56   I can talk about companies

A    Setting up a business

Setting up a business is a risk. Twenty per cent of new businesses fail within twelve months; fifty per cent go out of business in three years. It may be because of poor quality services or goods, or one of these common mistakes:

• inadequate market research

• poor control over suppliers and customers

• being over-ambitious and over-optimistic

• poor management of stock and assets

• inadequate knowledge of rivals

• employing the wrong people

 

Glossary

set up a business  start a business.

risk  the possibility that sth bad may happen in the future. risky ADJ.

fail (about a business)  be unable to continue. SYN go out of business.

quality  the good or bad condition or character of sth compared with similar things.

goods  (PL) things that are made to be sold.

inadequate  not sufficient; not good enough. OPP adequate.

market research  the study of what people want to buy and why.

supplier  a company that provides sth for another company. supply V.

stock  everything a company has for sale at any particular time.

asset  a thing of value that a person or company owns (e.g. a factory).

rival  a person or company that competes with another. SYN competitor.

employ sb  give sb a job (an employer is sb who does this: an employee is sb who works for an employer). SYN take sb on INF.

 

spotlight  prefixes over- and under-

As prefixes, over- usually means too much and under- means too little.

He overcharged us. (He made us pay too much.) Companies often overestimate sales figures. (Companies think that sales figures will be larger than they are.) OPP underestimate.

With adjectives, they may be followed by a hyphen, e.g. over-ambitious.

2     Complete the sentences. The meaning must be the same as in the sentences on the left.

►   This business is risky.  This business is a risk.

1     When did she start the business?  When did she set ____?

2     Why did the business fail?  Why did they go out    ____?

3     We are the main company that supplies them.  We are their main ____.

4     Their products aren’t very good.  Their products are of poor ____.

5     Do you still employ him?  Are you still his ____?

6     When did you employ her?  When did you take ____?

1     up the business

2     of business

3     supplier; suppliers

4     quality

5     employer

6     her on

B    Growth

The first years may be a struggle, but if a company can survive this difficult period, it may develop into a successful business:

• customer numbers grow and the company gains a share of the market

• turnover increases-the company breaks even

• the brand develops a reputation

• the company needs more capital and may sell shares to the public to obtain the finance

• eventually this growth may result in the company being taken over

 

Glossary

growth  the process of increasing in size or number. grow V.

struggle  a period of action to achieve sth difficult. SYN effort. struggle V.

survive  continue to exist in a difficult situation. survival N.

gain sth  obtain sth. OPP lose sth.

share  a part of sth that has been divided.

break even  not make a profit or a loss.

brand  the name under which one or more products are sold, e.g. ‘Nike’.

reputation  the opinion that people have about sth (it can be good or bad).

shares  (USU PL) units of equal value that a company is divided into and which are then sold to raise money (the buyers then own part of the company).

take over a company  take control of another company. takeover N.

 

spotlight  market

The market is the amount of buying and selling of a particular type of goods, e.g. There is a large market for these computers.

It also refers to an area or group of people who buy something, e.g. the European market, the teenage market.

The market leader is the company with the biggest share of a market.

6     Test yourself. Look at the glossary words and cover the meanings. What are the meanings?