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1. AN INTRODUCTION
TO SMALL BUSINESS
An English Language and Civics,
Business Education Workbook for
English Language Learners
STUDENT WORKBOOK
Written by
Michelle Y. Walker-Wade (formerly Riley)
2003

2. Introduction to Small Business for ELL
AN INTRODUCTION TO SMALL BUSINESS
An English Language and Civics, Business Education Workbook for English Language
Learners
Statistics show that the American immigrant population is finding the key to economic
freedom in entrepreneurship. Likewise academia is experiencing a surge in opportunities
for Vocational ESL training. What better response could we have, than to unite English-
as-a-Second- Language education with Business Education?
This workbook has been developed to help further the English Language Learner’s desire
to speak and excel in the world of business. It has been quite an ambitious journey, but
well worth the effort. The lessons are developed for the Intermediate/Advanced to
Advanced ESL student. Due to the number of complex business terms and concepts, this
book is a great “next step” for the students who are reaching the top of the ESL ladder.
This workbook and course do more than teach Civics, English and Business; it teaches
students a little bit about, American business culture and how they fit into it, community
building, goal setting, sales tax, how to read a receipt, mathematics, problem-solving
and planning, and so much more.
The format of the workbook is one that will enhance the students reading and vocabulary
skills. Furthermore, the suggested classroom activities (see the appendix) are great for
increasing the student’s speaking and listening skills.

3. TABLE OF CONTENTS
Page
Unit 1: Getting Down to Business
Lesson 1:Where Do I start? ............................................................ 1-6
Lesson 2: I Think I Want to be an Entrepreneur.............................. 7-11
Lesson 3: It’s Time to Start Planning .............................................. 12-16
Unit 2: Making Your Business Legal
Lesson 4: Making Your Business Legal......................................... 17-19
Lesson 5: Business Licenses in the State of California ................... 20-22
Lesson 6: Zoning Clearances ......................................................... 23-26
Lesson 7: Fictitious Business Names ............................................. 27-29
Lesson 8: Seller’s Permits ............................................................. 30-34
Lesson 9: Business Ownership Structures...................................... 35-40
Unit 3: Your Business Plans
Lesson 10 :Introduction to Business Plans ...................................... 41-44
Lesson 11: Elements of a Business Plan ......................................... 45-49
Unit 4: Pricing Your Products
Lesson 13: Three Pricing Strategies................................................ 50-53
Lesson 14: Simple Mathematics ..................................................... 54-58
Lesson 15: Operating Costs............................................................ 59-62
Appendix
Vocabulary..................................................................................... 64-67
Exercises Key ................................................................................ 68-70
Data & Evaluation Forms ............................................................... 71-72

4. Introduction to Small Business for ELL
Reading 12 - "Pricing Strategies”
Have you ever wondered how businesses determine the price of their products? Pricing is a very
important part of having a successful business. Not only does it determine how profitable your
company will be, it will also affect your customer’s demands and expectations. There are
several factors to be considered when determining prices. These factors are summed up into
three basic pricing strategies: Above Market pricing, Competitive Market pricing, and Below
Market pricing. A detailed explanation of each strategy is below.
3 Pricing Strategies If…Then…
Above market If you want to attract customers who are willing to pay
higher prices in exchange for premium service, then above
~ This means that… ~ market prices are good for you.
When compared to other If you want to attract customers who are willing to pay
businesses selling the same or higher prices in exchange for elegant environments, then
similar products, these prices are above market prices are good for you.
a bit higher.
If you are opening your business in a fancy neighborhood or
This is called some other location where there are few competitors, then
“High-end Pricing” above market prices are good for you.
If you want to grow your business on quality, rather than
quantity, then above market prices are good for you.
Competitive market If your business sells a product customers can easily obtain
from another business, then competitive prices are good for
~ This means that… ~ you.
When compared to other If your business sells a variety of products, then
businesses selling the same or competitive prices are good for you.
similar products, your prices are
about the same. If you want to attract customers who look for average
quality, name-brand products at good prices, then
This is called competitive prices are good for you.
“Medium Pricing”
If your business is located in a primary commercial zone,
then competitive prices are good for you.
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Property of: New Haven Adult School Page 4

