Our practical method for raising capital

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Chapter One

"Experience is a safe light to walk by, and he is not a rash man who expects success in the future by the same means which secured it in the past. — Wendell Phillips.

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O present this work in an orderly maner we must have a basis or definite plan of operations. We have therefore chosen to develop "Our Practical Method" along the line of capital-raising for retail store purposes first. From the conclusions arrived at during such development we have formulated the plans for capital-raising along the other ordinary lines of business, as wholesale, manufacturing, mining, patents, real-estate, mail-order, corporations, etc., etc. Since no two chapters are alike we earnestly advise a careful study of the entire book, to the end that a comprehensive view of the subject may be obtained.

It is a far cry from the days when they used to keep store in a log cabin, to the day of the present when they produce finely organized department stores with acres of floors and thousands of clerks.

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Chapter One

Nowadays people are trained to be efficient in one department and not as store keepers.

But once in a while an ambitious clerk feels a yearning to get into business for himself and to these worthy ones this book is aimed. Yet he is likely to falter before the money part, and for his benefit the facts contained herein are given. Only such statements are made and propositions put forth as are supported by the experience of mankind, albeit the exact methods and details will be new to most readers. Raising capital for business purposes is not new. It is as old as history and it is a subject which has, for one good reason, been shrouded in mystery, at least for many people. But when one analyzes the subject it is found to be much simpler than learning a trade, and far easier than saving money out of ordinary incomes. Indeed, in this day of high prices for living, about the only hope for the wage earner is to start in for himself, lest he become a drudge only and lose his very zest for life. Money raising is a question of a little study, application and patience

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and that is all there is to it. Merely a little knowledge, a little trying, a little time, and the desire is fulfilled.

We consider this knack, for knack it is, the most valuable of any, because like swimming or skating, once gained it is never lost. By following the methods presented herein, the novice should be able to raise a reasonable amount of money at once and not only that, but gain the knowledge and confidence which will enable him to keep supplied with money for business as long as he lives, no matter what happens.

We have avoided repetition as far as possible and therefore suggest that you read each chapter not only once, but several times. Study thoroughly so as to make the contents part of yourself. Do not allow your mind to contradict the facts, statements or suggestions, for they are the best and most economical. Finally remember that in your struggle for a higher place in the world our best wishes follow the book to you.

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"The way to wealth is as plain as the way to market. It depends chiefly on two words, industry and frugality; that is, waste neither time nor money, but make the best use of both. Without industry and frugality, nothing will do; and with them, everything."

— Franklin.

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"Heaven never helps the man who will not act."

— Sophocles.

rSlERHAPS, before going farther into LMbI the discussion, it might be well for you to examine into the conditions which have heretofore held you back, for we believe you must have had the desire to go into business for some time. Consider your thoughts, your experience, look yourself over, so to speak, that you may decide for yourself before the end of this chapter as to whether there is hope for you. Perhaps you have not really tried to get the money you need, maybe you have just thought about it, and let it go at that. Well, if that is so, you need not be discouraged for there are others in the same boat. Now a little thinking is good but some action added is a whole lot better. Just like yeast added to flour, it makes the dough. It is better to have thought and lost than never to have thought at all. So if your proposition has up to this time been one of wind only, do not be disheartened, but, as the thought is father

TWENTY-THKEE to the deed, so now is the time for action.

It may be you have been hampered by fear that you would lose your position if your employers found you were trying to get in business for yourself. This is at times a slight stumbling block but there are ways to avoid that possibility. This particular feature is important enough to be considered at length in another portion of this book. It is sufficient to say here that, if this point be an obstacle in your path, do not consider it any longer in that light, for it can be easily overcome.

