From statistics, you will observe that 90% of all existing business is operated as a sole proprietorship kind of business. So what business can be referred to as a sole proprietorship type of business?
A sole proprietorship business is a business owned and operated by an individual. This kind of business is not a separate entity. In fact, in this type of business, the owner is the business.
The business is usually named after the owner. For example, Mary’s Tea shop, Tony’s Grocery, Martins’ Fast food and so on.
Many small business owners, mom and pop businesses operate under the sole proprietorship type of business entity for the following reasons:
1. They want to be their own boss:
Many a time, i hear certain statements from aspiring entrepreneurs. Statements such as “i want to be my own boss.” Small business owners always feel good being in charge, being responsible for themselves and not taking orders from anyone.
2. The business owner keeps all the profits:
This is another reason why many entrepreneurs choose the sole proprietorship form of business. This business entity allows them to keep 100% of the profit.
3. Freedom to do their own thing.
Most entrepreneurs love this business entity because it allows them to freely express themselves. They can show their talent, skill, expertise and be acknowledged for it. Many entrepreneurs in this category love to do things on their own, it enable them show their expertise.
4. Small business owners prefer sole proprietorship style of business because they don’t have to prepare financial statements for anyone. Since they own the business, they are not accountable to anyone.
5. The owner has the ability to quickly take and implement decisions.
6. There are less paper work and no legal restrictions for this type of business entity.
7. The owner can cease to operate or close down the business without legal formalities.
In conclusion, choosing this type of business entity can help you keep cost down and start your own business without much hassle.
At this point, i rest my pen. Till we meet again, Good Luck
