8 ADVANTAGES OF SOLE PROPRIETORSHIP

• The capital required to start the business is small hence anybody who can spare small amounts of money can start one.

• Few formal/legal procedures are required to set up this business
• Decision making and implementation is fast because the proprietor does not have to consult anybody
• The trader has close and personal contact with customers. This helps them in knowing exactly what the customers need and hence satisfying those needs
• A sole proprietor is able to assess the credit-worthiness of his or her customers because of close personal relationship. Extending credit to a few carefully selected customers reduce the probability of bad debts.
• The trader is accountable to him/herself
• A sole trader is able to keep the top secrets of the business operations
• He/she enjoys all the profit

• A sole proprietorship is flexible. One can change the nature or even the location of business as need arises.

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