There was no sampling frame on which to base weights and raising factors for small businesses in South Africa. As a result, the research design used for SESE was based on those developed for Francophone African countries to measure the extent of their informal sectors. The methodology used for such surveys is known as the '1-2-3 methodology', consisting of three stages. The first stage involved identifying small and micro-businesses through a household survey. In South Africa, the LFS is used for this purpose. The LFS is a twice-yearly household survey specifically designed to measure the labour market. It also provides insight into a variety of issues related to the labour market, including the level and pattern of unemployment and the industrial and occupational structure of the economy. The definition of such microbusinesses varies from country to country, depending on size, turnover and other criteria. In South Africa, the criterion of ownership of non-VAT-registered enterprises, i.e. an annual turnover of less than R300 000, was applied for our selection. The second stage involved interviewing the owners of these businesses, to determine the nature of their business and their contribution to the economy. In South Africa, SESE questionnaire was used for this purpose. The third phase involved asking consumers in households about their buying patterns from large, small and micro-businesses.
