MEN AND METHODS

Dominion, Volume 21, Issue 245, 17 July 1928, Page 13

MEN AND METHODS

Business pians and ideas Suggestions for Reducing Costs and Increasing Sales. (.Conducted by Observer) System—Too Much or Not Enbugli? The comments of an executive of one of the largest stores in Australia have prompted an Amtricati trade journal, the “Dry Goods Economist,” to take up the question of too much systemisation. “When vve find a good thing vve are rarely content to use it in moderation, but must always rush to extremes, and it is this characteristic expressed in retailing” which meets with condemnation. Too little system, the "Economist” finds, is a great evil, and one that is responsible for “driving thousands of retailers out of .business in all countries, aud has thousands more banging over the precipice of failure. Too much system ean be just as much an evil as too little. Any business must expect a certain percentage of loss, due to inefficiency and dishonesty, as long as it lias to depend upon, that imperfect machine—human nature.'’ Influence in Business. The story which follows illustrates the value of character and reputation in business. A man of character, but no assets, once called on J. I’. Morgan, the great financial genius, and asked for a loan. Mr. Morgan listened to him. then put on his tint, and asked the applicant to accompany him down the street. They walked out Of the Morgan offices, down the financial district, Mr. Morgan bowing and speaking to acquaintances as they went along. Finally, Mr. Morgan shook pjim by the hand, and bade him good day. “But. Mr. Morgan, how about the loan?” Mr. Morgan. replied: “I have made it possible for you to get your loan in channels much more natural than from me. Any of the men who saw you with me will be glad to entertain the proposition.” Drapery Sales. A certain drapery establishment in a large city has adopted an unusual plan for conducting sales in its miscellaneous departments. When an article is offered for sale there, the price ticket also bears thc date. The price is supposed to be attractive enough to ensure a quick sale. If thc article is not sold within two weeks, the price is reduced by 20 per cent. If, a week Inter, the article is still unsold, another 20 per cent, comes off its price. Other reductions are made as time goes on until a sale is made. When the plan was first adopted, the public thought it might get lower prices by waiting, but this was overcome: by a system of commissions paid to the head of the department and his assistants. Every time it was found necessary to reduce the first “bargain” price, thc commission payable to the salesman was substantially reduced, with the result that assistants had to: exert every effort to stimulate sales. The head of thc department, who also does his own purchasing, has found it necessary'to buy. very shrewdly, as Hie “first offerings” have to be sufficiently attractive to appeal to careful buyers. Developing an Idea. Someone has said that the secret of success is to secure a good idea and advertise it. The following incident shows that one , simple, sound idea, properly exploited,'can be made the means of developing a whole new industry. It happened that in Hawaii the growers of pineapples were having considerable trouble in keeping the fields clear of weeds. Someone developed the idea of a paper mulch to stifle the growth of weeds. It proved an unqualified success. Someone in one of the'cities of thc United-States heard, that it was a good idea and experimented with ISin. strips of rough paper between rows of vegetables to save weeding. The idea worked very well and, in addition, the paper strips accelerated the growth of thc vegetables, because it kept the sun from drawing the moisture out of the ground and at the same time kept tlie warmth in the soil. A paper manufacturer heard about it and made up a small supply of special paper in rolls.. lie then advertised the hew aid to gardening. One mill is filled to capacity executing orders already in hand, another is in course of erection, and two more arc contemplated. Buying a Business. A business broker reports that a big percentage of people who buy .a small or meiJlymifSmcd business for the first time meet with failure inf the course of a few months. The reason given is that buyers do not carefully investigate thc claims of sellers, and are apt to be led away . by glowing accounts of the future possibilities of the business, its low rent, and the good reason for selling. The same broker adds that while many unprofitable propositions are readily disposed of, genuine profit-producing businesses, placed on the market for a legitimate reason, frequently fail to attract the investor. The points that one should know when buying a business 1. How long has the present owner had the business. If the business has changed hands a number of times in thc last, few years, the reasons underlying such changes should be parefully investigated. A man does not usually dispose of a profitable proposition unless he has. held it long enough to build up a considerable capital. 2. When a business is offered for sale, thc prospective purchaser is usually supplied with figures relating to income, rent and profit. In analysing these figures, subtract rent and expenses from profit. 3. Check the invoices for purchases made by the business over twelve months. Then compare tlie income tax returns for the same period. After making allowance for any increase in stock, the purchase figures will give an indication of the wholesale value of thc store’s turnover for the year. 4. Do not take goodwill too much for granted. The personal element has such a great influence on a store’s prosperity that one man may make a success of a business in which another would be forced into liquidation. Norman Angell, thc English economist and writer, while in America asked a motor-car manufacturer when the industry would reach the saturation point. The manufacturer replied: “When will the millinery business reach the saturation point?" * * * “Perhaps thc most significant change in our economic life has been the progress in the development of an ethical standard in the conduct, of business,” states a Birmingham banker. * * * Statistical studies of men and women's tastes, conducted by an overseas university. show that men are mainly interested —after working hours-— in money, business. and amusement, while women are more interested in clothes and decoration. I* * * An industrial company makes a point of putting a disabled employee back to work as soon as possible after an accident, to encourage him. Because of efforts 1° place him where his work is best suited to his abilities, it not infrequently happens that a man earns more after an injury than before.