Money Makes The World Go Round: talking about money in life and business (PART 2 - nouns)

Previously on Business42, we looked at the verbs we use when we discuss money. Today, we're going to continue that lesson and learn some nouns - or, how to describe money in different situations.

Before we begin that, however, let's look at the answers to the activity from the previous post. How many did you get correct?

ACTIVITY IDEA 1: answers

In today’s meeting, the Accounts team examined how much the company spends on external resources, such as suppliers, consultants and utilities (gas, electricity, etc.)
The Chief Financial Officer (CFO) started the meeting by revealing that our company paid consultants over £2 million last year. Even though our company made £20 million in profit last year, the CFO said that we should try to spend less on consultants. We could save up to £2 million this year if we end our business with these consultants or if we ask them to charge less money for their services.
Next, the Chief Accountant told us about how much money the company pays its employees. He told us that the average employee in our company earns £30,000 per year. Altogether, he said, employees cost the company around £500 million each year. The CFO announced that this was an acceptable amount of money to pay, so no changes will be made in this area.
Lastly, the Chief Accountant’s assistant brought up the issue of how much money the company gives to the charity Amnesty International. This charity raised over £30 million last year; £1 million of this came from our company. The CFO and the Chief Accountant agreed that we should continue giving money to this charity.


WORD FORMATION

All of the words which we have studied are verbs. Word formation involves turning a verb into a noun - and it is a very useful skill for expanding your vocabulary. Let's look at an example:

The verb to spend can be changed into the noun spendings.
But it's not natural English to say, "I spent spendings today." We use word formation to learn how to say a sentence in a different way:

"I spent more than I earned this month."

"My spendings were more than I earned this month."

There are other words which are related to the verb "to spend". Unlike "spendings", they don't directly match the spelling of the verb. Like "spendings", we shouldn't use them in a sentence with the verb. But we do often use them to talk about the money we spend. They are expenditure and outgoings.
We can't say, "I spent too much expenditure this month", or "I will spend my outgoings at Christmas". But when you see these words in a sentence, you know the sentence is talking about money which is spent. For example,you might hear in a business meeting:

"The company's outgoings rose by 25% this year." (and you know that the company spent 25% more money than it did last year)

OR

"The accounting department is asking us to cut down our expenditure." (and you know that the accountants want us to spend less)

COLLOCATIONS
So, with "spend", what nouns can we use in a sentence? Here are the most popular examples:

- money - this is the most common noun, especially if you say how much money (for example, "five dollars", "2,000 euro". The company spends a lot of money on paper. / My mother spends €50 on groceries every week. [NOTE: preposition "on" is used if you're giving a noun]
- a fortune - this means "a lot of money". I spent a fortune today / She spends a fortune on shoes. 

In summary then...
VERB: to spend
WORDS FORMED: spendings / expenditure / outgoings
COLLOCATIONS: money / fortune





Now, using this system (VERB - WORDS FORMED - COLLOCATIONS), let's look at the verbs from our previous blog post.

VERB: to cost

WORDS FORMED: 
-cost(s) [The cost of this TV is too much (=This TV is too expensive)]
COLLOCATIONS: 
- [money] [The car cost £2,000. / My jacket cost only $20 in the sale.]
- a fortune [It costs a fortune to stay in that hotel.]  

VERB: to pay
WORDS FORMED: - payment [The cost of this TV is too much (=This TV is too expensive)]COLLOCATIONS: [Because "pay" is the most general money-related verb, we can use it with almost anything. Many of these words will appear again with other collocations]
- a salary / a wage / a bonus [The company pays salaries/wages monthly. / There are many arguments over how much banks pay their employees in bonuses.]
- a fee / a price / a fortune [When you book a flight, you usually have to pay a hidden fee. / He paid a high price for his flat. / If she takes legal action, she'll have to pay a fortune to her lawyer.]
- tax / insurance [You'll be arrested unless you pay your tax. / I have to pay for my car insurance policy.]


VERB: to earn
WORDS FORMED: 
- earnings / income [Your income increases as you get older (=You earn more as you get older.)]
COLLOCATIONS: 
- pay [This is an uncountable noun which is used generally to mean "the money which I was paid". For example, I earned my pay by working overtime.]
- a salary / a wage [Technically, there is a difference between these two words, but most people don't use it. The difference is that "a salary" is pay which is the same each month, and is measured by-the-year, whereas "wages" are paid by-the-hour. So an office worker would probably "earn a salary" but a barista in a café would probably "earn wages". More information here.
I earned a large salary when I worked in the marketing company. / He earns his wages in a supermarket.]
- a bonus [This is the money you earn for a specific reason (successful sales, Christmas-time) and it is paid once, not regularly like wages or a salary.I earned a huge bonus for meeting my sales targets this year! / The bonuses which bankers earn cause a lot of controversy in these difficult economic times.]



