A sole proprietorship is a type of business with only one owner. It is easy and cheap to start. A sole proprietorship has numerous advantages. They include ease of establishment, low set up costs, efficient and flexible operations, close business relationship with employees and customers, and ease of ownership transfer.
Ease of establishment
It is easy to start a sole proprietorship business because the owner only needs to have a certificate of registration for the business. It does not require consultations with anyone concerning the business operations. The owner makes all the decisions of the business hence reduces time wastages through discussions like it is for partnerships and companies.
Low set-up costs
To start a sole proprietorship business, one only requires relatively less money than other business types. It is not costly for the owner, provided he has some money for starting the business. Sole proprietorship businesses may not require external sources of capital to start up because they are cheap to start.
Operations are efficient and flexible
in a sole proprietorship, the owner keeps all business profits. He also bears all the losses incurred by the business. Decision-making is quick, given that the owner does not need to discuss business issues with anyone else. Thus, business operations become efficient and flexible. The owner can easily decide on which changes to make in his business, including the decision to increase goods for sale, opening and closing hours, the number of employs to have, and how to spend business proceeds.
Close business relationship with customers and employees
Customers and employees of sole proprietorship can get close attention from the business owner because there is a direct relationship between them. Additionally, new relationships can be built easily and quickly. This is because the business owner spends ample time with his employees who take instructions only from one source. Customers also build business relationships with the business owner because they can easily reach him for any consultations with respect to business processes.
Easy transfer of ownership
When a sole proprietor wants to transfer the ownership of his business, he does not need to consult anyone. He decides alone on whom to give the ownership then continues with the transfer processes without any interruptions.