FOR PROFITS ON THE HOME BUSINESS

1. Keep your overhead low. Don't rush to expand; this will, believe me, come in due time if you have chosen an idea for which you are willing to give all that you have to give.

2. Don't offer anything for sale until your cost has been carefully computed. You may decide to sell knockdown bird houses or dog kennels, complete with directions, nails, screws, and so on. The first one you make and package may take you three hours and the tenth one but twenty minutes. Your price will be set upon the tenth one.

Don't hesitate to ask a fair price for your product or service; it is the tendency of those running home businesses to set their prices too low, and it can be your greatest weakness. Keep track of every penny you spend on materials and supplies. Compute a percentage of your home's water, heat, electricity, and rent; these come under overhead. Decide how much your time is worth per hour and add this. Now add 10 per cent for unexpected expenses; sometimes you may sell wholesale and this 10 per cent will go to the middleman or jobber. Adding all these expenses together, double the sum and this will be your retail price. If you find yourself saying, "I'd never pay that for this article," backtrack over your expenses and see what can be eliminated to bring the cost down; often eliminating a frill improves a product.

Once your price is established, stick to it. Don't cut the price to friends and neighbors. Never undersell your retail market, for if you do, you will soon lose it. The goods you yourself sell direct to customers must carry the same price as those you retail in stores or by mail.

3. Don't hire anyone to do something that you can do yourself. The minute you hire even one person, the whole nature of your business changes; you become not only an employer, subject to various government returns and taxes, but your time is divided between your own work and that of being an instructor, supervisor, and inspector. Remember you were willing to work long hours!

4. Don't hesitate to ask for professional advice. Take it, and profit by it.

5. Start in a small way. Don't forget the story of the restaurant owner who, after a prosperous first year of finding himself packing them in, added two wings, and soon failed. Nor the woodworker who made a simple wooden toy, sold all he could make, and in the flush of success, hired a factory, put his entire capital into expensive woodworking machinery, only to find that he had made more money when he had fewer orders and machines, and lower overhead. Try out your product before going into mass production. You won't be normal unless, after you have sold quite a few, you want to make some changes in it; listen to your customer's reactions and suggestions, You may believe the product you are making is perfect as it is, but it is the customers who will be using it and whose judgment you must listen to.

Since starting this book I gave a simple idea for making silhouettes to a friend who needed some money. I have spent enough hours in the five-and-dime stores trying to find an inexpensive trinket to bring home to the children to know that any new, good, cutout paper product will sell easily.

This young woman had some samples made up (pen drawings, not printed, though it is always best to show the finished product) and took them to Woolworth's in New York. Woolworth's purchased 1,500 packages, warning her not to have any printed beyond that amount until they were certain the first order would sell. Because it was so much cheaper to have them printed in lots of 5,000, however, she went into production to that amount. But the first 1,500 did not sell; there were no reorders.

I had been very much surprised when Woolworth's ordered only 1,500 and even more amazed to learn that the small order of 1,500 did not sell quickly. I asked her to send me a sample. I could not understand why parents were not delighted with this paper idea, which was to sell for a quarter. (Woolworth's paid her seventeen cents for each one.) When the sample arrived, I realized that she had taken what was a sure-fire idea and tried to improve upon it. She had slanted it for adults and not for children! What had been a simple idea that would have had a widespread sale had been turned into just another worthless paper idea. She had completely disregarded the potentialities in the children's market, but this would have been unimportant had she gone slowly. She would have at least broken even on the first 1,500 if that were all she had had printed. As it was, she went in the red for the printing costs and the thousands of sheets of black paper she had purchased to make up 5,000.

If she had been wiser (everyone is entitled to make mistakes) she would have produced 1,500, and sat back for consumer reaction. As soon as she realized her idea was worthless, she could have started to improve upon it. But by the time she saw her error it was too late. She had spent all her money and at this point is trying desperately to get someone to buy 3,500 packages of black-and-white paper, with which adults can decorate wastebaskets, lamp shades, and so forth. The original idea was to have simple Mother Goose pictures printed as silhouettes on sheets of black paper for children to cut out and paste as borders around their rooms, and so on.

Another error this girl made was in packaging the sheets of black-and-white-paper in envelopes much too large. No mother wants to carry home a package 24 inches long. An 8- x 10-inch envelope would have been sufficient, and would have sold much more readily.

The error was costly, but not an entire loss, because the next time this young woman is given or finds an idea she is going to feel her way slowly and use her common sense instead of rushing into production. Some men and women have started one home business after another—making one mistake after another—until one day they blended all their experiences into their actions and came up with a home business that prospered. They could have done the same with the first, had they stopped, looked, and learned; but they were in a hurry and would not heed caution's advice.

