Insurance

1. Is your store insurance handled by a conscientious and knowledgeable agent?

As a small merchant, you probably rely almost entirely on outside professional guidance in insurance matters. Therefore, finding a reliable agent, genuinely concerned with your insurance needs, is essential.

2. Have you updated your insurance needs to assure adequate protection for buildings, equipment, merchandise and other assets, as well as for public liability?

Insurance coverage should be checked periodically. It should be sufficient to cover existing contingencies. You may wish to hire an insurance expert other than your own agent to review your policies and make recommendations. Be sure hat the reviewer has all the information necessary to study your situation, and stress the importance of locating any new hazards and determining any decrease in former ones. Correcting your risk situations - for  example, by providing sufficient fire extinguishers or sprinklers, by lighting dark stairways and entrances, or by installing a good burglar alarm system - can drastically lower your premiums.

3. Is your public liability insurance adequate?

In recent years, customers, delivery people, and others have been suing merchants more and more frequently and for greater amounts. And juries have been tending to increase awards for damages in negligence suits. To be adequate, your liability insurance program must take into account the increased amounts that are now often being awarded in judgments.

4. Have you reduced your insurance premiums by using deductibles?

You should decide how much of your various risks you can bear yourself. Accepting a deductible, you can reduce your premiums and yet be protected against any major risk. When you use a deductible, you should, of course, build up a reserve fund to cover your uninsured risk.

Accounting Records

1. Do you keep careful records of your cash outlays for goods, supplies, and services?

The time it will take you to jot down the nature of a cash payment is very small. Such records, together with checkbook stubs, accumulate enough data for you to determine, in some detail, just how you are spending your money. Accurate records are necessary for tax purposes.

2. Do you maintain a cash budget?

Using the above-mentioned records as guides, you can actually plan your cash outlays. Doing this, and forecasting what your cash receipts will be, helps you to run a more orderly, and profitable, business.

3. Do you have your books balanced and accounts summarized each month?

It is best to know regularly what is going on and in which direction you are headed. Then if faults appear, you still have time to correct them before they become major problems.

4. Do you use a modern point-of-sale register for sales transactions and computer to record accounts receivable?

The old manifold handwritten sales-book has little place in modern retailing. Today, even delivered and charge transactions can be handled by a register operation, and you can automatically get a daily analysis of all sales and return transactions at each register area. Similarly, computer maintained accounts receivable may be more efficient than a manual system.

5. Have you considered having your sales and other records processed and analyzed by an outside agency?

Many agencies will process your records (using computers) and give you analytical data promptly. But before you contract for any such service, measure its cost and efficiency against what you are currently able to achieve.

6. Do you keep data on sales, purchases, inventory, and direct expenses for different types of merchandise in your store?

Even if you do the buying yourself, separate data for each type of merchandise will give you better control of purchases and promotions.

7. Do you have your books audited yearly by an independent public accountant?

To protect both yourself and your bookkeeper or accountant, you should hire an outside firm to make an independent yearly audit. A competent public accountant will be able to offer guidance on taxes as well as on other phases of management.

Planning For Growth

1. Over the past few years have you done very much long-range planning for growth?

If you are forward looking and flexible in your thinking, more than likely you will be continually planning and executing changes - for change is a dominant aspect of modern competitive life. Although a wise merchant respects the past, he should never be bound by it. Your long-range planning should take into consideration all of the following: merchandise assortments, selling methods and sales training, sales promotion media and devices, customer services (especially credit), addition of income bringing services, building modernization (fixtures and equipment), branch development or location change, financing (especially the reinvestment of earnings).

2. Is your store location still satisfactory?

If your neighborhood is deteriorating (and with it sales and profits), you should give some consideration to moving to a new location which your present customers could readily reach and where new customers could be attracted. A good nearby shopping center might be ideal.

3. Do day-by-day activities involve you so much that you find no opportunity for advance planning?

The small merchant must be both a planner and a doer. Day-to-day activities can be delegated so that you can do more important planning.

4. When you find that change is called for, do you act decisively and creatively?

Risk is always present in business. Some of it can be reduced by insurance. But there is no way to hedge on long-range planning. Once you have decided to make a change - based on all available facts - you should enter into the project wholeheartedly.

5. Do you find that recurring crises force you to make most of your changes before you have been able to give them thoughtful analysis?

The failure to plan for changes that must be made if you are to hold your customers and attract new ones leads to great waste and poor management practices. Sudden changes add unnecessarily to your expenses, they disturb your established customers, and they upset your employees' morale.

