1

ENGLIS
H
TYPES OF ECONOMY, COMPANY TYPES, STARTING A BUSINESS
TYPES OF ECONOMY
There are two oposite types of economy, market economy (also known as free-market economy) and planned
economy ( also known as centrally-planned or command economy), associated with the 2 main economic
systems, capitalism and socialism, where the means of producing and distributing goods are privately owned
and controlled (in the former) or state-owned and controlled (in the latter). ying at the very centre of a market
economy is the self-regulating mechanism of the market, which means that the production volume, the !uality of
goods and services, the price level, etc. are all determined by competition and the two main market forces of
supply and demand. "y contrast, a centrally-planned economy is totally directed by the state# there is tight
government control in all economic areas, and no market in the real sense of the word (there is no real
competition as the state cannot compete against itself).
$conomists, however, agree that there is no such thing as a purely %market economy& in the real world, not
even in the most developed 'estern economies, but ,mixed economies combining varying degrees of free
market and planned economy traits (some of the services being provided by both the private sector and the
state) - although the e(pression %market economy& is often used as a synonym for %mi(ed economy&.
)overnment not only has a regulatory role (i.e. it e(erts control over the economy by enforcing basic rules for
all economic participants) but also provides public services in such areas as education, health care, etc. (as
democratic alternatives to the private ones, and based on the principle that certain services should be
available to all citi*ens, regardless of their income)+ on the other hand, the state provides services that
cannot be left to the public sector (such as defence, environmental protection, the administration of ,ustice,
scientific research involving years of work with no immediate return on investment), and takes care of
people-s needs beyond the reach of market forces (e.g. through the social security system). There are
differences among western economies as regards the degree of government control# some people believe that
there is more government regulation in ./ economy than in many economies in 'estern $urope. 0ne thing is
however certain# in times of economic downturn, governments tend to increase their involvement in the
economy.
1s a matter of fact, government in any type of economy is called upon to protect public health and safety in
various ways# by banning harmful drugs, by protecting workers from ha*ards on the ,ob, by enforcing limits on
pollution, by setting minimum standards for wages and hours on the ,ob, by providing social security.
Vocabulary practice. 'hat would you associate the following words and phrases with# market economy (2) ,
or centrally-planned economy (34)5
1. ,ob security
2. entrepreneurship
6. prices determined by the interaction of supply and demand
7. bankruptcy of unprofitable businesses
8. private ownership state ownership
9. inefficiency
:. competition
;. high !uality goods and services
<. state ownership of all enterprises
4age 1 of 11
2
1=. wide range of products and services
11. mergers
12. free enterprise
4age 1 of 11
6
16. corporations
17. profit
18. overstaffing
19. shortage of basic goods
THE BUSINESS PLAN: ITS (A) PURPOSE AND (B) STRUCTURE
a) A business plan is a document which describes what an entrepreneur>business owner plans to do
and how they plan to do it. 1 business plan is needed in various situations. ?or instance, it can be used
by companies or investment-seeking entrepreneurs to convey their vision to potential investors, or it
can be used by entrepreneurs who need a bank loan to start a business.
b)The structure of a business plan
1 business plan usually includes the following elements#
general information about the future company (name, line of business, type of company)
the product>service that will be provided, and data about the market for that particular
product>service
premises (location, type of property needed# office, plant, factory, warehouse, etc.)
e!uipment needed
workforce (number of employees>the company-s organi*ational structure (including titles and
responsibilities)
the business goals> short-, medium- and long-term ob,ectives
the strategies that will be used to meet those goals
potential problems that may confront the business and ways to solve them
the capital re!uired to finance the venture and keep it going until it starts making a profit.
