Heading off crime losses - Small Business Report - includes other information

Nation's Business,  Feb, 1985  

Tags: Federal Reserve Board

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Small businesses not only lose more to crime than larger firms but their losses can be devastating enough to force them to close down.

A 20-page Bank of America report, "Crime Prevention for Small Business," says the most widely hit and vulnerable sector of the small business community is retailing, which has to contend with shoplifters, con artists, bad check writers, robbers and dishonest employes by day--and burglars by night.

The study gives owners tips on how to protect their stores with proper equipment, design of the premises and internal management policies and with controls that will deny criminals any opportunity to steal.

Owners should look at their shops' security weaknesses through a burglar's eyes. Any burglar will think again when he sees solid doors, secure locks, impact-resistant plastic windows, grilled or barred windows, bright lighting, a security guard on the grounds and a variety of alarm systems.

The more subtle, but costly, threat of fraudulent check passing--causing approximately 35 times greater losses for small retailers than for large stores--can be met by installing equipment that takes a picture of the check and the customer, having employes carefully scrutinize a check to make sure it was bank-issued, asking customers for identification or using a check verification service.

Some solutions for shoplifting: displaying merchandise in standard groups so salespeople will see at once if something is missing, placing turnstiles at entrances to direct customers through the cash register area on exit, locking display cases and giving cashiers unobstructed views of the aisles.

Employe theft, which accounts for the biggest loss by small business, should be headed off at the hiring stage, with comprehensive application forms and thorough reference checks.

Computer fraud may account for $300 million a year in losses to small businesses. They should restrict access to a few trusted employes, change passwords frequently and bond computer personnel.

Copies of the report are available for $3 outside California and $2 in the state from: Small Business Reporter, Bank of America, Department 3120, P.O. Box 3700, San Francisco, Calif. 94137. Women's Business Hot Line

With a $25,000 grant from Citicorp/Citibank, the nonprofit American Woman's Economic Development Corporation is expanding its two toll-free business counseling services.

AWED, established in 1976, offers a hot line service, instituted for women who need quick advice from an expert. Each hot line session lasts up to 10 minutes and costs the caller $5.

The other service will match a woman entrepreneur with a specially selected expert who will call her at AWED's expense after she has filled out an information sheet about her needs and specified a convenient time for the call. These sessions last from 1 to 1-1/2 hours; the counseling fee is $25.

AWED President Beatrice Fitzpatrick says the new grant "will aid us in meeting the growing demands from women for on-target business advice."

For further information: AWED, Lincoln Building, 60 E. 42d Street, New York, N.Y. 10165. Phone: (212) 692-9100. Business Starter Kit

An entrepreneur at any stage of business growth may find some help in a two-volume Starter Kit from the accounting firm of Coopers & Lybrand.

Volume I, The Performance Workbook: Planning and Startup Growth, covers planning and managing the three major stages of business development--launch, growth and maturity.

Volume II, Fact and Forms, describes how to develop a business plan, compares the various legal options available to an entrepreneur when organizing a business and identifies the tax attributes of each. A comprehensive overview of the many federal tax forms a small business owner might encounter is also included, as well as a listing of other resource publications.

"Faith in yourself, exuberance and a good idea may open the door to seed money, but as your business develops, you'll need more specific, concrete information if you're to convince bankers of your credit-worthiness," says James F. Lafond, director of the emerging business services practice for Coopers & Lybrand. "That means business plans, reassessing your goals and strategy, managing your company's growth and its attendant production and cash demands."

Copies of the complimentary Starter Kit can be obtained by writing to: Howard Bailen, Coopers & Lybrand, 1251 Sixth Avenue, New York, N.Y. 10020. The Fed Is Listening

The Federal Reserve Board is allowing the 12 Federal Reserve Banks under its jurisdiction to establish advisory councils so that the Fed can be directly apprised of the concerns of farmers and small business people, who then can learn about proposed Fed rules.

In addition, Fed chairman Paul Volcker has said that the Fed's Board of Governors "will meet with representatives of the councils annually in Washington."

"Small businesses and farmers have always been especially affected by the policies of the Federal Reserve," says Delegate Walter Fauntroy (D-D.C.), chairman of the House Banking Subcommittee on Domestic Monetary Policy. "The creation of these advisory councils will assure improved communication of concerns and views between these groups and the Fed." Fauntroy had written a letter to Volcker requesting the formation of the councils.

COPYRIGHT 1985 U.S. Chamber of Commerce
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