Question

Carol has decided to open a Vietnamese restaurant in her neighborhood. She will be solely responsible for the management of the restaurant. Which of the following problems is she likely to face while running the business?
a. She will find it difficult to make quick decisions.
b. Her business will not be able to quickly adapt to changing market demands.
c. Her restaurant may not be able to focus on a specific group of customers.
d. She will not have the flexibility to make critical decisions independently.
e. She may find it difficult to deal with the stress of rent increase.

Answer 1

Answer:

e. She may find it difficult to deal with the stress of rent increase.

Explanation:

Carol has decided to open a Vietnamese restaurant solely. She has adopted 'sole proprietorship' form of business.

Sole Proprietorship is a form of business owned, run & managed by a single entrepreneur (proprietor).

This form of business has following advantages & disadvantages:

• Advantages : Easy formation, dissolution ; sole, flexible, quick decision making
• Disadvantages : Limited Capital ; Entrepreneur Unlimited Liability ; Less expansion scope.  

So : Carol being a sole proprietor won't face problems like - difficulty in quick & independent decision making, adaptability to market demand, focus on specific consumer groups .

She as a sole proprietor, would rather face issue like limited capital funds & hence would - find it difficult to deal with stress of rent increase.