A sole proprietorship is the simplest type of business you can start. It’s owned and run by one person, and there’s no legal separation between the owner and the business. That means you are the business. If you sell handmade crafts online, walk dogs for a living, or run a local food cart, you might already be a sole proprietor—even if you didn’t file any special paperwork.

One of the biggest advantages of a sole proprietorship is how easy it is to start. There’s usually little or no cost, and you don’t have to register with the government (unless your state or local laws require it). You can just pick a business name, get any required permits, and you’re ready to go.

But there’s a catch: since there’s no legal distinction between you and your business, you’re personally responsible for everything. If your business owes money or gets sued, your personal assets—like your savings or car—could be at risk.

Sole proprietors report business income and expenses on their personal tax returns, which keeps taxes simpler than with other business structures. However, you may still need to pay self-employment taxes.

This structure works well for freelancers, consultants, tutors, or anyone starting small. It gives you full control and is great for testing an idea without a big commitment.

As your business grows, you might choose to switch to an LLC or corporation for better protection and scalability. But for many beginners, a sole proprietorship is the perfect first step.

In a fast-moving world, starting simple can be a smart way to learn, grow, and eventually expand your business journey.