To go into business alone or with a partner is the question
Starting
a business as the sole owner is one of the most gratifying ways of venturing into
business.
Most entrepreneurs prefer sole proprietorships because they are easy to set up. Once the sole owner acquires an operating license from the relevant town authorities, the business is up and ready to roll.
Starting
a business as the sole owner is one of the most gratifying ways of venturing into
business. Most entrepreneurs prefer sole proprietorships because they are easy to set up. Once the sole owner acquires an operating license from the relevant town authorities, the business is up and ready to roll.
Limited Liability
companies and Partnerships form of business come into existence only after
undergoing lengthy regulatory procedures, such as obtaining trading
licenses and preparing memorandums of understanding. The
simplicity of starting up a Sole proprietorship is the greatest
advantage that it has over other forms of business.
The
cost of starting a business on your own is restricted to basic capital
requirements. An entrepreneur who intends to start a barber shop, for
instance, only requires the necessary equipment and furniture and
perhaps one month’s rent in advance. He does not require the services
of an attorney. He does not incur extra expenses in the form of set up
fees.
Start up costs are normally a deterrent to many entrepreneurs but this is not the case with sole proprietorships. The State and its agencies do not need any legal documents or additional licenses from the owners of sole proprietorships.
Start up costs are normally a deterrent to many entrepreneurs but this is not the case with sole proprietorships. The State and its agencies do not need any legal documents or additional licenses from the owners of sole proprietorships.
Not all single-owner businesses are required by law to file annual tax returns although the owner should file individual tax returns.
But this is an advantage because profits realized by the
business are not subject to taxation.
Although the owner’s personal income from the business is taxed, profits from his business do not necessarily have to translate into taxable income. Taxation is premised on the assumption that you cannot separate the business from the owner. The law also allows business losses to offset the tax burden on the owner’s personal tax.
Although the owner’s personal income from the business is taxed, profits from his business do not necessarily have to translate into taxable income. Taxation is premised on the assumption that you cannot separate the business from the owner. The law also allows business losses to offset the tax burden on the owner’s personal tax.
A
sole proprietor keeps all his profits to himself. He does not share
the spoils from his business with anyone. He plans for his
earnings alone and sets his own pay. This motivates him to work harder.
Of great importance is the flexibility that comes with decision making in a sole proprietorship. It gives the sole proprietor enough control of his business because; he needs not to consult anyone, his decisions are not vetted by anyone except himself and he is only accountable to himself. Therefore, decision making is fast and the implementation of plans is quick. This kind of flexibility saves the owner a lot of time in the execution of duties.
Of great importance is the flexibility that comes with decision making in a sole proprietorship. It gives the sole proprietor enough control of his business because; he needs not to consult anyone, his decisions are not vetted by anyone except himself and he is only accountable to himself. Therefore, decision making is fast and the implementation of plans is quick. This kind of flexibility saves the owner a lot of time in the execution of duties.
Accounting
for a sole proprietorship can be restricted to keeping simple records.
Even if the business owner decides to keep separate accounting records
for the business, external financial reporting is not a requirement.
Moreover, the business does not incur costs in financial reporting such
as the costs of gathering and consolidating data or hiring external
auditors.
Business
operations in a sole proprietorship are manageable. The sole
proprietor does not call regular meetings to chart the course of his
business. He is not tied down by time restrictions. He can open and close his business without binding himself to timelines. He is free to hire and fire employees as he wishes.
A sole proprietor can decide to liquidate his business without having to consult anyone or going through the rigors of law. He owes no one an explanation for ending his venture. So it's not hard to see why many people prefer to go it alone.
A sole proprietor can decide to liquidate his business without having to consult anyone or going through the rigors of law. He owes no one an explanation for ending his venture. So it's not hard to see why many people prefer to go it alone.