Sue,
Your question of what if students can't read is a good one. My suggestion for students who can't read is to let them have a book with pictures and then you as the teacher should have them tell you about the pictures while you write down what they have said. This is called the Language Experience Approach to learning.
Once they have the written words to go along with the pictures, then they can practice reading this over and over again to help develop vocabulary and reading.