VERB: to save
WORDS FORMED: 
- savings [I have enough savings to go travelling next year.]
COLLOCATIONS: 
There are no collocations for this verb. The most common way to follow "save" is to describe how much money was saved. For example, I saved a little cash by shopping online or She saved £3,000 for her wedding.

VERB: to charge
WORDS FORMED: 
- charge [The charge for this service is €20.]
COLLOCATIONS: 
- a rate [The rate which they charge is a little expensive.]
- a fee [To fix my car, he charged me a fee of €200.]
- [an amount] [They'll charge you £50 if you cancel your flight.]



VERB: to make
WORDS FORMED: 
There is no word-formation for this verb
COLLOCATIONS: 
- money [This is the most general noun to use after the verb "to make". However, it's still used mostly in the business world (not in personal, everyday life). / He made money by betting on football matches. He made £200 in one day!]
- a profit [this is the money which a company keeps after it has paid its expenses. It's an extremely important noun in the business world, and is always used with the verb "to make". / The company made a large profit last year. / How much profit do you expect to make in your campaign?]
- a loss [This is the opposite of "profit": when a business spends more money than it has made, we say the business has "made a loss". It sounds strange to use "make" with a negative word like "loss", but it is natural. / He made a loss on his stock-market deal.]

VERB: to raise
WORDS FORMED: 
There is no word-formation for this verb
COLLOCATIONS: 
- funds [We use the verb "to raise" only when we discuss charities and not-for-profit organisations. "Funds" is a noun which describes the money which these organisations make. In other words "funds" apply to charities, just as "profits" apply to businesses. (It's also good to remember that a common full-time job in charities is "Fundraiser".  / The charity raised £2m in funds from their advertising campaign. / At Christmastime, many volunteers can be seen raising funds for charity.]

ACTIVITY IDEA 2

It is possible to use our new vocabulary (of Words-Formed and Collocations) to re-write the business report from the previous Business42 blog post. Remember that the full text, with answers can be found at the top of this page. However, let's look at it again and highlight the words/sentences which we can re-phrase. First, an example.

In today’s meeting, the Accounts team examined how much the company spends on external resources
...can be changed to...
In today’s meeting, the Accounts team examined the company's expenditure on external resources

(Remember that the second sentence isn't better or worse than the first sentence - it's just different. It's important for all English students to know the different ways to say the same thing.)


To practice this week's vocabulary, re-write the words/phrases in blue.

In today’s meeting, the Accounts team examined how much the company spends on external resources, such as suppliers, consultants and utilities (gas, electricity, etc.)The Chief Financial Officer (CFO) started the meeting by revealing that our company paid consultants over £2 million last year. Even though our company made £20 million in profit last year, the CFO said that we should try to spend less on consultants. We could save up to £2 million this year if we end our business with these consultants or if we ask them to charge less money for their services.Next, the Chief Accountant told us about how much money the company pays its employees. He told us that the average employee in our company earns £30,000 per year. Altogether, he said, employees cost the company around £500 million each year. The CFO announced that this was an acceptable amount of money to pay, so no changes will be made in this area.Lastly, the Chief Accountant’s assistant brought up the issue of how much money the company gives to the charity Amnesty International. This charity raised over £30 million last year; £1 million of this came from our company. The CFO and the Chief Accountant agreed that we should continue giving money to this charity.

Good luck, and keep practicing!

Money Makes The World Go Round: talking about money in life and business (PART 1 - verbs)

For better or worse, money is a part of our lives every day.

"Money makes the world go round!"

Whether you're a beggar looking for donations or a wealthy banker depending on currency exchange, as an English speaker you'll know how to talk about the money you use.
This is especially true for business English. Here we will learn the language which you'll need to use every day, no matter who you are or what you do.

On our Facebook page, we gave three connected quizzes on the vocabulary of money. The first quiz was a fun listening exercise (and the answers are included in the comments):

Post by English42.

