Question

Ravi runs a small grocery store where he is responsible for all the decisions, profits, and losses. What are the challenges he might face as a sole proprietor?

Answer 1

Ravi, as a sole proprietor, may face several challenges:

1. He bears unlimited liability, meaning he is personally responsible for all the business’s debts and losses.
2. He may have limited capital, limiting his ability to expand or meet growing demands.
3. The sole responsibility for all decisions can be stressful and overwhelming.
4. There is a lack of continuity; if Ravi becomes ill or unable to work, the business may suffer or close.
5. Limited managerial and technical skills might restrict business growth, as he must handle all aspects alone.

Thus, these challenges highlight the limitations typical of sole proprietorship.