Our friends Mr. Dun and Mr. Bradstreet tell us that there is about one
concern in fifty which succeeds in business. If you will look at the
successes you will find out that the proprietors were good buyers as
well as good sellers but that the particular point that made them
successful was their ability to make careful analysis in the matter of
expenses.
The business man should have his expenses divided into as many
classifications as possible. His payroll should be separated into
various departments, office, salesmen, workmen, accounting, and so on;
through all the items of expense the division should be made as finely
as possible.
The proprietor should have a statement each week on his desk showing
how every cent was expended. These items should be summarized monthly,
and constant reference made to the items of expense in comparison with
items of expense for the previous month, as well as items of expense
for the same month of the previous year.
One of the pit-falls in nearly every business is "general expense" or
"sundry expense." This department is a catchall for a lot of items, and
it hides a lot of leaks and wastes in business.
You can't divide your expense items too minutely. The finer the
divisions, the easier you can detect a waste of money.
The business man who has a statement of both receipts and expenses is
in the position of the first engineer of an ocean steamer; he does not
seem to be doing much and does not worry unless something goes wrong,
then he shows his training and ability to mend breaks and repair weak
places.
If the business man analyzes his sources of income into several
divisions the same as he does his items of expense, he will find it an
easy matter to correct errors that creep in the business. He does not
have to worry about those items of expense which show minus, nor about
those items of receipts which show plus.
With a finely divided sheet of both expenses and receipts you can
quickly determine where the profit is coming from and where the leaks
appear.
If an expense item shows plus, you can run down that item and see
reasons for it and endeavor to bring down that expense. If a receipt
item shows minus, you can run down that item and endeavor to increase
the receipts.
The writer has a little printed card on his check book and it reads
"Drive the axe into expenses." It is a constant reminder to stop the
wastes.
The only real success that comes to the business man is
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