One man business has many merits, and it is the simplest form of business. What are the top 10 advantages of sole proprietorship you should know that will help you decide whether you should prefer it to the partnership or not?
Here I have discussed all pros of sole trading in detail to help you know why you should prefer it to the partnership business.
Let us start!
What are the Top 10 Advantages of Sole Proprietorship you must Know?
Following are the top 10 advantages of sole proprietorship you should know: they will motivate you to be a sole successful trader and earn a lot of money.
1. Easy to Establish
It is straightforward to start a business alone as you do not have to follow any legal criteria. In partnership, different people are involved, and all of them have different mindsets.
It is a bit difficult to convince them of a strategy. But sole trader has to follow only two steps. Firstly, they have to think about an exclusive idea and then its implementation by following a good strategy.
Within few months or few days, your business will start giving you benefits. Moreover, you can create it by investing just a tiny amount of money. However, in partnership, there is a huge need for capital.
2. Decision Making
It is very easy to decide anything in sole trading. Suppose there was a problem, and there is a risk that the company will bear a loss soon. The trader will overview the whole situation and make a decision accordingly.
However, the partnership is a complicated and lengthy process as you first have to arrange a meeting of all partners, then there will be discussion, and it also takes a long time to convince all of them on one point.
Furthermore, as there are many people in the partnership and each gives his point of view thus, it takes a long time to change others’ opinions by providing a solid argument.
3. Total Profit
The most crucial benefit from the top 10 advantages of a sole proprietorship you should know is profit. Whenever there is a loss in the business, the owner has to pay all the debt.
Similarly, when there is profit in business, it is all yours, and you do not have to share it with anybody as profit is shared in all partners in the partnership. Thus you will have a large amount of money.
This money gives courage and confidence to the owner to carry on the business with this grace and work harder to flourish and grow it more.
Businesses run by the sole trader are usually small; thus, there are only a few things on which you have to focus. The first one is customer needs, and the second is their satisfaction.
Thus, you have to manage only a few things, and there is very flexible in it. On the other hand, in partnership, the team is very large, and you are running the business on a significant level.
Thus you have to check certain things like formulation of business ethics, government rules, and regulation. Moreover, it isn’t easy to manage a company having such a large number of workers.
5. Direct Relations with Customers
The most crucial benefit from the top 10 advantages of sole proprietorship you should know is the direct establishment of relationships with customers and improve with time.
You have to meet your customers daily, or after a few days, thus you get to know very much about them. You can easily understand their exact needs and budget.
Thus you will have a clear picture of your next strategy in your mind, and you know all targets of your next strategy, like what kinds of product you should launch, their specifications, and price, etc.
6. 100% Control
Sole traders have everything in their control, and they can invest the money as much as possible as all profit will be theirs. Moreover, if you want to change the whole setup of your business, you can do it within a few minutes.
But in partnership, before every decision, you have to think about each business partner and ask about his permission and suggestions. In short, you cannot be much creative in partnership.
But in sole trading, you can use your mind to the fullest, and you do not have to make an explanation for your idea. You implement it, and if it proves better, you can further modify it to make more money.
7. Social Benefit
Once most elite benefit from the top 10 advantages of a sole proprietorship, you should know is that it proves very beneficial for society and provides many services to humanity.
For example, they are free to donate as much as possible; moreover, they arrange free camps, etc. Thus sole traders prove a diamond for society and are respected very much.
So if you want to be so generous for your society choose sole proprietorship, you will have the authority over all assets, profit, and decisions; thus, you can do whatever you want.
8. High Privacy
In partnership, many people are involved, and all of them have equal authority to business; thus, they know all secret strategies and plans. Sometimes dishonesty produces in partners.
Or due to some problems, people often start exposing all the secrets of the business due to which there is very much loss, and the company loses reputation in the market.
However, there is no such issue in sole trading because only you have all the business secrets. Thus no one can harm your business by using secret information.
9. Employment Opportunities
Although a sole trader manages everything on his own, he needs some people for specific jobs, so he hires workers having the required skills and aptitude.
Thus, the rate of unemployed people will decrease. The poor will get a chance to show their talent and live a better life in short in a sole proprietorship your country earns money.
Moreover, sole owners only have to deal with employees, so he often gives them bonuses, plans things for their entertainment, and arranges free training classes.
10. Easy Dissolution
If you are tired of running a business and want to wind up, so you can live your life freely. It is easy, and you can disclose it within few days as you do not have to go through any procedure.
However, if you are a partner with anybody else, you cannot disclose it without other people’s consent. Moreover, in such a case, you have to pass through particular legal procedures.
It is hectic to pass through those trails, so it is better to avoid partnership if you do not want to run a business for a long time. I hope so; now you have an entire understanding of the top 10 advantages of a sole proprietorship, you should know.
To Sum up
All in all, you will be more relaxed, stress-free in sole trading; moreover, you will not have to ask consent of everybody before making any decision or implementing a strategy.
You must choose sole proprietorship if you want to create a lot of opportunities for others and give social services.
Thank you for your visit!