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Investigation of a local business – Partnerships and Sole Traders

Normally when a business starts the business is small. This is because the person who starts it hasn’t got a lot of finance. A person who starts alone in the business world is called a sole trader. If there are two or more persons involved, e.g. family or friends, then it is called a partnership. These two types of businesses are unlimited liability, because it’s not the business that is liable but the owner. This means that, if the business goes bankrupt, the owner’s personal assets can be taken away.

Methods of research

An investigation was done on a partnership and a sole trader, which are the most common type of businesses around in southern Spain. The investigation was to find out how these owners run and manage the business. Points were taken of how big the company was by the number of employees working. The way the owner brought in the customers in to the business and made them use/buy the service and what kind of a service the owner would give the customer. Then also made some interesting annotations of some key points which only that type of business would use and how the owner went along with it.

Sole trader

The sole trader investigated was a souvenir shop on the coast near the sea side. This shop was a total of 100m2, and sells all type of goods which the customers can take back to their own country for a remembrance. The market of these type of shops was only for tourists, in southern Spain most of the tourists are here in summer vacation, so the owner had to get all his profits in that specific time of year. On that beach line there were about twenty other shops, so competition is big. So each of the shops has to attract the customer eyes, if they don’t the business won’t work. Each shop had a different way of attracting the customer’s attention. Some did this by hanging big signs saying discounts; other shop put the quality goods outside so when the customer walks past it would bring it attention. If the owner of the specific shop saw a tourist looking at a good of his he would directly help them out and be as nice as he could.

The problem of being a sole trader is that everything that happens to the business has to be confirmed by the owner. He’s got do calculations and sees how his profits are doing. All the blames and complaints go to the owner. He said there is a lot of responsibility and there is a lot to do if you run the business by yourself. There is no one to help you if you’re a sole trader. This sole trader got its own finance by working for some one, and then building it up by him self.


This time I went to a bakery, this was owned by a young couple who did not have a lot of experience. This bakery is situated in the middle of a village called Arroyo de la Miel. This bakery isn’t that big at all but as soon as I entered it felt very cosy. This is a good point for them because the customer feels at home. This will make the customer return to the same bakery. All the breads were made freshly every morning.

As the bakery is new their customer loyalty is still low, however it’s getting better. The competition around that area is not that high, however there are bigger bakeries with more selection, but these are very commercial and unfriendly. The couple say being in a partnership is a lot easier because all the work is shared. They also said if there is any problem they can always assist each other. They told me as time goes on they will find another partner who is willing to finance them. They started off by getting a loan and little by little they’ll have to pay off. They got the loan at a bank with a good interest rate.

This summer I worked at a partnership, it was a family partnership, it was a family partnership. Husband and wife, they both work and they had about 18 employees working for them. It was not a big business; however they got a lot a profit out of it. As southern Spain is tourist based on the tourist’s economy, these people set up a restaurant, which is only open in summer.

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