Exactly how does one start a sole proprietorship? and does it mostly result in a profit or loss?

Question

it would be really helpful if you gave me an example of a sole proprietorship + some resources... Thanks

Answer 1

A sole proprietorship is a form of business enterprise with a sole owner. Examples are limitless - its basically any kind of business just as long as there is only one owner. You can have any number of employees and/or have it managed by someone else, but the risks of ownership (debts and losses) lies with that one owner.

To set up a sole proprietorship, you just have to go to your government's trade department, and fill out forms. They could ask you for a bank statement that proves you have the resources to run the business. Unlike partnerships and corporations, which have many owners ranging from 2 to thousands, sole proprietorships usually don't need approval from the Securities and Exchange Commission or its equivalent in most countries.

And like any business, sole proprietorships usually sustain operational losses at the start, as it establishes its presence in the market and develops its business model (how it makes a profit). If it succeeds in securing both, it should start earning then.

Answer 2

You actually don't have to do anything other than report this on your end of year tax return (in most parts of the US). Whether is results in a profit or loss depends entirely on you.