Possibly your lack of experience in your proposed enterprise has kept you from trying for capital. We do not suppose this is true, in your case, because it would seem foolhardy for anyone to try to raise money for any business in which he doubted his own fitness and ability. Confidence is the first and most necessary requisite. If you are not fit and can not make yourself reasonably sure on that point as far as your chosen enterprise is concerned, we say, choose some line in which you are sure, even if there

TWENTY-POUR is apparently less profit in it. You will be more likely to succeed, and that is what is to be earnestly sought.

A man is far better as a moderate success than as a flat failure. There is time enough when you are making a little money and are your own boss to consider doubtful propositions and to fit yourself for them if you think best.

Perhaps you have tried for the money and failed, thus becoming discouraged and going back to the old place with a heart as heavy as that of Job in all his misery. But that need not affect you in the least, other men have suffered the same defeat and then turned it into victory. Why not you? We say it is a question of a little knowledge, a little application and a little patience, and you know we are right for that is the experience of mankind. If you have suffered defeat and humiliation in this way, there is all the more reason why you should be guided by the counsel and advice of those who know and thus save yourself further sad experiences of a similar nature.

Do not by any means allow yourself to

TWENTY-PIVE become downhearted because of previous failure, Forget it. That's the watchword of the moneymakers nowadays and a worthy one it is. "What cannot be cured must be endured,' ' and you certainly can gain nothing by looking backward. Place your best foot forward, your hopes in the future, work in the present and all will be well.

You may have seen friends fail in business or you may have failed yourself, but neither of these are valid reasons for further failure. You should gain by experience remembering that every good business man makes mistakes, but only fools make the same mistake twice.

"God gives all things to industry. Work while it is called today, for you know not how much you will be hindered tomorrow. One today is worth two tomorrows; never leave that till tomorrow which you can do today."

— Franklin.

You may have neglected your personal appearance, a common though serious

TWENTY-SIX error, and thus handicapped yourself without realizing it. But that can be easily overcome, and it will be mentioned again later.

We think after all there is one great reason for your failure so far to obtain the capital necessary for you to make a start in your chosen business. It is a lack of the detailed knowledge of just what steps to take so as to be reasonably sure. The other objections all pale into insignificance beside this one great bar to progress. To be sure each objection must be overcome, but they do not all apply to all cases. However, since the minor causes often appear, we must give them their due meed of attention. But the one great fault, the lack of detail knowledge of procedure, will from now occupy the bulk of our argument. We shall start at the beginning and in our next chapter we shall take up the psychological (mental) aspect of the subject and show conclusively that the known laws of psychology may be applied with equal force to acts relating to business as to any other mental state, condition or exertion.

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Not that we want you to employ hypnotism in raising capital, but that we do insist on your employing mental suggestion which amounts to the same thing only in a lesser degree.

"Knowledge " says Bacon, "is power; 99 but mere knowledge is not power: it is only possibility. Action is power; and its highest manifestation is when it is directed by knowledge/ 9

—T. W. Palmer.

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"Science, when well digested, is nothing but good sense and reason." — Stanislaus.

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HE raising of capital is the result of mental operations, as is also true of every other action of man, There was a time when certain apparently mysterious phenomena of life were accredited to"reflex action" which is a phrase only, meaning nothing, and as inexplainable as the phenomena themselves. In these latter days the scientists have done better. They have now formed a working hypothesis, regarding mental states and conditions, which operates under a fixed law and, better yet, is so simple and easily understood that he who runs may read. Our space will not permit us to enter into an extended discussion of this subject here nor would such discussion serve any useful purpose. Thousands upon thousands of pages have been written in thousands of years on mental subjects but it has remained for the brighter minds of our own time to formulate a law and to place psychological questions within the domain of the exact sciences. Our single purpose in mentioning this

THIRTY subject at all here is to show how this law may be applied to help the business man and more especially the struggling beginner to attain the object of his financial desires. The law is in three parts as follows —

