This is the third of 10 articles to help you increase your retail or restaurant sales or profits by 25%. These ideas are in no particular order.

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Tip #3 Keep a Perpetual Inventory.

Forget shoplifting for the moment. It is estimated that the cost to business as a result of employee theft is greater than 6 percent per year.

Employee theft is responsible for 30% to 50% of all inventory shrinkage. Shoplifters are responsible for another 40%. Your employees are your biggest cause for inventory shrinkage. These figures hold up for both retail stores and restaurants. In restaurants, sources for shrinkage include employees eating the profits and giving away free food to customers and friends in exchange for larger tips.

One way to lower inventory shrinkage is to set up a perpetual inventory system in your store. Instead of checking your inventory once or twice per year (called periodic inventory), check it continuously.

You already own Cash Register Express, Restaurant Pro Express, or maybe some other alternative point-of-sale system. One of the biggest assest to a point-of-sale system is that you always know how much is still in stock (or at least, your computer has an accurate account of what should be in stock).

Perhaps you have 200 screwdrivers in stock. You sell 110 screwdrivers leaving about 90 screwdrivers. The order point feature of your point-of-sale system tells you that you are low in stock and need to order 300 more screwdrivers. By the time the screwdrivers come into the store, you may only have 70 left. Add the 300 new screwdrivers and you should have 370 screwdrivers. The problem is no one counts to make sure that the number of screwdrivers in stock is accurate. You rely on your computer to tell you what is on the shelf and never take a physical count until your yearly or periodic inventory counts.

Get your employees involved and make them responsible. Have an employee responsible for a weekly or even daily count of the screw drivers. If an employee knows that he has responsibility for an accurate account, he is far less likely to steal a screwdriver and more likely to make sure thefts do not occur.

You need to do everything within reason. You don't want your employees to follow around every customer who enters the store in order to avoid theft. On the other hand, you want your employees to know that inventory management is important to you and the business.

As a further precaution, you may want to swap inventory control assignments. Your screw driver counter may be responsible for counting light bulbs next month and your light bulb counter may be responsibe for counting hammers.

Making your employees responsble for inventory counts will lower employee and customer thefts. They may also help you figure out other reasons for inventory shrinkage that you may not have thought of.

For more information about the differences between perpetual inventory and periodic inventory go to:

http://en.wikipedia.org/wiki/Perpetual_inventory

For more information about how to control and prevent employee theft go to:

http://www.score.org/article_how_to_prevent.html

Apparently yes, if the government is running it.

I really have a problem understanding this.

New York State wants to bailout OTB (Off Track Betting). New York State residents have two choices. They can place all types of bets with a local illegal bookie. Due to the way odds are calculated and low overhead, the bookie always makes a profit.

Or, residents can place legal bets with OTB. The problem is that OTB is going bankrupt and the state wants to bailout OTB in order to avoid 1,300 layoffs.

My solution is to close OTB and retrain the employees to be illegal bookies. The employees are likely to make a better income, have far more flexible hours, and be in control of their own futures.

No. I am not serious about that. I do know that if a business is not making a profit, it should close. I certainly feel bad that 1,300 employees will lose their jobs. But, retailers and restaurants do not have the option of receiving bailouts. We are forced to make a profit or close down our business. If a government bookie business can't make money, it should close. Or, if OTB is going to get a bailout, than every business should receive a bailout.

This OTB story is not limited to New York State. Lots of selective businesses and organizations are getting bailouts. I am sure that some of these bailouts may be necessary, but for every penny spent on a bailout, money is being taken away from retailers and restaurants. The money is taken away through higher taxes leaving fewer dollars available for consumers to spend at local retailers.

Read the entire OTB story at:

http://www.recordonline.com/apps/pbcs.dll/article?AID=/20100413/NEWS/4130327/-1/SITEMAP