Unit 7 Why don’t we start a business of our own?

II. Basic Listening Practice

1.       Script

W: I hear you’re considering starting your own business. What kind of business do you have in mind?

M: Just an Internet start-up. I plan to design web pages for clients.

Q: What is the man planning to do?

2.       Script

W:Why are you planning to start up a textile company in the developing country?

M: You see, even here in the United States textile companies are turning a profit with huge labor costs. We could do the same thing in that country at a fraction of the cost because the labor there is much cheaper.

Q: Which of the following is true of establishing a textile company?

3. Script

W: We ordered 50 laptops from your company, but on the invoice I see there’s an extra charge for shopping. I thought shipping was included in the quote.

M: Shipping is included; there must be a mistake on the invoice. I’ll straighten on the mistake and send you a new invoice.

Q: Which of the following is true?

4. Script

M: This was s time-sensitive document! There’s no point in delivering it three hours late!

W: I’m sorry, sir. Perhaps I could connect you to our complaints department if you wish to take it further.

Q: What is true of the document?

5. Script

M: We were very surprised to receive such bad service from a company we’ve done business with in the past. So now we have this problem, and I’d like to know what you’re going to do about it.

W: I think this is the result of a breakdown in communication, and we need to look at our communication methods both internally and externally. Obviously we want to keep our clients happy, and unfortunately we’ve fallen short this time. I’m here to make sure it won’t happen again.

Q: What is the reason of the problem, according to the woman?

 

 

III. Listening In

Task 1: Attending a Business Reception

Script

Chris: I’ve been looking forward to this reception for weeks. I can’t wait to get sure of my own leads. You know, start making new connections.

Nora: Smart thinking. But what are you going to do with all those brochures?

Chris: The party ends at two, I figure I can have them all distributed by one-thirty,

Nora: No, no, no, no. Let me clue you in. Those brochures will make you look like a green hand.

Chris: What should I do then?

Nora: Hand out business cards. That’s the way to do it.

Chris: I don’t understand what’s wrong with these brochures about our company.

Nora: This room is going to be filled with potential clients, but there is an unwritten law; you leave your work at the door.

Chris: But how am I supposed to get anything of this if we can’t talk business?

Nora: You have business cards. Get out there and exchange cards. Just get a card for a card.

Chris: Then follow up on Monday?

Nora: You catch on quick. Let’s split up so we can cover more ground.

Chris: Great idea. This is going to be a piece of cake. I’ll meet you back here at two.

 

Task 2: Business Ideas

Script

Business ideas are all around you. Many business ideas come from a careful analysis of market and consumer needs. If you are interested in starting a business, but don’t know what product or service you might sell, here are some ways that may help you find one.

First of all, you should study how to value an existing product. The difference between raw wood and finished wooden products is a good example of putting a product through an additional process that increases its value.

But additional processes are not the only way value can be added. You might also add services, or combine one product with other products. For instance, a local farm which sells produce can also offer a vegetable delivery service—for a fee.

What business ideas can you develop along these lines? Focus on what products you might buy, and what you might do to them or with them to create a profitable business.

Some people have another way of making profit. They improve an existing products or service. We all know that the person who can build a better mousetrap will make a lot of money. That person could be you! A local entrepreneur has created an improved version of the hula hoop. It’s bigger and heavier, so hula-hoopers can control it more easily and do more tricks. How did she come up with this business idea? She thought hula hooping would be a fun thing to do with her daughter, but found the commercially available product too flimsy.

There are very few products or services that can’t be improved. Start generating business ideas by looking at the products and services you use and brainstorming ideas as to how they could be better.

 

Task 3 Start-up companies

Start-up companies can come in all forms, but the phrase “start-up company” is often associated with high growth, technology-oriented companies. Investors are often attracted to those new companies that have lower bootstrapping costs, higher risk, and higher potential returns on investment. Successful start-ups are typical more scalable than established businesses, in the sense that they can potentially grow more rapidly with limited investment of capital, labor, or land.