When you determine that you must make a change in some policy or practice, plan ahead carefully and give all those involved a clear account of what is going to be done. By planning ahead, you lessen the possibility of crises and the need for snap judgments.

Why do some Business managers hit the profit goal more often than others? They do it because they keep their performance pointed
in this direction - management of profit earning. They never lose sight of the goal - to finish the year with a profit.

This manual Gives suggestions that should help an owner-manager to zero in on profit earning. It points out that you have to keep
educated, make timely decisions, and take effective action. In effect you must control the activities of your company rather than
being controlled by them.

Topnotch Functionality in golfing, shooting, and fishing demands understanding, training, and perseverance.

Similarly, in Small businesses, year-end profit arrives to the owner-manager who strives for topnotch performance. You attain
profit making goals by understanding your operation, by practicing the craft of making timely, balanced judgments and by
controlling the organization's activities.

Adapt the Tips in this guide to your situation. They should allow you to call the shots to maintain your business headed in the
ideal direction - toward profit making.

First Rule of Profit Making: Know Your Small Business. The Time-honored truth"Knowledge is power" is especially pertinent to the
owner-manager of a small business. To keep your business pointed toward gain you need to keep yourself well informed about it. You
have to know how the company is doing before you can improve its operation. You have to know its weak points before you can
correct them. A number of the information you need you pick up from day-to-day personal observation, but records should be your
principal source of information about gains, expenses, and earnings.

Know Your Gain. The profit and loss statement (or earnings Announcement ) prepared regularly each month or each quarter by your
accountant is one of the most essential indicators of your business's worth and wellbeing. You should be certain that this
statement contains all the details you will need for assessing your gain. This announcement must pinpoint each revenue and price
area. By way of instance, it should demonstrate the gain and loss for all your products and product lines as well as the gain and
loss for your entire operation.

It is a good Idea to have your own profit and loss statement prepared so that it shows each product for the current period, for
the same period last year, and also for your current year-to-date. For instance, a P&L statement for the month of November would
reveal income and expenses for the current month, for November this past year, and prices for the eleven months of the present
year. Many businesses publish their annual reports with several previous decades so stockholders can compare earnings.

Comparison is The key to using your P&L announcement. If your accountant isn't already supplying figures which you can compare,
you need to talk about the possibility of getting them provided.

Financial Ratios from the balance sheet also allow you to know whether your profit is exactly what it ought to be. For example,
the proportion of net worth (return on investment ratio) reveals what the company earned on the equity capital invested.

Know Your Costs. An owner-manager ought to understand costs in detail. Then, you can compare your price figures as a percentage of
earnings (operating ratio). Be certain that your prices are itemized so you can put your fingers on the ones that seem to be
climbing or decreasing according to your experience and the price figures of your own industry. When costs are itemized, you are
able to spot the culprit when the general figure is greater than what you'd budgeted. Take advertising costs such as. You can grab
the offender should you split out your advertising expenses by product lines and by websites. In addition, a thorough check of
question returns from advertising will help to avoid unsuccessful books.

In understanding your Prices, keep in mind that the formulation for profit is: Gain equals Sales minus Costs.

Know Your Product Markup. Be certain The pricing of your goods supplies a markup adequate to the sort of profit you expect to
achieve. You must keep constantly educated on pricing because you need to adjust for rising costs and at precisely the same time
keep costs competitive. Knowledge on your markup also helps you to run close outs with your eyes open. Continuing to make
something that just a few customers desire is a powerful merchandising tool only once you use it on goal - for instance, to hold
or attract buyers to other high markup solutions. Don't hesitate to shed a loser from your line.

Garbage-In, Garbage-Out. An Owner-manager should not fudge the records. The acronym GIGO that the computer business uses is true
with manually stored records in addition to with machine-processed ones. When an owner-manager lets"garbage" to go into the
records, the reports will contain"garbage." Reports do not need to be extensive but they need to be accurate.

Search For Trends. Try not to look at a single month's earnings or Profit picture alone. The characters in your working statements
are meaningful only when you set the picture in the right framework - that is, look in the figures in the context of what's
happened and what's very likely to happen. In that fashion, you grab a downward trend before it gets out of hand.

You should also Concern yourself with the figures behind the bucks - for example, the amount Of units offered or the amount of
orders. Insist on cost-per-unit statistics. The Fluctuation of the cost-per-unit can be more meaningful than simply looking At the
dollar figures alone. Another idea is to exhibit these comparative Figures on charts so that significant trends can be viewed
easily.

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