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6 New business
o Work in small groups.
Discussion

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You are financial advisors to start-ups and small companies. What sources of funding would you recommend in these situations?

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BUSYBODIES is a temping agency providing clerical help to other companies. It needs a new photocopier/printer but it does not have the cash available to
buy it.

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DON BEAL is an inventor. He has patented a new type of car engine which is 50 per cent more efficient than existing engines. He needs money to produce a prototype but wants to keep control of his business.

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F1XA is a start-up pmv'Oing home- :
help for all sorts of everyday tasks or problems: gardening, household repairs, cleaning, ironing, etc. It needs £8,000 to cover start-up costs.

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~~~~~i~~t~:~;h~a~~~~:~~nr~ry cash-now problems. It needs £1,500 to pay for raw materials. They are expecting to be paid £5000 in outstanding bills in the next two weeks.

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o Read the advice leaflet below about business
the correct description
;, -bank

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funding. Match each type of funding with

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loan equJ:{~~inance.friendsand ~amily'gra'~t~:~1~~Jk~:»a~~';~'~~~::':~~lf,f~:~'~j~~;';c,

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5 Dr'!wing on personal savings and credit cards can cover start-up costs without having to wait for other people's decisions. The downside is that using credit cards can be expensive in the long-term. You get your funding, while the investor only realizes their investment when the business is doing well. You also get their expertise. On the downside, it's hard to raise this finance, and your own influence and share of the profits will be smaller. 6 These appear to be a source of cheap financing. However, there is often strong competition, and you may be required to provide matching funds. You may also need to prove a wider benefit to the community. 7 You can spread the cost of acquiring assets, and maintenance may be covered. :~~ i~;u~~~'te~~enn~~~ea~h:e~~fJn~~ ~hu:'e~~tr~~~~'e agreement.

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2 Regular repayments can make it easier to budget. On the other hand, repayment schemes can cause cash flow problems. You may also need to provide security, 'such as business assets, or a guarantor. 3 This can be a very flexible option for short-term or day-to-day requirements. The disadvantage is that they usually bear a higher interest rate than other loans.

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They might be willing to provide an interest-free loan or not require security. On the other hand, funding from this source can put

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o Look again at your answers
D Find
1 2 3 4 5 6 7

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in 1. Would you change any of your recommendations?

words or phrases in the leaflet with the following meanings.

the amount of money you pay back each month money coming into and out of your business an item you agree to give if you fail to pay a person who takes responsibility if you fail to pay debt which you pay back' without any additional charge money you provide alongside government funding the cost of keeping something working

. presentation. start-ups. Be prepared to make a ten-minute pitch and answer any questions that come up. Once you have decided to submit a plan. On successful completion of the due diligence process. The term sheet all the conditions of the deal. o Work with a partner from a different group. interested investors will check out the statements made in your business plan.': :3. Put the steps in order 1-7. and financial projections. Angels always an entrepreneur's background thoroughly. complete our application online. you will be invited to make a 3D-minute presentation to our full membership.. lack of skills in the management team financial forecasts based on assumptions inadequate financial returns lack of trust no clear exit route no track recordqrw.2 Vocabulary • o Read the seven steps in an application Scan reading procedure. Internet researc h Discussion and presentation . the goal being to convince members that your proposal is worth investigating in detail.and specifically capital from our group .."':: "'. Business angels may proposals for no apparent reason. Before putting forward your business plan for our consideration. /- Search for the key words "business angels" to find out more about their role in financing. d e f g o Use the phrasal 1 2 3 4 5 6 7 8 9 10 verbs in 5 to complete the sentences.!c-'§. draw up a list of Dos and Don'ts for start-ups looking for funding. Further interactive vocabulary practice on the DVD-ROM 6. Self-assessment. including type of equity and board of directors representation.J.qQt&:'f too complex . Get help if you can't how much finding to apply for. Presentation to membership. It's worth getting a lawyer to any contracts rather than trying to write them yourself. o ~2:14 Listening Listen to four entrepreneurs explaining why their proposals were turned down.. When all parties are happy with the terms and language contained in the term sheet. If they didn't turn you down at Step 2. If you get through the screening meeting. Term sheet. Online application.W '·!iI·'H{. The screening meeting allows investors to poor applications at an early stage. you should clear and convincing arguments.·~:::·!~'·h'/'. In your pitch. you must work out if angel capital . Present and compare your lists. They will go over your team's background and track record in detail. A lot of hard work is necessary before the deal finally . Due diligence. Decide which reason from the list below each person mentions. . This is designed to identify the most important details about your business so that our internal review· committee can weed out the non-starters. You work for a corporate finance firm bringing together investors and entrepreneurs. ' [J Work in small groups. interested angel group members will draw up a term sheet that sets out the structure of the investment deal. Only two per cent of business plans the complete funding process. Seventh Heaven Angel Investors Group The seven steps to heaven a b c Screening meeting..is right for your company. Funding. Problems often in the early stages. If your presentation is successful. the deal can go through. our review committee will invite you to a screening meeting. not scalable: nojjrelf#0: lack of market 'aVi~r(!i':\~ss ~. Using relevant phrases and vocabulary from the previous exercises.

