The most popular type of business is the sole trader structure. It is estimated to account for about 70% of small and medium businesses. This structure is quite popular due to the many benefits it offers. You are self-employed and many freelancers like this structure because it is easy to set it up. This type of business structure has its pros and cons that you need to consider before deciding to start it. These are some of the benefits of starting a sole trader business.
You Are the Boss
The good thing about being a sole proprietor is that you are the boss. That means you decide how to run your business. This is the main reason people quit formal employment to start their business. As the boss, you have a lot of freedom when it comes to making business decisions. Unlike a partnership where you need to consult other partners, you decide what to do with your business.
You Keep the Profits
The other reason you should consider being a sole proprietor is that you can keep all the profits. However, if you were in a partnership form of business, you would need to share the profits. Also, if you are a shareholder in a limited company, then you must share profits with other shareholders and investors.
Easy to Form
The truth is that it is much easier to set up a sole trader business than to form a partnership or limited company. You will find the process quite straightforward. You only need to register your business name and acquire a trading license.
Depending on your location, the cost of registering your sole trader business is low. However, if you need to set up a partnership or limited company, you need to fill out several forms. Thus, when starting a new business, you should consider the start-up costs.
When you register a limited liability company, you need to provide a lot of information to the government. For instance, you need to give details of shareholders and directors. As a result, you enjoy minimal privacy. However, if you register your business as a sole trader, you can keep information regarding your business private.
Another good thing about starting a sole trader business is the ability to change its structure as it grows. For instance, you can turn it into a limited company. You will find the process to be quite easy.…