The above elements can be re-arranged to form different structures depending on the purpose of the
business plan. @ere are 2 more possible business plan formats#
1)
Aision statement
The people
"usiness profile
$conomic assessment
2)
$(ecutive /ummary
"usiness Bescription
3ompetitive 1nalysis
0perations and 2anagement 4lans
4age 2 of 11
7
?inancial 3omponents
Business Plan Outline 1 For a Start-Up Business with appropriate headings for a business plan
outline#
1. Management Plan
2. Market Analysis
6. Executive Summary
7. Competitive Analysis
8. The Industry
9. Operating Plan
:. Marketing Plan
;. Appendices
<. Financial Profile
4age 2 of 11
Business Plan Outline 2. Here`s another, more detailed, Business Plan Outline:
Table of
contents:
1. $(ecutive /ummary
2. The Team
6. "usiness
$nvironment
7. 2arketing 4lan
8. 0perations
9. ?inance
:. Cisks D 3onclusions
Cichard-s "usiness
3entre
Cichard
Eane
.nit 21-6768 2ain
/treet,
0akville, 0ntario 9
2A:
CichardkFabc.co
m
1. Executive
Summary
Richards Business Centre is a start-up business, providing clients with photocopying, fax transmittal
and
reception services...
he Canadian retail business services industry currently generates !"#$ million in annual sales.
%nnual
revenue for the &a'ville mar'et is estimated at !" million. he ma(or growth trend toward self-
employment and home-based businesses has created a need to provide speciali)ed support
services...
%s sole-proprietor, * bring over +$ years of both technical repair and sales experience from a large
office e,uipment manufacturer. * have a Bachelor of -cience degree from the .niversity of oronto
and my technical bac'ground will give me great s'ills to manage the operation of the photocopy
e,uipment...
Based on the si)e of the mar'et and our defined trading area, our sales pro(ections for the first year are
!""#,$$$. /y salary will be !0$,$$$.
o date, * have completed mar'et research and secured the lease at an exceptional location in the core
of
&a'villes downtown shopping and business district..
%s a retail store with a first-class location, the company will en(oy wal'-in traffic but will focus on
newspaper advertising, direct mail and direct selling to aggressively build our client base within the
first year.
2. The Team
2anagement Team 4rofiles D 0wnership /tructure
1dvisors# ...
@uman Cesources Ce!uirements GGGGG
4age 3 of 11
3. Business Environment
4age 3 of 11
"usiness /ummary D @istory# Richards Business Centre is a start-up business .. o date, * have
completed mar'et research
Hndustry 0verviewGG.
3onsumer Trends GGG..
/easonal ?actorsGGG
4osition in the
HndustryGGG. egal
Hssues GGG
3ompetitionGGG
.se of TechnologyGG..
4. Marketing Plan
Target 2arkets# here are three main target mar'ets for Richard1s Business Centre2 .
The 3ompetition . he company1s main competition comes from..
/ervices: The ,uality of my service is paramount to ensuring that customers return. * will be
providing

4ricing /trategy GG
/ales>Bistribution
4lanGG.
1dvertising and 4romotions 4lan. 3ere are some of the ways we will promote our service2.
5. Operations
/tage of Bevelopment. o date, mar'et research has been completed.he next steps are as follows2

/uppliers# GG.
Iuality 3ontrol#
G..
and and $!uipment Ce!uirements# GG.
3ontingency 4lans2 *f the demand for my initial service fluctuates, * could introduce value-added
graphic design service and act as a bro'er for offset printing and liaise with a trade printer.
6.
Finance
*ncome -tatement2 Richard1s Business Centre re,uires e,uipment to operate. he ma(or start-up cost
will
be e,uipment and store space for which * will invest personal funds of !.... *nitial start-up costs
include
!...... in leasehold improvements to the rental space and !...... for two used and two new
computer wor'stations, a fax machine, and store fittings. 4ariable costs include paper and toner,
repair and maintenance, sales and mar'eting expenses. Regular monthly expenses are estimated
at !..... and miscellaneous start-up costs relating to administration will also be covered by my
capital in(ection and cash-flows from operations. 5ages are budgeted to be !..... per year.
Richard1s Business Centre will generate !...... in its first year of operation, with an estimated
gross profit of "$6, yielding approximately
!..... to cover administrative expenses. Based on the assumptions contained in this plan, *
estimate that the business will brea'-even in its first year of operations.
7. Risks and
Conclusions
4age 4 of 11
2arketing Cisks # G..
