disadvantages of sole trade

the following are the disadvantages of sole trade business

  1. there is no room for expansion because of the limitted capital invested
  2. a sole trader bearers all risks and losses alone because he contributes capital alone
  3. the business heavily relies on the life of a sole trader, in case of death of a sole trader the business is likely to collapse as well
  4. there is no proper accounting system and the business heavily relies on the money in drawers
  5. sole traders lack manegerial skills and they tend to do every thing including purchasing,sales and transporting
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