Business

Question 1

What is a home salon?

Answer 1

A beauty service business operated from a residential location, providing services such as facials, nails, hair treatments, and massages.

Question 2

Advantages of a home salon?

Answer 2

Low costs, flexible hours, and a personal touch.

Question 3

Disadvantages of a home salon?

Answer 3

Fewer clients, zoning issues, and less professional image.

Question 4

Legal considerations for a home salon?

Answer 4

Zoning laws and health & safety rules.

Question 5

What is a clinic/salon in a shopping centre?

Answer 5

A professional salon or clinic located within a shopping mall, offering a variety of beauty services.

Question 6

Advantages of a clinic/salon in a shopping centre?

Answer 6

High visibility, established client base, and client convenience.

Question 7

Disadvantages of a clinic/salon in a shopping centre?

Answer 7

High rent & costs, strict lease rules, and tough competition.

Question 8

Legalities for a clinic/salon in a shopping centre?

Answer 8

Lease agreement, mall rules, and health and safety regulations.

Question 9

What are spa/resort spas?

Answer 9

Luxury spas located within resorts or as standalone entities, offering high-end beauty, massage, and holistic treatments.

Question 10

Advantages of spa/resort spas?

Answer 10

Premium clients, high revenue, and good reputation.

Question 11

Disadvantages of spa/resort spas?

Answer 11

High setup costs, seasonal demand, and expensive to run.

Question 12

Legalities for spa/resort spas?

Answer 12

Zoning & licensing and health & sanitization.

Question 13

What is a mobile beauty business?

Answer 13

A beauty service that travels to clients’ homes, offices, or events.

Question 14

Advantages of a mobile beauty business?

Answer 14

Flexible scheduling & locations, lower overhead, and personal service.

Question 15

Disadvantages of a mobile beauty business?

Answer 15

Travel time & costs, smaller client base, and insurance risks.

Question 16

Legalities for a mobile beauty business?

Answer 16

Insurance, client liability, and licensing.

Question 17

Advantages of buying an existing business?

Answer 17

Established client base, known brand, operational systems in place, and immediate revenue stream.

Question 18

Disadvantages of buying an existing business?

Answer 18

Hidden issues, culture clashes, and reputation.

Question 19

Pros and cons of buying existing businesses?

Answer 19

Pro: Informed decision-making. Con: Potential high debt levels.

Question 20

What is the purchasing process?

Answer 20

Valuation, negotiation, and legal transfer and ownership.

Question 21

What is due diligence?

Answer 21

A thorough examination of the business to identify debts, lawsuits, and risks.

Question 22

Advantages of franchising?

Answer 22

Training, branding, and support.

Question 23

Understanding goodwill?

Answer 23

Pro: Attracts customers. Con: Fragile and can be damaged.

Question 24

What is a sole proprietorship?

Answer 24

A business owned by one individual who is fully responsible for all liabilities.

Question 25

Advantages of a sole proprietorship?

Answer 25

Full control, simple tax structure, and minimal startup costs.

Question 26

Disadvantages of a sole proprietorship?

Answer 26

Unlimited personal liability.

Question 27

What is a partnership?

Answer 27

A business owned by two or more individuals sharing responsibilities and profits.

Question 28

Advantages of a partnership?

Answer 28

Combines skills and resources.

Question 29

Disadvantages of a partnership?

Answer 29

Joint liability and potential conflicts.

Question 30

What is a private company (Pty Ltd)?

Answer 30

A separate legal entity that limits liability for its shareholders.

Question 31

Advantages of a private company?

Answer 31

Limited liability and easier to raise capital.

Question 32

Disadvantages of a private company?

Answer 32

Higher operational costs and compliance requirements.

Question 33

What is a public company (Ltd)?

Answer 33

A large company that issues shares to the public to raise capital.

Question 34

Advantages of a public company?

Answer 34

Ability to raise significant capital and limited liability.

Question 35

Disadvantages of a public company?

Answer 35

Requires detailed registration and financial disclosures.

Question 36

What is a personal liability company (Inc)?

Answer 36

A company structure for professionals where directors can be held personally liable.

Question 37

Advantages of a personal liability company?

Answer 37

Enhances professional reputation while providing limited liability.

Question 38

Disadvantages of a personal liability company?

Answer 38

Directors face personal liability if found negligent.

Question 39

What is a business trust?

Answer 39

A trust that holds assets for beneficiaries, managed by trustees.

Question 40

Advantages of a business trust?

Answer 40

Provides asset protection and limited liability.

Question 41

Disadvantages of a business trust?

Answer 41

Complex setup and higher maintenance costs.

Question 42

What is an external company?

Answer 42

A foreign company operating in South Africa without establishing a separate local entity.

Question 43

Advantages of an external company?

Answer 43

Provides access to the South African market.

Question 44

Disadvantages of an external company?

Answer 44

Must comply with local laws and tax regulations.