1. 世纪商务英语阅读教程（专业篇Ⅱ） 世纪商务英语阅读教程（专业篇Ⅰ） Small Business and Franchising Unit 3 Unit 3

2. Lead-in The winners do not necessarily take all. Neither do the giants. Small businesses also stand good chances of making a fortune because their owners are energetic, creative, and innovative. The fact is that the small businesses occupy an important position in the US economy. If it does not have sufficient capital, technology, experience, and managerial skills, a small business may turn to franchising for help in order to grow fast. After studying this unit, you will be able to: ◇ Understand the definition of small business. ◇ Know how to raise capital for small business. ◇ Know how to operate a franchising.

3. Text A Nature of Small Business 1. Small Business—the Opportunity for SuccessSmall Business—the Opportunity for Success 2. The Definition of Small BusinessThe Definition of Small Business 3. Small Business’s criteriaSmall Business’s criteria 4. The importance of Small BusinessThe importance of Small Business 5. A Successful BusinessA Successful Business 6. The Benefit of Small BusinessThe Benefit of Small Business

4. Small businesses express the freedom that Americans have to make their own destinies. The risks are indeed great——but the opportunities for success, both financial and psychological, are greater. Nature of Small Business Small Business—the Opportunity for Success

5. Nature of Small Business Small business may be defined as any business that is independently owned and operated, is not dominant in its field, and does not employ more than five hundred people. The Definition of Small Business ☆ Some people even consider defining a small business as one with five hundred employees only $120 a week would have to earn $3.12 million a year just to meet its payroll. ☆

6. The Committee on Economic Development suggested that any business meeting more than two of the following criteria should be considered a small business: △ Independent owns the business △ A small number of individuals are responsible for capital contributions △ A local orientation to the firm’s business △ A small market share compared to the industry as a whole Small Business’s criteria Nature of Small Business

7. No matter how small business is defined, one fact is clear: Small businesses are critical to the soundness of the American economy. 99.8 percent of all businesses employing less than five hundred people. The importance of Small Business Nature of Small Business

8. ★ Successful firms are built on innovation which takes many forms. Nature of Small Business A Successful Business

9. Nature of Small Business Joanna Doniger started her company after making a dress and renting it to a friend. She came up with the idea of renting evening and formal wear to women who did not want to buy a dress they would wear only once. Doniger applied the rental tuxedo concept to formal evening wear for women and opened a shop in New York with$100,000 of her own money and $300,000 from other investors. A Successful Business

10. Nature of Small Business Today, she has two shops in London in addition to her original store in New York, and she rents dresses made by designers such as Scaasi to about 150 women a week. A Successful Business

11. Nature of Small Business ★ With the energy, creativity, and innovative abilities, small-business owners have offered jobs for other people. ★ In history, one study found that firms with fewer than twenty employees created about 82 percent of the new jobs in the United States between 1981 and 1985. ★ Not Surprising, companies with fewer than one hundred employees led the way. The Benefit of Small Business

12. 1. Financial Resources Available to Small-BusinessFinancial Resources Available to Small-Business 2. The Owner’s Personal ResourcesThe Owner’s Personal Resources 3. Family and FriendsFamily and Friends 4. Financial InstitutionsFinancial Institutions 5. Other Sources of FundingOther Sources of Funding 6. Different Kinds of LoansDifferent Kinds of Loans Text B Financial Resources Available to Small Business 7. MESBICsMESBICs

13. Financial Resources Available to Small Business Someone wishing to start even a small retail store will need money to fund the regular operations of the business. Few new business owners have the entire amount, however. They must look to other sources for additional financing. Financial Resources Available to Small-Business

14. Financial Resources Available to Small Business The most important source of funds for any new business is the owner. One form of wealth is Equity. Equity represents an ownership position in assets and does not include assets financed through borrowing. The Owner’s Personal Resources

15. Financial Resources Available to Small Business Family and Friends People starting small-business often look to family and friends as sources for loans of long-term funds, or capital. ☆ Family and friends often find it difficult to turn down a small-business owner in need of cash. ☆

16. Financial Resources Available to Small Business Family and Friends Anyone lending a friend or family money for a venture should state the agreement clearly in writing. Usually, they can structure a favorable repayment schedule, and sometimes they can negotiate an interest rate below current bank rates. ☆

