1. Easy Formation: No legal formalities are required to initiate a sole trading concern. Any person capable of entering into a contract can start it, provided he has the necessary resources for it.
2. Incentive to Work hard: There is a direct relationship between effort and reward. The fact that the entire profit can be taken by himself without sharing with anybody else induces him to work ceaselessly.
3. Small Capital: Small capital is an important as well as specific advantage of sole proprietorship. Sole proprietor can start business with small capital.
4. Credit Standing: Since his private properties are held liable for satisfying business debts, he can get more financial assistance from others.
5. Personal Contact with the Customers: Since sole proprietor knows each and every customer individually he can supply goods according to their taste and preferences. Thus he can cultivate personal relationship with the customers.
6. Flexibility: The sole trader can easily adjust himself to the changing requirements of his business.
