The​ ​Pros​ ​And​ ​Cons​ ​Of​ ​Being​ ​A​ ​Sole  Trader    For​ ​many,​ ​setting​ ​up​ ​as​ ​a​ S ​ ole​ ​Trader​ ​Accountants​​ ​is​ ​the​ ​best​ ​way​ ​to​ ​start​ ​up​ ​a​ ​new​ ​business.​ ​When  compared​ ​to​ ​setting​ ​up​ ​as​ ​a​ ​limited​ ​company,​ ​it​ ​may​ ​seem​ ​like​ ​an​ ​easier​ ​and​ ​more​ ​convenient  option.​ ​However,​ ​like​ ​all​ ​important​ ​decisions​ ​in​ ​life,​ ​it’s​ ​best​ ​to​ ​weigh​ ​up​ ​the​ ​good​ ​against​ ​the​ ​bad  before​ ​making​ ​that​ ​important​ ​leap.​ ​Below,​ ​we’ve​ ​weighed​ ​up​ ​the​ ​pros​ ​and​ ​cons​ ​you’ll​ ​need​ ​to  consider​ ​before​ ​making​ ​any​ ​decision.   

    Pros    More​ ​control​ ​for​ ​you    As​ ​a​ ​sole​ ​trader,​ ​you’re​ ​your​ ​own​ ​boss,​ ​you​ ​steer​ ​the​ ​ship​ ​unaided.​ ​There’s​ ​no​ ​need​ ​to​ ​consult  directors​ ​or​ ​shareholders​ ​or​ ​compromise​ ​your​ ​own​ ​vision​ ​for​ ​the​ ​company.​ ​You​ ​can​ ​make​ ​decisions  and​ ​act​ ​on​ ​those​ ​decisions​ ​quickly,​ ​providing​ ​for​ ​the​ ​needs​ ​of​ ​their​ ​customers​ ​with​ ​minimum​ ​delay.    You​ ​keep​ ​the​ ​profit   

Sole​ ​traders​ ​retain​ ​all​ ​profits,​ ​rather​ ​than​ ​have​ ​to​ ​share​ ​them​ ​across​ ​the​ ​business.​ ​Many​ ​sole​ ​traders  often​ ​choose​ ​not​ ​to​ ​employ​ ​anyone,​ ​which​ ​obviously​ ​helps​ ​keep​ ​costs​ ​down​ ​and​ ​maximises​ ​profits  available​ ​to​ ​them.    It’s​ ​easier​ ​to​ ​change​ ​your​ ​mind    Many​ ​people​ ​dipping​ ​their​ ​toe​ ​into​ ​the​ ​unchartered​ ​waters​ ​of​ ​running​ ​a​ ​business,​ ​will​ ​choose​ ​to​ ​do  so​ ​as​ ​a​ ​sole​ ​trader,​ ​waiting​ ​until​ ​they​ ​have​ ​more​ ​confidence​ ​in​ ​the​ ​business​ ​before​ ​deciding​ ​whether  a​ ​limited​ ​company​ ​might​ ​work​ ​better​ ​for​ ​them.​ ​When​ ​you​ ​start​ ​out​ ​as​ ​a​ ​sole​ ​trader,​ ​you​ ​can​ ​always  choose​ ​to​ ​form​ ​a​ ​limited​ ​company​ ​for​ ​the​ ​business​ ​later​ ​down​ ​the​ ​line.    (Related:​ ​Want​ ​to​ ​succeed​ ​as​ ​a​ ​sole​ ​trader?​ ​Use​ ​our​ ​free​ ​business​ ​plan​ ​template​ ​to​ ​clarify​ ​your  business​ ​ideas,​ ​identify​ ​potential​ ​problems​ ​and​ ​measure​ ​your​ ​progress.​ ​Download​ ​your​ ​free  business​ ​plan​ ​template​ ​now.)    Cons    Liability    Sole​ ​traders​ ​are​ ​not​ ​seen​ ​as​ ​a​ ​separate​ ​entity​ ​by​ ​the​ ​law​ ​and​ ​therefore,​ ​are​ ​subject​ ​to​ ​unlimited  liability.​ ​In​ ​simple​ ​terms,​ ​this​ ​means​ ​that​ ​if​ ​the​ ​business​ ​gets​ ​into​ ​debt,​ ​the​ ​business​ ​owner​ ​is​ ​liable.  If​ ​your​ ​business​ ​was​ ​to​ ​nosedive​ ​with​ ​debts​ ​to​ ​be​ ​paid,​ ​you’ll​ ​lose​ ​not​ ​just​ ​your​ ​income​ ​but​ ​you’ll​ ​also  have​ ​to​ ​pay​ ​the​ ​money​ ​owed​ ​from​ ​your​ ​assets.      Access​ ​to​ ​finance    Sole​ ​traders​ ​often​ ​find​ ​it​ ​difficult​ ​to​ ​raise​ ​finance​ ​to​ ​fund​ ​their​ ​business.​ ​Banks​ ​are​ ​usually​ ​unwilling  to​ ​lend​ ​money​ ​to​ ​sole​ ​traders​ ​and​ ​when​ ​they​ ​sometimes​ ​do,​ ​the​ ​amount​ ​can​ ​be​ ​some​ ​way​ ​short​ ​of  what​ ​you’ll​ ​receive​ ​if​ ​you​ ​trade​ ​as​ ​a​ ​limited​ ​company.    Decision​ ​making    All​ ​decisions​ ​are​ ​made​ ​by​ ​the​ ​sole​ ​trader​ ​which​ ​means​ ​that​ ​the​ ​success​ ​or​ ​failure​ ​of​ ​the​ ​business  rests​ ​on​ ​the​ ​shoulders​ ​of​ ​one​ ​person.​ ​Being​ ​a​ ​sole​ ​trader​ ​doesn’t​ ​stop​ ​you​ ​from​ ​having​ ​employees  but​ ​ultimately​ ​all​ ​the​ ​important​ ​decisions​ ​will​ ​fall​ ​on​ ​you​ ​and​ ​there’s​ ​no​ ​one​ ​to​ ​share​ ​accountability  with.    So,​ ​in​ ​summary,​ ​if​ ​you’re​ ​considering​ ​the​ ​best​ ​way​ ​to​ ​set​ ​up​ ​your​ ​business,​ ​be​ ​sure​ ​to​ ​do​ ​your  research​ ​to​ ​discover​ ​both​ ​the​ ​advantages​ ​and​ ​the​ ​common​ ​pitfalls.​ ​Doing​ ​so​ ​will​ ​save​ ​you​ ​a​ ​lot​ ​of  hassle​ ​and​ ​stress​ ​in​ ​the​ ​long​ ​run.​ ​Good​ ​luck​ ​in​ ​your​ ​new​ ​venture!    KashFlow​ ​is​ ​easy​ ​to​ ​use​ ​bookkeeping​ ​and​ ​payroll​ ​software​ ​that​ ​can​ ​help​ ​streamline​ ​your​ ​work  processes​ ​freeing​ ​up​ ​more​ ​time​ ​for​ ​you​ ​to​ ​bring​ ​in​ ​new​ ​clients​ ​and​ ​keep​ ​your​ ​business​ ​competitive.  For​ ​a​ ​free​ ​no-obligation,​ ​1-2-1​ ​demo​ ​just​ ​call​ ​the​ ​on​ ​boarding​ ​team​ ​on  WWW.SIMPLEXACCOUNTING.CO.UK/SOLE-TRADER​.    Contact​ ​Details 

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