Final answer:
The statement that sole proprietorships, unlike large corporations, need a business plan is false. All types of businesses, including sole proprietorships, can benefit from a business plan. They provide a roadmap and can be essential for securing financing and managing the business effectively.
Step-by-step explanation:
Regarding the statement, 'Unlike large corporations, sole proprietorships need a business plan', this is false. Sole proprietorships, just like large corporations, can benefit significantly from having a business plan. A business plan can help a sole proprietor organize their thoughts, plan for the future, and potentially secure financing. It offers a roadmap for the business to follow and can be an essential tool for tracking progress and making informed decisions.
The structure of a sole proprietorship is straightforward—it is a business owned and operated by a single individual. Although sole proprietorships are easy to start and manage since there is only one boss, they come with the disadvantage of unlimited liability, meaning the owner is personally responsible for all debts and obligations of the business. This contrasts with corporations, which have a formal structure and limit the liability of the owners.
While sole proprietorships may keep all the profits, they must also assume all the risks. Given these considerations, even a small business operated by a sole proprietor should have a business plan to guide operations and help navigate the challenges of running a business.