5. Below market If you want to attract customers who are willing to sacrifice
quality for lower prices, then below market prices are good
~ This means that… ~ for you.
When compared to other If you want to sell off-season products, then below market
businesses selling the same or prices are good for you.
similar products, your prices are
lower. If you want to sell a small variety of products in large
quantities, then below market prices are good for you.
This is called
“Low-end Pricing” If your business is for enjoyment rather than for high
profits, then below market prices are good for you.
Exercise 12.1: Working with New Words and Phrases
Compare(d) Quality
Premium Quantity
Strategy / Strategies
Based on the definitions from the previous lesson and usage of your vocabulary list, deduce
which of the above words is best for each scenario.
______________________1. Paula found two white blouses she liked. One was made of
100% cotton and had simple buttons up the front. The other was
100% linen with short sleeves. The blouses cost $19.99 and
$16.99.
______________________2. Sarah was sure she wanted to work for a university or college.
She made a list of all the universities and colleges in her area,
and made it a point to check each ones job postings at least three
days a week.
______________________3. Costco and Smart-n-Final are popular stores in this area.
Customers can save money shopping there if they are willing to
buy in bulk.
______________________4. Joe does not like to buy his coffee in cans at the local grocery
store. He’d rather buy a few fresh coffee beans from a coffee
bean roster every couple of days.
______________________5. Jim loves his Rose-Royce. He uses nothing but the best gasoline
he can buy.

6. Introduction to Small Business for ELL
1
Exercise 12.2
Complete the chart by naming a business that fits each pricing strategy.
Type of Business Above Average Competitive Market Below Market
Pricing Pricing Pricing
Groceries
Clothing
Automobiles
Restaurants
Written by: Michelle Y. Riley for New Haven Adult School – EL Civics & Business Education: 2003
Property of: New Haven Adult School Page 6

7. Exercise 12.3
We will look at the websites of the businesses below. Decide if you think the business’ pricing
strategy will be above market, competitive, or below market. Then, explain why you selected
each one
Business Name and Web address Select a Pricing Explain why
Design
Hotel Deanza Above Market
http://www.hoteldeanza.com/ Competitive
Below Market
Castro Valley Comfort Suites” Above Market
http://www.cscastrovalley.com/ Competitive
Below Market
DeJardenia Living Floral Design Above Market
http://www.dejardenia.com/ Competitive
Below Market
Gerry’s Country Rose Above Market
http://www.gerrysflorist.com/ Competitive
Below Market
Crate and Barrel Above Market
http://www.crateandbarrel.com/ Competitive
Below Market
Bed Bay & Beyond” Above Market
http://www.bedbathandbeyond.com/ Competitive
Below Market

8. Introduction to Small Business for ELL
Introduction to Product Pricing – Important Phrases
Invoice price The price a business pays a manufacturer or supplier when they
purchase products for resell.
Selling price The customer’s purchasing price for a product.
Markup Amount The difference between the selling price and the invoice price in
DOLLARS. (Selling Price – Invoice Price = Markup Amount)
Operating Costs All the expenses created in order to run a business
Reading 13 - "Introduction to Pricing PRODUCTS: Simple Mathematics”
American manufacturers often suggest the prices for which they believe their products should
sell. This price, called the “Manufacturers Suggested Retail Price” (MSRP), is based on the
average American business’ operating costs. The MSRP, however, is only a suggestion and
business cannot be forced to use it. If a business owner decides to use the MSRP, (s)he must use
mathematics to make sure the suggested price is right for them.
When businesses price their products, they are generally concerned with two figures: the cost of
the merchandise (called the “invoice price”) and the price they will charge customers (called the
“selling price”). The difference between these two amounts is called the “markup amount”. So,
for example, if the invoice price of a toy is $12.00 per item, and the customer is charged $19.00
per item, then the markup amount is $7.00 per item.
Selling Price – Invoice Price = Markup Amount
$19.00 – $12.00 = $7.00
The amount of money gained in the markup must be enough to cover the businesses operating
costs, plus make a profit. For this reason, determining the Markup Amount is the most important
step in product pricing.
The simplest way to calculate a products lowest possible markup amount, and thus the lowest
possible selling price, involves a three–step process.
1. Add up all of your operating costs for one month of business, making
estimates for those expenses whose exact dollar amounts are not available.
This is called the Monthly Operating Costs.
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Property of: New Haven Adult School Page 8