Start-ups have a number of options for funding. Venture capital firms and angel investors may help start-up companies begin operations, exchanging cash for an equity stake. In practice though, many start-ups are initially funded by the founders themselves.

A critical task in setting up a business is to conduct research in order to assess the business ideas, the opportunities and risks in future development, and the commercial potential. If a company’s value is based on its technology, it is often equally important for the business owners to obtain intellectual property protection of their ideas. The news magazine The Economist estimate that up to 75 percent of the value of U.S. listed companies is now based on their intellectual property (Up from 40 percent in 1980). Often, 100 percent of a small start-up company’s value is based on its intellectual property. As such, it is important for technology-oriented start-up companies to develop a sound strategy for protecting their intellectual capital as early as possible.

Start-up companies, particularly those associated with new technology, sometimes produce huge returns to their creators and investors. Based on a research, founder CEOs of high-tech companies can typically expect their stock to be worth about $16.5 million if the company succeeds in going public. However, the failure rate of start-up companies is very high.

 

 

IV. Speaking Out

MODEL 1   I am having cash problems.

Bill:  Helen, you started this company only a year ago. If you want it to grow, I’m afraid you need to do something about cash flow.

Helen:  Bill, although you’ve worked here only for a couple of months, you already know this company inside out. I am having cash problems.

Bill:   Clearly you don’t have the money you need to buy the equipment to be competitive. You have just barely enough funds to cover your day-to-day operational expenses.

Helen:  I think my best bet is to secure a small-business loan.

Bill:    I don’t think that’s possible. It seems to me you don’t have the collared for a loan.

Helen:  What can I do then?

Bill:    Try the Small Business Association. They help underwrite loans for a small business.

Helen:  So, even though I don’t have much collateral, I can still quality for a loan?

Bill:    Under this special program, possibly.

Helen:  That would really help me cover our overhead. I just need to get some time to get the revenues up.

Bill:    Apply for the small-business loan, and keep your fingers crossed!

 

 

MODEL 2   I have some very bad news.

Helen: Bill, I’ve been searching for a loan, but I was rejected everywhere. Now I’m afraid I have some very bad news.

Bill:   What is it?

Helen: Well, the company has been experiencing serious financial difficulties for quite a long time now.

Bill:   I know we’ve been operating in the red for the past few months.

Helen: Exactly. After a long discussion with my partners, I’ve come to the conclusion that the best course of action is to file for bankruptcy

Bill:   What? Bankruptcy? I didn’t know you were in this kind of serious financial trouble.

Helen: Sales have been low all year long. Now two of our leading competitors are discussing a merger. Then we’ll have to face even stiffer competition. I feel the situation is going to go from bad to worse. We simply can’t afford to keep our doors open for long.

Bill:   When do you plan to make the announcement to tell all the employees?

Helen:  Early next week.

Bill:    What kinds of severance package will we able to offer them?

Helen:  Unfortunately, the best we can do is offer one month’s salary.

Bill:    Oh! How terrible! OK, I’ll contact Vivitek and see if they are interested in acquiring our company.

 

MODEL3 We’ve been looking for a merger partner.

Script

Bill:    I hear that Vivitek has been considering acquiring a CD manufacturer for some time.

Jessica: That’s quite true. What’s on your mind?

Bill:    My boss Helen thinks that our company would be a good match for Vivitek. And we’ve been looking for a merger partner.

Jessica:  Are you sure your operation has much to bring to the table?

Bill:     Definitely. The quality of our products is first-rate, and we have many reliable sales out lets. What’s more, Vivitek can propel us to even greater heights. It will be an all-around excellent match.

Jessica:  I think it might be, though we have yet to discuss details.

Bill:     As a matter of fact, we’ve already received a few attractive bids.