Let's concentrate on the second quiz. Here, we asked about the different financial verbs in everyday English. If you haven't done this quiz already, why not take about 5-10 minutes to try it?

Post by English42.

How many could you guess? Don't worry - only the most advanced students would be able to think of all of the possible words. Probably only a native speaker (who's a business person!) would know all of the correct verbs.
But we're here to study these words. So let's look at each answer. We'll find out why this word is correct, and we'll find out how to use it in a sentence...

1. She went shopping and spent over £200 on shoes!

"To spend" means to give money in return for a product or service. 
It is something a person or company does.

This verb is useful in your personal life and in the business world. For example, a company can spend €200 million on advertising.

2. This cafe is very expensive: an espresso costs €5.50.

“To cost” describes the price of a product or service.
This verb is used with the product or service – not with the person who is spending the money, or the person/company who is asking for the money. So, it is not correct to say: “British Airways costs €500 to travel to Toronto.” You should say, “A flight with British Airways costs €500 to Toronto.”

This verb is useful in your personal life and in the business world. For example, a company’s advertising can cost €200 million.

3. If you live in Scandinavia, you must/have to pay a lot of tax.

“To pay” is the most general verb we use with money. It means “to give money”, so it can be used for almost anything. We pay taxes, but we also pay when we go shopping, or when we get into trouble with the police, or when we work in a business. The list goes on...
It is something the person or company does. Looking again at sentence number 1 (“to spend”), we can simply say, “She paid £200.” If we want to include the product she bought, we use the preposition for: “She paid £200 for shoes.”

This verb is useful in your personal life and in the business world. For example, “The newspaper paid the celebrity after it reported an untrue story about her”.

4. In my job, I earn $500 per week for my work.

“To earn” means “to receive money for a job.”

This verb is mainly useful in your personal life. [see example in sentence 4.] Sometimes it is used in the business world. For example, “Apple earned a profit of $900 million this quarter.” But here it is more common to use the verb “to make”, which we can use in personal life and in the business world (“I make $500 per week”; “Apple made a profit of $900 million.”)

5.  I want to go to Italy this summer, but I don’t have a lot of money: I need to save around €1000 by next June.

“To save” means “to collect money” and “to not spend”.
As a verb, it comes in a sentence after a person or a company and almost always an amount of money appears after the verb.
The first meaning (“to collect money”) is mainly used in your personal life. We save money when we have more money than we need, or we need to spend less – the money then goes to a safe place (like a separate bank account); we regularly add more money and eventually use it to buy something expensive.

The second meaning (“to not spend”) can be used in your personal life and in the business world. We use it when we have bought something for a lower price than usual, or when we stop spending money on something.
(For example, “The iPod was £150 in the shop, but it was £130 online, so I bought it online and I saved £20”.
Or, “The company changed to a cheaper paper supplier and so it saved lots of money each month.”)

6. The mechanic said he would charge me £200 for a new wheel on my car.

“To charge” means “to ask for a price in return for a service or a product.”
Note that this verb is very similar to sentence number 2 “to cost”, but we use this verb after the person or company who is selling the service/product.

This verb is useful in your personal life and in the business world – but because we use “to charge” in connection with the seller, it is almost always a verb for business transactions.

7. Our company made a profit of £5 million last year.

[see sentence number 4]

8. So far, the charity has raised almost enough funds with its advertising campaign.

If you work in a charity or not-for-profit organisation, and you rely on money which other people give (not pay) the verb to raise is more common. It is the same as make or earn, but this verb is used only for organisations which are not businesses.
We use this verb in a sentence after an organisation and, like many other verbs here, it is followed by a noun or a sum of money. (For example, “The charity is trying to raise €1,000 to help a school in Africa.”)

ACTIVITY IDEA 1: When you feel confident that you understand each of these verbs, and how to use them, try this short exercise. It's a report from a meeting in a large company. Pay attention to the meaning of each sentence and the tense of each sentence, and then fill in the missing verbs (the first one is done for you):

In today’s meeting, the Accounts team examined how much the company spends on external resources, such as suppliers, consultants and utilities (gas, electricity, etc.) The Chief Financial Officer (CFO) started the meeting by revealing that our company [____________] consultants over £2 million last year. Even though our company [____________] £20 million in profit last year, the CFO said that we should try to spend less on consultants. We could [____________] up to £2 million this year if we end our business with these consultants or if we ask them to [____________] less money for their services. Next, the Chief Accountant told us about how much money the company pays its employees. He told us that the average employee in our company [____________] £30,000 per year. Altogether, he said, employees [____________] the company around £500 million each year. The CFO announced that this was an acceptable amount of money to pay, so no changes will be made in this area. Lastly, the Chief Accountant’s assistant brought up the issue of how much money the company gives to the charity Amnesty International. This charity [____________] over £30 million last year; £1 million of this came from our company. The CFO and the Chief Accountant agreed that we should continue giving money to this charity.

