WN et A nab a Ra UR cae eile OR na ee Uo Men vegan one Ngee ge cee ee ee ig! goat 108 Terrace Review — Wednesday, December 21, 1988 13 “Ee RNG reyes ate Business Beat = How to recognize danger signals in retail inventory Sound management of inventory is - vitally important to the retailer’s success. In the last three columns, we’ve dis- cussed ways in which that management is ‘applied through both physical and finan- cial controls. But there is more to sound manage- ment of inventory than establishing and maintaining physical and financial con- trols. The retailer has also to recognize, and respond to, the danger signals these physical and financial controls will. flash Manage cinnce when something is going wrong. Dev elopment Bank Here are the major danger signals to which a retailer should respond. _ @ Sales are slipping, The expected sales on which merchandise purchases are based, are not being realized; -@ Actual sales to stock ratio in merchandise budget plan, com- pared to planned sales to stock ratio, indicating either over- stocked or understocked position; @ Actual turnover rate is not as planned or does not compare to TR Sat tL soln Sots, edie gchar eS Se by Phil Haril, Jim Banman (left) arrived in Terrace about a month ago to work for one of the newest local businesses, the Northwest Academy of the Performing Arts. Although Banman is a keyboard teacher, he takes an interest in the progress of all the academy students, in- cluding guitarist Tin, Phillips, who has been studying the instrument for over two years. Governments make changes to “small business incentive programs | actual turnover rate of last year; @ Perpetual unit control indicates a slowdown in merchandise movement; @ Open-io-buy plan indicates purchase slowdown or a constant soverbuy; @ Visual control shows a large stock position; @ Dollar amount of markdowns — that is the amount of stock which must be sold at discounted prices — is increasing; @ Gross trading profit is slipping as indicated by both percentage and dollar figure. The federal and provincial governments have simplified their small business assistance _ programs. ‘Bill McKnight, federal Minister of Western Diversifica- tion, and Elwood Veitch, ‘Minister of Regional Develop- ment, announced early this month the changes to the $50 Program (SBIP). The program will continue to pursue the goals of the SBISA which will encourage the establishment, modernization or expansion of firms engaged in manufacturing, processing, aquaculture and advanced technology in B.C... . $50,000 of the loan being interest-free and the remaining ‘portion being repaid at a fixed interest rate of six percent. Loans are expected to be repaid within five years.’’ The costs of the program will still be equally shared by the federal and provincial govern- ments, and the mandate will be The retailer’s immediate response to any one of these danger signals should be to review inventory, starting with its character. million Small Business Incen- Veitch said: “We're getting the same to provide low-interest Is the business carrying the right styles, colors, sizes and types of tives Subsidiary Agreement tid of the alphabet soup and set- loans to encourage the establish- merchandise? Is the choice of basics — that is, the products (SBISA). ting up-a single program. The ment, modernization and expan- . | which generate most of his sales — still the right choice? Are SBISA’s Industrial Develop- program will provide interest- sion of small and medium-sized — Ti - enough of them being carried in stock or has the inventory been ment Assistance ‘Program free and low interest repayable business enterprises. diluted by too many fringe products? Are the products new or _—- (IDAP), Small Manufacturer's loans of up to $500,000 to eligi- | The Canada-British Columbia fresh enough? Are they being sold in the right quantities —by Incentive Program (SMIP), and ble firms with project costs of Small Business Incentives Sib- the unit, when: they should be selling by the box? Aquaculture Incentive Program _ less than $2 million. sidiary ‘Agreement (SBISA) is The next aspect of inventory to be reviewed is purchasing. Is (AIP). will. be consolidated into “Assistance of up to 50 per- one of eight. subsidiary agree- the retailer buying too little or too late? Too much or too soon? one loan program to be known cent of the eligible project costs. ments under the Economic and « Is the choice of suppliers too limited, or is it too expensive? as the Small Business Incentive. are possible, with the first. Regional Development Agree- e answers to these questions can be foun analyzin: ment (ERDA) signed in Te aac rcne,Sawenieet — Raffle winners announced = *< physical and financial inventory records. Such an analysis will November 1984 by the govern- also show if items are priced to the market. The test of a good ments of Canada and British price line is the speed at which, it turns over, and this will show in TERRACE — Local representa- Duncan. Columbia. inventory records, | tives of the Canadian Diabetic. Cash winners in the North- Copies of the new Small The retailer should also check such inventory-related aspects of Association recently announced west were #3769 of Smithers, Business Incentive Program | the business as the speed with which his merchandise is handled the winning ticket numbers in #2141 of Prince Rupert and ~ guidelines will be available from and the accuracy with which its price and other information is the association’s province-wide #4980 of Terrace, all of whom the Financial Evaluation recorded. What about spoilage and theft? Are initial markups Honda raffle. receive $100. Branch, Ministry of Regional realistic relative to current costs? Are markdowns becoming too Winner of the grand prize, a _ ° ——s Pyevelopment, 712 Yates Street, frequent? Honda Accord, was #50295 The Terrace Chapter of the Victoria, B.C., (604) 387-0315 Good inventory controls are essential to keep the retailer in- from Port Alberni. The winner Canadian Diabetic Association or the Department of Western formed, But good inventory controls, in themselves, do. not of a Honda Civic was #74110 extended thanks to all their Economic Diversification, 9th guarantee the retailer’s success, The retailer has also to know from Sidney. Third prize of local supporters who purchased Floor, 750 West Pender Street, how to respond to the information about the business that the $1,000 was won y #1083 of tickets, Vancouver, B.C. , (604) 666-6256. - controls provide. In our next column we'll take our first look at retail promotion SIDE RESO RT MOTEL and advertising. — a a p A UP TOS PERSONS _ ; INCLUDES PASSES TO RUPERTS BEAUTIFULL AQUATIC CENTRE “YOUR STAY WITH US WILL BE RELAXING AND ENJOYABLE EXPERIENCED —_ BUILDING MATERIALS Person Required by local Building Supply Store Duties include plan takeoffs, construction quotes. aa and customer contact, _ Call George or Bob at _ TERRACE BUILDERS CENTRE for an appointment — 635-6273 RESERVATIONS 624-9131 Adjacent to: Pools, Jacuzzi, ‘Universal Gym, Next to McDonalds OFFER GOOD f DEC. THROUGH JAN. sa eg creer SE (SS ae aa eh it 8 oe es ea! Sousa sy pi Tame Sere ea