9. 2. Estimate the quantity of products you hope to sell in one month (base this
estimate on your future sales expectations). This is called the Target Sales.
3. Divide the Monthly Operating Costs by the Target Sales. This will give you
the Operating Costs per unit – also called the minimum Markup Amount.
Monthly Operating Costs ÷ Target Sales = Operating Costs per unit
Once the Operating Cost per unit is calculated, it can be added to the invoice price. The end
result is the product’s minimum selling price. Using the same example of the toy with a $12.00
invoice price per item, lets assume that the seller’s Monthly Operating Cost was $420.00, and
their Target Sales were 60 toys a month.
We can calculate the Operating Costs per unit as:
Monthly Operating Costs ÷ Target Sales = Operating Costs Per Unit
$420.00 ÷ 60 = $7.00
Then, add the $7.00 to the $12.00 invoice price, thus obtaining our selling price of $19.00:
Operating Costs Per Unit + Invoice price = Selling Price
$7.00 + $12.00 = $19.00
Although this process is probably the most accurate way to price products, it can be very time-
consuming if there are a lot of products being sold. Thus, many businesses use the Markup Rate
method instead. With this method, businesses select a percentage rate, and simply markup their
products by that percentage. For example, suppose a store decided to markup all toys at a rate of
50%. The toy with the $12.00 invoice price would end up with an $18.00 selling priced:
Invoice Price + Markup Rate = Selling Price
$12.00 + 50% = $18.00
This selling price is slightly below the $19.00 calculation we previously made, so consequently it
does not fully cover the operating expenses. The business will usually make up for this
difference on the other products it sells.

10. Introduction to Small Business for ELL
Exercise 13.1
Answer the following questions
1. What does the acronym MSRP mean? ____________________________________________
___________________________________________________________________________
2. Is the seller required by law to use the MSRP? _____________________________________
3. There is a simple way to calculate the minimum Markup Amount. How many steps are in
this process? __________________________
4. These steps are to:
First: Add up all the _________________ _____________________ _______________
Second: Estimate the ______________________ __________________________
Third: Calculate the minimum Markup Amount by ____________________ these two
numbers.
5. However, many businesses use the ________________ ______________ method to price
their products because it is easier and less time consuming.
Written by: Michelle Y. Riley for New Haven Adult School – EL Civics & Business Education: 2003
Property of: New Haven Adult School Page 10

11. Exercise 13.2
Fill in the blanks.
If the invoice price of a camera is $32.00 per item, and the selling price
charged to customers is $59.00 per item, then the __________________
________________ is $27.00 per item.
If the _________________ _________________ of a book is $6.00 per item,
and the selling price charged to customers is $16.00 per item, then the markup
amount is $10.00 per item.
If the invoice price of a TV is $49.00 per item, and the ______________
_______________ charged to customers is $65.00 per item, then the markup
amount is $16.00 per item.
If the invoice price of a necklace is $8.00 per item, and the selling price
charged to customers is $15.00 per item, then the markup amount is
$______________ per item.
If the invoice price of a gold ring is $125.00 per item, and the markup amount
is $78.00 per item, then the selling price charged to customers is $
_____________ per item.
If the invoice price of a EZ-chair is $59.00, and the business applies a 30%
markup rate to it, then the selling price charged to customers is
$_________________.
If the shoe store applies a 45% markup rate to sandals, then the selling prices
of a sandal whose invoice price is$12.80 would be
$_______________________.

