Advantages of a Sole trader
Start business with limited capital
The sole trader can start the business with limited capital. The sole trader normally starts a business which is a small business, so the sole trader does not require high amounts of capital in order to start the business. The sole trader has the option to either borrow the money from his family or invest his savings into the business.
Profit is not shared
Sole trader does not have to share the profit of the business. The sole trader manages and runs the business on his own. The sole trade is the only owner of the business. The sole trader may employ some workers, and pay them salaries but these people do not share the profit. Their salary is considered a cost.
There is no interference by other people. The sole trader has the option to
Relationship with the customer
The sole trader is able to develop a very unique kind of relationship with the customer. As the company or organization grows bigger, it is difficult to maintain a close relationship with the customer. One of the primary reasons that the sole traders survive is that they are able to provide the unique service which the large organizations are unable to provide.
No legal requirement
The sole trader does not have to fulfill the legal requirements in order to set up the business as a sole trader. The limited companies have to get them registered and the partnerships are formed after the deed of partnership is signed. The sole trader does not have to get himself registered in order to commence business activities.
Sole trader does not have fulfill legal requirement to start the business
Sole trader has the liberty to take all the decisions by himself
Sole trader does not have manage a lot of things as the sole trader has to do limited tasks
The sole trader can spend more time with the family
Quick decision making
The sole trader does not have to listen to advice of other people. The sole trader has the liberty to make his or her own decisions. As the decision making is often done without consulting other people, the process of decision making is quick. The sole trader makes the decisions quickly which accelerates the business activities.
It is getting increasingly difficult to find a job in today’s economy. The sole trader not only contributes to the economy but he also solves the problem of employment. The sole trader lessens the burden of the government to provide a job as the sole trader works for his own business and earns his livelihood.