Cheatham, Carole

Rausch, Barbara I.

English

eGrove (Univ. of Mississippi)

Woman C.P.A. Volume 38 Issue 2 Article 10 4-1976 Small Business: Counseling Help for the Small Business — The Small Business Institute Barbara I. Rausch Carole Cheatham Follow this and additional works at: https://egrove.olemiss.edu/wcpa  Part of the Accounting Commons, and the Women's Studies Commons Recommended Citation Rausch, Barbara I. and Cheatham, Carole (1976) "Small Business: Counseling Help for the Small Business — The Small Business Institute," Woman C.P.A.: Vol. 38 : Iss. 2 , Article 10. Available at: https://egrove.olemiss.edu/wcpa/vol38/iss2/10 This Article is brought to you for free and open access by the Archival Digital Accounting Collection at eGrove. It has been accepted for inclusion in Woman C.P.A. by an authorized editor of eGrove. For more information, please contact egrove@olemiss.edu. GUEST WRITER: This column was written by Dr. Carole Cheatham, CPA.Dr. Cheatham is Associate Professor of Accounting at Mississippi State University and serves on the Editorial Staff of THE WOMAN CPA as Editor of the Reviews Department.Occasionally, every accountant is likely to be faced with clients or acquaintances who badly need basic counseling for their small businesses but who cannot afford the fee that a management consultant or public accounting firm would charge for their services. If the business is located in the vicinity of a university, and if the school is participating in a new program called the Small Business Institute (SBI), these ser­vices may be available free of charge.SBI is a program of the Small Business Administration (SB A). Although the Insti­tute has been in existence only for a short time, it has proved quite successful. Under the SBI program, a team of senior­level or graduate students in business administration is assigned to work with a small business. The team works under the supervision of one or more faculty coun­selors. A confidential and professional relationship is maintained between the SBI team and the client business. As far as the small business is concerned, the only requirement is that it is willing to accept the assistance of the SBI team. The ex­penses of the students are reimbursed by the SBA, but no fees are paid. Most businesses who receive SBI services either have a direct loan from the SBA or bank loans guaranteed by the SBA. However, if the school can work the business client into its case load, services of SBI can be obtained without loan contacts with the SBA. The business should contact the local SBA for further information and assignment of a team.The rest of this article describes some experiences of student teams workingSmallBusinessCounseling Help for the Small Business — The Small Business InstituteBarbara I. Rausch, CPA Marysville, Ohiowith small business clients through the SBI at Mississippi State University seen from the viewpoint of the author who serves as a faculty counselor for the SBI. In some ways, these experiences may be somewhat less than typical since Missis­sippi State University is located in a rural area where businesses in the program are widely dispersed and tend to be small even by SBA standards. Nevertheless, these illustrations should provide some concrete examples of how the student teams may be of assistance.Some of the areas in which student teams have assisted their small business clients include inventory planning, store layout, basic recordkeeping, advertising, compliance with state and local regu­lations and internal control.Inventory PlanningThis seems to be a very common problem and many small businesses participating in the SBI needed help in this area. In one instance, the owner of a cycle and lawnmower shop had new and used models displayed in the shop together. Some used models would be disassem­bled, and parts were taken from both new and used models to make repairs. No control was maintained over the parts and they were not checked out when they were used to repair a cycle or a mower. The team recommended that the parts area be screened off and that admittance be restricted. Further they recommended that disassembled mowers and cycles be placed in a central location and that repair order forms be used with each job on which parts used would be listed. To an accountant these recommendations are basic and absolutely necessary, but many owners of small businesses who place first importance on the skill required to accom­plish the repair work, may never waste a thought on the necessity of keeping track of repair parts used.Another team counseled with a ladies' clothing store that kept no inventory rec­ords. The team recommended keeping inventory records by department and that each item be identified with a coded tag. Then the team suggested that either the store personnel keep inventory records based on these tags, or that the business engage an outside computer service for inventory control, and they also recom­mended a specific firm.Store LayoutThis, too, seems to be a very pervasive problem among small businesses. Fre­quently teams return from their initial contact with the client with the reaction that the appearance of the business is cluttered or crowded or that the merchan­dise is hard to find.One team of students encountered a men's clothing store with several basic layout problems. The team suggested dis­play of all shirts in one area and locating all trousers in another. Another recommen­dation was to rearrange the racks to facili­tate traffic flow and to limit the number of garments to the capacity of the racks. Finally, the team recommended a sale to clear out old and shopworn merchandise.Another team counseled with the owner of a hardware store who had the merchandise stacked in the aisles and who was convinced that the customers actually enjoyed digging through piles of mer­chandise to find what they were looking for. The team suggested placing some of the merchandise in the storeroom and that other merchandise be rearranged and dis­played in a logical and orderly manner. Apparently, the students were convincing and the store owner began a basic clean­up and rearrangement of the stock.Basic RecordkeepingAlong with display of wares, recordkeep­ing is probably the most prevalent prob­30 / The Woman CPAlem which SBI teams at Mississippi State have encountered. In almost all cases, the teams have recommended improvements in the existing records. Oftentimes stu­dents express their frustrations at not being able to analyze other problems be­cause of the lack of sufficient records.In some instances, the