guest John Sue John Sue John Sue John Sue John Sue John Mr Gregor.Sustain . Just a few practical things.30:-10.00. h Plan Year 6 Year 7 Year 8 Year 9 Year 10 Discussion Sustain would like to expand. Complete the sentences about the guests' activities. 5 November HuntingdOO .15.m. 11.30--2. for years.00-7. Half an hour should actually be long enough. thanks.30 Cocktails on the lawn get all the planning right. I'm coming by train. At7.30--9. (trade) 2 John Gregor managing director 3 It solar panels for years.COMPANY HISTORY 1 started trading opened warehouse in Staines John Gregor named a managing director opened offices in Richmond bought Housesmart. but will require a bank loan to do so. And how many awards (3) ? • Hotel parking must be booked in advance if needed Three. .30. what time (1) ? 9. . Complete the dialogue with the questions she asked using the future continuous. o Read the dialogue Sue between the event planner and John Gregor. .6. I'll miss the cocktails company awards 10. Fine. Read Sustain's company history and complete sentences 1-6 below.30 John Gregor gives Personally. __ 3 2 At8. But I think some of the younger staff may enjoy dressing up.30 Jazz band unfortunately. I was wondering whether I could just Black tie or fancy dress ask you a few questions so that we can 7. __ . not until 7. 4 It offices in Richmond for 5 It government grants for 6 It Housesmart for years.30--11.00 Disco And (2) a parking space? No. Read the invitation to the party. (5) fancy dress? Certainly not. Complete the table with your own ideas. Black tie. an interior design company began selling solar panels started exporting products to Europe 4 started receiving government grants for sustainable development By the time Sustain reaches its fifth anniversary. (receive) (own) D 1 Sustain is holding a party next week to celebrate its fifth anniversary. 7. and what you will have achieved by your tenth anniversary. Internet researc o Present your business plans to the rest of the class. (4) the vegetarian option? No. And finally. I won't. (have) years. (be) (sell) years. not for me.00. 1 It __ for __ years.Hotel * Bring a . What would you like to know? (vegetarian options available) Firstly. __ At midnight.3 Grammar • o Sustain is company in the UK offering environmentally sustainable solutions to the building industry. Fifth anniversary ball Start 7 p. __ 4 At 10. You have been asked to make a business plan for years 6-10. Say what you will be doing in each year. Vote to decide who has the best plans.30 Three course dinner No problem. o Work in groups. OK. Fine.

