Prosperity Threads: The Sole Proprietor’s Challenge
The survival rates for start-ups have been approximated at 47% for the innovative and risk-oriented entrepreneurs (Nwazor, 2016). For a company like Prosperity Threads, surviving despite the conventional start-up challenges will require effective business management skills, great attention to detail, and focus on success. A sole proprietorship possesses unique characteristics that may also pose a challenge to the success of the business. In a competitive environment such as that in which Prosperity Threads intends to operate, the ability to cushion the business and its proprietor from risks can be a distinguishing factor between the potential for success and inevitable failure. One of the attributes of a sole proprietorship as described by Allen (2016) is that there is only one owner who has to incur all the start-up costs. In my proposed business, I intend to be a sole proprietor, yet I may not afford the entire cost of investment. I will, therefore, provide only $ 20,000 of the start-up costs out of my savings and access the rest through grants and loans. I also intend to ask for the financial support of my friends and family towards the project start-up. To sustain my living expenses, I will use my savings only, as part of my input to the business and continue catering for my needs through my other sources of income.
With a projected profitability of approximately $ 1 million, I will be able to cater for the costs of the debts received in financing the business as well as for my daily needs. To ensure the business runs as projected, I will need sufficient support from the human resources hired. I have no significant expertise in fashion design or in the development of textile products, but I intend to take advantage of the knowledge that other people have for the benefit of the business. One of the ways in which I will accomplish this is by engaging in competence-based hiring practices. By hiring experts, I will get an opportunity to learn on the business while also making profits. It will also be a sure way of limiting claims against the business.
As the entrepreneur, managing business claims will be an important part of my business. I have to be concerned about claims against the business since the sole proprietor is liable for claims made against the business (Allen, 2016). I believe in the business and will, therefore, be ready to take liability for any claim against it. However, I will also put in place self-regulation practices to ensure that the business complies with legal requirements, is conducted ethically, and provides quality service to clients. In the beginning, I intend to have full control over the business management given that this is one of the features I will have to contend with as a sole proprietor. However, as the business expands, which is my intention, I will need assistance in management. At that time, I will opt for either a partner or hiring a management team. Nonetheless, I would not wish to sell the business but would rather transfer it to my estate by will. By then, the business will have grown significantly since it is expected to begin generating profits within the first year and to attain break-even by the second year.
Allen, K.R. (2016). Launching new ventures: An entrepreneurial approach 7th Ed. Cengage Learning.
Nwazor, T. (2016, March 31). 7 steps-to-success for clothing industry start-ups. Entrepreneur. Retrieved from www.entrepreneur.com/slideshow/299680