Cheap and easy to set up, this structure has fewer compliance costs than a company or partnership. You call all the shots (including the coffee).
On the flip side, you’re personally liable. If something goes wrong, you could lose your home.
As all profits must go to the owner, being a sole trader isn’t ‘tax effective’. This may not seem a problem. But if you prosper (and why else would you start a business?) you can’t easily channel income to loved ones.
When a sole trader dies, so does the business. Unless you sell it first. We’ll cover that later.
For now, know that the structure you choose will have profound and lasting implications. So wise up before you do!