Why People Start Sole Proprietorships
Starting and running a business is not an easy feat. Most people fancy starting a sole proprietorship business for different reasons, particularly because they are easy to start. Even though this type of business might not be ideal for the owner’s liability, some businesspersons might only fancy working as a sole trader. Ideally, a Sole trader enjoys some unique rewards, and here is a list of some of these unique rewards.
You Are Your Boss
Most people fancy sole proprietorships because of the possibility of being a boss. This means that you no longer have to take directions on how to handle things. The freedom to make decisions without external influence is undoubtedly appealing to anyone. The flexibility to run your business as you wish is probably one of the main reasons people leave formal employment to start their business.
You Enjoy Profits Alone
Another reason to be a sole trader is the possibility of enjoying profits alone. Of course, there might be losses along the way, which will also not be shared, but the prospects of enjoying profits alone can be a significant influence. This benefit comes in handy when comparing sole proprietorships to other business forms such as partnerships and companies, where profits have to be shared between partners and shareholders.
You Are Not Burdened by Unnecessary Paperwork
Unlike companies and partnerships, forming and running a sole proprietorship is reasonably easy. You do not have to worry about submitting documents such as articles of association, memorandum of association, or file reports. Moreover, you do not have to worry about being burdened with unnecessary legal fees or being subject to personal scrutiny.
You Can Change the Business Structure
A sole proprietorship is a great option for traders who want to start small with the prospects of expanding when the business allows. With sole traders, it is a lot easy to change the business structure. For instance, if you are thinking about bringing in a partner with some expertise, you can easily convert your business structure to a partnership or company.
If you are looking forward to starting a business with ease, you have to explore the possibility of starting a sole proprietorship. This business form offers unique benefits, albeit with some disadvantages. You only need to do your homework to see whether it works for you.…