Lesson 5 LAUNCHING A BUSINESS

I. Read and memorize the following words, word- combinations and word-groups:

to start a business (syn. to launch a business) — розпочати

справу (бізнес)

e.g. Those thinking of starting a business should keep informed about the kinds of opportunities that exist, the persona) qualities needed for success and the kinds of training available

to prepare for the world of business.

to operate a business — керувати справою (бізнесом)

e.g. Many colleges now offer programs that teach students

how to start and operate a business, to face a problem — стикатися з проблемою e.g. Small businesses face many problems,

to risk (syn. to run the risk) — ризикувати

e.g. Corporate leaders may risk their own jobs when they

make major decisions that affect the future of corporation negatively.

sole proprietorship — одноосібне володіння

e.g. A sole proprietorship is a business owned by one person.

to pay taxes — сплачувати податки

e.g. Sole proprietors have minimal legal restrictions and

do not have to pay the special taxes placed on corporations.

to assume the debts — брати на себе сплату боргів

e.g. If a business fails, the owner must personally assume

the debts.

stockholder — акціонер, власник акцій

e.g. Ownership of a corporation is represented by shares

of stock, and for that reason corporate owners are known as stockholders.

partnership — товариство, компанія

e.g. A partnership is a business organization that is owned

by two or more persons.

II. Give English equivalents of the following:

приймати рішення товариство стикатися з проблемою нестача чогось мати успіх одноосібне володіння

сплачувати податки керувати бізнесом акціонер брати на себе сплату боргів досягти успіху ризикувати

III. Fill in the blanks with appropriate words:

1. About 50 percent of entrepreneurs start their ... in industries in which they have some ... . 2. People who come from families whose members were in business themselves are more likely to start their own ... . 3. In a large business the tasks of orga­nizing and operating are done by many hired ... . 4. ... is a business owned by one person. 5. All debts and all problems associated with the business belong to the . 6. ... is a business organization that is owned by two or more persons. 7. If the business were to fail, its ... would have the right to recover their money from any, or all, of the partners. 8. Ownership of a corporation is represen­ted by shares of stock, and for that reason corporate owners are known as ... .

experience creditors stockholders managers business companies a sole proprietorship a partnership owner

IV. Read and translate the text:

There are numerous reasons that make people think about owning a business of their own. Personal independence, unlimited profit potential, the opportunity to work at something that they really love and at hours they choose are some of the reasons people have given for frying entrepreneurship. Many

business leaders begin their careers as entrepreneurs after four years of undergraduate college training and even additional

graduate school training. Others become successful entrepreneurs without special training.

Many colleges now offer programs that teach students how to start and operate a business. Basic information js combined

with hands-on experience and the advice of successful business consultants. These programs help potential entrepreneurs decide whether their own ideas are good and how to follow through with them. With the high rate of business failure, this approach

can prevent personal financial losses.

A common way to learn about a business, and the op­

portunities for starting one similar to it, is to learn while working for someone else. It provides a source of steady income to people while they are planning to start their own businesses. About 50 percent of entrepreneurs start their businesses in industries in which they have some experience.

Evidence shows that people who come from families whose members were in business themselves are more likely to start

their own companies. Unfortunately, the record shows that two out of three new businesses fail within their first four years.

Small businesses face many problems. Bad economic times affect small business more than they do big business. In addition, small business profits tend to fall faster, and small businesses are more likely to fail.

What are the problems that face small business now? In

January, 1985 the National Federation of Independent Business reported that the four top problems facing small business at

that time were taxes, slow sales, the high cost of borrowing money and competition from other businesses.

In a large business the tasks of organizing and operating are done by many hired managers.

A corporation is one kind of business organization. Other kinds of business organizations are sole proprietorships and partnerships. Sole proprietorships are the most numerous kind of business organization, but most are very small. The reason for their popularity is that they are the easiest and least costly to organize.

Sole proprietors own all the profits of their enterprises, and they are their «own bosses», free to make whatever changes they please. They have minimal legal restrictions and do not have to pay the special taxes placed on corporations. Sole proprietors also have opportunity to achieve success and recognition through their individual efforts.

There are also disadvantages, A very serious one is the unlimited liability that each proprietor faces. All debts and all

problems associated with the business belong to the owner. A second disadvantage of the sole proprietorship is that it has limited capital. The money that a proprietor can raise is limited by the amount of his or her savings and ability to borrow. Also, when the owner dies, the business dies. Other disadvantages may include lack of opportunities for employees, limitations of size and lack of management resources.

