Text a. Small Business

Read and translate the text.

Small business plays a very important role in the economy of any country. Today small businesses are the heart of the market economy, that is why governments support small businesses by giving them tax benefits and providing financial and procurement assistance. The existence of strong healthy small business is the best way to prevent monopolistic control in any industries, preserve competition and thus assure the population of better products at better prices.

A small business – what is it? It is a business which is independently owned and operated. The owner of the firm is usually its operator. He provides the capital and is liable to all duties of his company. People become owners and operators of a small business in one of three ways: start a new firm, buy a franchise, buy or inherit an existing firm.

Small businesses are involved in different kinds of business. They manufacture and distribute goods, sell them at retail and provide different services. The majority of small firms serve only local markets; others function in national and international markets. In recent years there has been an increase of export services, such as management consulting, medical and technological services.

Numerous definitions of the term “small business” exist, but the economists believe that the size of the firm is most important. The size of a small firm must be small (as compared with large firms within one industry). The size of a firm is defined by sales volume in retailing and service and by the number of employees in manufacturing.

The economists use the following terms to define a small business. They are:

– Total assets – all that a business owns.

– Net worth – business assets less what is owed.

– Gross profits – money left from sales after all expenses (exept taxes) have been paid.

– Net profits – what is left from gross profit after business income taxes are paid.

– Income – money left after all taxes are paid and liabilities fulfilled.

– Number of employees – total number of workers and managers listed on the payroll.

Most anyone can start a business. The important factor, however, is to keep it going. If you are energetic, have imagination and desire to do a better job or provide a better service you may try. The next step is to choose the right business. It is an important and difficult task. You should consider your plans, preferences and abilities while choosing your own business. When your choice is made you must be fully prepared for it.

An employee works for wages, and a business owner works for profits. A business owner should have courage to risk his money in the hope of making profits. To earn the profits a business owner should have management ability. A person does not start a business with the intention of failing. Businesses fail due to incompetence. Management ability does not come automatically. All small business owners should have some knowledge of economy and business, understand the factors which affect them, must make business decisions on business considerations, must know where to get help if it is needed.

Assistance can come from bankers, advisors, government officials and suppliers who are interested in the success of a small business. Small business owners can study management taught by professionals at evening courses, private business schools and colleges.

Exercise I. Match English and Russian equivalents.

1. to support small business

2. to give tax benefits

3. to prevent monopolistic control

4. to preserve competition

5. better products at better prices

6. to provide capital

7. to be involved in different kinds of business

8. volume in retailing and service

9. to work for profits

10. to have management ability

1. предоставить капитал

2. объем розничных продаж и услуг

3. предотвращать монополистический контроль

4. работать ради получения прибыли

5. товары лучшего качества по более низким ценам

6. предоставлять налоговые льготы

7. поддерживать малый бизнес

8. сохранять конкуренцию

9. заниматься разного рода коммерческой деятельностью

10. быть способным управлять

Exercise II. Choose the right word or word combination.

1. Governments support small businesses by … .

a) controlling; b) giving them tax benefits.

2. The existence of strong healthy small business is the best way …

a) to increase sales; b) to prevent monopolistic control.

3. A small business is one which … .

a) produces goods; b) is independently owned and operated.

4. The majority of small firms … .

a) export goods; b) serve only local markets.

5. Assistance can come from … .

a) relatives and friends; b) bankers, advisors, government officials.

Exercise III. Complete the sentences according to the text.

1. Small businesses are … .

2. Small businesses assure the population of … .

3. The owner of a small firm is … .

4. People become owners and operators of a small firm … .

5. The size of a firm is defined by … .

6. A business owner should have courage to risk his money … .

Exercise IV. Match the words with their definitions.

loan, partnership, assets, retailing, payroll, sales, gross profit, net worth, net profit, profit.

1. The entire resources of a person or business, tangible and intangible, such as accounts and notes receivable, cash, inventory, equipment, real estate, good will, etc.

2. The act of operating a retail business.

3. The capital investment an individual or partners have in a busi­ness after the liabilities have been subtracted from the assets, that is, the capital value of the business.

4. A surplus that remains after the cost of goods is subtracted from the total receipts.

5. A surplus after all the expenses have been paid, including opera­ting expenses such as heat, light, rent, and wages, but excluding taxes.

6. A list of employees who are paid periodically by a firm, along with other information, also includes the money to pay employees.

7. A bookkeeping term referring to the amount of income derived from the sale of merchandise or services, both for cash and on account, less taxes, returns, and allowances.

8. An amount of money that is borrowed and must be paid back by a certain date or ondemand, usually interest is charged on the money borrowed.

Exercise V. Answer the questions on the text.

1. How do people become owners and operators of small business firms?

2. Why are small firms established?

3. Why are small companies very important for economies of any country?

4. What facts illustrate the importance of small business?

5. Can you define a small business?

6. What is the most important characteristic of a small business?

7. What terms describe the size of a business?

Exercise VI. Think and answer.

1. Is it difficult to start a small company in our republic?

2. Where can a small business owner get help in our republic?

3. Prepare a list of 5 firms and classify each of these firms as large, medium or small.