Sole proprietorship is suitable for those establishments where the following conditions are satisfied:
- Where the capital requirement of the business is small.
- Where the contact with the customer is very much essential.
- Where decision to be taken is needed quickly.
- Where goods are artistic in nature.
- Where the market for the product is local.
Basing on the above conditions, it can be concluded that the following types of business are suitable for sole proprietorship. These are small vendors, peddlers, hotels, small transport operators, retail shops, grocery shops and small restaurants.