A partnership is a business organization that is owned by two or more persons. Partnerships offer certain advantages over sole proprietorships:

Partners bring additional funds to a proprietorship.

Partners can bring fresh ideas and talents to business organizations.

Like the sole proprietorship, partnerships are relatively easy to form and are not subject to special taxation. Partnerships have the following disadvantages:

In many cases, each of the partners is subject to unlimited liability. Partners are individually responsible for all the debts of the business. In other words, if the business

were to fail, its creditors would have the right to recover their money from any, or all, of the partners,

A corporation is a business organization created under a government charter. Ownership of a corporation is represented by shares of stock, and for that reason corporate owners are known as stockholders. One feature of the corporation is that

the courts treat it as a legal «person». It can, for example, sue or be sued and enter into contracts, and it must pay taxes.

There are some other types of business organizations. They are: the corporation for small business, not-for-profit corporation, government-owned corporations, cooperatives and franchises (pp.49—61).

V. Answer the following questions:

1. What makes people think about owning a business of their own?

2. How do many business leaders begin their careers as entrepreneurs?

3. What helps potential entrepreneurs to start and operate a business?

4. What problems do small businesses face?

5. Who does the tasks of organizing and operating in a large business?

6. What kinds of business organizations you know?

7. What are the advantages and disadvantages of sole proprietorship, partnership and corporation?

8. What other special types of business organizations do you know?

VI. Define the terms;

sole proprietorships partnerships corporations creditors stockholders dividends

taxes

VII. Translate into English:

1. Підприємці — це люди, які мають власний бізнес і керують ним, сподіваючись одержати прибуток. 2. Тепер багато вищих навчальних закладів пропонують програми, які вчать студентів, як розпочати бізнес і керувати ним. 3. Близько 50 відсотків підприємців розпочали свою справу (бізнес) у тих галузях виробництва, в яких вони вже мали певний досвід. 4. У великому бізнесі завдання, пов'язані з організацією та управлінням, виконуються багатьма найманими менеджерами. 5. Великий і малий бізнес для досягнення своєї мети організовують свою роботу по-різному. 6. Акціонерне товариство, одноосібне підприємство — це різні види бізнесових організацій. 7. Одноосібне підприємc­

тво — це бізнес, яким керує одна особа,

VIII.Read and dramatize the following dialogue:

Nick: Hello, Peter, It's so nice to see you. How are you getting on?

Pete: Quite all right, thank you. And what about you? Haven't seen you for a long time. What have you been busy with?

N.: I've been pretty busy. In fact I want to talk to you about my business.

P.: Oh, I'll be glad to do something for you.

N.: I'm glad you are not in a hurry and we have time to talk today.

P.: Sure»

N.: Well, Pete. I need some legal advice. John and I are thinking of incorporating. We are going to expand.

P.: Really? It sounds interesting. It means that your partnership has been doing very well.

N.: Oh, yes, we have a success. Now some businessmen are interested in investing with us.

P.: Let me get this straight. You want to issue and sell stock in exchange for investment capital, don't you?

N.: Exactly. By the way, does a corporation have limited liability?

P.: It does. Unlike the owners of sole proprietorships and partnerships who can be held personally liable for the debts of their firms the most that corporate shareholders can lose (i.e. their liability) is limited to whatever they paid for their shares of stock. Corporations are so important because of the advantages they offer over sole proprietorships and partnerships.

N.: Tell me a little about these advantages.

P.: Well. Stockholders can enter or leave a corporation at will simply by buying or selling shares of stock in that corporation. When the corporate stockholders die, their shares of stock are passed on to their heirs. Meanwhile,

the corporation is free to conduct business as usual. In certain instances individuals can reduce their tax liability by incorporating.

N.: With all these advantages I wonder why there are so many more unincorporated business than incorporated ones?

P.: The answer has to do with the disadvantages of the corporation.

N.: Disadvantages? What can you tell me about them?

P.: It's difficult and expensive to organize a corporation. The process of obtaining a charter usually requires the services of a lawyer. Most small firms prefer to avoid these by

forming proprietorships and partnerships. Corporations are subject to special taxes. The federal government, along with many state and local governments, taxes corporate income in addition to the taxes paid by shareholders on their dividends.

N.: What does «dividends» mean?

P.: Dividends are the portion of a corporation's profit that are distributed to the stockholders.

N.: Thank you. What other things should I know?