6. Do accumulate knowledge about the idea you wish to carry out. You may have the best idea or product or service in the world. You may have more than adequate capital to work with. But your first requirement is a thorough knowledge of the product or service you wish to sell. All surveys that the U.S. Department of Commerce has made to determine the reasons for failure in business indicate that previous experience is essential to success. The best way to get this background, they say, is by working in a well-managed, successful business of the type that interests you. This is not always possible with a home business, and the alternative is to gather unto yourself every bit of wisdom on your chosen "line."

If you live in one of the twenty-six states supporting an extension service at the state university, call upon this service for assistance. Tell the extension service people just what you plan to do, and ask them if they have anything that can help you. Your taxes pay for this service, and information will be graciously given; their bulletins (and they have many) are yours for the asking.

Your taxes also support your library, where all the information is yours for the seeking—and the seeking is sometimes arduous. Don't give up. Tell your librarian exactly what you are trying to find out—whether it be the laws governing the weight of loaves of bread for sale, or the laboratory nearest to you that sometimes buys guinea pigs for research. This digging out of information is tedious. You will be tempted to give up, but the "know-how" you will want is in the average library, even though you may have to make several attempts to find it.

Practically all libraries stock all the government bulletins. Often these bulletins are not given out, but you may use them at the library. If you cannot find information on your subject, ask your librarian to get you the books you want. A service called "interlibrary" loan does allow you to borrow books not in your library. This service varies from state to state, and even from library to library within the state. Most states do have a central library agency that furnishes certain materials on request to local libraries; your library will know the service offered in your state.

Some cities are fortunate in having specialized libraries. Boston has the Kirstein library where you can obtain expert advice on all types of businesses; the Newark, New Jersey, Business Library is similar to the Kirstein, but the average library does not have such a well-trained staff as do these specialized ones.

When you start out on this hunt for information, right at the beginning get at least one good book on running a business. This chapter can, at best, give you only a skeletonized view of the mechanics involved in starting a home business, and there are many easily obtained books that will go into the subject for you in great detail. Business, to you, may mean a large factory, but even the simplest selling of your monogrammed handkerchiefs will involve some of the principles of big business. Going into Business for Yourself by O. Fred Rost (published by McGraw-Hill Book Company, Inc.) will give you the answers to many of your questions that are not answered here.

There are over 1,000 trade journals published in this country. Chances are there is one allied to your subject, and in these specialized publications you will find a wealth of information difficult to obtain elsewhere.

Take advantage of government bulletins; there are helpful ones published on all subjects from raising fur-bearing animals to operating a mail-order business. Don't hesitate to study something entirely alien to all your former training, provided, of course, that the subject interests you.

7. Keep a separate bank account for your home business. Actually, if your records are complete, this isn't necessary, but why take a chance of getting your business assets confused with your own?

8. Keep records. Even the smallest pin-money home business should keep complete records. Have an indexed file of all correspondence. A study of nearly 1,000 bankrupt businesses showed that not even 25 per cent of them kept any records. Once you are on your own, no income payroll deductions will be taken from your profits; you will, instead, file an estimated return once a year and pay your taxes quarterly. You will need a memorandum of every item to know exactly just what your profits are for your return.

9. Get everything in writing. Don't trust your memory or that of anyone else. Even if you plan to sell only six pecan rolls a week, write down to whom they went, how much they sold for, and what your cost and profits were. There are several types of record books on the market. Study them and buy the one that you feel is best suited to you.

Get all your orders in writing—that is, if they are of any proportion. The pin-money gal won't want to ask a housewife ordering a cake by phone to put it in writing, but any orders from retail stores or wholesalers should be accepted only on this basis.

10. Be flexible. You may have the best product in the world, but times change quickly. Change with them. Vogues come and vogues go. A lot of women picked up their pin money by making shell jewelry; the vogue is over. Study the trade journals, the magazines that have anything to do with the idea you have chosen; get in on the advanced trends and move right along with them.

11. Think prosperity. Your attitude will have much to do with whether or not you will make money at home. Again and again, the world around, it has been proved that we do shape our outer world of circumstances by the way we think. No one thinking in terms of poverty ever made any money. The only way to demonstrate prosperity is first to feel it. There is abundance and plenty for all—for all those who know this precept. If this book gives you only that one thought, it is well worth the time and money it has cost you. Once you begin to feel prosperous, you will jump that mental defeatist hurdle that looms in front of so many who have to make money at home. You will stop feeling sorry for yourself and will rejoice that you are able to work for yourself. When you find in this book a good idea—one with which you can certainly make money—you will not say, "That's just too much work." Instead, you will welcome it as the right way for you to go.

It is also likely that many of you do not need any more money. Rather, you may need a wiser use and a greater enjoyment of the income already in your possession. Since this book is written only to show you how to make money, it is not the purpose here to enter into your personal philosophy of living or your adjustment to your circumstances. But why struggle to make money if you do not need it? Too many men and women spend their years making money for which they have no use—it feeds some creative urge they are born with—but there are many creative ways of living in which you may indulge without adding unneeded dollars to your pocket.

