The Steps in Starting a Business

A-Read this text carefully:

The Steps in Starting a Business

Nearly every person who makes the decision to start a business is an entrepreneur

because he or she is willing to take a risk. Usually people decide to start a business to gain profits and to “do something on their own” or to be their own boss.

Entrepreneurs then gather the factors of production and decide on the form of business

organization that best suits their purposes. Anyone hoping to become an entrepreneur must also learn as much as possible about the business he or she plans to start. This process includes learning about the laws, regulations, and tax codes that will apply to the business.

Elements of Business Operation

To start a business, you must make potential customers aware that your services are

available for a price. You could have one-page fliers printed to advertise your business

and pass them out. You could also buy advertising space in the local newspaper.

Every business, regardless of size, involves four elements: expenses, advertising,

receipts and record keeping, and risk.

Expenses

If you own a painting business, you will need to purchase brushes and paint. As your

business grows, you might invest in paint sprayers so that you can complete jobs faster.

This new equipment would add to your income, but will probably take more money

capital than you have on hand.

Advertising

You will quickly find out that letting potential customers know that you are in business

is costly. Once you have customers, however, information about your business will spread by word of mouth.

Receipts and Record Keeping

No matter how small your business is, having a system to track your expenses and

income is key to your success. All receipts should be safely filed and saved.

Risk

Every business involves risks. You must balance the risks against the advantages of

being in business for yourself - including profit versus loss.

Depending on the kinds of jobs you do, you will need equipment and replacement

parts. At first, you might buy parts as you need them for a particular job: In time, you will

find it easier to have an inventory. An inventory is a supply of whatever items are used in

a business.

Probably one of the first things you want to do, if you have not already done so, is buy

a computer. With the computer, you also should purchase the programs that will allow you to keep track of all your expenses and all your receipts. Many such programs exist and are relatively inexpensive. Programs write checks for you, calculate your monthly profit and loss, tell you the difference between what you own and what you owe (called net worth),and so on. As an entrepreneur, you are taking many risks, but the profit you expect to make is your incentive for taking those risks. For example, if you spend part of your savings to pay for advertising and equipment, you are taking a risk. You may not get enough business to cover these costs.

B- Re-read the text and answer all the questions:

1-What is the general idea of the text?

2-Comment on this quote “Nearly every person who makes the decision to start a business is an entrepreneur because he or she is willing to take a risk”?

3- Decide whether these statements are true or false? Justify your             answers? 

a-Computer programs are so expensive.

b- Only huge companies need accounting records to meet success.

c-To gain money you have to spend money.

d-Every entrepreneur needs to be aware of different laws and regulations related to business.

4- Find in the text words or expressions meaning the same as: 

       a-to set up       b-director       c-charges        d-buy

5- What do the two underlined words in the text refer to?