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6.My boss started up this company _____ (to have taken; having taken) money from the venture capitalist.

7.All preparations _____ (were made; being made), the company launched the most strident advertising that year.

8.The investment of funds _____ (provided; being provided) start-up money for a new company is called venture capital.

9.In _____ (being tried; trying) to avoid taking out loans, the businessman decided to minimize expenses of his company.

10.Money _____ (received; to receive) from shares of stock is called dividends.

11.The banker seems _____ (to know; knowing) the present situation on the tourism market.

12.The government-based funds _____ (are to consider; are considered) to be the most preferable source of raising finance among small businesses.

Ex. 21. Oleg Krasnov needs money to finance his project. There is a dialogue between a loan officer and Oleg. Decide where these sentences (A-H) should go. Read and translate the dialogue from English into Russian.

Words to know:

A secured / unsecured loan – обеспеченный / необеспеченный заем Prime plus two – плюс два процента к льготному

A collateral – дополнительная гарантия

A Certificate of Deposit – депозитный сертификат

A.All of them have different rates.

B.Here you are.

C.some shares of stock

D.Do you have a brochure or any information on it?

E.What can I do for you?

F.Here is my card.

G.You might consider a cosigner with strong financials.

H.What rates are you charging presently?

At the Bank

Loan Officer: _____ ?

Oleg: I’d like to take out a loan for 250,000 rubles – unsecured, if possible.

_____ .

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Loan Officer: That depends on the type of loan – business loan, car loan, home improvements loan. _____ . Loans can start as low as prime plus two, and go up from there.

Oleg: What do you recommend?

Loan Officer: I would recommend you to start out with a secured loan. If you have

Ex. 22. Look through the dialogue again and express your opinion on the following points:

1.Oleg and Lena have two ways to raise money – taking out a loan from the Russian bank or sending their draft budget to the American Foundation, which supports business of the young. Which backer is more preferable?

2.The Russian banks are likely to develop special credit programs providing some prime rates, making concessions, and encouraging young entrepreneurs. Do you think such programs enable the young to make their businesses run well?

3.Which ways of fund raising would you prefer to undertake?

Ex. 23. Read the short texts about the businessmen’s attitude to investments.

Translate them from English into Russian.

Words to know:

Obsolete – устаревший

Logging enterprise (company) – леспромхоз

Unprofitable – убыточный, неприбыльный

To appeal – обратиться

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Lease – аренда, наём; to lease – брать в аренду

To draw credit resources – привлекать кредитные ресурсы

To tap – выпрашивать деньги

To acquire – приобретать

To switch to – перейти на что-либо

Pace – темп

To resort to – прибегать к чему-либо

Up-to-date – современный

To avoid – избежать

Working facility – рабочая площадь

Convinced – убеждённый

Insolvent – несостоятельный

Text A

Timber production is one of the main industries exporting raw materials abroad. It plays an important part in the Far Eastern economy. In the middle of the 1990s, this branch came to be in the very hard situation because of its obsolete equipment and unprofitable logging enterprises. None of the Russian banks expressed their readiness to extend credits, which had run into debts totally amounted to millions of the US dollars. To survive the Khabarovsk krai logging companies appealed to the credit organizations. One of them, the Asian-Pacific Cooperation Company, was founded in 1995 by the two largest log exporters – JSC Dallesprom and Exportles. The Company’s major goal is to draw credit resources for Eastern timber industry support. It has already known as an investment and lease establishment, which won confidence of its partners on the market. The APC Company taps finance using growing assets and guaranties of founders as collateral. It attracts investments from foreign companies, and supplies the Far Eastern enterprises with hi-tech logging equipment, trucks and other machinery made in Scandinavian countries and Canada, and which acquired a good reputation as safe for forests. They also meet environmental requirements and guarantee effective timber processing. Having leased this equipment, dozens of logging companies switched to essentially new level of productivity. They changed both pace and results of their work. Usually such timber industry enterprises receive this new equipment with the valid guarantee period for five years. They are to pay back the cost of the equipment by part of their production during first two years. Another three years they are able to work for the company’s development. Certainly, there are a lot of difficulties. They are bad weather, disrepair of the machines, and shortage of spare parts or specialists. To

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clear off a debt the enterprises need an actual management of investments. They have to reorganize the companies, and reduce their personnel. In other words the companies should adapt themselves to the market conditions, be able to compete both on the regional and world markets. Nowadays, the timber industry in the Russian Far East remains attractive for the domestic and foreign investment. Due to this fact, the logging companies resort to different forms of raising finance. Loans, lease and investments are among them.

