February, 1932
AUTOMATIC
WORLD
Page Eleven
Them Days Are Gone Forever - -
HILE looking for some in~
forrflation of value to op-
erators, I met an old-time
operator whom I had known for
some time, and said: "I've heard op-
erators say there was a time when,
if they could find a few good loca-
tions, all they nad to do was collect
the money and in a short time they
were on 'easy street.' What do you
know about those times?"
Edward E. Blake
"Know about 'em," he snorted.
"I've been an operator for fifteen
years and I don't remember anything about 'em. Of
course, I can remember when conditions were a lot bet-
ter than they are today. But ther,e never was a time
when a fellow could afford to think only of his good lo-
cations. , If I'm wrong, and there was such a time, oper-
ators of today had better forget about it, for those days
are gone forever."
Scenting a story from his own experience, I asked:
"Why, what is better than good locations?" "Maybe
there isn't aynthing better," he replied, "But I am be-
ginning to believe that there is something just as good,
and that is good management."
"There are plenty of operators who have been spoil-
ed by a few good locations. They see these few places
bringing in good money. It's easy to take. So they
get lazy, lay back comfortably, and pay no attention to
their other locations."
"Let's figure it out. For every good loeation, there
will be three which are not so good, and two others
which are poor. The operator who is thinking only of
his good locations is making each one of them carry the
load of five poorer locations. Old Man Experience tells
me they won't do it very long. Some day this operator
will wake up and find his business in the red."
"What's the answer to that?" I asked.
Make Even Poor Locations Pay
He shot back this reply: "The answer is-make every
location show a profit. Some are bound to show more
than others, but if each is paying its own way, then
the 'velvet' from good locations remains extra profits,
and isn't frittered away as an offset to losses from other
locations.
"Coin machine operating is a business, and like any
other business it will not manage itself. You've got to
run it, and not let it run you. A fellow has got to be
smart enough to make even his poorest locations pay
something. I think this is the biggest problem opera-
tors are facing today.
"If you are running a department store, and two or
three departments were showing a big profit, and all the
rest were showing a loss, how long would it be until
you were out of business? You know that you would
watch each department, and when anyone of them be-
gan to show a loss, ydu would check up on it and get
it back on an earning basis.
"Just consider each of your locations a department of
your business. When the income from a location be-
gins to fall off, try and locate the difficulty at once. See
if the location owner has lost interest in the machine.
W
He must always be a booster. Maybe you need to
change to some other machine to keep up the interest
of the players.
See that the machine is operating
smoothly. Don't let an out-of-date machine kill your
business. Think out some way to restore the earning
power of this location. What I am trying to say is that
if you are a good manager you can do it.
"My idea is that a good manager can make a busi-
ness pay in spite of 'hell, high water, and high taxes.'
Plugging Up the Le,aks:
"I'll never forget the time I discovered that I not only
had to wa.tch the income, but also the outgo. My ma-
chines were doing pretty well, and yet I didn't seem to
be making any money. J was doing a lot of work my-
self, and also had a service man. I was occupying a
store building in the center of town, paying rent for it,
not very much, but enough."
"After checking over things, I decided that · neither of
us were doing enough work. Our calls were costing too
much. Our locations were too far apart. We didn't
need the store.
"First ( I built an addition to my garage on my home
lot, suffioient for the storage of machines, and a work
shop. That cut out the rent. Then my mechanic and
myself spent two days a week loiking for new locations,
without extending our territory too much. Then we
dug out some old machines, repaired them thoroughly,
and placed them< in locations along our regular route.
"At the end of three months we were operating 25
per cent more machines without any· increase in our
overhead. These added locations were not as good as
our original ones, but the increase in income was 20
per rcent, and I was making a real profit.
What About Diversification?
"In the course of revamping my business, the ques-
tion of whether I should handle more than one type of
machine came up. Originally, I had been handling only
the regular slot machines. Every once in a while I would
have a call for something else. These request I would
turn down. But after I discovered the necessity of
Qutting the cost per call, I quit turning them down, and
even started to hunting for locations for other type
machines.
"At present my business is run on the basis of sup-
plying any kind of machine which I think will prove
profitable to the location owner and myself. And, be-
lieve me, I've been mighty glad of it many times, when
things have happened to prevent the operation of my
regular machines. Now I am operating slots, straight
venders, scales, novelty machines, and in fact nearly
everything.
"I do not say t~t diversification is best for every
operator. Nor do I say that every operator will suc-
ceed along exactly the same lines as myself. I do
think, however, we must forget what used to be, and
build our businesses to meet conditions as they are
today.
"Income per location, and income per machine, may
never he as large as in the days that are gone. But
what of it? Every other business is adapting itself to
lower income and we must do the same. 'Make every lo-
cation pay, make every machine pay, use your head, and