Advantages of sole trading include that:

 you’re the boss

 you keep all the profits
 start-up costs are low
 you have maximum privacy
 establishing and operating your business is simple
 it’s easy to change your legal structure later if circumstances change
 you can easily wind up your business.

Disadvantages of sole trading include that:

 you have unlimited liability for debts as there’s no legal distinction between private and business assets
 your capacity to raise capital is limited
 all the responsibility for making day-to-day business decisions is yours
 retaining high-calibre employees can be difficult
 it can be hard to take holidays
 you’re taxed as a single person
 the life of the business is limited.
 Advantages of Sole Proprietorships
 The advantages of a sole proprietorship versus other forms of organizations is the relative ease of set-up and the lower
start-up costs.
 Advantages of Sole Proprietorship

 The sole proprietor form of business ownership is the most common form in the United States and also the simplest. In
this form of business ownership, an individual proprietor owns the business, manages the business, and is responsible
for all of the business’ transactions and financial liabilities. This means that any debts incurred must be paid by the
owner. This form of business has several advantages.
 Quicker Tax Preparation

 As a sole proprietor, filing your taxes is generally easier than a corporation. Simply file an individual income tax return
(IRS Form 1040), including your business losses and profits. Your individual and business income are considered the
same and self-employed tax implications will apply.
 Lower Start-up Costs

 Limited capital is a reality for many start-ups and small businesses. The costs of setting up and operating a corporation
involves higher set-up fees and special forms. It’s also not uncommon for a lawyer to be involved in forming a
corporation.
 Ease of Money Handling

 Handling money for the business is easier than other legal business structures. No payroll set-up is required to pay
yourself. To make it even easier, set up a separate bank account to keep your business funds separate and avoid co-
mingling personal and business activities.
 Government Regulation

 Sole proprietorships also have the least government rules and regulations affecting it. They do need to comply with
licensing requirements within the states in which they do business and they do need to pay attention to local
regulations. However, the paperwork required is much less than large corporations. Thus, they can operate quite easily.
Sole proprietorships also do not pay corporate taxes.
 Sale and Inheritance

 The sole proprietor can own the business for as long as he or she decides, and can cash in and sell the business when
they decide to get out. The sole proprietor can even pass the business down to their heir, a common practice.
 Disadvantages of Sole Proprietorships

Sole proprietorships face a number of difficulties in the longer terms compared to limited liability companies.
Key Terms unlimited liability: The liability of an owner of a small proprietorship for all costs and debts of the business.

Sole proprietorships are the smallest form of business organization, and also the most common in the United States.
However, while there are certain advantages (it is easier to set up a sole proprietorship than a limited liability company, for
instance), there are a number of big disadvantages, particularly in the long term, that make the sole proprietorship model quite
unattractive to business owners.t

he main disadvantages to being a sole proprietorship are:

Unlimited liability: Your small business, in the form of a sole proprietorship, is personally liable for all debts and
actions of the company. Unlike a corporation or an LLC, your business doesn’t exist as a separate legal entity. Therefore, all of
your personal wealth and assets are linked to the business. For instance, if you go bankrupt and owe your debtors $100,000,
then that money will have to come out of your own wallet even if there is no money left in the business. If you operate in a
higher risk business, such as manufacturing or consumables, the cost to benefit ratio is favorable toward a corporate structure.

Lack of financial controls: The looser structure of a proprietorship won’t require financial statements and maintaining
company minutes as a corporation. The lack of accounting controls can result in the owner being lax about financial matters,
perhaps falling behind in payments or not getting paid on time. It can be a serious issue if financial controls are not strictly
managed.

Difficulty in raising capital: Imagine your business in five years. Will it still be a business of one? Growing your small
business will require cash to take advantage of new markets and more opportunities. An unrelated investor has less peace of
mind concerning the use and security of his or her investment, and the investment is more difficult to formalize; other types of
business entities have more documentation. Outside investors will take your company more serious if you are a corporation.

Wants vs. Needs Two people could argue for hours about whether a given product or service is a need. Obviously,
circumstance and frames of reference are important in this discussion. What one person needs, another person wants. Also,
there are a variety of ways to meet a need or a want.

For example, we all need to eat. But does that mean we need to eat a filet mignon with fresh steamed vegetables and
a nice glass of white wine? While at first glance it's easy to assume the difference between wants and needs, when you really
start getting into it, the differences can be difficult to articulate.

Wants, Needs and Economics Quite simply, the economic definition of a need is something needed to survive. In
economics, the idea of survival is real, meaning someone would die without their needs being met. This includes things like
food, water, and shelter.

A want, in economics, is one step up in the order from needs and is simply something that people desire to have, that they may,
or may not, be able to obtain. Again, with those two simple definitions, it doesn't seem like there should be much to talk about,
but there is. Economics deals with how we allocate scarce resources, and those scarce resources may be needed to meet
someone people's needs and other people's wants. So, we do need to talk about wants and needs.

Imagine a farmer of barley. After his harvest he has two potential customers: one that wants to buy his barley in the hopes to
make an import beer and the other that wants to use the barley to make bread. Most people, if answering seriously, could
acknowledge that bread is more important in a healthy diet than beer. Who does the farmer sell to? Should the reason
someone wants to buy his product matter? Shouldn't he just sell for the highest price? These are the difficult questions about
wants and needs that economics struggles to answer.

Greeting Service When customers walk into a restaurant, whether it is McDonald's or Chez Pierre, they expect to be acknowledged. This is a
small service, but it is imperative to the success of the restaurant, as customers who are not greeted may simply walk out and eat somewhere else.
The type of host a restaurant has will depend on the type of restaurant it is as well as how busy it is. Some restaurants pay hosts to greet
customers, call names off waiting lists and walk customers to their tables. In other restaurants, management and wait staff take over this duty.
Regardless of what you can afford for your restaurant, always make sure someone has the responsibility of greeting the guests and that person
knows it is her responsibility.

Wait Staff When customers go to a restaurant, they expect a good wait staff, unless they are dining at a fast-food chain. Even then,
customers expect the counter workers to get their orders right in an appropriate amount of time and solve problems quickly and courteously. In
traditional, sit-down restaurants, customers expect the wait staff to be attentive, but not too attentive. Wait staff should not hover or interrupt, but
they also should come back frequently enough to attend to their customers' needs. In addition, they should bring food in a timely manner and
handle problems, such as food that has been sent back pleasantly. Customers also expect wait staff to be friendly and personable.
Environment Customers usually go to restaurants to meet with others socially in a friendly environment. Although environment
is not usually considered a service, service plays a large role in creating a good environment. In addition to making sure the restaurant is
clean, attractive and the decor is consistent with the food and restaurant's image, restaurant owners need to tell their staff its OK to let
guests linger. Wait staff should not hint that it is time for the guests to go. For example, they should not rush the food to the table unless
the customer requests it. They also should not start to clean nearby tables in an obvious manner or wait for customers to get out their
money to pay the check. To the contrary, wait staff should say things like, "Feel free to chat as long as you like -- let me know if you'll
need some dessert or a drink refill."

Food and Drink Probably the most important service that a customer expects to receive when dining out is a good
selection of delicious and well-presented food. According to London wine writer Jamie Goode, it is more important that food be simple
and good tasting, made with quality ingredients, than to be fancy or pretentious. Goode also notes that customers expect a large wine
selection that is not overpriced. Furthermore, customers expect food to be consistent with the image of the restaurant. Customers who
are dining at a family restaurant, for example, expect sandwiches, traditional dinners and moderate prices. At a more elegant restaurant,
prices can be higher but food needs to be more of the gourmet variety.