The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1916-07-13
BANKING TALK,
N0BUS|NESS
CAN SUCCEED
UNLESS IT HAS BACKBONE, AND
THIS is THE INVESTED CAPITAL
OF THE PROPRIETOR - MUST
HAVE RESERVE.

IN business 40 SO BECAUSE Illey idCh
capital. No business can succeed un-
less it has backbone, and this back
bone is the invested capital of the
proprietor. Whether it is a milton
dollar corporation or a corner gro
cery there must be, as a rounda-
ton, the investment of the proprietor.
The man who starts out in bust
ness ION a shoestring" fails. No mat
ter what he may have in the way of
borrowing facilities, there may come
time when he finds the avenues Of
borrowing closed against him. Then
his reserve capital comes into plav.
To meet the weekly payroll, stock
up, tide over bad times, fit the place
up with machinery and fixtures, re.
quires money and this money should
be the saved money of the proprietor.
Just how much capital a concern
requires is a matter of individual Ie-
quirements The larger the business
the larger the capital. If, for in
stance "a man were to engage in a
mercantile line, he should have
enough money saved by thrift to buy
his fixtures, and part of his stock,
and balance for working capital to
keep in the bank. He should not
put his money in fixtures so that he
has none for stock, and vice versa.
Neither should he forget that his best
credential with his banker is. a good
working balance.
The reason why banks are so par
ticular that borrowers keep a balance
is not that the bank wants excessive
profts-lending, say a thousand and
asking that one-quarter Of it be kept
on deposit, but that the borrower
may have free working capital at his
command all the time.
The position that If ] borrow a
thousand and am asked to keep $3.50
on deposit, l might as well borrow
$3.50, is not well taken; for even
though the bank balance is borrowed
money, and costs the interest, it is
cheap price to pay for the bankers
good will. In fact. a business man
could well afford to pay six per cent
for money and leave it with his bank
er, for the good it would do his credit.
In the granting of credit, business
honlyarc tyir dICf
heed to the ratio between quick as
sets and quick liabilities. The bank
er likes to see two to one-two dol
| lars of quick assets to one dollar of
quick debts. The quick assets are:
cash. bills receivable, accounts re-
ceivable and merchandise. Quick
Liabilities are: Debts due for borrow
ed money and debts due tcr stock.
The difference is the working capi-
-dl-thr amru}t in exceGs Cf 'rs
caots This r cans to say TIA. " the
lick assets ere all turned ~ casa
mo the Getts paid, without h.s'u-' /
ne the othFi assets, such n, t.al e..
tate, machinery etc, there H. u tr
a cash .JalErrp left over.
ne uf the great wea,I,e"scs 1t
,m. r,ran bu. ess life Is tha -'a'rt"s +
of business on too little capital. Two
carpenters and builders who have
saved few hundred dollars decide
to be their own bosses and by some
scheming get a piece of land. They~
persuade somebody or some iRSSSu-E
ton TO agree to loan them a certain
amount on the property when conf
plete and lay their plans and tigurei
closely. Something goes wrong, thei
weather is bad, the work is delayed
strikes, and liens not reckoned witht
| interfere, and the result - faiuref
They lack capital; and lacking ~
lose out. They cannot carry thel1
load.
Clerks with little money and CT
lossal nerve begin business for khemf
selves, only to find bankruptcyNta
ing them in the face in a short W.
due to lack of capital. A good !eS
makes the proprietor jubilant am
willing to gamble that the next WY
be better. He moves into larger qua
ters, lives more extensively, buys
car and hires his servants, only
find depression setting in, unsetuf
business conditions, competition, III
haps, and no way OF retrenchiH
Happy is the man who can plod aloI
on the safe track, satisfied 10
sure rather than sorry. Honey
power, and impotent is the man
the business that lacks it.
Be as honest as you expect
other fellow to be. Get all the aOlI
you can acquire and all you can al
] to buy. but do not overlook the
portant fact that backbone is he1
sary in every business just as 1t IS
every body, and without it IN