But if you are absolutely set upon making money, decide at once not to set your goal too low. Don't allow one single chance to escape you, as did the salesman who made $7,000 a year. When his territory was cut in half, he still made $7,000, and when it was again reduced by one-half, he brought home the same amount. He saw himself as a $7,000-a-year man although, as time showed, he had had, at one time, potentially a much more valuable territory.

Too many home careerists limit their vision. They see themselves making only ten dollars a week extra instead of the fifty (or two hundred) they could make easily with a little more imagination. But you say you don't have any imagination. Do you worry? If you worry, you have imagination. Worrying is simply creative thinking in reverse. Your job, as you start digesting the ideas in this book, is not to use this imagination backwards as in worrying, but to turn it around and use it forwardly and constructively. As you come to an idea that you believe may be for you, instead of immediately thinking of the things that are wrong with it, you will, with your pencil, begin to list all the ways in which it is right and suitable for you. Daily, if you will live with this list, and add each thought that comes to you, you will soon find the list has grown to sizable proportions. Set aside a time of day for this "idea time." Keep your pad and pencil beside your bed, if bedtime is the time you have chosen, and watch the ideas for promoting your plan, product, or service roll out. The more you do this the more freely will the ideas pour forth. Creative thinking, which you will be doing—using your imagination is what it amounts to—increases with use. Imagination is much like the battery in your automobile. It charges only when it is being used, and unless it gets enough hours of charging, it runs down and becomes useless. It may take a week to ten days before you get your creative imagination working, but once it starts, it will keep generating.

In your idea time you will decide how to give your product "eye-appeal," how to distribute it, how to give it color, how to improve it over your competitors', and so forth.

12. Consult your zoning laws. Make certain that you can open, in your neighborhood, a home business of the type that you wish. Your lawyer can tell you, and he also will know whether or not you need any licenses. Any legal papers, such as those necessary when you form a partnership or have anyone invest capital in your business, should be drawn up by a competent lawyer. Have him also investigate those laws—federal, state, or local—which might have any bearing on your business.

13. Have enough money to live on. Plan for at least nine months ahead if you intend to start a full-time proposition. I hope you'll start on a part-time basis; remember, few businesses show a profit right from the start. Too much money, however, can be as bad as too little. With only small capital you will tend to go more slowly and your mistakes will be smaller. Try to use your own money and borrow as little as possible. If you have to borrow as much as 50 per cent, either give up your idea or wait until you have saved the money so that you don't have to borrow over 25 per cent. Don't be timid about asking your banker for this amount. You may have to produce some security to get the money, and he can show you what to use for collateral. Don't hesitate to take your banker into your confidence; he won't steal your ideas. But do choose a banker who is friendly to small business. We might as well admit it—all bankers are not. If the first banker you go to isn't friendly, pick another.

And now with most of the don'ts behind you, the fun begins. Before you are almost two hundred exciting ways in which to make money at home.

Actually, no one can blueprint for you one sure, straight way to home-business success. I have written that you must have adequate capital before you begin, yet many a business flourishes today after starting on much less than the proverbial shoestring. I have told you that you must not go into business for yourself if you think you can work only when you want to, but it is easier to work ten hours a day at what intrigues you—and when you pick a home career you certainly can pick one pleasing to you—than a forty-hour-a-week job at something that you don't like. Working for yourself—and this country never would have grown as it has had not some men had the vision and courage to go on their own—is the most stimulating and satisfying way to make money.

The idea you find for yourself in these pages should and will stimulate your imagination, once you start your daily idea time, in which you list everything that has any connection, however remote, with the service, product, or idea that you have chosen for making money.

With a good idea in hand, there is still one ingredient necessary if you are to go on to making money at home. This ingredient is your common sense. You can read all the books on making money ever printed, and think the nights away with long thoughts of prosperity; but your own common sense will be worth more to you than all the words of wisdom ever printed, or all the dreams of making money that you can conceive. You can use the imagination you already possess; everyone has imagination. But not everyone has common sense. Can you acquire this? I do not know. But if you do have common sense and courage, and use your imagination, there is nothing to wait for; you cannot fail.

But before you can use either your imagination, your courage, or your common sense, you must first have an idea. This book is full of ideas. Take them, cull them, dream over them. Worry a little, if you must; waste though it is, nothing was ever achieved without some worry. Every idea was not written just for you. Many will not appeal to you, and some, you will immediately realize, will not fit your own aptitudes at all. Don't start utilizing an idea until you are absolutely certain that it is the exact one for you. But once you start, let nothing stop you.

Remember—an idea, to be good, does not have to be strange. It must simply be one that will do something for people that they would like to have done for them; or be something that they would like to possess, or eat, or wear.