Jessica:  Well, we of curse need to come up with a plan that is attractive for both parties

Bill:     True, but my boss has to keep our shareholders’ interests in mind.

Jessica:  It’s reasonable to keep your employees’ welfare in mind.

Bill:     Yes, we don’t want to disappoint them.

Jessica:  Then let’s talk about specifics.

 

V. Let’s Talk

1) rapid growth  2) shock  3) large  4) shot up 5) hard  6) opportunities 

7) different  8) stable  9) money  10) own

 

 

VI. Further Listening and Speaking

Task 1: Where to Start Your Business

Script

You have to consider the location when launching a business. You will be “planning your business tree” there and will have to maintain it for years to come. You have to keep in mind a few things when deciding on a place t open your business.

First of all, you have to take the local economy into consideration. Is your local area growing and building? Are the market trends good? Even if you have to locate your business farther from your home, try to find a place that is building up and bringing people in. The worst thing you can do is to pick a place that is in the “bad area of town” because it is less expensive. Your address can be the first thing people will ask for, and it can say a lot about your business.

The second thing you have to bear in mind is the job market. Since unemployment is low in most area in the Unites States, consider what type of employees you will need and find out if there are many in your area. The amount of money that you will have t o spend in the recruiting phase could be an indicator that you should or should not locate the business in an area with a different employee pool or not.

Another factor people have to consider is whether you can integrate with the local community and get to love it. To make the community warm to you, you should become involved in it by joining the local Chamber of Commerce, Business Association, City Council Committees, or other local organization that could offer you help. Why plan on retiring “one day” to some great location? Why not move there now and start your dream business?

 

Task 2: Too clever to be wise

Once there was a Scottish accountant. The business has been in the family for generations and generations. Over time, with the countless clients that had gone in and out of the office, the marble step in front of the building had developed a big, deep dip in it from all the wear and tear.

The accountant’s friends kept telling him that he had better get it replaced; otherwise he’d be sued if anyone ever slipped and fell.

Reluctantly, the accountant called a stonemason to get a quote for the repairs. When the stonemason got there, the accountant demanded a price for a new step.

“Ah, big job,” said the e stonemason, “But I suppose I could give you a new step for a hundred pounds.” The accountant was stunned. “Are you crazy, man? I can’t pay you a hundred pounds!” Thinking about it for a second, he turned to the stonemason and asked, “What would you charge me to dig up the step and turn it over so that the worn part is in the ground and I’d get a new square step?” The stonemason hesitated, “20 pounds.”

“Do it!” demanded the accountant, “And call me when you’re done.”

The accountant went back inside to read his books, but after only 15minutes the stonemason rang the bell. As the accountant opened the door, he saw the stonemason standing there, pointing to a deep dip in the step. The stonemason laughed as he said, “Your great-great granddaddy thought of that a hundred and fifty years ago!”

 

Task 3 Mergers and acquisitions

Passage 3

Although the terms merger and acquisition are often used interchangeably, as though they are synonymous, they mean slightly different things.

When one company takes over another and clearly establishes itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer “swallows” the business, and the buyer’s stock continues to be traded.

In the pure sense of the term, a merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a “merger of equals”. The firms are often about the same size. Both companies’ stocks are surrendered, and the new company’s stock is issued in its place.

In practice, however, actual mergers of equals don't happen very often. Usually, one company will buy another and, as part of the deal’s terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it is technically an acquisition. Being bought out often carries negative implications; by describing the deal euphemistically as a merger, top managers try to make the takeover more palatable.

A purchase deal will also be called a merger when both CEOs agree that joining together is in the best interest of both of their companies. But when the deal is unfriendly—, that is, when the target company does not want to be purchased—, it is always regarded as an acquisition.

Whether a purchase is considered a merger or an acquisition really depends on whether the purchase is friendly or hostile and how it is announced. In other words, the real differences lie in how the purchase is communicated to and received by the target companies’ board of directors, employees and shareholders.