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1.Read the text and answer the questions.

  1. What does diversification mean?

  2. Why do people usually diversify into areas akin to their existing businesses?

  3. What are the advantages of diversification?

  4. Why should you treat your new business as a completely new one?

  5. What is the common reason for failure?

  6. Why is it important to change the status of the company?

2. Decide if the statements are true (T) or false (F).

  1. Diversification is different from expansion

  1. Generally, people diversify into areas similar to their existing businesses.

  1. Broadening your operation means you can still be profitable even if the activity of one of your businesses is lessened.

  1. The company shouldn't spread its resources too thinly.

  1. Your original business always suffers when you set up another business.

  1. A limited company has certain advantages.

  1. In the limited company the directors are personally responsible for its debts.

  1. A limited company involves a lot of paperwork.

  1. Diversification usually means another stream of profits.

3. Match the words on the left with their definitions on the right.

1) diversification

a) similar

2) akin

b) creation of a new parallel business

3) to share

c) money spent regularly to keep the business

running

4) personnel

d) lessening of business activity

5) downturn

e) to have or to use with others

6) overheads

f) staff

7) thinly

g) difficult, but very interesting

8) challenging

h) scarcely

4. Try to explain these words in English. What do they mean?

Use the example: Expansion - making things larger e.g. business

diversification

profit

facilities

personnel

take a downturn time consuming

debt care

5. Complete the sentences using the words from the text.

  1. Diversification is the creation of a new 'parallel' …to run alongside the existing business.

  2. The two businesses may be able to share certain …, and even … .

  3. You should draw up plans with the same amount of … and … .

  4. The most common reason for … is that companies spread their resources too … .

  5. The new business always looks very …and… .

  6. The main …of a limited company is that it is a completely separate legal … from its owners.

  7. The …is that a limited company involves more paperwork.

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