Nuwan is a sole trader. He runs a specialist sports shop that sells a broad selection of cricket and tennis products. His 3 employees are trained to deliver high-quality customer service. Nuwan is glad that the economy is expanding, but he is concerned that interest rates may rise. He thinks his small business has benefits when compared with large retailers. Nuwan wants to raise profit margins and believes the best approach is to cut costs.
(a)[2]
What does the term ‘sole trader’ mean?
(b)[2]
Identify two possible indicators that show the economy is growing.
(c)[4]
Identify and explain two ways an increase in interest rates could affect Nuwan’s business.
(d)[6]
Identify and explain two advantages that Nuwan’s business could have over large retailers.
(e)[6]
Do you think that the best way for Nuwan to raise profit margins is to reduce costs? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “The ownership of the business is held by one individual/person.” …