0perational Cisks G.
@uman Cesource Cisks
G..
3onclusions# *t is my goal to start a business to provide business services such as photocopying,
fax and computer wor'station access to the &a'ville business community. * believe that it is an
opportune time to start a business li'e Richard1s Business Centre since the retail services industry
in Canada is currently worth !"#$ million7 in &a'ville, the industry is estimated to be worth !"
million. 8urthermore, since new small businesses are being launched with great fre,uency, the
potential mar'et for our services is growing exponentially. * bring more than +$ years of
technical repair and sales s'ills to the table and am investing
!9$,$$$ personally to start this business.
4age 4 of 11
Grammar: The Conditional (IF-) Clause
MAIN CLAUSE CONDITIONAL
CLAUSE
(introduced by if, unless, provided that, on
4resent Tense
3ompanies get loans
?uture
Jou-ll get the loan
4resent 3onditional
They would set up a family
business H wouldn-t complain
4erfect 3onditional
@e would have been promoted
4resent
Tense
H? they are eligible
4resent
Tense
H? you submit a good business plan.
4resent /ub,unctive (4ast
Tense) H? they had enough money.
H? H were you.
IF + Modal Verbs
H? K 'H>'0.B K Hnfinitive (polite re!uest)
Hf you-ll give me your address, H-ll send you all the details.
Hf you would kindly follow me, H-ll show you to your room.
Hf you would wait a moment, 2r. "rown will give you all the information you need.
H? K /@0.B K Hnfinitive (possible but unlikely action>event)
H think the book is out of print, but if you should find it anywhere, buy it for me, please.
1s far as H know, she is on holiday, but if you should see her, tell her to get in touch with me at
once.
4age 5 of 11
BANKING, MARKETING, MANAGEMENT
BANKING
TYPES OF BANKS AND BANKING SERVICES
There are several types of banks (central banks, commercial Lor retailM banks, merchant banks,
investment banks, etc.), speciali*ing in different lines of business.
A central bank is a country-s primary monetary authority , wh ich is responsible for issuing currency
(bank notes and coins), administering monetary policy , h olding member banksN deposits , and facilitating
the nationNs banking industry . T hus, a central bank sets interest rates, controls the money supply, keeps
the country supply of gold and foreign currency, and acts as lender of last resort to commercial banks
that are faced with li!uidity problems. .nlike large financial firms, most consumers do not interact with
the central bank at all.
A commercial (or retail) bank can be defined as a business that trades in money and provides services
for businesses, organisations and individuals, or the general public (holding deposits, lending money,
giving investment advice, e(changing foreign currencies, paying money in accordance with customers-
instructions, etc.). /uch a bank is also involved in international trading. Hts main source of profit is
represented by the so-called Omargin& (i.e. the difference between the interest rates paid to
depositors>lenders and the interest rates that borrowers are charged with).
The difference between a commercial bank and a merchant bank is that the latter deals with
businesses (rather than the general public), providing services needed in the case of takeovers and
mergers, issuing securities, offering stockbroking and portfolio management services, financing
international trade, etc.
An investment bank is similar to a merchant bank, but acting only as an intermediary, speciali*ing in
advisory services+ it does not offer loans.
GRAMMAR PRACTICE.
THE GERUND
Aerb1 K Aerb2 (-HP) form)# appreciate, dead, detest, prevent. avoid, ris', admit, contemplate, deny,
postpone, en(oy, fancy, imagine, suggest, 'eep, mind, consider, miss, involve, resist, face, mention,
escape
Aerb1 K 4reposition K Aerb2 (-HP) form)# burst out, 'eep on, go on, give up, ta'e to, thin' of, accuse
of, insist on, succeed in
Poun K 4reposition K Aerb(-HP) form)# ob(ection to, difficulty in, art of, way of, means of, 'ey to,
method of, fear of, danger of
1d,ective K 4reposition K Aerb(-HP) form)# sorry for, prone to, good at, ashamed of, fond of
4reposition>3on,unction K Aerb(-HP) form)# without, before, after, while, between.
