Welcome to English as a Second Language Podcast, number 196, A Business Plan.
You're listening to English as a Second Language Podcast, episode 196.
I'm your host, Dr Jeff McQuillan, coming to you from the Center for Educational Development in beautiful Los Angeles, California.
Remember to visit our website at eslpodcom.
There you will find a complete learning guide for this podcast that includes all of the vocabulary definitions, additional vocabulary and culture notes that we don't talk about on the podcast, as well as a complete transcript of this episode.
Today's episode is about starting a new business, and with a business plan.
Let's get started.
About a year ago, i came up with an idea that i thought would revolutionize the way people sell their goods on the internet.
After a lot of planning, I decided to try to attract investors by developing a business plan.
I got some advice from my friend Steve, who is a very successful entrepreneur.
First, he told me I needed to figure out my business model.
How would my investors make money?
How long would it take for the company to be in the black?
Steve said that the proposal would need to show revenue projections for the first five years and that I should give an estimate of gross sales for that same period.
Steve also said that I should include what I thought was the target market for the new service and my plan for convincing potential buyers that the new service would give them a competitive advantage.
After working on the plan for a few months...
I thought it was ready to show some prospective investors.
All I need is just one big investor to take a chance on it.
Hopefully this time next year I'll be well on my way to building a new business empire.
This podcast is called A Business Plan.
A that describes what your new business is and how you are going to make money.
And if you are starting a new business, it is always a good idea to have a plan.
How are you going to make money?
What do you need?
And so forth.
If you want other people to give you or lend you money for your business, they will usually ask for your business plan.
Well, in today's story we begin by saying that about a year ago I came up with an idea.
To come up with an idea means that you think of that, you imagine an idea.
I came up with an idea that I thought would revolutionize the way people sell their goods on the Internet.
To revolutionize... means to completely change.
The word revolution as a noun is when there is a complete or radical change, often in the way that a government is run, but we also use the term for any big or major change in something.
We can use that term revolution.
Well, this is the verb to revolutionize.
I want to revolutionize the way people sell their goods, G-O-O-D-S, on the Internet.
Their goods are the things that they are selling, such as computers or cups or telephones.
Anything physical that you sell is a good.
The other kind of thing you can sell is a service item.
S-E-R-V-I-C-E.
A service is something you do for someone.
It isn't something you can give them physically.
Well, I am trying to revolutionize the way people sell their goods their products would be another term on the Internet.
After a lot of thinking and planning, I decided to try to attract investors.
To attract means to try to get, to try to bring to you.
An investor, I-N-V-E-S-T-O-R, is someone who gives you money for your business.
Usually someone who expects that they will get a percentage of the profits from your company.
So if I give someone 100000, and that is 50 of what it costs to start the business, I expect 50 of the profit of the money that the business makes after it becomes successful.
Well, investors want to see a business plan So I decided to get some advice from my friend Steve.
Steve is a very successful entrepreneur.
E-N-T-R-E-P-R-E-N-E-U-R
Entrepreneur is originally a French word and in English it means someone who is good at starting new businesses, someone who likes to start their own business.
Usually these are small businesses, but sometimes they become bigger as they become more successful.
So an entrepreneur is a usually small business person who likes to start new businesses.
Well, my friend Steve told me that I needed to figure out or to think of ways My business model.
The term business model, M-O-D-E-L, means the way that you are going to be able to make money.
How are you going to make money on something?
Who are you going to sell your product, your goods, or your service to?
And how will you do that?
That is your business model, how you will make money.
Back about five, six years ago, there were many entrepreneurs on the Internet who started companies that were not successful.
And one reason was that they did not have a good business model.
They didn't know how they were going to make money on the Internet.
I don't know either.
One question that my business plan has to answer is how long will it take for my company to be in the black?
When we say a company is in the black, we mean they are making money.
They are taking in more money than they are spending. or what we would call a profit, P-R-O-F-I-T.
If you are in the black, you are making money.
You are getting a profit from your business.
The opposite is to be in the red.
If you're in the red, you are losing money on your business.
Of course, you can't be in the red for too long because you will no longer have any money left.
Well, Steve said that the proposal that I was trying to put together needed to show revenue projections.
