Starting a business on your own has many advantages compared to creating a corporation and bringing a bunch of others into the fold. When you start a sole proprietorship, you are calling the shots. Although you have to accept all the responsibility, there really is nothing like the feeling of being the boss.
If you are still on the fence about taking this leap, consider all the advantages of sole proprietorship. Let’s see why it is good to be on your own.
1. You Can Keep Your Business Private
One of the advantages of sole proprietorship is that there is a degree of anonymity that comes with starting small. During the early days when times are lean, and mistakes are made, your business details are not public knowledge.
The only thing that was reported this year was when you registered the business name. Therefore, your profits, losses, and expenses are all private. The business may need a year or more to reach its full potential. As long as goals are being met, the only person that needs to be held accountable is you.
Your business can be run online and out of the local spotlight until you feel it is time to branch out. Once you get the feel of how to run a business, you will know exactly what specialists you need to hire. You can also opt for collaborations instead of managing full-time employees.
2. You Have Complete Control of the Business
As a sole proprietor, the business owner calls all the shots. Although this can be a frightening concept to those who like structure in their lives, running your own business means you make the rules as you go. The only person to answer to when things go wrong is you.
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. That’s because when things eventually succeed, there is no other feeling like self-accomplishment.
Unlike a corporation where everyone needs to be on board and decisions can not be made without everyone in the loop, the small business owner has complete control.
3. You Enjoy Flexibility to Take Risks
Another of the advantages of sole proprietorship is being able to take risks to grow the business. With a corporation, everything is done in a systematic way that minimizes risk. The fear of taking chances is so much bigger as many people’s livelihoods are on the line.
This is not the case with the sole proprietorship. Risks are just part of a normal operating procedure. These risks can help to grow the business and separate a company from hundreds of similar businesses in a crowded niche. Taking risks and learning from the results is how to guide the business upwards. The small business owner learns early on to have very thick skin because they will fail more often than they succeed.
The small business owner will succeed as a result of all those failures. Learning from mistakes will pave the way to create even bigger goals for the following year.
4. The Excitement of a Challenge
Working at a corporation means everyone has to carry their own weight. Some will have to work more than others to make up for those that lag behind. With the sole proprietorship, the business owner knows that there will be challenges and gets excited about the thought of developing a plan to succeed.
Part of the thrill of being in business by yourself is taking on a challenge and looking for creative ways to succeed. There is no other feeling like doing something that others have failed at or being told it is impossible to complete.
These challenges help the small business to expand and develop the skills to compete with the bigger companies.
5. Simplified Taxes and Business Reporting
One of the biggest advantages of sole proprietorship is simplified business reporting and tax filing. There will not be any formation documents filed with 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.
Therefore, the small business owner will not feel the details of taxes and business reports overwhelming him or her. This allows them to focus their efforts on growing the company and building a brand.
With the sole proprietorship, the business owner has to answer to himself. Therefore, there will be no weekly and monthly progress meetings to get up to speed with fiscal matters.
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 at the ground floor level. Each week, you build upon the successes of the prior. These small successes begin to stack one on another, so goals are easily met early on and many times expectations are exceeded right out of the gate. Not having to appease a dozen board members, the small business owner will set goals, and do whatever it takes to reach them.
Regardless if it involves working longer days, making more calls, or meeting with more clients, this extra work has an immediate impact on the bottom line of the small business moving forward.
7. Take Pride in Your Workmanship
Within every large corporation, there are employees who exceed the expectations of their managers. On the other hand, there might be more 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 few employees on the job.
Since the actions of the employee have a bigger overall impact on the business, pride in workmanship becomes a part of the everyday operations. If the business has one employee, every action they take affects the company.
When the company starts implementing the idea of pride in workmanship at the start, it becomes a way of life. This positive internal culture carries the company through the years.
These are just some of the advantages of sole proprietorship that excite entrepreneurs to be on their own. Perhaps you have already exceeded your own expectations and have some 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.