Weeks 1-2: Topic 4 Entrepreneurship: Businesses - pg. 41 - 42 (Advantages and disadvantages of formal and informal businesses)

Question 1

Fill in the blanks:

3. 1.1. THE ADVANTAGES OF A FORMAL BUSINESS INCLUDE:
4. The _____ of a formal business are clearly defined and all ________ work towards achieving those ______. Tasks are generally done on time.
5. Some formal businesses are protected by _____ if they are legal entities.
6. They can get more ______ or larger _____ from banks once they have formed a good credit companionship with their bank.
7. Businesses in the formal ________ seem to have far more credibility. Other businesses are more likely to trust them as ________ that they enter into are binding and will be upheld by law/ ______ of law. A good name (credibility) will also enable the business to enter into/to ______ larger ________.
8. Government _______ are usually only awarded to formal businesses.

Answer 1

1. goals; employees; goals
2. law
3. services; loans
4. sector; contracts; court; secure; contracts
5. tenders

Question 2

Fill in the blanks 2:

3. 1.2. DISADVANTAGES OF FORMAL BUSINESSES INCLUDE:
4. Some formal businesses such as ________ can sue and be sued as they are recognised as a _____ person. Such formal businesses could pay ______ fees for expensive court cases if _______ are broken.
5. There will be certain legal ___________ that have to be met, depending on the form of ownership. For example, companies have to be ________ and all businesses pay ____ on their income.
6. Formal businesses have their _____ mapped out and this may mean that employees do not have much scope for _______.

Answer 2

1. companies; legal; legal; contracts
2. requirements; audited; tax
3. goals; creativity

Question 3

Fill in the blanks 3:

3. 2.1. ADVANTAGES OF INFORMAL BUSINESSES INCLUDE:
4. They contribute to the South African ________ in much the same way as formal businesses, as they also provide ______ and _________ to satisfy the needs and _____ of the consumers.
5. They often reduce ___________ and poverty as these entrepreneurs are often able to support themselves.
6. They are usually easy to _____ as they do not have overhead ________/ rent to pay.
7. Entrepreneurs in the informal sector can be _______, which could benefit them and their business.
8. Entrepreneurs in the informal sector learn _____ while they are at work in the informal sector and they are then able to use these ______ when they set up a business/find a ____ in the formal sector.

Answer 3

1. economy; goods; services; wants
2. unemployment
3. start; expenses
4. creative
5. skills; skills; job

Question 4

Fill in the blanks 4:

3. 2.2. DISADVANTAGES OF INFORMAL BUSINESSES INCLUDE:
4. It is often difficult to get _______ help as banks often see them as unreliable, with little ______ to offer. They could borrow from micro-lenders, which is far more ______ than borrowing from a bank.
5. They don’t pay ____, so the government loses out on ______.
6. They are unregulated, meaning there is no official ______, so they can carry out illegal/______ activities.
7. They often set themselves up outside formal businesses’ __________, tend to be untidy and cause ___________ in these areas.
8. They generally trade in ____, which can be a risk as they could be robbed by __________.
9. People employed in these businesses generally have ____ working conditions - they work long hours with no proper ________. Their equipment is generally ___ or they have none.
10. People employed by informal businesses could be _______ and misused as there is little/ no protection offered to them.

Answer 4

1. financial; security; expensive
2. tax; revenue
3. control; unsafe
4. premises; overcrowding
5. cash; criminals
6. bad; breaks; old
7. abused