Rome wasn't built in a day. I (call) you tomorrow if I have time. She (travel) for fourteen hours non-stop. i: Example Are you coming with me tomorrow? Will you be coming with me tomorrow? 1 2 3 4 5 6 Are you going to see Axel this week? Are you eating with us this evening? Isyour bosscoming to the meeting? Will you stay in the office at lunchtime? Are you -going to phone the office? Are you going to fly to Moscow? t I Test yourself: Future perfect or future perfect continuous D Complete these sentences using the future 2 3 4 5 perfect or future perfect continuous. so I (tell) him then.I ' . Would you like a lift? I (go) past your hotel on my way home. stop dreaming! Now.we (5) (work) together for exactly three years. He's going to get a medal because (work) here for twenty years in June. We (4) still ___ (try) to get the marketing right! Remember.I I" Ii.sunbathing! Tony: I don't believe it.6 New business Test yourself: Future simple or future continuous o Complete the sentences using the future doing). Tony. j. By this time next year we (1) (float) the company and we (2) (sit) by the Red Sea. We (think) of you. When the plane gets in. And this coming Christmas is only our third anniversary . he (wait) for more than three hours! Our next wedding anniversary is silver. I'll be seeing Dan tomorrow. Where you (be) on Friday afternoon? What do you think you (do) a year from now? Test yourself: Future continuous o Usethe future continuous to make these questions about people's plans more polite. We (3) (not go) public by then. He's on a Nile cruise at the moment so he (8) (not get) any further with the designs. His staff hate him. ? . (talk) to the accountant. And I doubt whether his employees (9) (finish) anything before he gets back to the office.. I (7) (not meet) him until next Thursday at the earliest. 1 simple (will do) or future continuous (will be 2 3 4 5 6 7 8 I I' Don't call me at 2. That was Dave on the phone.30 because I __ ' _.. so we (be) married for 25 years. He'sa real dictator! And he certainly (10) _ (not think) about us with all those pyramids to visit. Tony: Talking of pyramids. I wonder if we shouldn't have just stuck with them instead of launching into this milk spa venture . D Cleo: August 19! Imagine. She'll be exhausted when she arrives from Tokyo. He (not come) to the conference. Complete the following conversation using the correct form of the verbs in brackets. Pablo will be furious. Jules whatsisname? Cleo: Well. Anyway. I (not finish) the report by Friday. when (6) _ you (see)that design consultant of yours next. Cleo. Good luck with the presentation.

It currently employs more than 223. 2 Say briefly what the advantages and disadvantages are of each... They also have the drawback that .. The main disadvantage of (a leafleVleaflets) is that .. and why. 3 Decide which promotional activities would be suitable for promoting a deodorant spray for men..000 people... b 1 direct mail 2 3 4 5 6 7 8 9 free gifts with every purchase free samples leaflets and brochures newspaper articles point -of-sales display sponsorship television and radio advertising website Useful language Discussing advantages and disadvantages One advantage of (direct mail) is that . Direct mail is expensive. .Promotional activities and branding Getting started 1 Work in pairs and match the promotional activities below with each picture. cleaning products and toiletries. C page 44 (Countable/uncountable nouns) Promoting AXE Company background Unilever is a large multinational based in Britain and Holland which produces foods. Another good thing about it is that . but you can target individual customers..

