A sole trader is a start up business, set up and owned by a person or group of people. They may make a decision to employ some other professional but they are the only owner as they have registered and set up the company.
At the time of starting a business, a sole trader may have some liability but with the span of time, they can overcome it if business is run smoothly with dedication. A sole trader is himself responsible for the success or failure of company.
There are many advantages of starting a business as a sole trader. Few of them are:
1. Control: You have full control over it and you can run it in your way. As a sole trader you are not only owner of the business but also you are liable for its success and failure. Since you are the boss of your business, you do not require consulting other shareholders or directors and working on their ways. You have your own vision about this Business and you know – how it can grow. In another words you are all in all for your Business.
2. Operational Flexibility: You are flexible to work on your style. You are free to take any decision quickly. For Example – You can change price of your product or remove any product from your list if you find that it is not highly demanded in Market or it is out of Fashion. Taking crucial decision without making any delay is necessary in competitive market now a days.
3. Quick and Simple to Start: To start your business as a Sole Owner is the most convenient and safe way to start your business when compared to form a Private Limited company. You just need to register your company with HRMS and you can start running it as a Sole Trader.
4. Set up Cost: As you have adequate knowledge of nature of business you are starting so you do not require to hire external professional like Solicitor or Formation Agents for your business. You do not require much money to operate your business if it is in small scale. If it is small and do not want to spend more money, you can start operating from your home.
5. Accounting: The accounting process for Sole Trader is very simple as they do not require maintaining Annual Accounts or a Corporation Tax Return. The Sole Trader only requires maintaining invoice and expenses. In the end of financial year, you should file a personal Self-Assessment Tax Return that will include details of profits and losses from the Business you have started as a sole trader.
6. Profit Outcome: As a sole trader you are the owner of all the profits earned through Business. Most of the Sole Trader do not employ anyone or employ few employees so that they can run their business with low investment, so all profits goes in the pocket of Sole Trader.
DNS Associates is a certified accounting firm having a team of knowledgeable accountant manager who can understand nature of Business you are interested to start and help you to set up as a Sole Trader.