ADVANTAGES AND DISADVANTAGES OF INFORMAL BUSINESSES

 These are businesses that are generally not registered though they may have licenses. People with such businesses do not pay taxes nor do they adhere to government regulations.

However, before one goes far with such a business, one needs to be acquainted with laws and regulations to be adhered to in one’s business.

ADVANTAGES OF INFORMAL BUSINESSES

1. They are adaptable to changes.

2. They are easy to start so most people can run them on a full or part time basis.

3. They lead to fast employment generation.

4. They form a basis of initiating new industries.

DISADVANTAGES OF INFORMAL BUSINESSES

1. They are not legally recognized.

2. They are not properly organized.

3. They are not always reliable as profit making enterprises.

4. They do not have clear access to loans by financial institutions.

5. They do not comply with social security regulations (NSSF)

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