Owning Your Own Business There are many advantages and disadvantages when owning your own business. When you own you own business, it’s known as a sole proprietorship. But with any type of business, there will always be advantages and disadvantages.
Five advantages for owning your own business are: 1) The owner receives all profits, meaning that all earnings go to the sole proprietor, or the owner, and isn’t shared with anyone else. The profit is not split among partners, or split among a corporation. So when you own your own business, you’re the first and only one that receives all earnings and profit. So if a person has a successful firm, he/she is the first to reap the success and rewards. 2) Another advantage
…show more content…
All you need is money and a realistic vision. 4) Another advantage of a sole proprietorship is that you pay lower taxes. This happens because as you own your own business, the earnings are considered as the owner’s personal income. Because of this, the sole proprietor may be subject to lower taxes than other forms of businesses, such as a partnership or corporation. 5) In addition to all the other advantages listed, another advantage of owning your own business is that you, the owner determines how much you want your firm or company to grow. You decide if you want to stay a small business or expand, whether it be locally or nationally. This can be advantageous because the owner can determine whether it’s better to stay small or grow. If you’re business is successful, you may want to expand to reach more and more clients, helping you make more money and to establish your firm as a successful one. Or you might think that it might be better to stay small and local, because you might not want to take a chance because you might not want to mess with a good thing. Whatever the situation, the owner decides what suites the company. But with advantages, there are also disadvantages of owning your own business. Five disadvantages of a sole proprietorship are: 1) The owner is personally liable for all debts and incurs all losses. The sole proprietor is responsible for all debts that the company owes. The owner takes all losses. There are no other owners to
| A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances.
SOLE PROPRIETORSHIP: Sole proprietorships are the most common form of business in the United States. You and your business are one in the same. While being your own boss as its advantages, like working your own hours and collecting all profits made by the business, there are some disadvantages. For starters is coming up with starting working capital. Most Sole Proprietors have to seek funds from other sources.
The individual owner is limited to personal money and loans when it comes to funding the business.
Sole proprietorships are the most common type of business in the U.S. They are most commonly chosen because they are the easiest type of business to set up and give the sole owner of the company complete control of the company. There are many benefits to a sole proprietorship in regards to control, profit retention, and convenience.
Sole proprietorship: Is the simplest and most common business structure. There is no legal distinction between the proprietor and the business, which means it is autonomous. You are entitled to all profits and responsible for all your business's losses and liabilities.
If you start your own business there are many benefits but if you do not know what you are doing, you will fail. You must have a motif, a passion and be willing to sacrifice in order to do what you have to do. Having a business has many benefits like having the ability to fluctuate your hours, building relationships, sharing your knowledge or products. But managing a business is not easy it takes a lot of hard work, dedication, and consistency. A business could make millions one year then be bankrupt the next because the economy is not always the same. You must be able to manage your money well because you must have capital to buy inventory whenever needed, while maintaining a budget to support your family, and to put money away for retirement. Because you could have one really good month but then next month could have no consumers. So your business must be your
SOLE PROPRIETORSHIP: Has only one owner. Easy to start up. Some of the advantages are: owners may do whatever they want to with the business and if they want to go on vacation they can. One of the disadvantages they cannot bring in another person to help run the business. This business form is particularly common.
A sole proprietorship is a form of business that is owned by a single individual. • Liability – Due to the lack of legal distinction between the owner and the business, the owner is fully responsible and liable for all debts that the business incurs in the same manner that an individual is fully responsible and liable for all debts that they incur. There is no legal distinction between the assets of the owner of the sole proprietorship and the business; this means that creditors have the ability to come after the owner’s business and personal material assets. Income Taxes – Since the business is the same as the owner of the sole proprietorship, all profits or losses from the business are filed by the
Sole Proprietorship would give you complete control since you assume all the risks, which mean you get all the profits, but you also suffer all the losses and liabilities. There is little to no paperwork to be done with a sole proprietorship. You only pay personal income tax to include Social security. The business doesn’t have to file a tax return, but you are still liable for payroll, unemployment and compensation taxes (Clarkson, Miller, & Cross, 2016).
In terms of being a business owner, Yooree believes that the pros of owning one’s own business is that it is very rewarding, one can set their own schedule, the job can be positively challenging, it is possible to create an unlimited destiny, and it gives people an opportunity to grow within themselves. The cons, however, are that the work is never done, and solo entrepreneurship simply means that there are never enough people to help with the
Even though there are also many advantages of a sole proprietorship, there are other alternative forms of business organizations that I would recommend, such as a general partnership. A general partnership is a form of business organization that comes into existence when two or more persons carry on business together with a view to a profit. In order to form a general partnership, a series of criteria must be met and understood such as; the partnership must register its name and obtain a business license, a partner cannot be employed by the partnership, all benefits of the partnership business must be received by the partners directly, all partners are personally liable for all the obligations of the business.
Having a sole proprietorship has many advantages and disadvantages for PODS. Some advantages to having a sole proprietorship would be the ease and cost of formation, having more flexibility and control, able to make quick decisions, minimal legal costs, closing business distribution and use of profits (Ferrell, Hirt, and Ferrell,2014) This is a wonderful option for someone who is just starting out and wants an easier way conduct business. Sole proprietorship also can have some disadvantages such as only having access to limited funds, lack of continuity due to investors not wanting to invest their money into something that has little or no history (Ferrell, et al., 2014). Most new business owners are not able to hire employees which have the qualified skills needed to get the company up and going successfully.
After the creation of a business plan, the next step to operating a business is the selection of an appropriate business structure. Different legal forms of business ownerships affect different managerial and financial factors from the business names to the tax obligations (Gregory, n.d.). The most common forms are sole proprietorship, partnership, cooperatives, and corporations. There are different types of corporations in the business world, but the two most general corporation types are S Corporation and Limited Liability Company (LLC) (Ferrell et al., 2013). The sole proprietorship is the easiest and most basic form of business ownership. It is owned and run by one individual, which is the proprietor. The individual is entitled to all profits and is responsible for all the business’s
The advantages to the sole proprietorship are single control over the business and its decisions, easy to start up, less regulations and paperwork burden that the other types of business. The disadvantages are unlimited liability for their company debts and actions. The law does not recognize any distinctions between the owner’s business assets and personal assets. Banks are very skeptical about lending to these types business because there is only one person to hold liable for repaying the debt.
The advantages to a LLC are: 1) Reduction of personal liability. A sole proprietor has unlimited liability, which can include the potential loss of all personal assets. 2) Taxes. Forming an LLC may mean that more expenses can be considered business expenses and be deducted from the company’s income. 3) Improved credibility. The business may have increased credibility in the business world compared to a sole proprietorship. 4) Ability to attract investment. Corporations, even LLCs, can raise capital through the sale of equity. 5) Continuous life. Sole proprietorships have a limited life,