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5.They will not lend money to people starting a business for the first time.

6.You must have property to guarantee the loan.

5.Read these three paragraphs, which give information on how to obtain finance for business start-ups, and decide which one each statement 1-6 in Exercise 4

refers to.

A.Banks are in the business of lending money, so you will get a polite hearing. But fine words, enthusiasm and energy won’t be enough to talk them into giving you a loan. They expect to see an intelligent business plan. Establish realistic budgets and work out what the absolute minimum is that you need to live on. A cash flow forecast is important. So give details of your projected income and expenditure, and have an idea of how long it will take you to reach a break even point (when a company is neither making a profit nor a loss – точка безубыточности).

Banks like to use assets such as premises, motor vehicles or equipment as collateral (or security - залог) against loans. Banks don’t care whether or not your business has great potential. They are only interested in the business’s ability to cover the principal and interest payments.

B.If your friends and family express an interest in helping you with your business financing, try to persuade them in a professional way. Make a presentation in exactly the same way as you would to a bank. Don’t be embarrassed to show financial statements, tax returns or whatever else they want to see. Do anything to get that money! But do think carefully before asking family members to trust you with their life savings. If the business fails how will you tell them? You should prepare a written agreement about any loans. If you don’t, bitter arguments will damage the relationships eventually.

C.Another possibility is to find business “angels” - some venture capital firms which will consider financing a start-up. However, they will only be interested in entrepreneurs who have experience of successfully starting up businesses. They are best known for financing high-tech firms, but they do finance other types of businesses.

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Role play Advice about starting a business (work in pairs) Pair A

You are business advisors. You will give advice to a pair of entrepreneurs about how to finance a small business they want to start.

Before talking to them, decide what type of finance might be suitable for them: a bank loan, a loan from family or friends, a mortgage or using personal savings.

You will need to ask them:

-about the type of business

-about their personal financial circumstances

-if the business will suit the skills and interests of theirs

-if they have done market research

-who their future customers will be

-if they have many competitors

-if they have any advantages over their competitors

-what machinery they need for their business

-where they are going to locate their business

-when they are going to reach a break-even point

Prepare some questions and when you are ready, meet the entrepreneurs, discuss their plans with them and give them your best advice.

Pair B

You are entrepreneurs who are thinking of starting a new business, but you need advice on how to finance it. So, you are going to consult some small business advisors.

Some ideas for people who want to start their own business:

a)Buy a disused cinema. Decorate it in the style of Ancient Egypt, or Dracula’s

Castle. Rent it out as a venue for parties and conferences. Change the décor every six months.

b)Breed ostriches. Ostrich meat is the meat of the future and contains less cholesterol than turkey and chicken.

c)Run a job placement agency for new graduates. Offer and advice service, which includes psychometric testing to see what sort of job is the most suitable for candidates.

d)Open up a second-hand store. All you need is a storage area and an idea what second-hand goods are worth. Someone brings an object to your store and together

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you set a price. Set it and take a third of the money as commission.

e)Build teams with nature’s help. Rent some place (eg. a Scottish island) and organize training weeks to help business people find their inner strengths by climbing mountains, hunting, and camping outdoors. Use ex-army instructor to run the courses.

f)Open an English-speaking tearoom where people pay by the hour to improve their English. They can enjoy tea, cake, and the company of English speakers.

g)Start up a health food shop selling organic fruit and vegetables. More and more people are worried about the food they eat and the chemicals that they have in them.

Your personal financial circumstances: you have savings of $50,000

Financing requirements: approximately $70,000 if you are ready to use your

Work together and decide what questions to ask and what advice you need from the advisors.

You may ask them advice on the type of financing your business, best location of your firm, a number and kind of employees recruited, etc.

When you are ready, explain your business idea to the business advisors. Get their advice on how best to finance your business.

Unit 6 Human Aspects of Business Organizations

Part 1 Management Functions

Words to remember

management (n) – the activity or skill of directing and controlling the work of a company or organization

vital (adj.) – necessary; of the greatest importance overall (adj.) – including everything

objective (n) – a goal or an aim charge (n) – (here) responsibility

to evaluate (v) – to carefully consider something to see how useful or valuable it is; to assess

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to fit (into) (v) – to match or agree; to harmonize to establish (v) – (here) to create

to revise (v) – to change (opinions, intentions) because of new information or more thought

to allocate (v) – to decide officially that a particular amount of money, time etc should be used for a particular purpose

to attain (v) – to gain or arrive at, esp. after long effort; to reach associated (adj.) – connected with

to staff (v) – to provide workers for an organization

to supervise (v) – to be in charge of a group of people or a particular area of work supervision (n) – the work of making sure something is done properly

ongoing (adj.) – continuing

to direct (v) – 1. to control and be in charge of (an activity or situation); to manage 2. to order; to command

direction (n) – management or control

to guide (v) – to show someone the right way to do something, especially something difficult or complicated

to motivate (v) – to encourage someone and make them want to work hard potential (adj.) – not actually existing at present

phase (n) – a stage of development

to complete (v) – to finish; to bring to an end

to assign (v) – to give someone a particular job or task adequately (adv) – good enough

to vary (v) – (here) to change, esp. continually interpersonal (adj.) – concerning relations between people

Tasks to perform

1. Give English equivalents of the words and word partnerships used in the text.

оценивать альтернативные планы; выбирать определённый курс действий;