Do you know what is the meaning of a sole proprietorship? In the simplest of terms, it means that you are starting your own business. The catch here is that you do not have a partner or anyone in a legal binding with you to run the company. You are starting this work alone and you are the only rightful, legal and true owner of this company. While it sounds exciting to be the only owner it ca also be nerve wrecking. Thus, read ahead to know all the things that are important to consider before you start a sole proprietorship.
Advantages of a sole proprietorship
Let’s look at the positive side. This means, read ahead to finds the pros or the benefits of being a sole proprietor.
- Control: The most important advantage of owning a sole proprietorship is that you are the ultimate owner. This means that everything is in your control. Who you wish to keep in the company and the policies and style that you wish to adopt for work are totally in your command. You do not need to answer questions to anyone else or be accountable. This helps you to work the way you want to and think is the best and more effective.
- Quick decision making: This is another benefit of starting your very own sole proprietorship. In case of a partnership, you need to get all your partners on board so that they agree with your thought. Until and unless all of them agree, you cannot proceed ahead. That actually results in a loss of loss of time. In fact, there may also be instances when you are unable to reach them and you need to wait for them to revert to your calls and messages. However, in case of a sole proprietorship, you can make quick decisions. Though this not imply a hasty implementation, you can proceed with your work at a fast pace.
- You know it all: This means that since you are the only owner of the firm and the business as a whole, you know everything that is taking place under you. This is because nothing can happen until and unless you give a green signal and sanction it. In case of a partnership, there is the possibility that your partner may venture out into something without your knowledge or in your absence and just not inform you, but that that’s not possible if you are the sole owner.
However, just like every coin has a flip side to it, there are also disadvantages of having a sole proprietorship. Thus, read ahead to find the cons.
- Delayed decision making in case of your absence because you are the only one who says a yes when the plans can be implemented and put into action.
- In case you suffer a loss, you are the only one who bears the brunt. In case of a partnership, the load is shared by the partners and that can reduce your stress to a great extent.