The talking machine world (July-Dec 1922)

24 THE TALKING MACHINE WORLD October 15, 1922 Necessity of Definite Standard by Which to Measure Results Accomplished : By A. M. Burroughs Burroughs Adding Machine Co. To operate a business successfully it is necessary that you have some definite standards by which to measure results accomplished. You must have a mark to shoot at. After an analysis of your territory and its prospects you may find, for example, that you can reasonably anticipate an annual sales volume of $36,000.00. Then divide it like this: $36,000.00— Annually 3,000.00— Monthly 693.00— Weekly 116.00 — Daily (six-day week) Your daily sales quota is $116.00, but right now is the time to see if that will yield an adequate profit after your daily expense has been deducted. Make a chart of 'the daily expense that is involved when you open your doors every morning. The business month will consist of twentysix days, and each week of six days in applying rent, light, heat, etc. The figures given below are used simply as an illustration of the principle only. In practice these accounts mus^ be carefully based on actual conditions. Rent $5.75 Light, heat and power 2.00 Postage, telephone and telegraph 1.00 Interest paid and cash discount given 1.00 Salaries 9.00 Taxes and insurance 2.00 Shop expenses 3.25 Advertising 2.50 Depreciation 1.20 General expenses 50 IllllllilllllllllllflllllllllllflU ticipated sales are $116.00 daily, and our fixed expense at least $28.20 daily. $116.00 28.20 $ 87.80 This leaves $87.80 for the cost of goods sold. For purposes of illustration we will say that you mark up your merchandise 30 per cent on sales (and all mark-up should be figured on selling price). Perhaps your mark-up is larger or smaller. Conditions vary in different locali jj Talking Machine J ( Dealers Who Desire to j H Win in Business Must J jj Shoot at a Definite jj m Mark So as to Score • Using 30 per cent, then your gross profit will be: Thirty per cent of $116.00 $34.80 Expense 28.20 $28.20 In these expenses a salary is included for the proprietor. This is a part of the expense. You should draw your salary as any other employe of the business. It must be included in the sa'ary amount if you are to have a true basis for figuring profit. Cash discount given is rent paid for money just as truly as interest, so that item is included in the expenses. Depreciation is actually figured annually. It should, however, be estimated and charged monthly. At the end of the year an adjustment can be made. From our dailv charts we find that our an Net profit 6-60 Per cent net profit -057 This is not an adequate return for the time, effort and capital invested. It w'ould give you only about $2,000.00 net return on annual sales of $36,000.00. To increase net profit you must do one or more of three things — 1. Increase selling prices. 2. Increase sales volume. 3. Decrease expenses. • Competition and established sales policies have fixed the selling prices and for this reason you cannot increase the mark-up. But the last two factors are within your con SERVICE TEXAS OKLAHOMA Records The Records of Quality The Records your customer wants. Our stock is complete and the haul from DALLAS to your store is short, hence less expensive. We have the new hits while they are new and the old favorites and classics all the time. Write us about the agency for this record in your town MARTIN WEISS CO. 903 Elm Street DALLAS, TEXAS : (jhj, >ng(Tj B m ,t.| m m m ©a©© >•< >•< s«n >u & a a a a a aasii wsmawsiemm sua a a »a ©asaa'sag* trol. You can possibly increase your net profit by both increasing sales and lessening expense. Better service, a more intelligent cultivation of territory and greater sales effort will increase the sales volume. You can add at least $9.00 per day to your sales by these means. By careful use of light and by adopting other economies you should save 25 cents per day. You can probably save 25 cents a day in the store by eliminating wastes and lost time. Possibly a salary saving of 50 cents per day may be made in the salary account. On this basis refigure the daily quota of sales and expense and profit. SALES $39,000.00— Annually 3,250.00— Monthly 750.00— Weekly 125.00 — Daily EXPENSES Rent $ 5.75 Light, heat and power 1.75 Postage, telephone and telegraph 1.00 Interest paid and cash discount given »••• 1-00 Salaries 8.50 Taxes and insurance 2.00 Shop expense 3.00 Advertising 2.50 Depreciation 1.20 General expense 50 '$27.20 PROFIT Thirty per cent of $125.00 $ 37.50 Expense 27.20 Net profit $ 10.30 Per cent of net profit .0824 Net profit on $39,000.00 annual sales $3,213.60 If 30 per cent is your gross profit and your fixed daily expense is $27.20, then you must sell each day $90.70 worth of goods before you have made a cent of profit. For 30 per cent of $90.70— $27.20 daily expense. Then 30 per cent of every additional dollar sold is net profit. Set up this daily quota. Keep a record of it. Compare your actual sales with your quota daily. Quota should be your minimum performance. When you fail to make your daily quota, add the deficit to the following day. MANY NEW PATHE DEALERS BOOKED Greatly increased business is reported by H. T. Leeming, of the Pathe Freres Phonograph Co., Brooklyn, N. Y. "Not only have we received largely increased orders from the dealers now on our books," stated Mr. Leeming, "but many new dealers have been added. I can state without exaggeration that we are now adding new retailers at the rate of one a day. Both Pathe and Actuelle records are in heavy demand and the outlook for the future is bright." E. J. NALLY SAILS FOR CONTINENT Edward J. Nally, president of the Radiq^ Corp. the 1 ranee, Germany, Holland, Italy, Norway and Poland. nuwaru j. many, preMueiu oi me jxauio ^ of America, left recently for Europe p "Homeric." He will visit England, Fra To deal harmoniously with others it is always advisable to try and see through their eyes. It's a mighty wise procedure. PREDOMINATES SO* RECORD FIELD k. A