17. Financial Resources Available to Small Business Inevitably, businesses must at some time borrow from a financial institution. Typically, small-business owners start shopping for financing in their local institutions. Financial Institutions ☆

18. Financial Resources Available to Small Business When CB Sports of Bennington, Vermont, decided to go into the business of manufacturing ski apparel, its founder, C.B. Vaughan, put together a business plan and $5,000 of his own money and sought start-up financing of $50,000 from a small bank in Manchester, Vermont. The bank not only made that loan but each year increased the amount to meet CB Sports’ needs. That is the kind of service that entrepreneurs look for from local institutions. Financial Institutions

19. Financial Resources Available to Small Business Other Sources of Funding Some community groups sponsor revolving loan funds to encourage the development of particular types of businesses. ☆ State and local agencies may guarantee loans, especially to businesspeople or for development in certain areas. ☆

20. Financial Resources Available to Small Business Other Sources of Funding The Small Business Administration has four financial assistance programs: ☆

21. Financial Resources Available to Small Business Direct loans, which are usually made only to businesses that do not qualify for loans from financial institutions. ☆ Guaranteed loans, which ensure that a direct loan made by an institution to a qualified small business will be repaid. ☆ Different Kinds of Loans

22. Financial Resources Available to Small Business Participation loans, a combination of guaranteed loans and direct loans in which the SBA guarantees an institution’s loan for part of the firm’s needs and makes up the balance in a direct loan. ☆ Different Kinds of Loans

23. Financial Resources Available to Small Business Minority Enterprise Small Business Investment Companies (MESBICs), which are financing companies partially funded by the SBA that make loans to minority-run businesses MESBICs

24. 1. What is Franchising?What is Franchising? 2. Franchiser and FranchiseeFranchiser and Franchisee 3. The Operation of FranchisingThe Operation of Franchising 4. Case Study: McDonald’sCase Study: McDonald’s Text C The Operation of Franchising

25. The Operation of Franchising What is Franchising? In the business sense, franchise refers to the rights given to someone to market a company’s goods or services in a certain area. ☆ A license to sell another’s products or to use another’s name in business, or both, is a franchise. ☆

26. The Operation of Franchising Franchiser and Franchisee The company that sells the franchise is the franchiser. ☆ The purchaser of the franchise is the franchisee. ☆

27. The Operation of Franchising The franchisee acquires the rights to a name, logo, certain methods of operation, advertising, products, and other elements associated with the franchiser’s business. In return for this, the franchiser collects a franchise fee, and enjoys a share of the profits and other interests. The agreement also includes regulations and controls relating to the operation of the business.

28. The Operation of Franchising One of the most common of these franchising arrangements arises out of the invention of some new machinery. ☆ Another arises out of the development of trademark. ☆

29. The Operation of Franchising The owner of the trademark grants a right to others permitting them to manufacture the goods with the trademark. A trademark user agreement contains provisions about the production, preparation, presentation, marketing, sale, and the quality of the goods that the user must obey. ☆

30. The Operation of Franchising The franchiser must have developed a successful system of carrying out a business in all its aspects and minimizing the risks in opening any new business. ☆ The system includes criteria about the business sites, facility established to train franchisees. ☆

31. The Operation of Franchising The training process includes any special method of manufacture, or processes to be applied to goods, or (with fast food operations) secret recipes, methods of preparation and the manner of providing services, the methods of marketing and merchandising. ☆ Franchising is believed to be one of the fastest ways for a company or franchiser to expand business and for small companies to develop both safely and quickly. ☆

32. The Operation of Franchising Case Study: McDonald’s McDonald’s, a fast food giant, is a good case in point. ☆ In 1954, the McDonald brothers agreed to let Kroc, sell McDonald’s franchises. ☆

33. The Operation of Franchising Case Study: McDonald’s In 1955 Kroc established a franchising company known as McDonald’s Systems Inc. and opened a second McDonald’s restaurant in Des Plaines Illinois. ☆ In 1961 Kroc bought out the McDonald brothers for $2.7 million. ☆

34. The Operation of Franchising Case Study: McDonald’s Today, over 70 percent of McDonald’s restaurants are run on this basis, and there are now more than 30,000 McDonald’s Restaurants in over 119 countries. ☆ In 2002, they served over 16 billion customers, equivalent to a lunch and dinner for every man, woman and child in the world. McDonald’s global sales were over $41bn, making it by far the largest food service company in the world. ☆