WHY A BUSINESS FAIL'S.

Waikato Times, Volume 118, Issue 19663, 24 August 1935, Page 9

WHY A BUSINESS FAIL'S.

(To the Editor.) Sir, —The larger the business the smaller the profit is a truth that even the principles of business seldom realise. Most firms have a statistical department, but how few ’Of the “heads” know the significance of statistics! The main thing in statistics is percentage, relativity and ratio. . How many managers of firms know the , ratio of quick assets to current ha- ■ bilities, sales to expenses, debt to capital, etc.? If he knows these things, and others of equal valiue, he is running his business with light. He , is less likely to have accidents. j Here are a few items that produce i losses: Adding up figures, £2 per! week; per salesmen, 19s per day, in yardage; £6O per annum wasted in packing materials; 52 per cent, of hie customers were lost by the rudeness of employees. Glassification of goocLs also reduces profit. One firm stocking 17,000 different products found that 65 per cent, of its business was | on 610 products. Varieties grow up like weeds, and, like weeds, choke a business. Another producer of losses is tne ; “directors and managers" department. How many businesses say, Hurry up , get on with it," to the workers? Scientific management begins at the top. It asks: “Have you provided suitable building, machinery and raw materials?” Then it asks the managers: “Have you a stores and planning department?” Then it goes into the ofilce and asks: “Have you reports as well as records?” The foremen come ■ next. Are they teachers or drivers? Last of all the workers. They are to do as they are told. Nothing else. How do we run our business? These points may help a “boss,” a “head, j or even a “worker.” I am, etc., j ANALYST. | Hamilton, August 22, 1935'. j