assistance of the SBI team is limited to just one thing — like when a team helped the owner of a grocery store prepare a balance sheet. Then the need proves to be ongoing, and in this case another team later assisted in setting up a cash journal. In a small electronics firm a team helped the owner set up a cash journal and suggested that the owner hire a student to keep it current and up-to-date. Still another team set up cost records for a building contractor for budgeting and recording costs for each home built.Whether the owner of a small business borrows from the SBA or from a lending institution, balance sheets and profit and loss statements are a must. Therefore, basic recordkeeping has to take top prior­ity in the services rendered by SBI teams.AdvertisingThis, too, has been identified as a problem area in many of the businesses that stu­dent teams have counseled. Some busi­nesses did not even have adequate signs to identify the business or its location. One team complained that their client's gro­cery store could not be seen soon enough to do any good —150 feet when approach­ing from one direction, 500 feet when traveling in the opposite direction. A billboard-type sign near the road, signs in the window and limited newspaper ad­vertising were among the recommen­dations of the team.For another client, a small department store, the team actually checked the rates in the local newspapers and recom­mended a specific area paper with a wide circulation. The students also reviewed and revised the contents and layout of the newspaper advertisements and encour­aged the client to use plastic bags with the stores's name.Compliance With State and Local RegulationsCommunications is a troublesome area and when it comes to business regulations and local authorities, many owners of small businesses have their share of prob­lems. One team found a barber shop owner waiting impatiently for the city engineers to fill a hole and mark off the lot so that the construction of the new barber shop could begin. The old shop had been displaced by Urban Renewal and the shop was temporarily located in a mobile home. The barber was somewhat distressed that the city officials were taking so long to ready the lot. A trip to city hall by the students revealed that the city engineers were awaiting notification by the owner that the SBA loan needed for construction had been approved. When they were informed that the money had been made available three months ago, the city en­gineers' team was on the scene the next day to prepare the lot. A classic case of lack of communication, and the initiative of the SBI team put an end to a lot of frustration.In another case, the owner of a filling station had been in business for about three months but had never filed any sales tax returns or paid over any of the sales tax collected. The SBI team contacted a member of the state sales tax division who supplied the owner with the necessary forms and assisted with setting up proper sales tax records.Internal ControlSeveral business owners have complained to student teams of incidences of shoplift­ing. Generally, students have been unable to determine the extent of the problem — primarily because of poor inventory and sales records. Some teams have come away with the impression that the owner was using shoplifting as an excuse for a poor profit performance. One team noted that their client, the owner of a grocery store, had gained 30 pounds since taking over the business two years earlier. How­ever, internal control has been poor in many instances, and several teams have recommended improvements in this very important area.In one case, the owner of a service station had employed a recently released convict. The employee worked alone for many hours every day. To compound the problem, the cash register was not equip­ped with a tape to provide a record of cash received and inventory records were not maintained. The SBI team encouraged the owner to use a cash register with a tape and to seek more qualified help, since the ex-convict proved unreliable in other ways as well. The owner implemented both of these suggestions.One grocery store owner complained that shoplifting was going on in the store although nobody was ever caught in the act. The owner frequently had to work in the meat department in the back of the store which made surveillance of the shop difficult. The students suggested basic changes in the store layout and helped obtain and install a one-way glass door to the meat department.Benefits of the SBI ProgramThe categories of small business problems outlined above certainly do not constitute an exhaustive list. Student teams have dealt with a full range of business prob­lems. From the students' standpoint, the SBI program has been very beneficial. It has provided a bridge between the stu­dents' academic preparation and their eventual life in the business world. With a few exceptions the teams have brought great enthusiasm to their task. It is one of the few academic projects that the stu­dents seem to truly enjoy. Students who return after graduation frequently talk about their cases and ask about their clients.From the standpoint of the client busi­nesses the program has also been success­ful. At times, the success was brought about by the expertise that the students bring to the problem. At other times, the key to success had simply been the objec­tive, enthusiastic attitude the students provide. Most owners have been very cooperative with the student groups, and many have implemented the recommen­dations made by the students.On the whole, the SBI program is prov­ing beneficial to both client businesses and student counselors.Accounting faculty positions at Michigan State UniversityFull professor, several assistant professors. All require doctorate. Full professor, strong research and top quality teaching record. Assistant professors may specialize in financial, managerial, auditing, systems, taxation. Resumes should include full data as to academic record, experience, teaching preferences, names of references.Contact: Dr. Harold Sollenberger, Chairman Eppley Center, Michigan State University, East Lansing, Ml 48824Equal Opportunity, Affirmative Action Employer.April 1976 / 31

Small Business: Counseling Help for the Small Business — The Small Business Institute

https://egrove.olemiss.edu/cgi/viewcontent.cgi?article=2744&context=wcpa

Small Business: Counseling Help for the Small Business — The Small Business Institute

Abstract

Similar works

Full text

Available Versions

eGrove (Univ. of Mississippi)