by Shaheen Darr

Created on: November 03, 2008   Last Updated: November 22, 2010

Despite uncertainties in business cycles and competition from larger businesses, sole proprietorships have proved they are survivors and here to stay. The sole proprietor enjoys benefits precisely because of the size of his business and some additional benefits that he enjoys are as follows:

A sole proprietor is the sole decision maker in the business and has the freedom to decide what to sell in his business within the parameters his business licence permits. The window display, the layout of the goods on his shelves and the way the goods are displayed are all areas that he has total control over. He is not limited by any manager so his own creative abilities are allowed free reign and expression. This freedom has to be used to the best of his abilities as it contributes to the success of his business.

The sole proprietor is given the opportunity to learn about the different aspects of running a business making him an all rounder in his field. From marketing and sales to finance and purchasing he can train himself to run his business without paying out large amounts to hire specialists to run each department separately. There is freedom to hire and fire without consulting anyone or waiting for someone else to make the business decisions for him. There is no bureaucracy involved so decisions can be make quickly.

The start up of a sole proprietorship, especially one operating from home requires very little capital and start up fees. It is ideal for those who are just starting out and who do not need an expensive base. Apart from very little legal requirements it is necessary to inform the Inland Revenue when you intend to start your sole proprietorship and set up a bank account to keep your business transactions separate from personal ones.

Accounting records are usually simple and can be easily monitored by the sole proprietor himself. Keeping all receipts of expenses and purchases incurred have to be kept for the end of year self assessment that has to be sent to the Inland Revenue. These expenses can be deducted from any income that the business has earned to give an overall picture of how the business has done over the year.

The advantage of a sole proprietor is his unique ability to know his market personally. He gets a chance to meet and greet his customers and know their changing requirements on a daily basis. If he maintains his relationships with his customers well he can have a loyal customer base that come to him again and again. The ability to keep his prices competitive and his goods reflecting the market needs is vital for the sole proprietor. This can be difficult as large enterprises have the advantage of reducing prices and absorbing losses better than a sole proprietor can.

It is a challenge to be a sole proprietor but if you are selling a good product and know the market well it can turn into a successful venture. You decide the hours you want to work and when you can go on holiday and you keep the profits without having to share them with a partner.

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