Sole proprietorship is a popular form of business ownership known for its simplicity in setup and maintenance, as well as the limited liability it offers to entrepreneurs. If you're thinking about starting a business in this structure, exploring different examples can be very helpful.
To highlight the variety of opportunities, we've compiled a list of 10 examples of sole proprietorship businesses for you to explore below.
Freelance writers are a prime example of the sole proprietorship model, as they offer their writing services to clients without the need for a complex business structure. Being a sole proprietor and a freelance writer offers several advantages, including flexibility in choosing projects, setting their own rates and business expenses, and maintaining complete control over their work.
On the other hand, many sole proprietors face challenges in finding regular clients and managing marketing efforts since there is no built-in customer base.
Personal trainers often operate as sole proprietorships because individual sessions allow them to work with multiple clients simultaneously and set their own rates based on the type of service offered. Being a sole proprietor or a personal trainer can provide independence and financial rewards. However, it also carries risks due to potential injuries incurred during physical activities.
Moreover, marketing efforts must be made to attract new clients, as well as to establish relationships with other business owners and secure funds for business growth.
Many web designers choose to work as sole proprietors because they can manage projects independently while focusing on creative design elements that come naturally to them. The advantages of being an independent contractor and a sole proprietor web designer include the ability for sole proprietors to set their own prices, contract terms, and target clientele with specialized needs.
However, it's important for sole proprietor web designers to stay up-to-date with new technologies and trends in order to remain competitive in the market and maintain a valid business license.
Tutors who specialize in certain subjects or provide private lessons often operate under a sole proprietorship model due to personal tax returns and the low overhead costs associated with this type of business and income tax structure.
The main benefit of tutoring is that it allows you to teach what you are passionate about while still earning money for your time and expertise. However, it can be difficult for tutors to establish themselves as experts within their subject areas without an established network supporting them.
Consultants are also common examples of other business entity types, such as owners of sole proprietorship businesses, who primarily focus on providing expert advice or tailored solutions for each client's specific needs. They rely primarily on the expertise and skills of the business owner themselves (the consultant) rather than a specific team or product offering.
Due to their experience and expertise, consultants often charge higher fees than other professionals, granting them more freedom in setting their rates and contract terms with business entities. However, finding consistent work can be challenging for consultants who lack an extensive network or fail to market themselves effectively.
Photographers typically work as independent contractors or sole proprietorships because it allows them more freedom when pricing services, such as weddings or special events, and scheduling shoots based on availability. This independence also means they don't have an entire staff working above them, making decisions about production capacity limits.
However, being a sole proprietor or self-employed photographer may offer tax benefits, but it also brings challenges, such as financial obligations like the temporary need for additional equipment (which may require leasing/renting) or the need for assistance from other professionals/experts like lighting technicians (which may require hiring within the appropriate budget level). Therefore, profitability becomes harder to achieve, and expenses versus earnings should be carefully monitored.
Online sellers are ideal candidates for operating small businesses under a sole proprietorship business model since there are no overhead costs associated with managing storage facilities or labor costs involved in handling goods sold online.
Although shipping costs still need to be factored into pricing calculations, the biggest advantage of starting a new business online is the ability to quickly tap into an expansive worldwide customer base; however, competition is likely to be high.
Therefore, online sellers must find ways to stand out from their competitors through unique product offerings or exceptional services if they want long-term success and stability.
Catering businesses serve as excellent examples of the income and tax advantages of a sole proprietorship. These businesses can be efficiently managed by a single individual who oversees all operations, including food preparation and presentation, customer service, billing, and the management of the business bank account.
Compared to traditional restaurants, catering companies have many advantages, such as lower startup costs, income tax withholding, limited legal liability, and improved scalability of business structures, making it an attractive option even if you don’t possess culinary skills.
Of course, running an effective catering company involves hard work and dedication, but once established, these businesses can generate a substantial business income.
Event planners typically prefer working as solo entrepreneurs because this small business administration model provides personal income tax deductions for financial planners and allows them to have greater flexibility when planning events, whether locally or around the world.
This line of work offers amazing professional growth opportunities, as event planning requires knowledge and skill sets spread across various areas such as hospitality management, marketing communications, and financial management.
Additionally, unlike other professions that involve tedious paperwork, event planning offers a chance to explore different cultures and build relationships across industries, thereby opening doors for tremendous career growth for event planners.
Digital content creators are a popular example of solo entrepreneurship since these individuals control every aspect of the content creation process, including research, creative direction, editing, post-production, and distribution. They maintain consistency throughout campaigns while venturing into fields such as creating compelling visuals, audio, videos, animations, software, and more.
Working solely with the business owner's limited liability company, business funds, and the owner's personal assets provides benefits such as cost savings and the opportunity to develop a diverse skill set more efficiently. Also, the constant creative challenge keeps things interesting and limits burnout associated with long hours typical of a desk job.
As we have seen, there are many examples of sole proprietorship businesses that can provide financial and creative freedom. From web designers to event planners, photographers to digital content creators, these professionals benefit from the autonomy that comes with their sole proprietorships, working independently to hire employees while still having access to a wide range of customers or clients.
For those looking for an entrepreneurial opportunity that fits their skillset and lifestyle, becoming a sole proprietor could be the perfect way to start or scale your own business. With hard work and dedication, you can make your dreams come true by taking charge of your career path!
Martin Bell (Founder & CEO of Bell Ventures) is the visionary and driving force behind the hyper-successful 100 Tasks Startup System which has driven the growth of 20,000+ startups including Zalando and Delivery Hero.
At Rocket Internet, he pioneered the 100-Day-Launch process and led 120+ private and public sector venture-building projects.
Now Martin aims to democratize entrepreneurship by sharing his invaluable practical knowledge and tools to empower aspiring entrepreneurs just like you. Does that sound like you? Then make sure to learn more below ...
