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Problems of

18th November 1930
Page 70
Page 71
Page 70, 18th November 1930 — Problems of
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Which of the following most accurately describes the problem?

THE HAULIER AND CARRIER

The Importance of Establishment Costs in Relation to Rate-fixing, Enumerating Small, but, Nevertheless, Essential, Items that are Frequently Overlooked

IT will come as a surprise to readers if I state at -Ithis late date that there are really only two problems of the haulier ; one is the fixing of rates, the other Is obtaining business.

Readers will be inclined, I am sure, to think that I have used a good many thousands of words in dealing with no more than two problems. The answer to that is really two-fold. First of all, the variations of these two problems are as never-ending as this series of articles. 'Secondly, there are always new readers coming along who are just as unaware of the difficulties that face them as he who read the first of the series nearly a dozen years ago.

The worst of it is, of course, that every new haulier is at once faced with both the problems simultaneously ; that is to say, he is faced with the prospect of obtaining business and of deciding what he must charge for that business when he receives it.

Small Items that Mount Up.

That was the position of the man to whom I referred in the previous article. I got so far as explaining to him the meaning of establishment charges. He had never even heard of them before, let alone appreciated how important they were in the matter of ratefixing. I had shown him that even .in his case, the case of a beginner with one vehicle of 30-cwt. capacity. he would have to pay at least 5s. per week for rent of premises, 5s. per week for rent of telephone, 6d. per week for lighting and 6d. per week for heating, making a total of 11s, per week for those items alone.

"And those," I continued, "are by no means all. You will want some billheads, as they are usually called, and although it is possible for you to get a thousand for 10s., I think you will be better advised to spend another 5s. or 10s. and get something a little cz18 more attractive and, therefore, more effective. A billhead, or a letter heading, as I would prefer to put it, is a much more important item in business than the newcomer imagines—and so is correspondence generally.

"I am of opinion that a letter heading is a valuable form of advertisement I think no man should object to spending a little on a design of a good heading, and he should not be afraid to make use of it."

"What do you mean by make use of it?"

"Well, think of it in this way. Every business man's desk is more or less littered with letters. Even the tidiest will have a heap at one side continually under his eye. If you take frequent opportunities for writing to him about one thing or another you will be sure that one of your letters is always before him, with your letter heading, and in that way your business is constantly being advertised to that customer."

"But he won't necessarily always have my letter on the top of the pile."

The Letter an Efficient Advertisement.

"No, but for one reason or another he probably• looks through that pile of letters half-a-dozen times a day, and every time he looks through it he sees your name, your style, your business. If he happens, on one of these occasions, to have in his mind some job of haulage, he will, on seeing your notepaper, say to himself : ' Ah ! That reminds -me. There's a little job of fetching that consignment of apples from the docks. This chap Jones might just as well do it for me.' And in that single order may be enough profit to pay, not only for the little extra expense of having good notepaper printed, but of keeping in touch with customers by means of the simple method of writing a letter about some aspect of your business."

"But what has this to do with fixing my rates" '

" Only this : that your expenditure on stationery and postage is the next item that I want to consider in relation to establishment costs. It is my experience. that few of those people who do not keep books have the slightest idea as to the amount they spend on one item alone, and that is postage stamps. Notepaper• and envelopes should cost at least 30s. a year, which is 8d. a week. Stamps will average at least another 2s. 4d., to make that up to 3s. a week, and there is the cost 0,f telegrams, say anaverage of another Is. a week. That makes 4s. for your letters and telegrams."

"Well, I should never have thought it was as much as that. I shouldn't have bothered about it at all."

" There' you are. That is just what I had in mind, and it is because I know that most Men have quite wrong ideas about• it that want to impress the importance of this matter upon you. 'Now, there is your office furniture, and you will have' to include something for that, even if you consider the typewriter alone, and, by the way, all your letters should be typewritten. Its maintenance will cost you about

a year, which is approximately 1s. fid. a week. Now I come to an extremely important item which you have probably not thought of at all." -• "lArliat is that?'

• " Travelling expenses."

"But I'm not going to have any travelling expenses. How can I?"

"You're going to have quite a lot of travelling expenses. How do you think you are going to get business? • Not by sitting at home and waiting for it, anyhow."

"No, but I thought of advertising a little." • "Oh, yes, you'll certainly have to advertise, but, far more important is the method of personal canvass. Even if you rely on advertising you will have replies to your advertisements, and it is 10 to 1 that the reply will take the form of a request that you should call and discuss the matter. Your best plan in such a case will ho to jump on to your lorry—supposing it is disengaged—run out to the inquirer, discuss the matter with him and show him the vehicle you are going to use ou aren't going to do that for nOthing." "Well, I thought I should, as I have got my own lorry to run about in."

"But, goodness gracious, man, every mile you run with your own lorry is going to cost you at least 6d., so that if you cover five miles a day like that there's half-a-crown a day."

"But I can't spend my time running about looking for husiness and be busy carting loads as well."

"Exactly. That is all the more reason why, if you have to go and see a man about a job, it is costing you money, because you are diverting your lorry from some money-earning business."

"Oh, yes, I see what you mean."

"As a matter of fact, travelling expenses may amount to something Considerable in the course of a year, and I am being moderate in suggesting that you reckon them at 10s. a week."

"All right, let it go at that, then."

"Now, there is this advertising that you talked about. Had you anything in mind?"

"Yes. I was thinking of a regular advertisement in the local paper and another in the small-advertisement columns of The Commercial Motor.

"Quite. That is going to Cost you as much as 10s. some weeks, perhaps a little less in others. It wouldn't be safe to reckon on less than 7s. 6d. a week, would it?"

"No, that's a fair figure; but, I say, haven't you nearly finished?"

"Nearly,' but you are beginning to realize that there are such things as establishment costs, aren't you?" •

"Rather. I am wondering if I shall ever be able to earn enough money to pay my establishment costs."

"That's a good one. You need have no fear. With a properly conducted haulage business there is always bound to be a fair opportunity for the making of reasonable profits.

"It's the man who doesn't know what his business is costing him and who quotes cut rates who loses in the haulage business."

S.T.R.

(To be continued.)

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