*ts no use:its no good:its ;not< worth: cant stand: cant help: spend time: waste time: it needs: it
re,uires K Aerb(-HP) form)
4age 6 of 11
THE INFINITIVE
LONG INFINITIVE
Verbs that can only be followed by a LONG INFINITIVE (not a Gerund)#
Aerb1 (want, persuade, hope, manage, urge, agree, afford, decide, choose, fail, learn, offer, wish,
refuse, expect, prepare, pan, arrange, promise) K Aerb2 (0P) HP?HPHTHA$# to go, to see, to break)
Nouns (patience, courage, nerve< + LONG INFINITIVE
Adjectives (honoured:surprised:fortunate:easy:difficult:hard: happy:glad:pleased) + LONG
INFINITIVE
Question words (when, how, where) + LONG INFINITIVE: * dont 'now what to do.
SHORT INFINITIVE
Verbs that can only be followed by a SHORT INFINITIVE:
- modal verbs (must, may ,might, shall, will, would, should, ought to, can, could)
- make: /e made me cry.
- let# @e won-t let me go there alone.
- causative have# H-ll have my assistant prepare the report.
VERBS and EXPRESSIONS THAT CAN BE USED WITH EITHER THE INFINITIVE OR
THE GERUND WITH NO CHANGE IN MEANING:
start, begin, attempt, love, continue, hate, prefer, permit, allow, recommend, cant bear
VERBS and EXPRESSIONS THAT CAN BE USED WITH EITHER THE INFINITIVE OR
THE GERUND WITH A DIFFERENCE IN MEANING:
- remember#
H always remember to lock the door (do not forget).
H remember locking the door (H remember that H locked the door)
- regret#
H regret to tell you that your application has been turned down.
H regret going to that party. (H regret that H wentG)
- propose#
H propose to start tomorrow. (H intendG)
H propose starting tomorrow. (H suggestG)
- mean#
H mean to tell them the whole truth. (H intendG)
H-ll try it, even if it means wasting my money. (G even if it involves G)
- try# They tried to persuade them to sign the document. (They made a certain effort>did their
bestG)
'e tried changing the strategy. (They ,ust made an e(periment.)
- stop#
0n his way to the station, he stopped to buy a newspaper. (G.he stopped in order toG)
?rom that moment, he stopped buying newsapers. (@e never bought any more newspapers.)
- verbs of perception (see, hear, feel, watch)#
H watched her cross the street. (completed action)
H watched her crossing the street (non-completed action)
4age 7 of 11
THE LANGUAGE OF MARKETING
Market structure.
The market structure refers to the makeup of a particular market considered in terms of: the
number and relative strength of buyers a nd sellers , t he degree o f collusion a mong them, the level and
forms o f competition , t he e(tent of product differentiation , a nd ease of entry i nto and e(it f rom the
market. There are 7 basic types of market structure#
1. Perfect competition# many buyers and sellers of a standardi*ed product, none being able to
influence t he level of prices .
2. Monopolistic Competition: many buyers and relatively many sellers of a differentiated
product, with some control over market prices
6. Oligopoly: few sellers of a standardi*ed or a differentiated product who are able to e(ert
considerable control o ver market prices.
7. Monopoly: a single seller of a product for which there is no close substitute, who has complete
control over supply a nd prices.
8. Monopsony: a single buyer with considerable control over demand a nd prices.
EXPRESSING TRENDS - Read the following article, and draw up a list of verbs used to express
trends:
Europe hit by economic slowdown
European economies contracted in the fourth quarter of 2008, with some countries registering the
worst figures in decades, official data shows.
The euro*one economy shrank by 1.8Q in the previous !uarter and 1.2Q on the year, $urostat said.
)ermanyNs economy shrank by 2.1Q compared with the previous !uarter, its worst !uarterly
performance since 1<<=.
?rance shrank by 1.2Q, initial data shows, while Htaly registered a drop of 1.;Q, the steepest drop since
1<;=.
The data puts pressure on the $uropean 3entral "ank to cut interest rat es.
