Question

For which of the following types of business do you think a sole proprietorship form of organisation would be more suitable and why?

(a) Grocery store

(b) Medical store

(c) Legal consultancy

(d) Craft centre

(e) Internet cafe

(f) Chartered accountancy firm

Answer 1

Sole proprietorship will be most suitable in case of a Grocery store as in this case, initial business setting-up costs are not very high, the legal requirements are minimum and the scale of operations is small. Besides, direct personal contact is needed with the customers in the case of a grocery store and hence sole proprietorship where there is a single person who owns and manages the business may be more suitable as he would be able to know his customers well and thus serve them better.