What are the risks of owning a Sole Proprietorship?
There is always a risk to every business venture. Everyone who runs a business must understand the risks involved and strike a balance between risks and profit ratios. The following are risk factors which are involved in owning a sole proprietorship:
The owner is personally liable for the company’s losses.
The owner does not have any safety net to protect the business and firm because the owner often does not have any idea about the risks that may arise in the future.
UDs are often not equipped with health insurance.
UD owners are at risk of losing their investments because they own the business by themselves. Therefore, they face such losses in certain circumstances.
There is a high risk of injury liability because if the owner gets injured, there is a possibility that no one could be around to operate the business.
Owning any business, including a sole proprietorship, takes up much of the owner’s time and effort. Therefore, the business owner will have to lose out on other opportunities which the owner could otherwise have accepted.
What steps should be taken after the Sole Proprietorship has been Set up?
There are some steps that could be taken after setting up the new sole proprietorship. Every business has some plans before it begins operations. After the business has been started, the plans can be executed. After a sole proprietorship begins operations, the following steps must be taken:
Identifying the Target Audience
Before starting a sole proprietorship, the owner must identify which demographic is going to be targeted. The target audience and their needs will inform the marketing of the business’s products.
Reaching the Audience
After targeting the audience, the next step is how to reach the targeted audience. A decision about by which the audience is to be reached must be made.
Identifying the Problem
After reaching the audience, the sole proprietorship owner or sole proprietor must identify the problem to which the target audience would like a solution.
Confirming Product Validity
The product must be valid and authentic so that it will be useful for the target audience during the relevant time period.
Holding a Free Trial/Demonstration
The owner must hold a free trial or demonstration to the users of the product to help them know more the features and properties of the product.
Creating a brand slogan
The brand slogan must be created and advertised in such a way that users will remember it.
The owner must give incentives to the product users during the starting time period.
Testing and Updating the Product
This step is necessary in order to increase the performance of the product, and thus the company’s profitability, to its maximum level.