The simplest and least expensive business form is the sole proprietorship. Being the only owner, they have all the control of the decisions that need to be made. They should also know that the biggest disadvantage is that they are fully liable for all the actions, lawsuits and debts of the business. Being your own boss can be exciting one minute and terrifying the next minute. They are not a separate tax entity. They report business revenue, expenses and net income or loss on their individual tax return (form 1040). The business ends with a death of the owner unless they previously sold or transferred their business. The only requirement is the license they need from their local jurisdiction. Licenses often involve the payment of fees and proof of qualification by examination. Legally, it is up to the owner to know if their business requires licensing. .
Starting a business requires planning, strategies, skills, and the strength to succeed. First and foremost, they must have a strong desire and the motivation to succeed in their business. Starting and running a business requires a lot of energy and the ability to focus on their objectives. Planning is a key factor in the success of any business. "Those who fail to plan, plan to fail."(George Hewell) Planning is a strategy to improve the odds of success in a business world that is always changing. It is good to plan because it gets them ready for what is to come. It also helps them to present their needs to financing source. "Planning is a vital tool to any manger since it allows him or her to prepare for the future, rather than being commanded by it.(Allen, pg64).
Operating a business takes certain skills but not much. Few people have all the skills needed to run a business, but they can balance their weaknesses by hiring staff or consultants and by becoming more knowledgeable through education or training. A business owner needs to be organized in order to make a good use on their time.
