Small Biz Advice: Cash Control

holly-photo-280x290Holly Howard runs Ask Holly How, a small business consulting company based out of Williamsburg, Brooklyn that works with a wide variety of businesses from restaurants to retail to art studios and pretty much everything in between. Her clients report increased income and profit, decreased expenses and a significantly better quality of life. Holly heads up the Small Business Book Club at McNally Jackson Books.

Email her to ask a question for the next Ask Holly How hhoward@askhollyhow.com.

Dear Holly,
I run a small bar that only takes cash.  I have set up strict reporting guidelines and use tools to track inventory, sales, and cash on hand at the end of the day, but at times, I worry that my staff could be stealing from me.  I am constantly checking my liquor inventory against the sales, and for the most part, it always checks out, but is there a way I can ensure that the staff won’t steal? 

Thanks,

Cash Concerned

 

Dear Concerned,

I think this is a common worry among business owners who deal mainly in cash.  It’s great that you have set up protocols for reporting and are constantly checking your inventory against your sales and counting your money closely.  By doing this consistently, you send a message to your staff that you are monitoring every aspect of the sales process.

While there’s no guarantee that employees won’t steal from you when they are around so much cash, there are things you can do to improve the odds that they won’t.

First of all, I would do background checks on all of my new employees.  Always ask for at least three references and make sure that you are hiring honest and loyal people.

Second, know that people steal for a reason.  And, employees are more likely to steal when they feel taken advantage of or undervalued.  So, make sure you are paying your employees a fair wage to begin with so you’re not contributing to a situation where the employee feels like they “deserve” a little more cash because you’re grossly underpaying them for what they do.

Third, create a moral atmosphere.  Treat your employees with respect.  Create opportunities for them to feel ownership in the business by recognizing their contributions to the team.  When we feel a sense of ownership in a business, no matter how small a part we may play, we feel more inclined to want to make that business succeed.  In his book, Shine, Edward M. Hallowell says, “People who feel recognized and valued do not feel nearly as inclined to rip off the system, so to speak, as people who feel unrecognized, exploited, ignored, or devalued.” You as the owner can create this moral atmosphere by building teams and recognizing individual contributions to your bar’s success.

Keep tracking your sales, inventory and cash reporting, pay your employees a fair wage for their work, and always hire staff who have a history of being trustworthy and loyal.  If you want peace of mind, and to be able to trust your staff with the cash, take responsibility for creating a moral environment at work. That begins and ends with you as the owner, which means that you do have the ability to ensure that your cash will go into the drawer and not the pockets of your employees.

Best,

Holly