Is A Sole Proprietorship Right For You?

Of all the different forms of business, the sole proprietorship is the simplest. Because it is a one person business it isn't constrained with the same regulations as larger corporations. If you have the next great concept and are motivated to chart your course with a carefully thought out business plan, you may well be on your way to business ownership. You needn't have a grandoise plan that will consume your every waking hour. Sole proprietorships consist of freelancers, contractors and consultants to name a few. Many of whom work their businesses in their spare time.

The ease of starting a sole proprietorship is much less taxing than if you owned a larger company and had to cut through miles of red tape. You don't even have to go through state registration as larger corporations do. Some cities do not even expect registration of single owned and run companies.

The headache many companies endure with quarterly taxes can be skipped over since you are only required, in most instances, to fill out a simple 1040. You probably won't need an accountant for this. Many tax programs, including Tax Act Online will even guide you through losses and profits, self-employed tax assumptions and more.
The advantages of sole proprietorships are vast:

1. Starting or stopping with ease. To start with you may purchase the tools or equipment needed to get you off the ground running. Mary Kay business owners usually purchase what is called the Cadillac kit for under $500. With simple word of mouth and a few business cards they quickly see the return on their investment. For others it requires a simple small office lease or power tools. Not loving it? Want out? Stop. It's that simple. Pack it up, store it and walk away. You don't have to sell out to a partner or vote on it. You simply quit.

2. You answer only to yourself. It's so much easier to get motivated for the day when you know you're doing this for yourself. Sure, there will be mistakes along the way, but you only have to face yourself. And the rewards are sure to be great along the way.

3. Enjoying the luxury of being your own boss. There is no greater motivation than knowing it is your name at stake. To know that it is within your power to singlehandedly ensure your own success is elating.

4. The heritage you leave behind. Generations of people after you will continue to build on your dreams and your success.

5. It's all yours. Next to being your own boss, nothing feels greater than knowing it is completely within your power to earn as much or as little as you choose. The best part of that equation? You share all your profits with - you and only you (minus only the cut your Uncle Sam will take, but hey...)

6. Work when you want, where you want, how long you want. It is completely up to you how many hours you choose to put into your business or when you cut your losses and walk away. Sole proprietorship means you are in charge, you make the decisions, including how long you continue your business.

7. Write-offs. Tax Act Online will walk you through these too. Business meals, office space, tools, mileage...the write-offs are virtually endless.

8. The bottom line. Larger businesses have the responsibility placed on them to pay into workman's compensation, unemployment, higher taxes. As a sole proprietor you are only responsible for you and your taxes are taxed as your personal income. While you will have to pay quarterly, this is a small price to pay and far outweighs the cons of business ownership.

Ask around. You can learn from others mistakes and successes by simply speaking with other business owners. Chamber of Commerce meetings are a great place to meet business owners and learn from their experience so that you are better equipped for success with your business.