DanielLowns a shop selling fruit and vegetables. It is located on of country X.
ID: 2799090 • Letter: D
Question
DanielLowns a shop selling fruit and vegetables. It is located on of country X. He is a sole trader and has been in busines who all work part-time in the shop. aniel's Fruit and Vegetable Shop 5 Daniel buys his fruit and vegetables from a wholesale s wholesaler charges Daniel a delivery fee of $20 f deliveries a week Daniel wants to encourage more week. He is planning to offer a low cost delivery service quantity of fruit and supplier and he pays cash. T for each delivery. Daniel usually has a main road in the capital city for 10 years. He has 5 employee fruit and vegetables from other shops. He is not sure customers to buy fruit and vegetables from his shop e gach week This would discourage customers from b delivery service to customers who order the s how to promote this new serviceExplanation / Answer
a.
Sole trading business is the single-ownership business.
Disadvantages of this business are as below:
1. Limited capital
2. Limitation of staff strength
Explanations are as below:
Limited capital: Since there is only one owner, D, he has to acquire all the capital for promotional act, which is marketing. Arranging such capital through sole trading business might be difficult, since banks and financial institutions may refuse his loan applications because of the question of liquidity.
Limitation of staff strength: There are 5 employees and all are working part-time. It seems that there is no marketing specialist, since the owner doesn’t know about the marketing procedure. This is the problem of such kind of business; since the business is small getting the right person could be difficult. Qualified and experienced employees are usually reluctant to join in such small business.
b.
D should become a franchisor.
Since the business is small, the owner himself can’t control all the shops which are going to open through an expansion policy; therefore, opening more shops is not suitable here. The other option is suitable; if franchises are sold the involvement of owner becomes low. He doesn’t have to see the proceedings thoroughly. Therefore, franchising is appropriate here.
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