[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column][vc_empty_space height=”15px”][vc_video link=”https://youtu.be/x1q4eqtK0CM”][/vc_column][/vc_row][vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column][vc_empty_space height=”15px”][vc_column_text]It is an exciting endeavor to start a business, but also a risky one. Business owners face many challenges and risks, and starting a business as a sole trader is more challenging. Running a business as a sole trader may seem like a practical way to keep costs down, but it can affect the business’s longevity and success in the long run. In this blog post, we’ll uncover why it is crazy to run a business as a sole trader.
Unlimited Liability
A sole trader is personally responsible for all business debts and liabilities. Sometimes when something goes wrong with the business, a sole trader will sell their cover business losses. Also, it is riskier for industries like construction, where accidents and damages are more likely to occur. Will you still consider running a business as a sole trader if this will put your financial future at risk?
Limited Resources
Your time, resources, and skills as a sole trader can be limited. Growing and scaling the business is more challenging if you are alone. Imagine the struggle to take on a larger project, hire employees, or effectively promote your business. Running a business is challenging enough, and as a sole trader, you might not have enough time to do other things for the business.
Lack of Support
It can be lonely running a business alone. You don’t have any support as you don’t have colleagues or co-founders. There is no one to share the burden when things get stressful, which often happens when running a business. And, when making important business decisions, you don’t benefit from multiple perspectives.
Difficulty in Attracting Investment
You may find it challenging to secure investment as a sole trader. Investors may think investing in your business is risky as it is a one-man band. Investors calculate the risks and prefer to invest in a business with a team in place, a solid business plan, and opportunities to grow. It is hard to convince and show investors that your business will grow and become successful if you are a sole trader.
No Exit Strategy
Lastly, you may not have an exit strategy in place as a sole trader. Selling or transferring your business without partners or co-founders can be challenging. Same when you retire or leave the business for personal reasons.
In conclusion, starting a business as a sole trader may seem practical, but the risks and challenges are significant. Plus, you will be responsible for all business liabilities, limited resources, lack of support, difficulty attracting investment, and may not have an exit plan in place.
Instead, you may consider starting a business with a co-founder or entrepreneurial team. In that way, you’ll have someone to share the burdens and risks of starting a business, balance business skills, and transition out of the business when the time comes.[/vc_column_text][vc_empty_space height=”15px”][vc_empty_space height=”15px”][vc_column_text]Should you require any additional assistance please don’t hesitate to contact us.[/vc_column_text][vc_empty_space height=”20px”][vc_column_text]
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Other Individual Tax Information & Articles:
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