Hn the whole of 2==;, the economy in the 18 countries using the euro grew by =.:Q against the
previous year, $urostat said. /lovakia ,oined the euro*one on 1 Ranuary 2==<, making it a 19-country
club. The Butch economy shrank =.<Q during the !uarter while the 1ustrian economy eased by =.2Q,
the first drop in nearly eight years. Hn the same !uarter, 4ortugalNs economy contracted by 2Q on the
previous !uarter and 2.1Q on the previous year.
4age 8 of 11
SThese are huge contractions in $urope, the largest in living memory in most cases,S said Een 'attret,
economist at "P4 4aribas.
3ompanies have cut investment and e(ports have dropped as the global recession has taken hold.
$uropean companies hit by the slowdown include 1ir-?rance E2, which reported a third-!uarter
operating loss on ?riday, and 2ichelin, whose final-year profits fell as the crisis in the global car
industry took its toll on the tyre maker.
The decline in demand for cars was further highlighted by data released on ?riday.
The number of new cars sold in $urope in Ranuary was down 2:Q compared with Ranuary 2==;, the
$uropean carmakersN association, 1cea, said.
German gloom
The slowdown was the most dramatic in )ermany, which registered the biggest fall since )erman
reunification in 1<<=. The 2.1Q contraction was the third consecutive !uarterly drop in $uropeNs
biggest economy, according to the initial data from the ?ederal /tatistics 0ffice, worse than the 1.;Q
anticipated by analysts.
Jear-on-year, the )erman economy shrank by 1.9Q, after growing by 1.7Q in the third !uarter.
2any are now gloomy about the prospects for 2==<. SThis shows things went downhill sharply at the
end of the year,S said Ruergen 2ichels, an economist at 3itigroup. S'eNll likely head down again the first
and second !uarter.S
SThis number makes it plain that weNre in a very serious recession - the most serious since 'orld 'ar
Two. HtNs no surprise that e(ports and investment have tumbled,S said Birk /chumacher at )oldman
/achs, adding that the rise in inventories did not bode well for the first !uarter. The situation Scan hardly
get worse,S said 3arsten "r*eski at HP) ?inancial 2arkets. SThe )erman industrial production has run
out of steam with companies working only off their backlogs. ?oreign demand has plummeted over the
last months,S he added. ast month, the )erman government forecast that the economy would shrink by
2.28Q this year.
France slowdown
The slowdown in the ?rench economy was slightly worse than analyst e(pectations of a 1.1Q drop. The
?rench economy e(panded slightly in the third !uarter, by =.1Q, which means that ?rance has not
officially entered a recession - which is defined as two consecutive !uarters of contraction.
'ith consumer spending up by =.8Q, some analysts found cause for hope.
S3onsumer spending has held up !uite well so you can say there is still money out there to be spent and
?rench households are spending it,S 1le(ander aw, chief economist at Terfi said.
3ompanies also reduced their inventories in the fourth !uarter, shaving =.<Q off gross domestic
product, a fact that could bode well for industrial production in the first !uarter. 'ith warehouses
emptier, companies may increase production.
2any say that tough times lie ahead. SThe first !uarter will be difficult,S 3hristine agarde, ?ranceNs
economy minister, said. S'e will have a difficult year.& The data increases pressure on the $uropean
3entral "ank to cut rates. The bank cut the benchmark rate to 2Q in Ranuary, the lowest in the bankNs
1=-year history and kept the rate unchanged in ?ebruary. Hts ne(t decision is due on 8 2arch.
@as Comania-s industry been hit by the economic downturn in $urope5
THE PRODUCT LIFE CYCLE
Any product goes through various stages that make up its ~life cycle:
1. an initial, development stage
2. introduction or launch (the firm seeks to build product awareness and develop a market for
the product)
3. growth (the firm seeks to build brand preference and increase market share+ sales increase
significantly)
4age 9 of 11
4. maturity (the strong growth in sales diminishes, and then stabili*es, and the main ob,ective at
this point is to fight competition and defend market share while ma(imi*ing profit)
5. saturation (the market becomes saturated)
6. decline (a downturn in sales; prices and profitability diminish significantly)
7. withdrawal (the product is withdrawn from the market)
Po product will sell all by itself, although, according to the ~marketing concept&, manufacturers
produce what they can sell, rather than sell what they make (as in the case of Othe selling concept&).
