68 



The Horists^ Review 



July 8. 1»20 



RETAIL STORE MANAGEMENT 



WHAT THE LEADERS IN THE TRADE ARE DOING 



BEGINNING IN BUSINESS. 



Four Roads to Retailing. 



The value of a good beginniug is 

 proverbial. When a retailer has once 

 set out, methods and equipment may 

 still to some extent be changed and 

 advertising may give a fresh start, but 

 the foundation is laid at the beginning 

 and the whole structure of the later 

 business rests on that beginning. There 

 are four ways of entering into business 

 as a retailer. You may buy an interest 

 in an established store. You may buy 

 an established store. You may buy the 

 fixtures of a closed store and either 

 move them to a new location or reopen 

 the existing store. You may start a 

 new store. Which method is adopted 

 depends largely upon local conditions 

 and upon the capital, experience and 

 ability of the person. 



Sizing Up Your Prospect. 



If you are thinking of acquiring en- 

 tire or, by partnership, partial owner- 

 ship of a running business, it will, of 

 course, be much easier to determine the 

 advisability of the step than if you are 

 going to reopen a closed store or start 

 a new one. Among the first questions 

 to be asked about it are those concerned 

 with its location and its present trade. 

 How long has the store been in the 

 present location and how long has the 

 jiresent proprietor owned the store? 

 Are the majority of the store's custom- 

 ers transient or regular? What pro- 

 ))(>rtion are local and what telephone? 

 How many of the store 's customers 

 •pass the store each day? What is the 

 approximate total number of customers 

 in the locality? Is the bulk of the 

 trade due to the proximity of resi- 

 dences, or of special institutions, such 

 as hosjiitals, cemeteries, hotels and rail- 

 road stations? If you plan to live in 

 the same building with the store or 

 near it, is the neighborhood a desirable 

 one for your family? 



Are There Any Strings to It? 



Coming to the store itself, the pro- 

 prietor's reason for selling is naturally 

 significant; the advertisers in the Want 

 and For Sale department of The Review 

 show that they recognize that by fre- 

 quently inserting a phrase in their For 

 Sale advertisements stating their rea- 

 son for selling. In examining a new 

 proposition, the prospective buyer 

 should find out in detail, not only why 

 the proprietor wants to sell, but how 

 he figures his selling price. Who took 

 the inventory and when? It may be 

 well to have a new inventory taken by 

 disinterested examiners. How old are 

 the fixtures? What was their cost and 

 what is their dejireeiation? Are they 

 sufficiently modern and in good condi- 

 tion? Both the refrigerator itself and 

 the method of cooling should be given 

 careful attention. 



Find out, too, what the assessed valu- 

 ation of the store is and whether it has 



increased or decreased during the last 

 five years. Is the title clear? If there 

 is a mortgage, who holds it? Are you to 

 assume any bills payable? If so, have 

 them carefully listed and bind yourself 

 no further. If you accept bills receiv- 

 able as value received, have a local col- 

 lection agency or auditor appraise their 

 value. Find out from the wholesale 

 houses with which the store has been 

 doing business the volume of its pur- 

 chases. Is the store fully covered by 

 insurance transferable to you? Does 

 purchase of the store entail transfer of 

 contracts for gas, electricity, water, 

 service, etc.? What other contracts do 

 you assume? 



You should know whether the store 

 holds a lease. If so, is it transferable? 



Every Florist 



Has hit upon Ideas 



that have made Money 



for Him. The Spread 



of such ideas through 



the Trade makes Progress. 



'mBf 



Is the medium for spreading those 

 money-making ideas. Tell the trade 

 about yours. Contributions on any 

 subject relating to the trade are 

 always welcomed by the Editor. 



The way tlicy are written is not so 

 iinpoHant as the lileas they convey. 

 WrUe as you would talk. 



Is it renewable? When does it expire? 

 Is the building mortgaged? In renting 

 a store, have it clearly understood with 

 the landlord who is to make any needed 

 alterations. 



Other important points to be consid- 

 ered are the store's reputation with the 

 public and its relations with its present 

 employees. Is the legal good will real 

 and transferable? Has the store been 

 generally well managed? What is its 

 credit? What is the overhead? What 

 wages are jiaid? Will the members of 

 the present working force remain in 

 your service? Under the present man- 

 agement, what have been the net profits 

 during the last five years? Is the busi- 

 ness largely cash or charge? 



When the examination has been 

 brought to a favorable conclusion, a 

 competent attorney should be employed 

 to insure a safe passage through the 

 legal intricacies of the transaction. An 

 attempt to economize here may prove 

 disastrous later. 



If you are going to open a new store, 

 y(jur plans will need to undergo much 

 the same scrutiny as that suggested for 



the going concern that was to be pur- 

 chased. The first question to consider, 

 however, is the amount of capital you 

 have, for upon this will depend the lo- 

 cation, the class of fixtures and equip- 

 ment you put in and the elaborateness 

 with which you stock up at first. Re- 

 gardless of the total capital to be used 

 in starting, a sound proportion on 

 which to figure is stated to be five-sixths 

 for stock, fixtures, etc., and one-sixth 

 for working capital, with debts limited 

 to twenty per cent of the total capital. 



The New Store and Its Capital. 



For the new undertaking, the loca- 

 tion must be examined with particular 

 care, since its value can be less directly 

 estimated than in the case of the estab- 

 lished store. In a large city or place 

 of much business, the other flower stores 

 in that locality may indicate the gen- 

 eral nature of the demand, but they 

 will also raise the question as to whether 

 that neighborhood can support an addi- 

 tional store. Notice the reasons for the 

 success or failure of those stores, past 

 and present. What is the distance to 

 the nearest store in each direction? 

 Does it seem probable that telephone 

 business can be developed enough to 

 counteract the possible dangers from 

 competition in local trade? Is the 

 neighborhood changing in character in 

 a way to diminish the local demand for 

 flowers or to make this particular type 

 of store out-of-place and unprofitable? 

 What is the social character of the 

 neighborhood in its bearing on the use 

 of flowers and what is the earning ca- 

 pacity of the people living there? Arc 

 the people 50-cent or $.5 buyers? It is 

 also well to note what line of business 

 occupied the store room previously or is 

 there at present and to find out why 

 that business has seen fit to move. 



If the store is to be rented, is the 

 rental in proportion to the probable 

 volume of business? It has been esti- 

 mated that under average conditions, in 

 communities of from 2.'5,000 to 100,000 

 population, the rent should run from two 

 to three per cent of gross sales; in 

 places having a population less than 

 25,000 it should be one to two per cent, 

 and in cities over 100,000 it should be 

 between three and six per cent. 



Windows That Win. 



In starting a new enterprise, even 

 more than in purchasing a running busi- 

 ness, the store room or building must 

 pass a careful examination. The store 

 with the step up or the step down should 

 be avoided and in every other way the 

 coming of customers into the store 

 should be facilitated. The show win- 

 dows, if they are to speak effectively 

 to the passer-by, must be of adequate 

 size and should be equipped with enough 

 plugs for both the lighting and the elec 

 trie fan which will be needed in winter 

 to keep frost from forming on the in 

 side of the windows. The question of 

 lighting the show window has been 

 given detailed treatment in this de- 



