Anything which affects the personal life of a sole trader affects his business also. Prolonged illness or death of the sole trader brings the affairs of his business to a stand still. If his children are interested and efficient to run the business, the sole trader business can be continued. Otherwise, it will be closed. The closure of a business will cause inconvenience to the consumers and may also result in-social loss.

It is a highly flexible type of organisation. A sole proprietorship concern is generally run on a- small-scale basis. In case a change in operation is required, it is possible without involving much expenditure. The proprietor can adapt and adjust the activities of the business to the changing trends and market conditions because the sole trader is the sole owner of his business.

The fear of loss acts as a stimulant for hard work. Besides, it makes him very cautious in his approach. Hard work and cautious approach bring him more reward and improves efficiency and economy of the business .

The sole trader is entitled to enjoy all profits of the business. Since, he is the only person who invested money, he need not share the profit with anybody else. At the same time, he himself should bear the entire loss. So, it is said that he owns all and risks all.

According to P.K. Ghosh and Y.K. Bhushan, "The sole proprietorship is a form of organisation in which an individual introduces his own capital, uses his own skill and intelligence and is entirely responsible for the results of its operations".