What are the advantages of sole trade

What are the advantages of sole trade

Advantages of sole trade- Following are the advantages of sole trade

1.Easy Establishment and Operation

Commencing of sole trade is very easy. Sole trade can be established easily. No legal formality is required on its establishment. Its operation is also very easy. Any body can start it at any time. Operation of sole trade is free from various tensions.

2. Economy and Stability in Establishment

Sole trade’s establishment is very economic. Various expenses on legal formalities are not required. Sole trade runs for a long period of time.

3. Secrecy

In the sole trade secrecy can be maintained easily. Sole trader executes all the activities individually so no body can know the matters of business.

4. Freedom to Choose any Business

In the sole trade, trader can start any business of his choice. He is free to start any business according to his interest and will.

5. Quick Decisions

In the sole trade decisions are taken quickly. There is no delay in decisions. Quick decisions make help in increasing the efficiency of business. He can avail of any business opportunity according to his decision.

6. Personal Contact

In the sole trade, the sole trade maintain personal relationship with the customers. He attempts to make better relations with the customers due to personal contact closeness increase with the customers. He pays proper attention on fashion and demand of customers.

7. Personal Control

In the sole trade, sole trade controls the . business personally. He do all acitvities of business. He is supremo decision making authority of his business.

8. Decentralisation of Business

Sole trade business normally runs on a small size business. So, various persons can open or start sole trade business and they can earn profit. Thus sole trade business decentralises the business.

9. Less Burden to Taxes

The sole trade business is treated as an individual in the tax matter. For the purpose of tax, there is no difference between the personal and business income.

10. Employment Opportunities

In the sole trade business larger employment opportunities are available. Small sized business can be started by a common man and he can remove his unemployedness. Thus sole trade provides employment opportunity.

11. Consumers Service

Sole trader gives proper consumer service. Due to personal contact with customers he supplies goods and services according to fashion and demand. He avails goods and services when customers required.

12. Harmoneous Relations with Employees

In the sole trade relations between employer and employee are better. In this system of business direct relations are exist between them.

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13. Development of Personal Qualities

Necessary qualities are developed in the sole trade. Self confidence arises in the trader.

14. Other Advantages of Sole Trade

Other advantages of Sole trade are as under:

  1. Incentive to work hard
  2. Flexibility in business.
  3. Independence.
  4. Monopoly of profit.
  5. Advantages of inherited qualities and goodwill.
  6. Social importance
  7. Less capital requirement
  8. Suitable for some businesses.
  9. National importance
  10. Direct relation between activities and consequences.

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