FD-301_vsyo / Subj / 746-Entrepreneurship. Предпринимательство

administrative domain. Managers have to effectively use the resources in order to receive as many rewards as possible (bonuses to salary).

Control of Resources differs in the same way. Since the manager's salary depends on effective resource control, he often takes interest in owning or accumulating as many resources as possible. The pressures of power, status, and financial rewards cause the administrator to avoid rental or other periodic use of the resources. The opposite is true for the entrepreneur who, under the pressures of limited resources (funding), risk of obsolescence, need for flexibility, and the risks involved, strives to rent or achieve periodic use of the resources only when they are badly needed.

Organization Structure. In the administrative domain, the organization structure is formalized due to the need for clearly defined lines of authority and responsibility based on management theory and the reward system. The entrepreneur, true to his or her independence, employs a flat organization structure based on informal personal contacts.

2. Fill in the chart given below. Discuss it in groups.

Business points of difference		Entrepreneur	Manager
1.	Strategic Orientation
2.	Commitment to Opportunity
3.	Commitment to Resources
4.	Control of Resources
5.	Organization Structure

3. Read the text and answer the questions

Setting up a limited company

John, Matt and Nick started a limited company last year. They named it JMN Ltd,

using the capital letters of their names. John, Matt and Nick are all investors and

shareholders.

The company's capital – the money it has for buying goods and equipment – is

$10,000.

Matt	$1500	JMN Ltd
John	$3000	capital: $10,000
Nick	$5500	shares: 10.000 x $1

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John invested $3000, Matt put in $1500, Nick -$5500, so – Nick is the majority

shareholder (he owns the most shares). Nick also has a controlling interest (he owns more than 50% of the shares).

The company's capital is divided into 10,000 shares of $1 each. $1 is the nominal value (or the face value) of each share. Matt owns 1500 shares. The nominal value of

his shares is $1500.

After a year, the company made $ 1500 profit. This is divided between the shareholders. The company announced a dividend of 15 cents per share ($1500 profit:

10000 shares).

John received $450 (3000 shares x 15 cents), Matt - $225, and Nick - $825.

NOW CHECK YOURSELF:

Jane	$300	AJK Ltd
Ann	$600	capital: $2000
Kale	$1100	shares: 2000 x $l

AJK Ltd had $200 profit after the first year.

1.Why did they call the company AJK Ltd?

2.Who is the majority shareholder?

3.What is the face value of Ann's shares?

4.What dividend did they announce after the first year of their work?

5.How much did each of the shareholders receive?

Text 6. The «Ten commandments» for small business success.

1. Learn the business

Learn as much as you can about the business you want to start or buy. If you don't have experience in the type of business you want, try to get a full or part-time job in a similar business.

2. Develop a plan

Study your business ideas and develop a plan of action. Know your product or service, and manage it to produce a profit. Remember, plan your work and work your plan.

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3. Control expenses

Controlled expenses will keep your overhead low, your profits high, your bills paid, and your credit and reputation established.

4. Get advice

Establish immediately a relationship with a banker, attorney and accountant who specialize in small business, preferably someone you feel comfortable with.

5. Keep accounts current

Keep your accounts receivable current. Don't be afraid to ask payment for goods /services rendered. It's just good business.

6. Establish goals

Successful entrepreneurs are goalsetters. Set your goal. Work toward its successful completion. Then set another. But aim only at one goal at a time.

7. Be positive and persistent

A positive attitude and a persistent approach throughout the development of your business can produce only a successful outcome.

8. Communicate

Be attentive. Read carefully. Speak clearly. Poor communication results not only in misunderstanding but lost time and money.

9. Be honest

Honesty is not only the best policy, it is the only policy. Provide good service, your most valuable assets is your customer.

10. Learn more

When you have a business of your own, you can never afford to stop learning.

