The Benefits Of Operating As A Sole Trader

Being a sole trader, also known as being the sole proprietor, remains one of the most popular types of business structures in Africa for many reasons. Especially if you are going into business on your own for the first time, Sole proprietorship can hold a lot of advantages especially if you are going into business on your own for the first time. Some of the advantages are as follows

1. AUTHORITY
As a sole trader, you are the boss of your own business. You can do whatever you want at anytime, you can even decide to go in holiday. You are in full control of all the decisions being made without consulting directors or shareholders.

You can develop the business exactly as you choose. This, in theory, will allow you to make decisions sooner and act on them swiftly because you are in charge of everything, giving your customers the best support and Services for their needs.

2. SPEED
Being a sole trader remains one of the quickest and simplest ways to get your Africa business off the ground, establishing and operating your business is simple. There is no need to register your company with Companies House, so you avoid filling out all those time-consuming Companies House forms.

3. FLEXIBILITY
As a small business, sole traders can offer a more personal service with local roots and ties. For example, allowing you to be more flexible with choosing a local supplier over a big corporation.

This can be more appealing to potential customers as you can build up confidence and trust in the local community. You can also change your pricing structure or change the products that you offer, adding new products or removing those that don’t prove to be very popular.

4. PRIVACY
With a limited company, anyone can access financial information made public from registering with Companies House. As a sole trader, you have maximum privacy, and your information is kept private until you tell a second party.

Competitors are not able to access private information which prevents them from being able to see how you are faring and use that information to copy your methods of success.

5. PROFIT RETENTION
As a sole trader, you keep all the profits that you earned through the business as opposed to having to share them with shareholders or having to inject them back into the business. A popular choice among sole traders is the idea of not employing anyone, this keeps costs low and maximises the profits available to you.

However, as with everything there are also some disadvantages to operating as a sole trader. The main one is that you are personally liable for any debt that your business incurs. This could affect your personal savings and other assets.