Australia Network - Nexus - English Bites - Friday review

Every Friday on English Bites we review the week's programs. Today we're going to talk a bit about the language of business while we look back over the some of the stories you've seen.

Let's start with one about the Sydney Dance Company, and the challenges they face keeping their business going.

LUISA SACCOTELLI: Leigh Small is doing some very fancy financial footwork as general manager of the Sydney Dance Company.

LEIGH SMALL: For performing dance companies you have different levels of risk. With Sydney Dance Company every year we make one new work so that's the highest risk you can have in performing arts. Government funding is 29 per cent of our gross annual turnover.

About 50 per cent of our revenue is from commercial enterprise, so it's box office, fees for performance, dance classes that we run here, income from the cafe that we run and then there's about 17 per cent of revenue is from sponsors.
Currently we're sitting on a net deficit of $600,000 and we operate through an advance against our grant.
So our cash flow situation is steady, but our net deficit situation is rocky.

We heard a lot of business-related words there. We met Leigh Small, who was doing fancy financial footwork. 'Financial' means related to finance or money. People who 'manage finances' look after the money side of a business. They manage the 'income', the money coming in or being earned, and the 'expenses', the money going out or being spent. Let's listen to where the company gets its income.

LEIGH SMALL: Government funding is 29 per cent of our gross annual turnover.

About 50 per cent of our revenue is from commercial enterprise, so it's box office, fees for performance, dance classes that we run here, income from the cafe that we run and then there's about 17 per cent of revenue is from class="highlight">sponsors.

Government funding is 29 per cent of their gross annual turnover. 'Turnover' is the amount of business done in a period. 'Annual turnover' is the amount of business done in a year. And 'gross' means the whole or total amount of something.So a 'gross annual turnover' is the total amount of business the company does in a year, including everything. Listen to how the business is doing now.

LEIGH SMALL: Currently we're sitting on a net deficit of $600,000 and we operate through an advance against our grant. So our cash flow situation is steady, but our net deficit situation is rocky.

They are sitting on a net deficit. A 'deficit' is a shortage or a loss. It's when the amount of money spent is less than the amount of money earned. And in business terms, 'net' is the opposite of gross - it's the amount left after expenses are deducted. 'Gross income' is the total income before any expenses have been taken out.'Net income' is the final income once all expenses have been taken out. It's the final profit or loss of a business. They have a 'net deficit'. When they've paid all their expenses, they are 'in deficit' or making a loss. He says their cash flow is steady. 'Cash flow' is the amount of money flowing in and out of a business during a certain period. OK. Now let's look at another of this week's stories. This one's about a different type of business - a drive through coffee business. Listen for some of the terms we've already talked about.

LUISA SACCOTELLI: They operate from the driveway of an inner suburban bottle shop between 6 and 9.30 in the morning, paying rent of just $70 a week.

LINDA PICKETT: The customers sit in their cars and wait for us to serve them in the window and then they continue on their way.

LUISA SACCOTELLI: 80 per cent of those buying are men.

LINDA PICKETT: The initial rush of traffic is the tradies on their way to work. Then it swings into the executives from about 7.30 until the 9.30 period. It was six months that we were actually in our business daily. That was what we had to do in order to pay ourselves back the initial investment that we made.

LUISA SACCOTELLI: Now, 12 months later, they have repaid their $35,000 start-up costs and are turning over $120,000 a year.

LINDA PICKETT: We operate at a gross margin of about 70 per cent. We do between 100 and 150 in the three, three and a half hour period. For our coffees we have actually decided that we are to charge a premium because we are offering a premium service. We sell a 12 ounce for $4.

LUISA SACCOTELLI: When it all breaks down, the $4 cup has 44c worth of coffee in it, 40c of milk and the cup costs 20c. Taking out wages and rent, the women are left with a net profit of $1.70 a cup.

They have repaid their $35,000 start-up costs. 'Start-up costs' are all the money you have to pay when you start up a business. It includes registering the business, buying all the things you need, and renting a place. You heard them talk about the business turning over $120,000. To 'turn over' is the verb related to the noun turnover. 'Turning over $120,000' means 'doing business to the value of $120,000'. Let's listen to how they make their money from each cup of coffee.

LUISA SACCOTELLI: When it all breaks down, the $4 cup has 44c worth of coffee in it, 40c of milk and the cup costs 20c. Taking out wages and rent, the women are left with a net profit of $1.70 a cup.

Each cup costs $4. That's the 'gross income' they get for each cup of coffee. The $4 cup has 44 cents of coffee, 40 cents of milk, and the cup costs 20c. So that's some of their 'expenses'. That leaves $2.96. When you take out wages for staff and rent for the place they work from, they are left $1.70. That's the 'net profit'. 'Profit' is the opposite of 'deficit'. It's when the amount of money spent is less than the amount earned. So a 'net profit' is the total amount of money made from the cup of coffee, once all the expenses have been taken out. Listen to that clip again

LUISA SACCOTELLI: Now, 12 months later, they have repaid their $35,000 start-up costs and are turning over $120,000 a year.

LINDA PICKETT: We operate at a gross margin of about 70 per cent. We do between 100 and 150 in the three, three and a half hour period. For our coffees we have actually decided that we are to charge a premium because we are offering a premium service. We sell a 12 ounce for $4.

LUISA SACCOTELLI: When it all breaks down, the $4 cup has 44c worth of coffee in it, 40c of milk and the cup costs 20c. Taking out wages and rent, the women are left with a net profit of $1.70 a cup.

And that's all for English Bites today. But don't forget to visit our website for lots more business and finance words.