1. Man has two minds, objective and subjective.

2. These two minds operate under entirely different states and conditions.

3. The subjective mind is entirely controlled by suggestion.

Now just a word as to the powers and relations of these two minds after which we shall proceed to show the application of this knowledge to the affairs of business. The objective mind has many powers, but the one great power is that of inductive reasoning which goes from effect back to cause and deals with such unfeeling subjects as astronomy, geometry, arithmetic, etc., or in other words the objective mind deals with things that the eye can see or can be proven by material facts of common knowledge. The objective mind controls the voluntary muscles of the body and is the mind of our waking hours, the mind of cold calculating

THIBTY-ONE reason, the mind of common sense. The objective mind is in evidence most during waking hours and therefore we are so familiar with its operations that we need not dwell upon its powers at greater length but simply caution you to bear in mind its principal power, that of inductive reasoning.

Now the subjective mind is far more interesting and has far greater powers because it is the Soul of man. It has the power of infinite subdivision and reproduction which means the equivalent of creation itself. It has at times a perfect power of deductive reasoning which means prevision, foretelling, clairvoyancy or, more simply, reasoning ahead. It has an absolutely perfect memory, recording every thought and deed in the minutest detail. Last, but by far the most important to you, the subjective mind is the seat of the emotions or feelings. The objective mind is a product of evolution, something which has developed in man through the lapse of ages, to better fit him to do battle with his environment. Through the power of speech first, no doubt, then connected ideas, then communication of ideas, then signs, then writing, and finally

THIRTY-TWO history, has the objective mind of man placed him in his proud position as the head of the animal creation. Yet the subjective mind, while originally the creator of the objective mind, and now a slave to its bidding, possesses powers so far transcendant to those of the objective mind that there is really no fair comparison. For instance, the subjective mind or soul is that force which gives life to man, governs the functions, sensations, and conditions of his body, develops him to manhood, preserves and warns him in the face of danger and provides a perfect anesthesia in the hour of death. Wonderful powers to be sure. But what interests you most is that this subjective mind is the seat of the emotions, impulses, feelings, and that it is absolutely controlled by suggestions. Now these suggestions may come from your mind or his own objective mind or surrounding circumstances, which naturally leads us to our point which is : \ That capital may be most easily obtained by playing upon the emotions, feelings and impulses of the investor. 4

That is to say, by the employment of discreet suggestions rather than by cold

THIRTY-THREE blooded argument. It will be our purpose to show you how to successfully employ the one and avoid the other and that is

"OUR PRACTICAL METHOD."

It is a case where the longest way around is the shortest way home. Too many men become so imbued with a sense of their own honesty and big ideas of their own business ability that they are likely to think all they have to do is to say to some man, "lend me five thousand," and presto, the money is put in the bank and all is as merry as the wedding bells. But getting capital is not so rosy a dream as that would make it appear. One must employ a little shrewdness, a little cleverness, he must be very discreet so as not to scare away the very one from whom he expects the wherewithal. The investor must first be made to feel comfortable, to have confidence in you and to be sure you do not want his money for any unseen purpose of your own. Thus, you see the very first step is to secure a friendly feeling on his part. Since the subjective mind is the seat of the emotions, impulses and feelings it is very plain that the

THIRTY-POUR first appeal must be by suggestive actions to inspire confidence and not by argumentative words to combat reason. It is very sure that investors would always say "no" if they were allowed to reason, but when approached rightly and given the proper suggestions their money is yours and you can handle them as well as their money. We shall now leave this subject temporarily but will bring it up again later when we get to the point where the actual methods of introducing the suggestions are taken up.

"Every great scientific truth goes through three stages. First, people say it conflicts with the Bible, — next, they say it had been discovered before. Lastly they say they always believed it." — Agassiz.

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Chapter Four "The advantage of a close alliance."

fylANY young men lacking experience lIAI in business methods are led to believe by newspaper talk that the only way to obtain a start is by means of a corporation. The very word itself seems to have an alluring sound, as though if one could only become part of a stock company, the money would just flow into its coffers. Now let us say right here that a corporation is something to be considered later. It is only good in cases where an immense amount of capital is involved and where the interests are diversified to a great extent. Then there is no doubt but what a corporation is, in many instances, advisable. But for the person who has a start to make in the world the corporation is useless.

