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Top 10 Advantages of Sole Proprietorship – Subjectquery.com

Top 10 Advantages of Sole Proprietorship – Subjectquery.com
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The Advantages of Sole Proprietorship are also known as Merits of Sole Proprietorship. It includes various points for the purpose of understanding the nature of a particular business of an individual entity.

A sole proprietorship is a legal form of business enterprise in which an individual regulates the business. This individual gain all the profits and bear all the losses of the business and this person is also the allrounder player of his/her own business because he/she is the sole owner, financer, controller, and manager of our business.

So, the Advantages of Sole Proprietorship over business are as follows:-

  1. Easy to form,
  2. Sole or Individual authority,
  3. Decision-Making Process,
  4. Gain total profits of the business,
  5. Direct Motivation,
  6. Direct relations with customers,
  7. Flexibility in operations of the business,
  8. Creation of employment facilities,
  9. Social benefits,
  10. It helps to develop their personal qualities.

Merits of Sole Proprietorship-

The Advantages of Sole Proprietor are also known as Merits of Sole Proprietor and it includes:-

1.Easy to form-

This is the first Advantages of Sole Proprietorship and it means an individual person can easily establish the particular sole trade business. To do this sole business, a single person has to think first and then have to take it in a practical form. This is a huge advantage for a sole trader because it requires a minimum capital to start the business and without any legal formalitie this business gets established.

In simple words, The job of an individual sole trader is very simple like “Purchase newspapers and selling them in street“. He also wears many hats like- do financial planning< follow the marketing procedure< Helps in development< Make strategies and tactics.

2. Sole or Individual authority-

This is the second Advantages of Sole Proprietorship and this means that there is only one single man in this business, which manages and control the total system of the sole trade business. He/She can put as much money as he/she can in his/her business because he.she has complete control over his business.

This is also the best merit of sole proprietorship because a single individual can supervise his/her business alone because he/she is the king/queen of his/her business.

3. Decision-Making Process-

This is the third Advantages of Sole Proprietorship and it means is the procedure for selecting the best idea, work, and thought for increasing the engagement of the sole trader business. In this sole business, a single individual is an owner himself, due to which he takes all the legal decisions himself because he/she is the owner of his/her own business.

This is a very important process in which a sole trader takes action very quickly and also solve the problems of the public because this is a stage at which a businessman has to select the best option for the business and achieve their goals also.

4. Gain total profits of the business-

This is the fourth Advantages of Sole Proprietorship and it means an every individual owner of the business are totally responsible for acquiring the income or profits of the sole trade business. Only single individual in this business pays capital, after which all the income or profits from him in his/her own. Similarly, he/she also bears the all losses or risks of the business.

For any person, his income is his biggest motivation, because of which he carries on to carry that business forward and is known as a successful sole trader.

6. Direct relations with customers-

This is the sixth Advantages of Sole Proprietorship and it means the relation of a sole proprietorship is seen as a very bigger factor than its customers because he knows his customer’s tastes and preferences very well and also deal them very well.

This Merits of Sole Proprietorship indicates the relation between sellers and their customers because the direct relation of a seller or customer, their engagement capability is accumulated day by day and as well as a trustworthy relation is also created. The sole trader believes that in any way he has to satisfy his customer and has to attract himself because this will increase the goodwill rate of a seller (sole proprietor) in the market.

The best thing I found in this advantage was that this relation reduces the gap of distribution channel and also make the user friendly environment.

7. Flexibility in operations of the business-

This is the seventh Advantages of Sole Proprietorship and it means the business of a sole trader is small in size and the structure of its management is also small, due to which the business works in a flexible form and manner. Any small or big business, only to work for the customer’s needs and wants satisfaction. They also monitor the dynamic conditions of the market.

In simple words, flexibility is the key of smoothness, without the flexibility no business or businessman can be survive because this always helps to provide the potential to the businessman.

Note:- The Merits of Sole Proprietor are also known as Pros of Sole Proprietorship.

8. Creation of employment facilities-

This is the eighth Advantages of Sole Proprietorship and it means a sole proprietor owns a specific business and helps to create the employment opportunities for the public in our society or community. Through this facility, a sole proprietor can expand his business, as well as some people’s source of income.

In a sole proprietorship, the single owner of the particular business helps to supervise the employees of our corporate and provide various facilities like rewards, bonus, entertainment facilities after the process of placement.

9. Social benefits-

This is the ninth Advantages of Sole Proprietorship and it means a sole business owner is a king of his business. He has lots of freedom things related to his business, such as the decision making power, skill placement, efficiency development. A sole proprietor works very well for our society, such as, it helps to develop the social morality like self-reliance, self-determination, take action for the welfare of the society, and do hard work also.

One more thing, the sole trader always happens to be an asset for his society, not a burden.

Note:- The Merits of Sole Proprietorship are also known as Pros of Sole Proprietorship.

10. It helps to develop their personal qualities-

This is the tenth Advantages of Sole Proprietorship and it means a sole trader is called as individual identity. It helps to target focus on their business growth, self development, and self-esteem individually. It is a business in which all the profits and non-profits decisions are to be taken by the sole trader, due to which his efficiency and capacity start enhancing day by day.

With personal qualities, it will be able to promote his inner skills and will be able to deal with his sole proprietorship business by becoming like a good leader and superior. Personal qualities includes sincerity, honesty, understanding, loyalty, trustworthy, intelligency, and other state of mind.

In an any individual business, this is the second main advantage of a sole proprietorship because it helps to develop their working standards, qualities, balance, and attitude also.


I hope your Advantages of Sole Proprietor concept have been cleared. If your concept is cleared, then please do share and comment…


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  3. 8 Disadvantages of Sole Proprietorship

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