Businesses Flashcards
What are the characteristics of a developing country?
Little industrialization
Low standard of living
Low average income
Large percentage (70%) of people work for themselves or in small businesses
What is another name for developing countries?
Third World Countries
What are the characteristics of a developed country?
Advanced industrialization and technology
High standard of living
High average income
Large percentage of people work in big businesses
Describe the different places in which informal and formal businesses are located.
Informal - city centre, suburbs, roads
Formal - fixed location, shop or office
Describe the differences in ownership between informal and formal businesses.
Informal - individual entrepreneur
Formal - Multiple owners
Describe the differences in management between informal and formal businesses.
Informal - owner, family members
Formal - Employees
Describe the differences in types of goods and services between informal and formal businesses.
Informal
Sell to poor people
Small quantities
Low markup
Formal
Variety
Describe the differences in target market between informal and formal businesses.
Informal - poor people
Formal - Salary earners
Describe the differences in problems and challenges between informal and formal businesses.
Informal
No proper accounting
Competition
Small profit
Formal
Keep record of transactions
Describe the differences in regulations between informal and formal businesses.
Informal businesses are largely unregulated
Formal businesses require trading licences and are subject to industry-specific regulations
List the three categories of business, based on how they earn their money.
Manufacturing
Trading
Service
What are accounting records?
books or records that are used by a business to keep track of all transactions and business deals
What is tax?
A payment charged by the government to pay for the provision of goods and services to the public.
A noose around your neck.
What is a wholesaler?
A business that buys goods in large quantities from manufacturers and sells them to shops or customers in smaller quantities.
What are municipal rates?
Taxes or levies charged by towns or cities to pay for services like rubbish removal.
A noose around your neck
What is VAT?
A tax paid when you buy goods and services
What is a VAT vendor?
A business which charges its customers VAT and pays the VAT over to the government.
What is a mico-enterprise?
a very small informal business employing less than five people
What is a small business?
A business that employs 5 to 50 people
What is an enterprise?
Another name for a business
What is a medium-sized business?
A business that employs 50 to 200 people
What is a large business
A business that employs more than 200 people
What are shares?
Equal parts of a business that can be bought by the public
What does SMME mean?
Small, medium and micro-enterprises
What is a spaza shop?
Small informal shop in a township, often run from a house or a container
What is a shebeen?
An unlicensed or unregulated seller of alcohol, often in a private home