It is so much easier to obtain a partner, so much quicker and last, but not least, so much less expensive that there is really no good reason to consider a corporation at all where an ordinary amount of money is involved. Selling stock certificates is a very hard proposition ordinarily, but this is especially true where there are

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no assets to show except the good will of the promoter. Stock selling is an art or science by itself , one which requires careful training and extreme cleverness on the part of the salesman. It is therefore with the exercise of careful judgment on our part that we advise you to avoid any attempt to obtain money by selling stock unless you need more than $10,000 in cash or have assets or an established business upon which to base your claims.

Stock selling as a means of raising capital works well in the cases of wholesale, manufacturing, mining or real estate enterprises on the start, or in any other business where it is sufficiently well advanced so that it can be easily shown that capital is needed only to enlarge its scope. But for you who need a little money for a start, a partnership is the only sure and sensible course. A corporation is unwieldy, hard to handle, and this is particularly true in the case of a retail business where each and every stockholder has different ideas as to how a store should be handled. It is much easier to get along with one partner than with many stockholders and where speed in turning sales

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of goods is necessary, as a small business, stockholders are always in the way with a dozen useless suggestions.

In a partnership there are no annual statements to be made to the Secretary of State, meaning publicity and other ills, as is the case in corporate bodies. Your business is your own and you should, while getting started, be in a position to keep it to yourself. But the main point of advantage of a partnership is that your partner cannot force you out of business at his own sweet will. The officers of a corporation might vote you out, but your partner will have no more to say than you and, therefore, a mutual understanding is necessary. It would be hard for you to get a hajf interest in an incorporated company while in a co-partnership itfis customary for one to put in the money, the other furnish the brains and do the work, and then share alike in the profits.

We think the experience of mankind clearly proves the better way is for you to get a partner, do your best for two, three or four years, then sell out and go by yourself. You see our plans are to place you eventually in an entirely independent

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position which is what you yourself should most earnestly desire. There is no boss like being your own boss and to further carry out that idea we have placed one chapter in this book on how to buy or sell an interest, to the end that you will not lose sight of your ultimate object and that you may be prepared, when the time comes, to be a business man on your own hook, independent, free to do as you wish.

"Let all your views of life be directed to a solid, however moderate, independence. Without it no man can be happy." — Junius.

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Chapter Five

"Choose always the way that seems the best, however rough it may he; custom will soon render it easy and agreeable/' — Pythagoras.

fflOST men desiring to enter the retail IMji business have their choice already made, and to them nothing need be said in particular about a choice of a kind of business. But as a book of this kind must needs be general to a certain degree we take this opportunity of making a few suggestions to those who are undecided as to the best paying kind of store. Now if you belong to the latter class we say at once that it is not so much the business itself, as the men at the head of the business, that is responsible for its success or failure. Men fail in clothing stores, other men take the same store in the same same location and make a fortune in a few years. And so it is with all lines of retail trade. No line of goods for which there is a reasonable demand can be said to be so humble as not to be worthy of consideration. In the larger cities they make fortunes in dry cleaning, laundry, second hand stores of all kinds, house wrecking enterprises and even move garbage for money. So it would appear from

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the experience of mankind that one need not hesitate for fear that his opportunity is not large enough. Any line is capable of growth and no country was ever so favorable as this great land of ours to starting in a small way and building rapidly. Two items only are worthy of attention here. One is experience, the other taste or adaptability.

If both these requirements are combined in one person his success is doubly assured. But a lack of either, while a slight handicap, is not a reasonable cause of failure. One can, by the use of a little judgment, employ labor having either experience or adaptability. But if one lacks both in himself, failure is quite certain. Which is to say if you have no natural liking for, nor experience in, a certain line of business, do not put money into it, neither your own nor that of anyone else. For it is no credit to waste another man's money. Even if you knew positively you could raise more money later for some other enterprise, yet we would still say no, for you would be wasting your time, and time is money. Far better to take some business that you like, that you could be proud of and take

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pleasure in, even if it does not look so good from the outside.

