Business Environments

Question 1

Public Secto

Answer 1

Businesses that operate in the public sector are owned by the government and have been established to provide collective goods and services to the people living in the country

Question 2

Private sector

Answer 2

The aim of these businesses is to satisfy customers’ needs and wants, while generating a profit.

Question 3

Formal Sector

Answer 3

administered according to the laws of the country as determined by government. In short, this means these businesses pay tax and contribute to the GDP (Gross Domestic Product) of South Africa.
.
Businesses operating in the formal sector have a fixed location,

Question 4

Informal Sector

Answer 4

do not adhere to the legal requirement of paying tax and are therefore not included in the calculation of the GDP
These businesses are usually not found in fixed locations,

Entrepreneurs in the informal sector must buy their raw materials (fruit sold on the street) or products from somewhere and often it is from the formal sector (the farmer or fresh produce market or supermarket)
which then contributes to the GDP of South Africa.
There is also the potential (although it does not happen often) that these informal businesses may grow enough to become part of the formal sector.

Question 5

Examples of businesses that are typically found in the informal sector

Answer 5

Production: the making of beaded jewellery, grass/wire baskets or animals carved from wood, etc.
0
Hawking: people selling their products or services at the robots or in car parks, etc.
Services: the cutting and braiding of hair on the street corner or teachers offering extra lessons and not declaring this income to
SARS, etc.