Thus, starting from the introduction and growth stages of the product life cycle, produces have to inform
their target customers as well as their distributors and retailers about the product-s e(istence, its
advantages, characteristics, etc. Throughout the product life cycle, marketers will continue to take care
of the product-s promotion (as a key component of the marketing mix, or the ~four Ps, besides
product, place and price) by using various promotional tools and tactics.
MANAGEMENT - The manager`s role.
1ccording to 4eter Brucker, the main managerial functions are# planning (setting ob,ectives),
organizing, integrating (communicating goals and decisions and motivating people), measuring
employees- performance, and ~developing the company-s employees. Bifferent management layers
(top management, i. e. senior managers such as company chairmen+ middle management+ lower-level
management) involve, of course, different functions, or a different emphasis laid on those functions.
The SWOT analysis
1 top manager is essentially a company-s strategist. "efore choosing the right strategy on matters of
ma,or importance to the company, the top manager uses a tool (commonly referred to as a /'0T
analysis) that identifies the internal and e(ternal factors (strengths, weaknesses, opportunities and
threats) involved in a pro,ect or business venture, providing information that is helpful in matching the
company-s resources and capabilities to the competitive environment in which it operates. 1 /'0T
analysis is also a useful tool for understanding and decision-making for all sorts of situations in business
and organi*ations.
Therefore, a /'0T analysis can be used for various purposes U for instance, to assess#
a strategic option, such as entering a new market or launching a new product a
business idea
a potential partnership
a company (in terms of its position in the market, commercial viability, etc)
an investment opportunity a
sales distribution method a
product>brand
a opportunity to make an ac!uisition
changing a supplier
outsourcing a service, activity or resource
4age 10 of 11
STRENGTHS
1 firm-s resources and capabilities that
can be used as a basis for developing a
I
competitive advantage . $.g.#
N
T
strong brand names
E
good reputation among
R
customers
N
patents
A
cost advantages from know-how
L
e(clusive access to natural
resources
favorable access to distribution
networks
WEAKNESSES 1
company-s internal weaknesses,
$.g.#
The absence of certain strengths, such as#
a weak brand name
lack of patent protection
poor reputation
high cost structure
lack of access to natural resources
lack of access to distribution channels
OPPORTUNITIES
$(ternal opportunities for profit and
E
growth.
X
T
$.g. #
E
R
loosening of regulations
N
removal of international trade
A
barriers
L
unfulfilled customer needs
arrival of new technologies
THREATS
3hanges>events in the e(ternal environmental
that may present threats to the firm.
$.g.
new regulations
increased trade barriers
shifts in consumer tastes away from the
firm-s products

emergence of substitute products
4age 11 of 11
Bibliography
Bumitrescu, A. 2., Bona, B., 3ondru*-"acescu, 2., 2arin, A. /*=> ?&.R -@A- &
-.CC@-- - $ditura .ranus, 2=1=.
3otton, Bavid, *=@R=%*&=%B B.-*=@-- &A*C-, Pelson and /ons td.,
1<;<. $mmerson, 4aul, B.-*=@-- @=CB*-3 3%=>B&&D %>4%=C@>,
2acmillan, 2==:
2acEen*ie, Han, 8*=%=C*%B @=CB*-3, 3ommercial 3olour 4ress, ondon, 1<<:
2acEen*ie, Han, /%=%C@/@= %=> /%RD@*=C, 3ommercial 3olour 4ress, ondon, 1<<8
2acEen*ie, Han, @=CB*-3 8&R B.-*=@-- -.>*@-, 3ambridge .niversity 4ress,
3ambridge, 1<<:
TomoVoiu, Pora, C3*> AR%C*C >@ CR%/%*CE @=CB@FE, $d. 4etrion, 2==7.
Aince, 2ichael, %>4%=C@> B%=C.%C@ AR%C*C@, @einemann, 0(ford, 1<<7.