1. Work in pairs. Discuss these rules. What may happen if you don’t follow them? Use the following phrases while discussing this problem:

I doubt that…; quite to the contrary…; it’s inter	esting to note that…; what strikes
me here is that…; I might as well add that…; I’d li	ke to draw your attention to...;
it must be emphasized that…; it goes without saying	that…; it is common knowledge
that…; needless to say…; it explains why…; the matter of		fact is that…
I think you underestimate (overestimate)…; now I	begin to see why (how)…

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2. Read the text below. Speak on the role of lawyers, accountants and banks in starting business.

Good advice

More then 90% of small business failures are “manag ement failures” due primarily to inadequate preparation and poor record-keeping.

It is important to establish immediately a relationship with a banker, lawyer, and accountant who specialize in small business, professionals you feel comfortable with.

Lawyers

∙Help determine the legal form of your business.

∙Help draft partnership agreement, and/or corporation papers.

∙Help obtain permits and licenses.

∙Help negotiate a purchase-sale agreement, if you are buying a business.

∙Help negotiate contracts.

∙Help you understand and deal with federal and local laws and regulations affecting your business.

Accounts

∙Help you set up a good record-keeping system.

∙Help you with a financial evaluation of the business you are planning to buy.

∙Help you write financing proposals.

∙Help protect your profit and cash flow.

∙Help you prepare periodic financial statements after you have started in business.

∙Help you with retirement plan savings.

∙Help you prepare your income tax returns.

∙Help you with Social Security, Withholding Tax, Depreciation Schedule.

∙Help you with disability benefits.

Banks and lending institutions

∙Accounts – Provide accounting and service to facili tate your cash flow.

∙Fixed Asset – Some provide financing on inventory, receivables, machinery and fixed asset equity.

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∙ Financing – Provide financial backing and guidance for the well-planned

business.

∙SBA – Often work with the Small Business Administra tion in providing you with a small business loan.

∙Business Growth/Money Advise – Banks can provide yo u with money and capital for start-up and business growth.

4.Answer the questions.

1.What do you want to be busy with?

2.Do you want to go into business alone or with a partner?

3.What partner do you get along well with?

4.Imagine you run a shop. What will you do to attract customers?

5.Do you have to consult a lawyer to make the right choice when starting a business?

6.What is your background?

7.Are you a careful person, or do you like to run a risk?

8.How can you combine the resources with your partner?

9.What services and skills can you contribute in your business?

10.How will you distribute profits and losses in your partnership?

11.What corporation would you invest money in?

13.What legal procedure do you have to follow if you want to form a corporation?

14.Who has final authority and supervises the daily management of a corporation?

15.In what way can a corporation act?

16.What do you think about the possibilities of forming corporations in this country?

17.In what branches of industry is a corporate form of proprietorship the most beneficial in this country?

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6. Try the crossword

All the words in this puzzle are connected with different forms of business ownership

1.The money shareholders invest into a company to buy property and equipment.

2.One of the owners of a partnership.

3.Usually people carry on a business

to gain it.

4.One of the forms of owning business.

5.These kinds of corporation are usually nonprofit.

6.To put money into a business or bank account so that it will make a profit.

7.The sole (only) owner of a business.

8.To buy and sell goods.

9.The price written on a share or coin is called … value.

10.Something belonging to a person or a business which can be sold.

11.A partner which is known to the public, but without authority in management.

12.One of the owners of a corporation.

13.Your legal duty to other people.

14.One of the forms of owning business

15.If a sole proprietor or a partnership

fails, the owners will go …

16. You can only buy and sell shares in a … limited company if the other shareholders agree.

17.The part of business.

18.A person you owe money to.

19.The shares in a … limited company can be bought and sold freely.

20.Another name for a business.

21.Income of a shareholder.

22.When a limited company fails, it goes into …

23.A partner which is not known to the public.

24.Money you owe to another person.

25.Shares in a public limited company may be bought and sold at a …

exchange.