Text B

Boris Klimov is famous for his Closed Joint Stock Company Klim. An engineer, a candidate of Technical Sciences, he developed his company, and today the Klim unites several enterprises with total number of employees 1,300 and more than 3,500 square meters of production area. Every twenty four hours, up to 25 tons of sausage, ham, smoked meat products are produced. They are distributed to different parts of the Far East.

The Klim attracts consumers by its wide range of food products, their high quality, reasonable prices and up-to-date level of service.

The Company’s Director General has his original point of view on the work of the so called small business enterprise:

1.To follow strict principles of running business. They pay salaries and taxes on time, and cover both the utilities and services expenses, as well as expenses for raw materials.

2.The Company should always function. It renews the equipment, and opens new production lines, but never stops work.

3.To avoid investments, because they are the same credits. The Klim does not draw any credit that is why they decline many foreign investors’ proposals.

4.This enterprise is willing to cooperate with companies supplying technology, equipment and raw materials from Germany, China, Republic of Korea and Japan, as the Klim is considered to be a reliable and stable partner.

5.The Klim is ready to collaborate with the local administration bodies on the mutually beneficial conditions. The Company would expect them to grant working facilities, provide with guaranteed state orders and possibilities to put new lines. Then the Company would create more jobs.

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6. To expand into the market and keep developing the production. That means improvement of the products’ quality, renewal of assortment, and involvement of the staff to share common goals.

Boris Klimov is convinced in the revival of Russian economics through the middle and small business development. He is aware of the biological resources effective use that enables the Far Eastern economy to develop. The Klim Company’s head is sure that our territory needs more enterprising and persistent businessmen, devoted to their work, as well as sensible governmental policy, reasonable and convenient tax system, which can stimulate the production. Boris Klimov is sure that the Russian Far East could develop its economy, and improve the Far Easterners' prosperity.

Ex. 24. Look through the above texts again, read the statements below, and define whether they are true or false.

1.In 1990s, the Far Eastern banks were quite risk-averse and reluctant to lend logging companies.

2.Credit companies also didn’t want to take risk when making deals with such enterprises.

3.The major goal of the Asian-Pacific Cooperation Company was to draw credit resources for automobile industry of the Far East.

4.The APC Company finances the logging companies and supplies them with equipment.

5.Having leased this machinery, the Far Eastern logging companies could manage their financial difficulties.

6.The APC Company also manages its investments to be sure that the companies could pay back their debts.

7.The logging enterprises are often reluctant to borrow money for the development of production.

8.Today timber industry is still insolvent.

9.The Klim Company’s Director General never takes credits for development of the production.

10.The Klim Company is a success because of its sensible, managerial and financial policy.

11.Foreign investors are not interested in financing food industry enterprises.

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12.Mr. Klimov doesn’t borrow money from banks or credit companies because it is meaningless to invest in small and medium-sized business.

13.Food enterprises are always profitable. They don’t need investments from outside.

14.Leasing can attract only small enterprises working in timber industry.

Ex. 25. Sum up what you have learnt from the above material, and speak on the following topics in short conversations.

1.Taking credits: pros and cons.

2.To take risk or not to take risk when raising money for starting up.

3.Investment projects of the Russian Far East (the railroad and traffic bridge across the Lena river near Yakutsk; the railroad Berkakit – Tommot – Yakutsk; the Kamchatka recreation area; the Khabarovsk Children Park after A. Gaidar; the shopping and entertainment center in Bolshaya Street in Khabarovsk; the Komsomolsk-on-the Amur refinery and others).

4.What is better: domestic or foreign investments in the national economy?

5.Does the East of Russia attract investments? Why?

6.Students can run their business as well as grown-ups. They can get money to start up from various sources, which are at the entrepreneurs’ disposal.

UNIT III. HOW TO MAKE YOUR BUSINESS PROFITABLE

Ex. 1. Read and remember the words.

Profitable, lucrative – прибыльный

To invent – изобретать, invention – изобретение, innovation – инновация,

нововведение

To consume – потреблять, расходовать, consumer – потребитель To shoplift – украсть в магазине

Item – наименование

To hit on the idea – выдвинуть (развить, разработать) идею

To take off – увлечь, поразить, начать, стартовать, взлететь, иметь успех, (по)действовать

Traveling salesman – коммивояжёр

Exaggeration – преувеличение