There were also print ads in Rolling Stone and Spin magazines. the marketing consultant for AXE. Following the promotion. 'That was something completely original. Some 100 lucky young men were flown in to attend the party. D To show people they needed AXE. girl likes boy. B Sales of AXE increased by 22 %. The party was filmed and edited into an hour-long show broadcast on TNN in April. Andrew W. The product. C The free disc.000 hits. which was advertised as the AXE House Party: lots of girls. or 20% more than the goal. the company used a number of marketing ploys to bring the product to the attention of the public. . free samples of the deodorant. 4 According to Mary Drapp. Their website received more than 943. A radio advertising 35 40 10 45 15 50 20 Adapted from Promo 2 Read the article again and choose the best answer for each of the following questions. D Brand awareness rose to 3. it combined young men's natural interest in pretty girls with the attraction of a great house party. Hundreds of girls were invited to dance and enjoy musical acts from Nelly. often given by attractive female models. who received free samples and information about the event. nobody has ever taken a consumer promotion and turned it into a television show.0% to 3. rock stars and a beach house. THE 25 campaign and online publicity called for young men to log on to the Internet to playa video game on the AXE website. in retail stores. Participants had to apply their dating skills to score points. resuits included a 22%' increase in general brand awareness among males aged 11 to 24 and a 3. which was already popular in other parts of the world. C To encourage a different type of customer to buy the product. B By answering an advertisement. . D The use of the Internet. Read it very quickly to find out which promotional AX:·'E···'········' . C There was an increase in the percentage of young men who knew about AXE. cards or billiards. B To improve men's dating skills. C By applying through an Internet site. held near Miami. was launched in the United States with a powerful promotional plan to make it appeal to American male youth culture. go to a game room or play airhockev. B The television programme. 6 What was the effect of the marketing campaign? A Twenty-two per cent more people knew about AXE. all of which hvped the centrepiece of the promotion: a once-in-a-lifetime party at a Florida mansion.. B To encourage people to visit the website. C To excite people's curiosity. 5 What was unique about the promotion of AXE? A The house party. Unilever began the December before by direct-rnailinq millions of college students and young males aged between 11 and 24.000 special packs went on salein retail stores. point-of-sales disolavs. . AXE continued to capitalise "Onthe 'event. says Steve Jarvis. The idea was simple: boy buys AXE. Who were the target audience in Unilever's promotional campaign? A Young women B Young men C Men of all ages D Men and women 2 How did people get an invitation to the house party? A By receiving direct mail.' After the party. he entered a lottery to win a trip to the party . . media advertising and public relations (PRJ. These included an online game. D To show the effectiveness of the product.Reading 1 The text below describes how Unilever promoted their AXE deodorant activities they used. Using the slogan 'the AXE effect'. D By participating in a game. 'To ourknpwledge. And they succeeded in doing that. manager of strategic alliances and sponsorships for Unilever. . Leaflets similar to ones made for a party by a group of college students were posted in relevant locations such as men's toilets at nightclubs. says Mary Drapp. Some' 500. If the player reached a certain level. 3 What was aim of the publicity for the house party? A To show an exotic location. Promotional activities and hrandino 29 .7%. boy meets girl. offering two cans of the deodorant spray with a tree AXE house-party CO that featured songs from the artists who hadappeared at the party. Guests could use the pool. what was the aim of the promotional campaign? A To increase brand awareness.7% increase in antiperspirant and deodorant market share. 'It was all about getting into the mind of the 20-something guy. EFFECT 30 5 When Unilever wanted to launch its AXE deodorant spray for men in the United States. boy smells nice. spray in the USA. AXE focused on the intrigue and discovery of the party .K. Nicole and the Riddlin Kids.

Why did Tesco originally introduce their own brand? A To increase sales. Tesco washing powder or Tesco bread. e. E) page 45 (-ing forms and infinitives) Supermarkets' Listening own brands You are going to hear Christina Bunt talking about Tesco's own brands. It is a common activity in advertising agencies. C they don't need advertising.g. 3 Tesco can sell own value brands more cheaply than other brands because . h start using (your computer/the Internet) tactics/tricks j visits (to a website) k start selling for the first time Role-play Work in groups of about four. discuss why supermarkets have own brands. The target customers in the US and Canada. You should: • brainstorm ideas for possible promotional activities • evaluate the ideas and decide which ones you want to use • produce a plan of action • compare your plans with other creative teams. C To reduce costs. launch (line 1) ploys (line 10) retail stores (line 13) public relations (PR) (line 14) hyped (line 14) log on (line 22) focused on (line 27) hits (line 35) 9 capitalise on (line 46) 10 brand awareness (line 52) 11 market share (line 54) 2 3 4 5 6 7 8 a b c d e build on an existing success concentrated on how much of the market is taken by a particular product knowledge that a certain brand exists the activity of keeping good relations between an organisation and the outside world publicised strongly g shops. are young women campaign States and Canada.Vocabulary Match these words and expressions from the text (1-11) with their definitions (a-k). 0812 Listen and choose the best answer for each question. B They have a higher profit margin.. C They don't depend on outside suppliers. A they pay their suppliers less. a shampoo has decided that it is time to launch which has been very successful for this shampoo.. 2 What is the main reason for supermarkets having own brands nowadays? A They bring customers back to their shops. a promotional aged 12-25. An 'own brand' is a product which a supermarket sells with its own name on it. Your job is to prepare for the launch. 1 Before you listen. team in the marketing The company department of a large in the United called Useful language Brainstorming Brainstorming consists of thinking of as many ideas as possible. B To reduce reliance on suppliers. without deciding whether they are good or bad ideas until later. B they sell in large quantities. Have you thought of ? + -ing form You work on the creative multinational in your country Provocation company. How about ? + -ing form Why don't we ? + infinitive I think would be a good idea. 30 Promotional activities and branding . etc. supermarkets.

