Unfortunately two out of three new businesses fail within their first four years. According to a President’s report, The State of Small Business, the share of small business output has been declining. Large companies, in part due to their efficiency, have taken over markets that previously belonged to small businesses. Nevertheless, estimates showed that small businesses, defined by the International Revenue Service as businesses having fewer than 500 employees, accounted for 39% of all the goods and services produced in America.
According to the report, small businesses face many other problems. Bad economic times affect small business more than they do big business. In addition, small business profits tend to fall faster, and small businesses are more likely to fail. According to the President’s report, ‘The larger the firm, the better the chance it has of surviving’. The report also said, ‘A firm with 21-50 employees has 54 % chance of surviving four years. A firm of under 20 employees has 37 % chance of surviving four years.
What are the problems that face small business now? The National Federation of Independent Business reported that the four top problems facing small business at that time were taxes, low sales, the high cost of borrowing money and competition from other businesses. On the bright side, the innovativeness of entrepreneurs in small businesses is likely to enable small business to react quickly and successfully to changing times. The report points out that 80% of new jobs are provided by businesses with 100 or fewer employees. Small businesses produce twice as many innovations per employee as larger firms. Those innovations are the source of new jobs and new opportunities for entrepreneurs.
Where is entrepreneurship most likely to be welcomed? The answer is in small business. In fact the word ‘entrepreneur’ is frequently used to define a small business owner, since the owners in small businesses usually carry out many of the functions of those businesses themselves. In large business the tasks of organizing and operating are done by many hired managers. Large and small businesses are organized in different ways to meet their objectives.
UNIT 4
FINANCIAL INSTITUTIONS
Most individuals and firms need the banking services offered by commercial banks. A bankis a financial institution that accepts deposits and makes commercial loans. A bank deposit is an amount of money paid into a bank account or held in a bank account especially when it is earning interest.
The main function of banks is to act as “financial middlemen”. They channel money from depositors to investors, from those wishing to save money for future use to those wanting to spend it now. Deposits can be in the form of savings accounts or checking accounts. Savings account is a bank account for saving money over a long period of time usually with higher interest. Checking accountis a bank account that allows the customer to use a cheque book and provides services such as bill payments. People who deposit theirsavings in banks get deposit insurance.
Another function of banks is to make loans. This function is very important to the economy. Business loans enable firms to meet current bills and finance expansion. Consumer loans enable individuals and families to get goods and services immediately paying for them with future earnings.
One of the principal sources of income earned by banks is the interest on their loans. Checking accounts with bank loans provide a means for expanding the money supply.
Active Vocabulary
financial institution – финансовое учреждение
accept – принимать
deposit – вклад
account – банковский счет
middleman – посредник
current – текущий
savings account – сберегательный счет
checking (current) account – текущий счет
cheque book – чековая книжка
bill – коммунальный счет
Tasks
Translate the following combinations into Russian.
to need the banking services
to accept deposits
to make commercial loans
an amount of money
to pay into a bank account
to hold in a bank account
to earn interest
to act as “financial middlemen”
to channel money
to save money for future use
to save money over a long period of time
with higher interest
to allow the customer
to use a cheque book
to provides service
bill payments
to deposit theirsavings in banks
to get deposit insurance
to make loans
to enable firms
to meet current bills
to finance expansion
to enable individuals and families
to get goods and services
to pay with future earnings
the principal sources of income
the interest on loans
to provide means
to expand the money supply.
Translate into English using the expressions from the previous task.
1 нуждаться в банковских услугах
2 принимать вклады и делать займы
3 денежный объем, хранимый на банковском счете
4 зарабатывать процент
5 действовать в качестве финансовых посредников
6 переводить деньги от вкладчиков к инвесторам
7 экономить деньги для будущего использования
8 сохранить деньги на длительный период
9 использовать чековую книжку
10 обеспечивать оплату счетов
11 получать страховку вклада
12 позволять фирмам покрывать текущие счета
13 финансировать расширение
14 позволять семьям получать товары и услуги немедленно
15 оплата из будущих заработков
16 основной источник дохода
17 обеспечивать средства для расширения денежного потока
Study the new words and make your own sentences with them.
Translate into English using the expressions from the previous tasks.
1 Все предприниматели нуждаются в банковских услугах.
2 Финансовые учреждения принимают вклады и делают займы.
3 Весь денежный объем обычно хранится на банковском счете.
4 Деньги на банковском счете зарабатывают процент.
5 Финансовые учреждения действуют в качестве финансовых посредников.
6 Они переводят деньги от вкладчиков к инвесторам.
7 Банки помогают экономить деньги для будущего использования.
8 Предприниматели могут сохранить деньги на длительный период.
9 Банки позволяют использовать чековую книжку для оплаты коммунальных счетов.
10 Текущий счет позволяет обеспечивать оплату товаров и услуг.
11 Вкладчики всегда получают страховку вклада.
12 Банковские услуги позволяют фирмам покрывать текущие счета.
13 Банковские займы позволяют финансировать расширение бизнеса.
14 Потребительские займы позволяют семьям получать товары и услуги немедленно.
15 Оплата из будущих заработков – очень удобна.
16 Основной источник дохода банка – процент за хранение вклада.
17 Текущие счета обеспечивают средства для расширения денежного потока.
Match the notion and its definition.
Bank savings account checking account insurance loan interest deposit
1 an amount of money that a bank lends you
2 a contract relating to a particular risk
3 a financial institution that accepts deposits and makes commercial loans
4 a bank account that allows the customer to use a cheque book and provides services such as bill payments
5 the money we pay for borrowing money from a bank or the income from lending money
6 an amount of money paid into a bank account or held in a bank account especially when it is earning interest
7 a bank account for saving money over a long period of time usually with higher interest
Define the meaning of the words highlighted in the text.
Fill in each blank with a suitable word.
1 They …… money from depositors to investors.
2 People who deposit theirsavings in banks get deposit …… .
3 Another function of banks is to make …… .
4 Business loans enable firms to meet ……. bills.
5 Consumer loans are paid with future …… .
6 One of the principal …… of income is the interest.
7 Checking accounts with bank loans provide a means for expanding the money …… .
Insurance channel loans current sources earnings supply
Questions and tasks.
1 What is a bank?
2 What is a bank deposit?
3 How do the banks perform their main function?
4 Explain the difference betweensavings account and checking account.
5 What do people who deposit theirsavings in banks get?
6 What do business loans enableto do?
7 What do consumer loans enableto do?
8 What arethe principal sources of income earned by banks?
9 What do checking accounts with bank loans provide?
SOCIAL AND BUSINESS SKILLS
Bargaining