P.: Well. Corporations whose stock shares are sold to the public give up their right to privacy. The law requires that these large, open (or public) corporations disclose information about their finances and operations to anyone interested in reading about them. The purpose of this legislation is to give people information that helps investors and may also be of value to the competition. For that reason some corporations have chosen to remain closed (or private) corporations rather than disclose information they would prefer to keep secret. Now you seem to know a lot about business.

N.: Not everything yet, and the subject becomes quite technical,

P.: I'm glad to hear it. It's time to go now. See you later!

N.: Thank you very much for the information. Bye!

IX. Make up your own dialogue using the following exp­ressions:

to distribute profits and losses to make a right choice to attract customers to go into business

an ammount of money to get along with to run a risk to be liable

X. Inform the group about the future activites or states:

M o d e l : I have the right to expect uniform product quality. I shall have the right to expect uniform product quality.

1. Many colleges offer programs that teach students how to start and operate a business. 2. I know a lot about this business. 3. This program helps potential entrepreneurs decide whether their own ideas are good and how to follow through with them. 4. About 50 percent of entrepreneurs start their

own business in industries in which they have some experience.

5. Evidence shows that people who come from families whose members were in business themselves are more likely to start

their companies. 6. Many business leaders begin their careers as entrepreneurs after four years of undergraduate college training (and even additional graduate school training).

XL Ask for confirmations of the truth of the following statements:

M o d e l : You will call on us tomorrow.

You will call on us tomorrow, won't you?

The manager will not answer my questions on Saturday.

The manager won't answer my questions, will he?

1 . A consumer will have the right to expect uniform product quality. 2. Voting won't take place at a corporation's annual meeting. 3. Small businesses will face many problems. 4. Large and small businesses will organize in different ways to meet their objectives. 5. Sole proprietors won't have to pay the special taxes placed on corporations. 6. I shan't know a lot about this business.

XII. Translate into English:

1. Батьки сподіваються, що він стане гарним підприємцем, матиме власний бізнес і керуватиме ним. 2. Вона вже має чудовий досвід у цій галузі виробництва і, можливо, розпочне власну справу, 3. Як менеджер, він буде виконувати завдання, пов'язані з організацією та управлінням виробництвом, 4. Ми знаємо, що корпорація завжди ма­

тиме переваги над одноосібною власністю та партнерством.

5. Рада директорів обере президента та інших посадових осіб для керівництва компанією.

XIII. Communicative situations:

1. Would you like to own your business? Why yes or why not? If so, would you prefer to buy an existing business or start from scratch? Explain.

a) What product or service would you provide?

b) What talents, interests, skills and abilities do you have, or likely will have, which would make you successful in

this business?

c) Where would you want to locate the business and for what reasons?

d) What type of business organization would you prefer?

(sole proprietorship, partnership, corporation)? Explain your choice.

2. Do you have the personal characteristics that might help you become a successful entrepreneur? Read each question on the Rating Scale. Place a check mark on the line above at the point where you believe successful entrepreneurs would rate themselves. Repeat the exercise for yourself by placing an «X» closest to the answer that best describes you. The check mark need not be placed directly over one of the suggested answers if your rating lies somewhere between two answers. Be honest with yourself. Are you a self-starter?

a) I do things my own way. Nobody needs to tell me to get going.

b) If someone gets me started, I keep going all right.

c) Easy does it. I don't put myself out until I have to.How do you feet about other people?

a) I like people. I can get along with just about anybody.

b) I have enough friends and I don't need anybody else.

c) Most people bug me,

Can you take responsibility?

a) I like to take charge and see things through.

b) I'll fake over if I have to, but I'd rather let someone else be responsible.

c) There's always some eager beaver around waiting to show off, I say, let him.

How good an organizer are you?

a) I like to have a plan before I start. I'm usually the one who lines things up.

b) I do all right unless things get too complicated. Then I lose interest.

c) I just take things as they come.

How good a worker are you?

a) I can keep going as long as necessary. I don't mind working hard.

b) I'll work hard for a time, but when I've had enough, that's it.

c) I can't see that hard work gets you anywhere.Can you make decisions?

a) I can make up my mind in a hurry if necessary, and my decision is usually O.K.

b) I can if I have plenty of time. If I have to make up my mind fast, I usually regret it.

c) I don't like to be the one decides things. I'd probably blow it.

Can you stick with it?

a) If I make up my mind to do something, I don't let anything stop me.

b) I usually finish what I start.

c) If a job doesn't go right, I turn off. Why beat my brains out?

Can you keep records?

a) Since they are needed I'll keep records even though I don't want to.

b) I can, but it's more important to get the work out than to shuffle numbers.

c) I would rather hire someone to keep records for me.