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Grade 11 Business Studies Test
5 June 2017
Public & Private Sectors:
Public Enterprises: owned & controlled by the government
...
e
...
Not primarily profit driven, subsidized by government
to keep usage costs to an affordable minimum
...
Businesses not selling products in demand or providing
poor service will quickly go under
...
[taxi industry, spaza shops, informal hairdressers]
Benefits:

Disadvantages:

→ Money earned in the informal sector

→ Does not contribute to tax

is spent in the formal sector
→ Employment is created

→ Does not contribute to the GDP of a
country

Formal Sector: pays tax and contributes to the country’s GDP
...
Raw
materials are natural products of nature which can be divided into five broad
categories:
1
...
Forestry

2
...
Mining

3
...
Most
products undergo several forms of processing before they are ready for sale
...


The Tertiary Sector: Includes the distribution of processed goods (& occasionally raw
goods) for sale, as well as the sale of the goods
...

Personal services: are done for individuals [hairdressers and teachers]
Commercial services: are done for businesses [transport & storage]
Tertiary services occur throughout the production process, both the primary &
secondary sectors make use of tertiary services
...


Entrepreneurship & Management:
Entrepreneurs are an important force in driving our
economy, providing products & services, as well as
creating employment
...
Many highly
qualified professionals run their own businesses or
are consultants in their field of expertise
...
Both informal & illegal sectors are largely composed of entrepreneurship
...

Entrepreneurial Qualities:
→ Passionate visionaries: believe in something new, or that others have failed at
previously
...
Innovate various aspects of traditional
businesses (products, methods & marketing campaigns)
→ Risk takers w/ positive attitudes
...

→ Good leaders who persuade others to buy into their dream
...
Prefer not to work for a boss who tells
them what to do
...
Success is a result of hard work over a long period
of time
...

Entrepreneurial Skills:
→ Have the knowledge & expertise to successfully run a business
...


Business Plans & Gantt Charts:
Advantages of a Gantt chart:
→ Visual & chronological order
→ Gives a time-frame for each task

A Gantt Chart for the Completion oF a
Geography Project by 4 Students

→ Shows how complete or
incomplete a task is
→ Shows which activities need to be
run simultaneously as well as

Poster [Riley]
Essay [Mackenzie]

which activities cannot begin

Research [Corey]

before the completion of other

Planning [Macey]

activities
→ Can include the person/group

Current

0

Completed

5

10

15

Days

responsible for each task
Constructing a Gantt chart:
1
...
Mark time intervals on the x-axis (weekly increments for shorter tasks & monthly
increments for longer tasks)
3
...

4
...

5
...

•Identifies a gap in the market
•Identifies threats before they become a reality (the viability of the product, the size of the otential
market & the stability of suppliers
...


Planning

•Sets SMARTER goals
[specific, measurable, acheivable, realistic, time-related, ethical & recordable]
•Does a SWOT analysis
•Formulates a business plan & an action plan

Resourcing

•If environmental scanning & planning were successful, resources are mobilised:
•fellowe investors, raw materials, capital items (such as machinery, equipment & furniture), finance
is arranged & staffing is done (it is important to have the right staff for the right jobs)

Preparation

•Occurs a few weeks before the launch of the company
•Everyone needs to be as well prepared as possible
•Communication is very important as everyone is in a new environment & situation

•The momentum from the startup/launch of a business needs to be maintained

Action

Evaluation

•Is done on a regular basis
•Feedback on what to try, continue and avoid or stop is collected

Work Breakdown Structure (WBS):
→ Indicates the work to be done on a specific task
→ breaks up each element of the task at hand
→ operates through a hierarchical structure
...
Formation procedures
2
...
Continuity of existence
4
...
Progressive tax in South Africa
b
...
5 million per annum
c
...
Management & control aspects
6
...


Private
Company
Pty limited
...

dependent on
the # of shares
available
complicated
limited
separate

limited

unlimited

unlimited

unlimited

unlimited

progressive
personal tax

taxed on
personal
capacity of
partners

28% company
tax

28% company
tax

28% company
tax

members

director /
board of
directors

director /
board of
directors

Sole Trader

Partnership

Ltd
...
,

# of owners

1

Startup
Liability
Legal Entity
Continuity of
Existence
Tax

Management

owner

partners

Close Corporations:
Members of a Close Corporation:
→ Have a maximum of 10 owners ∴ expansion can be difficult if capital needs to be
raised
...
e
...
) This limits capital, expansion & the possible longterm success of a business
...

→ Members are required to play an active role in management - good for small
business where owners want to be involved in daily management
...

→ More than one person can be involved in the making of important decisions - this
can improve the business’s chance of success, but can also slow-down the decision
making process leading to a loss of opportunities (& lower chance of success)
→ Financial statements do not need to be signed off or audited by a CA, which might
save the business money, but they do need to be reviewed by a member of SAIPA
(The South African Institute of Professional Accountants)
...

→ A member can only stand to lose their investment in a CC if the business lands in
financial trouble
...


Private & Public Companies:
Private Companies:
Shares can only be bought by invitation - shares
can only be sold with permission from other
shareholders
...

The more shareholders, the more capital is
available

Public Companies:
Shares are freely negotiable on the JSE
(Johannesburg Stock Exchange) - they are easy
to buy & sell
...

Because buyers can buy any shares, there is
quick & easy access to capital (provided shares
are in demand)
Management is appointed at an AGM (annual
General Meeting) where shareholders vote for a
Board of Directors (this has advantages &
disadvantages)

Companies Act No
...

The new act promotes innovation & investment in South Africa’s markets
...
However, no new close corporations
may be registered under the new companies act
...
They
will retain both their name & registration number
...

→ Incorporation is done once a notice to incorporate and memo of incorporation have been
filed to a commission
...

→ memo of incorporation: a detailed document providing all information regarding the setting
out of rights, duties & responsibilities for shareholders and directors
...


with regards to the handling of the
company’s information

→ A minimum level of skill needs to be
maintained depending on the required
function
...

IN ADDITION:
→ Public & state-owned companies are required to be externally audited by an auditor &
auditing committee
→ Public & state-owned companies are required to appoint social & ethical committees
...


Auxiliary Functions of Marketing:
Marketing involves all of the functions required in getting a product or service from the
producer to the consumer
...

Variables in the Marketing System:
Manageable Variables:
→ marketing mix (the 4 ps)


Product policy



Pricing policy



Place policy



Promotion policy

→ Marketing Objectives - which are the marketing manager’s responsibility
...

Non-Manageable Variables:
→ factors that exist in the external environment (PESTLE factors)



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