You buy an article for two dollars and sell it for two and a half, and you say to yourself: "There is fifty cents made." But is it? Let us see.
Before crediting your business with that fifty cents, you should have considered these points.
1. The loss of interest on that two dollars. 2. Your own time or other time paid for. 3. The capital invested in things not sold. 4. The rent. 5. The transportation, insurance, heat, light, bad accounts, unsalable goods, taxes, public donations, and the flood of items that go to swell the outlay of every merchant, whether in the great city or at the country crossroads.
WEEDING OUT
Every man in trade should make an inventory of his stock at least once a year. Having done this, he should give his stock a fresh appearance, whether new goods be added or not, by relegating to the scrap heap, cellar or the garret all the dingy, dirty, disreputable stuff that he could not sell or give away, and which has induced sore eyes whenever seen.
Keep a stock book.
Quite as important as keeping the stock in order is keeping the books in good shape.
At least once a year the books should be weeded out. Why carry as bills collectable accounts which you have been assured, for years, would never be paid?
Wipe them out and charge them to profit and loss.
Where machinery is used, it is a good plan to charge off every year ten per cent of the cost; this to make good the loss from wear and tear.