The proposal, which is the same as the business plan, needed to show revenue projections.
To show S-H-O-W here means that it would have to be in the business plan.
It would have to be on a piece of paper that said what the revenue projections were.
What are revenue projections?
Well revenue, R-E-V-E-N-U-E is another word for the money that you get, that people give you for your product or service.
That's your revenue.
The opposite of revenue is expenses.
Expenses e-x-p-e-n-s-e-s is the money that you have to spend to give other people, to make your product or to run your service business.
A projection P-R-O-J-E-C-T-I-O-N is a prediction.
It's what you think will happen.
So a revenue projection is your guess about how much money you?
My proposal has to have revenue projections for the first five years of my business and I also need an estimate of the gross sales for that period.
An estimate, E-S-T-I-M-A-T-E, is similar to a projection.
It's a guess.
It's what I think something will be.
Your gross G-R-O-S-S sales S-A-L-E-S is the amount of your product or your service that you sell, not including the refunds or other returns that people might have.
So, for example, if I am selling 10 staplers and I sell 10 and I make 100, that would be my gross sales.
But one of my customers might want a refund, a return of the stapler, and so I would have to give them 10 back.
Each stapler is $10, let's say.
So your gross sales are the $100 before any returns or refunds to your customers.
Steve also said that I need to think about the target market for my new service.
A target market are the customers that you are going to sell your goods and services to.
A market here just means the people who will buy your product. when we say a target market we mean the market that is specifically for what you are selling in the story it says that I have to have a plan to convince potential buyers that the new service that I am going to give them would give them a competitive advantage A buyer, B-U-Y-E-R, is someone who buys.
It's a noun for someone who buys your product or service.
A potential buyer P-O-T-E-N-T-I-A-L is someone who might buy your product, but they haven't bought it yet.
So your potential buyers is the same as your potential customers people who will buy your product or service.
I have to convince people who may be interested in my service that I will give them a competitive advantage.
A competitive C-O-M-P-E-T-I-T-I-V-E advantage A-D-V-A-N-T-A-G-E means that they will do better in their own business if they use my service.
So an advantage here means something that will help you be better than other people, and competitive advantage means that you will be able to sell more, for example, of your product if you buy my service.
After working on my plan, I decided to show it to some prospective investors.
Prospective, P-R-O-S-P-E-C-T-I-V-E, is the same as potential.
Investors who might want to give me money.
All I need is just one big investor to take a chance on it.
The expression to take a chance on something means that you aren't sure if it is going to work and But you are going to gamble.
You are going to guess that it might work.
And so you try it, even though you don't know if it will work.
That is to take a chance on something.
Hopefully this time next year, meaning by this same date next year, so if it's September in 2006, by September 2007 I'll be well on my way to building a new business empire.
The expression to be well on your way means that you will have made significant progress.
You will be very close to your goal or your objective, what you are trying to do.
Well, my goal is to have a business empire.
An empire.
E-M-P-I-R-E is a large company which has many, many different offices or sells many, many different things.
The opposite of an empire would be the Center for Educational Development.
Now let's listen to the story, this time at a native rate of speech.
About a year ago, I came up with an idea that I thought would revolutionize the way people sell their goods on the internet.
After a lot of planning, I decided to attract investors by developing a business plan.
I got some advice from my friend Steve who is a very successful entrepreneur.
First, he told me I needed to figure out my business model.
How would my investors make money?
How long would it take for the company to be in the black?
Steve said that the proposal would need to show revenue projections for the first five years and that I should give an estimate of gross sales for that same period.
Steve also said that I should include what I thought was the target market for the new service and my plan for convincing potential buyers that the new service would give them a competitive advantage.
After working on the plan for a few months, I thought it was ready to show some prospective investors.
All I need is just one big investor to take a chance on it.
Hopefully this time next year, I'll be well on my way to building a new business empire.
The script for today's podcast was by Dr. Lucy Say.
That's all we have time for today.
From Los Angeles, California, I'm Jeff McQuillan.
Thank you as always for listening.
We'll see you next time on ESL Podcast.
English as a Second Language podcast is written and produced by Dr Lucy Say, hosted by Dr Jeff McQuillan.
This podcast is copyright 2006.
