MAKING BUSINESS A SCIENCE

The Bureau of Business Research has recently published a second bulletin giving a more detailed account of its investigation of the retail shoe industry. The work is similar in character to that which the Department of Agriculture and the agricultural schools have done for farming.

In addition to this intensive study of the shoe business, the Bureau has begun the collection of data on the retail clothing, grocery and hardware business in Boston. The work is at present merely preliminary. In case these industries are found to offer a practical field for intensive investigation, they will probably be subjected to detailed study.

The aim of the Bureau is a scientific analysis of the condition of distribution in order to gain an organized body of knowledge for the Harvard Business School, and indeed for, other like schools and for business men in general.

From the data accumulated, valid conclusions of great practical and theoretic value are being drawn. The highest and lowest percentages and the percentage about which data centres of these stores gross profits, operating expenses, buying expenses, and outlay for sales force, advertising, deliveries, rent, and interest on capital have been computed, together with the highest, lowest, and centering percentage of stock-turns. The last item may be cited as an example of the public importance of this investigation. More stockturns would mean a greater profit without an increase in price, and fundamentally a public economy. In subsequent bulletins the Bureau will give more basic figures, by means of which every shoe retailer will be able to compare his accounts, item by item, with the average accounts of many fellow-traders and see wherein his business falls short of the average efficiency. While the conditions of manufacture have already been subjected to scientific study, little data available on retail selling. The shoe industry was chosen because there exist no wide differences between its products, and because this industry presents the typical conditions of retail distribution.

In the summer of 1911 agents visited shoe retailers in Ohio and Wisconsin and soon learned that practically no two retailers kept their accounts in the same way, and that many kept insufficient accounts. The work of the Bureau was arrested by the need of a common basis for comparison, which could be gained only through the introduction of a uniform system of accounting. To provide such a system, the Bureau secured, in the fall of 1911, a joint committee composed of accountants of national reputation and of shoe men most representative in Boston and vicinity. As a result of their labors and counsel and that of the Bureau, the Harvard System of Accounts for Shoe Retailers was given to the trade early in 1912. Over six hundred retailers have adopted this system of accounting and in exchange for it are sending their own figures to the Bureau.