Pierre Omidyar, who started eBay, Paul Orfelea, who started Kinkos, and Ann Withey, who came up with Smartfood popcorn and started Annie’s Homegrown, are all famous sole proprietors. None of these companies exist as sole proprietorships right now, but they all show how successful a sole proprietorship can be.
A business that is not incorporated is a sole proprietorship. The business is owned by a single person, who is in charge of all of its finances and legal obligations. Personal and business assets are tied together, and business income is taxed as personal income. But sole proprietors can write off business costs like supplies, marketing costs, car expenses related to business use, and the cost of keeping an office open.
When a person starts a business on their own, they automatically become a sole proprietor. No special paperwork needs to be filled out, but the state, county, or town where the business is located may require the owner to have a business licence or permit. A licence or certification may also be needed by agencies that control the type of business being run.
Businesses that work well as sole proprietorships are ones that can be run from a home office and don’t need a lot of equipment. Most real estate agents, freelance writers, and artists are sole proprietors. Many bookkeepers, caterers, janitors, tutors, and virtual assistants are also self-employed. Repair professionals like plumbers, electricians, and heating, ventilation, and air conditioning (HVAC) specialists often work on their own.
