OPERATING OPPORTUNITIES

WALLY LYNCH Paid Associates PO. Box 741623 Daffas, Tx.75243

f UEne has been so much emphasis I in our industry in the past few years on price that no one seems to have time or interest in anything else.

The computer has helped most of us to become more productive. Our time is spent in those efforts which allow us to provide lower prices. We negotiate harder, longer and, hopefully, more effectively. We advertise more and make public guarantees to have the lowest price.

We certainly are reacting to one another and treating the symptoms in a massive way. But what about the cause? For what purpose are you in business? To have the lowest price or to make the highest net proht?

It seems a paradox, but can you imagine what would have happened to profits ii as an industry, we had spent as much money on people and their productivity as we did on price impression the past few years? Here are a few rocks you can look under in your organization to see how you might have fared.

TRAINING Look inside your operation and ask is our training program conducive to attracting, developing and retaining the best people? Imagine the military without basic training. The employer or employee untrained in the fundamentals of personal selling and customer relations, regardless of his assignment, can't march or shoot effectively in the retail market. Professional trainers, in just these two subjects, can show thousands of third party letters attesting to 250/o to 500/o favorable sales change through structured training.

OVERTIME A 50 hour week costs an additional 37.5% in dollars for 250/o more hours. Companies should be using part time employees at close to minimum wage without benefits to eliminate overtime and benefit costs.

BUSINESS PLAN A major imperative of any productive company is the setting and agreeing to goals. Would any football coach bring a team to a game without a plan? Can any work force be effec- tive without knowing the rules and objectives?

TURNOVER Studies indicate that nationally, on average, one of every four employees in every work force is changed annually. This is a 250lo rate. Recruiters are charging in the area of 30% of the first year's salary. Add training time costs. relocation. etc. and it's a huge number. Personality and aptitude testing are inexpensive preventive medicines. Companies can test not only prehiring, but existing employees as well. Results provide management with a guide to what has been successful to compare with candidates. Costs range nominally between $50 and $150 per test.

COST OF GOODS GONE is another way ofsaying "cost ofgoods sold and/or stolen." Theft bugaboo in retailing continues to rise. Various estimates range to 3.80/o of sales. The National Retail Merchant's Association (NRMA) identifies it as 450/o employee theft, 350/o customer theft and 200/o error and/or bookkeeping fraud. Virtual outlawing of lie detector tests makes written, inexpensive honesty tests a must in coming to grips with the manageable part of the 3.80/0.

A good exercise would be to cost and evaluate the benefit potentials described above against your own P & L at halfthe worth stated. For most, payroll will run about 60% oftotal operating expenses. If you want more details, write to the address in the column heading or call (2141 690-6600.