[The answers to this quiz will appear in the next post on Business42]

Building Your Mission Statement

In this week’s blog, we’re going to look at mission statements for business. These are (usually) short sentences which describe a company’s vision and activities. We’ll look at the benefits of a mission statement and we’ll look at some real companies’ mission statements. Most importantly, we’ll learn how to write a business statement in English.

Before we begin, let’s take a look at our Facebook quiz from 1 January.

Post by English42.

And here are the answers:

a) “To devote our talent and technology to creating superior products and services that contribute to a better global society.” (Samsung)

b) “To be the Ultimate House of Luxury, defining style and creating desire, now and forever.” (Chanel)

c) “To organize the world’s information and make it universally accessible and useful.” (Google)

 d) “To create a better everyday life for the many people...offering products at prices so low that as many people as possible will be able to afford them.” (Ikea)

e) “To refresh the world - in mind, body and spirit. To inspire moments of optimism - through our brands and actions. To create value and make a difference everywhere we engage.” (Coca Cola)

All of these mission statements are great for their use of English. Hopefully, you’ll be able to see some of the language features which they all share. In a moment, we’ll look at these, but first we should answer one very important question...

WHY SHOULD WE MAKE A MISSION STATEMENT?

It’s important to remember that, like many other business tools, a mission statement does not have to be used only in a business. It can be very useful for your department, your employees – or even just your own personal life. If it’s used in any of these ways, a mission statement is good for you in two different ways:

Internal benefits: a mission statement can help managers to direct, and it can help give a strong feeling of purpose and reason to the employee, the team and the company in general. Everyone knows what they’re doing, and why they’re doing it.

External benefits: by describing your work, a mission statement can tell the world about your beliefs, and (importantly) it tells customers how you are different from other companies like yours (competitors).

THE ENGLISH OF MISSION STATEMENTS

Step 1: verb + noun

The best business statement is made up of two parts: 20% good English, and 80% original thought. It requires a good English vocabulary, but this is much less important than your ability to describe your (your team’s or your company’s) vision and purpose.

There is one thing we can see in all of the statements: they all start with an infinitive verb. An infinitive verb is a verb with “to”: 

“To create”

       “To be”

 “To organise”

All mission statements, like snowflakes, are different – but they all start with an infinitive verb. This is usually followed by a noun:

“To create a better everyday life” 
 

       “To be the ultimate house of luxury” 

  “To organise the world’s information”

 

Together, the verb and the noun basically describe what the company is or what the company does. This is the first step to writing your mission statement.
[Coca Cola have done something clever: they have chosen a very strong, descriptive verb, to refresh. (This is what something new, different or desired does to you: e.g., a cold, sweet Coke on a hot day)]

Step 2: adjectives

After this, you can improve the statement by adding adjectives if you like. Chanel have already done this: they want to be the ultimate house of luxury. Ikea want to create a better everyday life. This step is optional, but the next step must be done.

Step 3: more nouns You’ll need to add more information, to give more details to yourself, your team or your customers. Usually, you will use nouns for this. For example, Chanel have chosen “style” and “desire”. Like Coca-Cola’s verb “to refresh”, these are very powerful nouns.
 

Step 4: more adjectives

Samsung have chosen the nouns “products”, “services” and “global society”, and they have added some strong adjectives to describe two of these things: “superior services” and “a better global society”. Like step 2, this step is optional. You don't need to add adjectives, but you can. If you do decide to use adjectives, be sure of two steps:

1) don't use too many adjectives - two or three is best.

2) try to use strong, descriptive adjectives. (e.g. Samsung's products aren't just good - they're superior!)

One last tip

If you decide to do a mission statement after this blog then congratulations! However, don't do it alone. Teamwork is essential - "two brains are better than one" - especially because there are two main ingredients to writing a mission statement:

1. a great vocabulary, so you can choose the best verbs, nouns and adjectives;

2. original thought about your company or team.

Be careful, but be adventurous!