12. Introduction to Small Business for ELL
Exercise 13.3
Using these formulas, calculate the minimum Markup Amount and Selling Price for each
Monthly Operating Costs ÷ Target Sales = Operating Costs per unit
Invoice Price + Markup Amount = Selling Price
*** Remember: the Operating Costs per unit is also the minimum Markup Amount
Details provided: What is the minimum What is the minimum
Markup Amount per Selling Price per item?
item?
The Monthly Operating costs is: $300.00
The Target Sales is: 100
The per item Invoice price is: $9.00
The Monthly Operating costs is: $680.00
The Target Sales is: 80
The per item Invoice price is: $49.00
The Monthly Operating costs is: $500.00
The Target Sales is: 20
The per item Invoice price is: 100.00
Using Markup Rates, calculate the Selling Price for each
Details provided: What is the selling price
The Markup rate: 20%
The per item Invoice price is: $70.00
The Markup rate: 45%
The per item Invoice price is: $28.00
The Markup rate: 85%
The per item Invoice price is: $12.00
Written by: Michelle Y. Riley for New Haven Adult School – EL Civics & Business Education: 2003
Property of: New Haven Adult School Page 12

13. APPENDIX
SMALL BUSINESS
RESOURCES

14. Introduction to Small Business for ELL
Vocabulary Lesson Write the Definitions below
Acronym 7
Advertisement 1
Assessed 8
Brief 11
Business contact 3
Business industry 3
Business Plan 10
Business Services /Business 3
Products
Business Startup 3
Commercial Zone 6
Compare 12
Compete 3
Complex 11
Comply 4
Database 7
DBA 7
Demand 3
Entrepreneur 1
Exempt 7
Written by: Michelle Y. Riley for New Haven Adult School – EL Civics & Business Education: 2003
Property of: New Haven Adult School Page 18

15. Vocabulary Lesson Write the Definitions below
Residential Zone 6
Sacrifice 2
Sacrifice personal comforts 2
Sales Taxes 8
Self-disciplined 2
Self-managed 1
Self-motivated 2
Self-starter 2
Selling price 13
Shareholder 9
Simple 11
Strategy/Strategies 12
Structure 9
Surname 7
Tangible Goods 8
Taxable items 8
Unincorporated cities 5
Venture 2
Violate 5

16. How well do you understand the following topics about Small
Business Ownership?
Circle the number that best corresponds
1 = I have never heard of this topic
2 = I’ve heard about it, but I don’t know anything about it
3 = I know a little about it
4 = I know about it well enough
5 = I know about this topic pretty well
The Personality Traits of an Entrepreneur
1 2 3 4 5 One who is innovative, creative, a risk-taker, organized, self-disciplined…
Networking
1 2 3 4 5 Talking to other business people, attending Networking Events…
Legal Requirements
1 2 3 4 5 Business licenses
1 2 3 4 5 Zoning clearances
1 2 3 4 5 Fictitious Business Names
1 2 3 4 5 Seller’s Permits
Ownership Structures
1 2 3 4 5 Sole proprietorships
1 2 3 4 5 General partnerships
1 2 3 4 5 Limited Liability partnerships
1 2 3 4 5 Corporations
Business Plans
1 2 3 4 5 Coversheets
1 2 3 4 5 Business Descriptions
1 2 3 4 5 What makes up a business plan (the elements of a business plan)
Product Pricing
1 2 3 4 5 Pricing strategies: Above market, completive market, below market
1 2 3 4 5 Calculating operating cost
1 2 3 4 5 Target sales
1 2 3 4 5 Invoice prices and Selling prices
1 2 3 4 5 Markup Amount and Markup Rate

17. Introduction to Small Business for ELL
Course Final Questionnaire
During the course of this class…
1. What new word and phrased did you learn?
2. What new ideas did you gain?
3. What information did you find most interesting and helpful?
4. What information did you find least interesting and helpful?
5. What did you learn about starting a Small Business?
6. What do you think about the legal requirements of owning a business in California?
7. What math skills did you learn?
8. What math lesson was most helpful?
9. What math lesson was least helpful?
10. What new ideas do you have about customer services?
11. What did you learn about working in teams?
12. What would you like to learn about next?
13. What did you like about the class?
14. What did you dislike?
Written by: Michelle Y. Riley for New Haven Adult School – EL Civics & Business Education: 2003
Property of: New Haven Adult School Page 26