15. Foreign trade

Countries buy and sell various goods as well as various services. Goods bought from abroad, such as food, cars, machines, medicines, books and many others, are called visible imports. Goods sold abroad are called visible exports.

Services, such as insurance, freight, tourism, technical expertise and others, are called invisible imports and invisible exports.

The total amount of money a country makes including money from visible and invisible exports, for a certain period of time, usually for a year, is Gross National Product, or GNP.

The difference between a country's total earnings or GNP, and its total expenditure is called its balance of payments.

The difference between what a country receives for its visible exports and what it pays for its visible imports is its balance of trade. If a country sells more goods than it buys, it will have a surplus. If a country buys more than it sells, it will have a deficit.

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16. The business plan

The business plan is probably the most important document that any company can have and yet it is also the least well known or used. The idea behind a business plan is like having a map before you set out into relatively unknown territory.

When businesses first begin, they are normally run by one person and that person usually understands what he or she is trying to do. Within a very short space of time, however, the business can grow to a size where one person cannot keep all the possibilities and options in his or her own head and cannot fully understand all the possible ways in which the business needs to be controlled.

Then a description of the company usually comes. It says how the company began, what it is called and what it is in business to do. Many companies find it useful to have a written ‘mission statement’ so that everyone — inside or outside the business — knows what it is trying to do. The 'mission statement' may sound very grand but it is intended to be a realistic statement and not simply a 'wish'.

Then comes a section of the management. Banks and other lenders will need to understand the quality and experience of the management of the company. This section will contain details of the names, ages, experience and qualifications of the management. It is also usual to say why the managers want to work in the company and how they see its future.

Many business plans also contain a section of products and pricing. This section describes the products and services which the company offers. It will also say how those products have been priced and how the company in­tends to increase or decrease the prices over the next few years.

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