline two features of batch production.
Answer
- A limited amount of identical goods is manufactured at the same time, allowing for efficiency in production.
- Work is done on each stage of the production before a new batch is started, which enhances the organization of the manufacturing process.
Step 4
Step 5
Outline three factors that Dolly should consider when setting the price of her products.
Answer
- Cost of production/research & development: Dolly needs to analyze the costs associated with producing cakes and buns to ensure that the prices cover these expenses.
- Target market: Understanding the characteristics and demographics of her target market will help determine the pricing strategy.
- Competition: Analyzing prices set by competitors can guide Dolly in deciding whether to pursue a higher or lower pricing strategy.
Step 6
Explain the term target market.
Answer
A target market is the specific group of people a business aims to reach with its products or services. It is characterized by shared attributes such as age, income level, geographical location, or lifestyle. Identifying a target market allows businesses to tailor their marketing strategies to meet the needs of that specific group.
Step 7
Explain the term channels of distribution.
Answer
Channels of distribution refer to the pathways through which products or services travel from the manufacturer to the end consumer. This can involve a number of intermediaries, including wholesalers and retailers. Factors in determining the channels include market reach, image of the product, and logistical considerations such as cost and transport.