CASE STUDY
Scott Hamilton - Signwriter

Scott Hamilton is a sole trader. After leaving art college in 1996, he worked for a signwriting company and gradually built up his skills and speed. In 1999 Scott felt he had developed his abilities and understanding to the stage where he could start his own signwriting business. So he did a business course at college and learnt about the problems and pitfalls of setting up his own business.

His first task was to find out, by producing a business plan, whether it was worth setting up at all. The business plan covered costs and receipts. Costs included paint, labour, heating and lighting, materials, telephone, running a vehicle, and advertising. Receipts were based on the hours worked in a week, and the hourly rate he could charge.

Scott decided to operate from home using his garage for carpentry and artwork. This reduced his overhead costs considerably.

Businesses need time to get established, and Scott calculated that at first he would only be working for 5 – 10 chargeable hours a week. By the end of the first year, he estimated that this would rise to 25 hours.

Taking into account the costs of his materials, he calculated that if he charged $35 an hour, he could make a reasonable return.
This means that his revenue would more than cover his costs, leaving room for profit.

Questions

1. Do you think that being a sole trader is a suitable type of business for Scott?
I think being a sole trader is a good choice for Scott. He had already experienced working for someone and now that he has decided to become a sole trader and taken a business course I think he will be successful.

2. What would be the main advantages and disadvantages to Scott for being a sole trader?
Full income
No employee wages
Doesn’t have to rely on others
Works on own terms

Disadvantages:
Has to take full responsibility for everything
Cannot rely on others to help,