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	1		2																						3			4
																					5
6		7										8
											9							10
																		11
12									13																						14
								15								16											17
					18
19		20
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22
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		25																							23

Text 7. Developing a business plan

A good business plan must be developed in order to make the opportunity a reality. This is perhaps the most difficult phase of the entrepreneurial process. An entrepreneur usually never prepares a business plan and often does not have the experience to do a good job. The major sections of the plan are: marketing plan, financial plan, and organization plan. A good business plan is not only important in developing the opportunity, but is also essential in determining the resources required, obtaining those resources, and successfully managing the resulting venture.

What to include in your plan? You will want to consider many questions when developing a business plan. Some of them are given here.

∙ The concept – what your product is and how it will work.

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∙Your objectives – personal and business.

∙Your production methods, where the business will be based, how many staff you are likely to need

∙The market – what it is, how big it is, where your product or service fits in, how you intend to sell it.

∙The competition – who your main competitors are and how your product or service differs from theirs.

∙Your sales and marketing strategy.

∙Your production costs and who your suppliers will be.

∙Any relevant qualifications or experience you have.

∙Financial projections – profit and loss forecasts f or two to three years, and a cashflow forecast and balance sheet.

∙How much money you will raise, what it will be used for, and how and when you

intend to pay it back.

1. Translate the questions from Russian into English.

Вопросы, которые вы должны задать себе

РЫНОК

∙Какой у Вас товар/услуга?

∙Необходимы они или люди могут обойтись без них?

∙Как Вы будете реализовывать товар/услугу?

∙Как Вы будете их доставлять?

∙Кто Ваши клиенты?

∙Спрос на Вашу продукцию/услуги растет или падает?

∙Каковы уровень доходов, образ жизни, возраст, пол, потребности и вкусы Ваших клиентов?

КОНКУРЕНЦИЯ

∙Кто еще занимается подобным видом деятельности? Получают ли они значительную прибыль?

∙Сколько они берут за товары/услуги?

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∙ Какая новая технология сделает Ваш бизнес более эффективным, более

конкурентоспособным и даст Вам преимущество?

РАСПОЛОЖЕНИЕ

∙Расположен ли Ваш бизнес в стратегическом районе? Привлекательно и удобно ли это место?

∙Есть ли стоянка для машин?

∙Благоприятны ли местные законы? Сколько Вам придется платить за страховку?

СОТРУДНИКИ

∙Кто будет заниматься счетами и следить за векселями и кредитом покупателей, расчетами с работниками?

∙Кто будет заниматься делопроизводством?

∙Кто будет отвечать за качество?

∙Будете ли Вы платить достаточную зарплату, чтобы нанять хороших специалистов?

∙Каким образом Вы будете обучать своих сотрудников?

2. Speak about business plan using these texts and questions of exercise 25 on page

369 in “World of work”.

3. You are going to take part in this project. Fill in the forms for the competition

committee.

		YOUR COMPANY
1. COMPANY NAME
2. COMPANY ADDRESS: city:		postcode:
3. OFFICE TELEPHONE NUMBER:
4. FAX:
5. DESCRIPTION OF THE PARENT COMPANY:
a) Type of your company:
	state company		private company
	joint venture		joint stock company
company with limited liabilities			holding

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b) Sector of economy:
manufacturing	services	others
		(please specify which)

Specify the sector of economy using the attached classificator:

c)Main fields of your company’s activities:

d)Profile of your department / division within the company’s activities:

6.NAME OF CEO:

7.CEO’S phone:

fax :

8.TOTAL NUMBER OF EMPLOYEES:

∙in your company

∙in your department (division)

9.PRODUCTION VOLUME OF YOUR COMPANY:

BUSINESS PLAN

1. Statement of the business plan

1.1.Company name _____________________________________________

Applicant (s): __________________________________________________

Address: ______________________________________________________

Phone: __________________ FAX: ________________________________

1.2.Purpose of the business plan ___________________________________

______________________________________________________________

2. Business plan objectives

2.1.Major objective (must be verifiable, specify measurement method): ____________

_________________________________________________________________________

2.2.Subsidiary objectives: ___________________________________________________

1._______________________________________________________________

2._______________________________________________________________

3._______________________________________________________________

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