Although you have all the responsibility, there really is nothing like the feeling of being your own boss. If you’re still on the fence about taking this leap into complete independence, consider all the advantages of sole proprietorship. Let’s see why it is good to be on your own.
Starting a business on your own has many benefits when compared to creating a corporation and bringing others into the fold. When you start a sole proprietorship, you’re the one calling all the shots.
1. You Can Keep Your Business Private
One of the advantages of sole proprietorship is that there’s some degree of privacy that comes with being the only one in charge. During the early days when times are lean, and mistakes are made, your business details aren’t public knowledge.
The only thing you need to report under this business model is when you registered the company name. Your profits, losses, and expenses are private information that only you can access. Your business may need a year or more to reach its full potential, and you feel comfortable sharing your successes and failures. And better yet, the only person you’re accountable to is you.
You can run your business quietly until you feel it is time to branch out. An online venture is a particularly smart way to launch a startup and test a new idea. Then, once you get a feel for how to run your company, you’ll know if you need to hire employees or bring in new partners. You can even opt for contract freelancers instead of managing full-time employees. In that way, your business remains your private business.
2. You Have Complete Control of the Business
One of the most compelling advantages of sole proprietorship is that the business owner calls all the shots. Although this can be a frightening concept for those who like direction, running your own business means you make the rules. The only person you need to answer to when things go wrong is you.
And when things go right, you can pat yourself on the back for your perseverance. Running a business on your own is hard work. Those long hours and sleepless nights are par for the course. But when you finally succeed, the feelings of accomplishment are powerful and very real.
Unlike a corporation where everyone needs to be on board, and you can’t make decisions without feedback from partners or employees, the owner of a sole proprietorship has complete control.
3. You Enjoy the Flexibility to Take Risks
Another one of the advantages of sole proprietorship is being able to take risks to grow the business. With a corporation, processes follow a systematic model that minimizes risk. The fear of taking chances is a stronger influence when other people’s livelihoods are on the line.
This isn’t the case with the sole proprietorship. Risks are just part of normal operating procedure. These risks can help to grow your business, and it can truly separate your company from hundreds of others in a crowded niche.
Taking risks and learning from the results is often the best way to guide a new venture. The owner of a sole proprietorship relies on risk to learn important lessons about becoming successful. And learning from mistakes will pave the way to create even bigger challenges for the following year.
4. The Excitement of a Challenge
Working at a corporation means everyone has defined tasks to perform in a regulated manner. One of the most significant advantages of sole proprietorship is the ability to take on challenges and learn new skills. You’re often forced to find creative ways to get things done.
There is no other feeling like mastering a skill that may normally take years to learn. The owner of sole proprietorship learns on the fly, picking up new competencies, and finding the most efficient ways to get things done. Often because, frankly, there isn’t anyone else to get them done.
These challenges help the small business owner expand and develop the skills that allow them to compete with bigger companies.
5. Simplified Taxes and Business Reporting
One of the biggest advantages of sole proprietorship is simplified business reporting and tax filing. There are usually no formation documents required by state or federal governments with a sole proprietorship.
That means there is not going to be any public disclosure like that with a corporation or LLC. It also means there’s no annual filing fee.
Because of this, the owner of a sole proprietorship can avoid becoming overwhelmed by unfamiliar tax forms and business reports. This allows them to focus their efforts on growing the company, building a brand, and connecting with customers and clients.
6. Meet and Exceed Goals
When you start small, there is only room to grow. One of the most promising of the advantages of sole proprietorship is that you are on the ground floor. You don’t have to live up to the successes of any partners or employees.
Each week, you can build upon your accomplishments from the prior week. These small successes begin to stack up, and this provides more than enough motivation for any small business owner.
Without having to meet the expectations of others, you can set goals that make sense for you and make your own decisions on what it will take to reach them.
Even if sole proprietorship often involves working longer days, making more calls, or meeting with more clients, this extra work has an immediate impact on your bottom line. And this will drive you to make and achieve new goals.
7. Take Pride in Your Workmanship
In every large corporation, there are employees who exceed the expectations of their managers. On the other hand, there might be some workers who seem to be just cashing a paycheck each week.
With the sole proprietorship, the success of the company rests on the back of the one employee on the job, the owner. Since your actions have a bigger overall impact on the success of the business, pride in workmanship becomes a part of everyday operations.
If the business has one employee, every action they take affects the company.
When a company implements the concept of pride in workmanship at the very start, it becomes a way of life. And this positive internal culture carries the company through the years.
Are You Enjoying the Advantages of Sole Proprietorship
These are just some of the advantages of sole proprietorship that excite entrepreneurs and motivate them to launch a business on their own.
Perhaps you have already exceeded your own expectations and know of other reasons why entrepreneurs should consider creating their own company.
Leave your comments and share your experiences, so we can help others to take that leap and follow their dreams.