2. Pick out terms and phrases that professionally seem most important for you to discuss the topic.

3. Think of questions using the above-mentioned words.

4. Open a discussion by asking and answering those (and other) questions.

• Well, there are several reasons. These are quite difficult times. There has been a pretty general recession – though they tell us the worst is over now – which means that unless you are part of a big, international concern – and not always even then! – it is quite difficult to make a living by making and selling things. Then there’s the question of labour relations. One is used to hearing all kinds of horror stories about the activities of wicked trade unions, about excessive wage demands, and about what is officially called industrial action, which usually means strikes. I’m sure there is no doubt that these factors do contribute to the rapid disappearance of many little businesses, but it is more than likely, in my opinion, that what really accounts for most of the failures is quite simply bad management. So I shall spend the next few minutes talking about management, and in particular about the management of money, which is the single most important aspect of managing a business.

• Let’s look at some of the ways in which a business may be badly managed, to see if we can learn some lessons from them about good management. First, many new business are under capitalized, that is, there isn’t enough money available to them to give them a real chance to succeed, if everything goes smoothly right from the start, they may survive. But if they encounter problems and delays, and they are under-capitalized, they will be in trouble. And we should remember, too, that enthusiasts lend always to be over-optimistic, so they underestimate the amount of capital they are going to need. So that is our first lesson: never attempt to start a new venture if you haven’t got enough capital to see it through.

• Second, many new businesses fail because they are in the wrong place or their premises are unsuitable – too big or too small, or something of the sort. This may mean that they can’t afford to pay the rent and other costs, or they operate inefficiently because they haven’t got enough room to plan properly or to expand if they need to. So our second lesson is: don’t be in too much of a hurry to settle on premises if you aren’t quite sure they are right.

• Third, some ambitious new businesses spend too much of their capital on presenting a glossy image, with expensive fittings and office furniture which cost a great deal of money but do not contribute anything to meeting the expenses. So that’s our third lesson: get your priorities right and don’t spend too much of your capital on non-productive items.

• Fourth, far too many business fail because their managers have not done their homework, in two ways in particular – in researching the market to make sure that the product they have in mind is really in demand and not already available from lots of other companies at competitive prices, and in investigating and setting up ways of distributing the finished product, that is of getting it to the customer on profitable terms. Remember, even if you product of its type in the world, but no one wants to buy it or you can’t get it to the people who do, you will fail. And that’s our fourth lesson: always research the market before you decide to enter it – and that includes taking a long, hard look at the competition. There is a fifth lesson here, too. Be very sure you have a system of distribution ready before you even start to produce anything.

• There are quite a lot of other factors to be taken into account: installing the right equipment, hiring a suitable workforce, ensuring a supply of raw materials on terms you can afford; controlling production, keeping a close check on prices and customer credit, but above all, remember today’s golden rule: plan every step of the way before you start your business.

(Business Studies by C.V. James Section I. Starting Business p. 2)