real reasons w y peop Ie l . complacent from past success. reinvent themsel~es and.Ificult to . di . or It was a h' For that consumers si nal that a product was somet 109 new. 2 3 4 5 6 7 8 9 a design which represents a company jproduct (extract A) spend extra (extract A) increase (extract A) change (extract B) method (extract C) job (extract C) relaxed. Brands were were quite rationally. long-time "ector 0 I hid Of ou had a complain!. we I.f h h h. .' Bra:1ds. N' II 1. Work with a partner and discuss whether you agree or disagree with each one. a brand was rather simple. IncludIng online we.' p . se thla tbVirkginwould sel. lScovenng t e h like brands but they are sull heavily used. Talking point Discuss in small groups.' others. Choose a brand you are all familiar with. Focus groups. building straightforward guarantee of qualiry and consIstency. satisfied and not worried about dangers (extract D) change themselves radically (extract D) attractiveness (extract D) • • • What image does it have? How do you feel about the brand? How is it marketed? Promotional activities and branding 31 .Lecertam peo Ie b SOme people are just more fun and interesting. Peop e want to matters more 0 o 0 0 0 • The newmarketing approach is to build a brand not a r d to sell a Ilfesryle or a personaliry.ce run ho:~.execuflve 0 nrer ran: you were a soap-powder com an e competition would come from th dP y Y ars ago. h mistakes. . Often the product itself is not as important as the feelings and ideas associated with it. Nowadays. Firms such as Coca-Cola an McD~nald's. to newer products..u. d' f] Walter Thompson. an advertlslOg agency. are poor at . anicking that they need to do somethtng.~. n.' The trouble is that most marketers have to struggle to creat~ suon feelings for their brands. for example. they switch products Ei more 0 ten Brand f . are rearnt up ong before the product is produced As one company president says of his product ir I'S . 2 3 4 5 6 7 8 9 10 2 When you buy a brand. lose the essence of rheir -fashioned market-research methods help expiam such appea. .l consumers to uuy e icrent y. prepare to pay B II ' . vcr. even strong brands have to deal with competition from other companies. .ar FltzGera pOIl)!S out. your h e same in us try and prob bl r e same COUntry.' says Jeremy u more. I and more as choices multiply. then say which extract each statement 1-10 in Exercise 1 corresponds to. The products we buy reflect the sort of people we want to be.bsites. a the first piece of consumer protectlo . to appeal to emotion: . . I Old . ffi I As Unilever s chaIrman. s now ace competirion from the most unexpected quarters. rat er t an ItS taste. People's loyalty to brands is decreasing.1mobile phones. Some traditionally strong brands have found it difficult to remain attractive to consumers. . . :r . Now ir could be anyone Who'd h hay 0 ~~__-----~'-~~D simplify their lives.g . d a premIum. you know the product will always be of the same quality each time. f I b d 'If . .. f TI. Yet admit that their customers are c h anglOg . ur B As shoppers have become more mobile and di d I b IScovere more paces tO uy. ' ItS sense 0 u~our. People are willing to spend more on branded products. find It d.: l an Ing serVIces? Adapted from The Economist Vocabulary Find words or phrases in the extracts which mean the following. A logo was a C A Historically.a so e pe h 'You knew were to go I y . Id 'A brand is a storehouse 0 trust. without realising it. that is the reason for its success' 'Our pro UCt IS a personaliry' he claims ''''' I" .The power of brands Reading 1 Look at these statements.Ct ~ requires a far greater understanding of human psycholo' I thIS muchI hadrder task than describing the virtues of a produc gyt 'IteIS a C sirn pea s d I . Vers. Traditional methods of investigating consumers' tastes are often not effective. says Rita Clifton chief . Brands save time and make shopping easier. Sometimes the brand is invented before the product is developed. Read the following extracts from an article about brands.

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