The Richmond Virginian. (Richmond, Va.) 1910-1920, 1917-05-02

own work TO a large extent cor using
the services of a youngster who is
a general utility man around the
store, and whose wages are thus dis
tributed over the entire business. On
! the other hand, the downtown foun-
tain has to have dispensers dong
nothing else, and as the stores remain
open later, a regular shift is required
/ to take care of the business, Con-
| sidering the many rainy days and
evenings; when few people are on the
streets. and the long stretches Of nom
| Committal weather. which is neither
cold enough for hot drinks nor hot
enough for cold, II is apparent that
1.-The big expenses assumed by the
downtown man help to make an over
head which is much larger than that
applied TO the business of the subur-
ban store.
The Profit and Loss Charge
Another source of expense which
| is overlooked by some downtown OPP
serators is the fact that losses through
! failure to sell all of the perishapIe
goods put into stock are not At all
.infrequent The suburbanlte escapes
this by handling staples for the most
+, part on which losses Of the kind
noted are unlikely. The store in the
tcongestea district can get more for its
t fancy drinks than the neighborhood
J druggist who seldom attempts
menu which is out OF the ordinary, but
! the point TO he remembered Is that
the elaborate offerings are worth more
| because the cost of putting them up
/ is greater and the possibility OF Toss
Of materials III strong.
| One o~tgrowth OF this difference in
conditions Is that while the man with
! big expenses. having a downtown store
/ for which he is paving several nun
dred dollars a month rent knows that
he must figure in sufficient margin
! TO cover the cost Of doing business, the
little chap in the outskirts is TOO like
/ iy TO consider the soda proposition as
/ velvet" by reason of not employing
extra help and having reduced eN-
penses in other hines In fact, the
writer ran across a successful drug
gist in q good ueiEhborhood district,
who estimated his fountain proiits by
deducting the cost of the materials
/ from the gross receipts He made no
tcharEe for his services or that Of his
/ partner. nor did he figure the inter-
est on hts investment. depreciation.
/ etc He did not even consider the
I fact that the fountain. by reason of
] its shaai-wagon position IN fAc
store. ought 20 have carried the lion 5
share of the rent.
Bad business Reasoning.
( I'm in the drug business. and |
have my store here anyway. is his
! method al reasoning, SEsa nay
partner would have to be on the Job
/ whether we sold drinks or not. and
Jimmy. our hoy is needed TO sweep
our. run errands. etc. 80 that we
couldn't save anything If he werent
| ha ndtng out drinks when necessary.
! Therefore, | can't see why ] should
iconsider the morey which is left after
deducting the cost of the goods used
at the fountain as anything but proft.
I II looks like clean. easy money TO me,
| The druggist quoted failed to see
THAT the soda water department Is big
enough and strong enough to stand or
Its own bottom. He did not appre-
ciate the fact that II is just as illogi-
cal TO make no charge for rent against
the fountain as TO relieve the pre-
scription department or the prophet
airy sales Of their proper share Of the
overhead expense. The overhead is
there, true; but 1t is made up by rea-
/ son OF the fact that storeroom and
supervision and light and heat and
other facilities have to be provided
| for The business as a whole. and no
| one department lis entitled 10 immuni-
! ~ from participation in this expense
! than another.
! Undoubtedly good profits are made
| In the soda business, and it is no OBJ
lection TO il to say that expenses
should be properly considered. On
| the other hand. the druggist who has
fountain out n the suburban dis
trict. and who, by loose method Of
| figuring. thinks that he is making sa5
a month out of il, will likely wake
up If he gets wise 10 the facts and
put in a system that will make the
fountain really productive. He will
find that he must have more business
to pay expenses and make a profit;
and he will run his fountain efficient
liy putting in the best of materials
and advertising what he is Offering.
He will 30 after neighhorhood bust
ness. delivering ice cream and soda
water. II necessary. 10 those in the
vicinity. He will increase his bust
ress to such q point that there will
be no question about its being a win
lner. AS II is. he is rolling lazily along,
thinking that he is making money,
when. as matter of fact. properly
considered. he is Just about breaking
even. except for one factor to which
reference will be made later; and
what he needs is real eye-opener.
which will suggest to him vigorous
sales policytand more careful and sys-
tematic operation OF this important
phase OF the business
Paying FIxed Charges
The factor referred to above Is the
effect of the operation of a fountain
on the general overhead OF the store.
The suburban druggist quoted gas
right in saying that most of the gen
eral expenses are hxed. and could not
be reduced, even il the fountain were
not there: and consequently the addi-
ton of the revenues OF the soda foun-
tain to those OF the rest OF the store.
with the expenses remaining station
airy. Immediately has an effect on the
overhead. which drops -aewn The
decrease means that the net profits Of
the business are added to. exactly to
that extent
Thus assuming that a store Is do
ing $4,000 OF business a year on
30 per cent overhead basis. it's ~.
penses are $1,000 a year. this includ-
ing an allowance for the salary OF
thu nroHrfnfnr.4 - a..