There are some things in life that you are allowed to be selfish about – your career, progress and happiness. For how long are you going to continue building and fulfilling another person’s dreams and visions? Perhaps you have even told yourself – “I can run things better than my boss,” or “I want to build something for the future,” or “I want to do what gives me fulfillment.” These could be the motivation you need to start something for yourself!
Why not? You’ve been able to get an education, training and experiences in your field spanning several years. Or you’ve got a hot idea or concept that the market needs. What about the downturn in the economy that has made a lot of job cuts and losses a reality in several industries? Whatever the motivation – running your own business is really the best way to go.
Of the several ways of getting into a business, sole proprietorship is really one of the most preferable. It is the simplest and most common form of business ownership. A sole proprietorship is basically a one-man business where one person is responsible for all aspects of the business. In other words, the buck stops on this one man’s table regarding the business.
Sole proprietorship has several advantages:
Decision making is vested in a single individual. This makes for flexibility;
One-man organizations can take advantage of opportunities and adapt to change faster than other types of organizations;
Chances of broken focus are minimized because the vision of the founder is followed ;
Lower costs of startup. Lower costs of being in business;
Lower taxes and other fees associated with being in business.
With this option anyone can start a business as entry requirements are minimal;
A study of the most developed economies in the world such as Japan and the United States indicate that small businesses are a key indicator of economic growth;
Many respected and successful organizations today actually started out first as sole proprietorships; and
Resources can be more easily disbursed without the added hassle of multiple signatories, paperwork and documentation.
However this is not to say that sole proprietorship is without its demerits, some of which are:
Liability is unlimited. The organization and its owner are one and the same in the eyes of the law. This means should the enterprise fail, the founder would have to cough out funds from other sources to repay creditors;
There is a high likelihood of lack of fiscal discipline among sole proprietors. Improper record keeping and lack of financial controls may run the business down;
Because all authority is vested in one person, there is a possibility that if the person is not around nothing will get done and no decisions will be taken;
Access to loans and new capital is harder for such businesses. Many investors prefer to invest in and deal with corporations.
Sole proprietorship can really be a beautiful proposition due to the following reasons:
1. You now get to apply all you have gathered from your experiences in business for yourself;
2. Whatever you make is yours to keep, you don’t need to share it with anyone;
3. You can work where, when, how and whatever hours you want – you are accountable to only yourself;
4. Sole proprietors finally have the time to do things they’ve always loved but couldn’t do because of their employment. Traveling, spending time with family, taking up social work are just some examples;
5. You now have a chance to build something that outlives its founder and makes your life more worthwhile and meaningful;
6. Finally you’ve discovered an opportunity or a need that you believe you can fill.
It is important to also note that there are certain attributes and characteristics that anyone intending to be a successful sole proprietor must have. They include:
Discipline, especially over money and finances;
Desire to learn and adopt new ways of doing things;
Being highly organized;
Motivated;
Passionate about the business;
Committed to its continued growth;
Willing and ready to make personal sacrifices for the continued growth of the business;
Always on the lookout for improvement;
Thrives on challenges and solving problems;
Is not afraid to fail, fall and start over.
Fortunately one is not born with any of these traits. The good news is they can all be learned and developed. Today many people are getting tired of working for someone else and branching out on their own to find fulfillment and satisfaction!
