Sole Trader Case Study George Saunders George Saunders was employed by a national newspaper but was made redundant in January 2009. He spent seven months searching for another reporting job, but eventually gave up and decided to set up his own business. He had always enjoyed books and opened up a second-hand book shop in Cardiff. In a room above the bookshop he opened up a small cafe. He used four thousand pounds of his own savings and a thousand pound bank loan to meet the set up costs. He also qualied for forty pounds a week from the Government's Enterprise Allowance Scheme. George employed two part-time students to help out in the cafe during weekends and school holidays. After a slow start business picked up and his cafe gained popularity with students from three local colleges. He spotted an opportunity and lowered his prices slightly to encourage even more students. After one year be extended his bank loan to two thousand pounds and bought some more kitchen equipment to provide substantial lunchtime meals. Again he kept prices low and targeted the student market. The business expanded and George was beginning to enjoy good profits. The bookshop only made a small contribution to turnover but George felt it helped the inlage of the cafe which attracted his customers. One morning when he was opening a local authority representative arrived unannounced to inspect the business premises. After a two hour investigation the inspector left saying that George would hear from the authority the next day. Aletter from them informed George that his kitchen must conform to a long list of health regulations. George estimated that the cost would be three thousand pounds. He arranged a meeting with the bank that same afternoon. Unfortunately they could only lend him half that amount. George was eventually forced to borrow from a private loan company, paying a high rate of interest. QUESTIONS: 1. 'What features of a sole trader does the example of George Saunder's business show? 2. In what ways does the above case highlight the (i) advantages (ii) disadvantages of being a sole trader