Many schemes look rosy from what rumor carries but when they are sifted down they are found to be just ordinary from a money-making standpoint. If the line to which you have a natural leaning is also one in which you are experienced so much the better, for then success is within your grasp. But if not, then it would be a wise move to gain a little actual experience before engaging capital and striking out for yourself. In most cases this is comparatively easy and will always repay the time and effort by preparing one to avoid mistakes, which are costly. Again it is much easier to raise capital than in cases where the one desiring the money lacks enthusiasm or knowledge. Not one investor in five hundred would put a dollar into your proposition unless he was sure, by suggestion or by spoken or by written words, that you were intensely interested and thoroughly experienced in your proposed venture. So you see it is harder not only to make money, but to raise money, in cases where a lack of interest or experience is apparent. Not only that but the very

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life of business, buying low and selling high, is next to impossible for the novice. Therefore we say,in all frankness, if undecided, choose by all means, such a business as you have a natural liking for and in which you have had experience. Your chances of success in raising the capital, either through others or by yourself are far superior, and your prospect of a business success infinitely greater than in any other way.

"Nature has concealed at the bottom of our minds talents and abilities of which we are not

— Rochefoucauld,

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Chapter Six

"Fear nothing but what thine industry may prevent." — Quarles.

HERY few people really understand the power of advertising to draw trade and sell goods and for the benefit of those a few remarks will be made here as to the location of a store, as that is a question which bothers not a few. Many are held back because they have not a first class location in sight and fear failure if they accept an inferior one. To those we say at once do not hesitate on that account but go straight ahead securing the best location at hand, keeping your eyes open for a better one later. A noted politician once said, "the only way to get elected is to get votes,' ' and similarly we say the best way to get business is to get a location and make the start.

Not but what some locations are better than others, for we admit all the stern truth of that. But do not forget the drawing power of advertising. If your prospective store is not unreasonably out of the way a moderate use of the newspapers, billboards, streetcars, etc., as advertising mediums will surely bring

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people to your store and, after they have commenced patronizing you, it becomes your duty to see they are so well taken care of that they will surely come again. In a general way a good location means near a point where many people pass or are wont to congregate. This may be in a big office building, near a traction corner, postoffice, hotels or near a ship landing. But no matter where the location may be if it is worthy of investment in a store, it is surely worthy of advertising.

The main point we desire to make here is, that while the best location is of great importance, yet it is not of such great importance as to keep you out of business. It is better to make a reasonable profit and to be your own boss, all the while keeping a weather eye out for a better point of vantage, than to wait indefinitely for a location so perfect that you may never find it. Now we shall take up the subject of advertising for business purposes in another chapter of this book and therefore do not feel it necessary to devote much space to that subject here. We merely desired |to assure the doubter that he need not hesirOETY-EIGHT

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tate on account of having, what he considered, an ordinary location in mind. It is the advertising that counts and it has power enough by suggestion to draw trade in places where you would never think a man could make a dollar. Many a man has got rich in the store business in places that had previously been turned down by dozens of supposedly astute business men. There is just one way and that is to act on your best judgment. After making a careful investigation into the merits of several, pick out the best one, in your opinion, and then proceed directly to follow the plans in this book for raising the capital with that particular location in mind. No doubt you have noticed in your own experience that every time you acted against your better judgment you made a mistake. That is to say when you followed impulse (subjective emotion) in preference to a cold, calm weighing of facts you found you were wrong. Now that is an experience common to mankind, and we suggest here that you make a vow this very day never to follow anything hereafter but your better judgment, formed after mature deliberation. You know the say-

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ing by Shakspeare, "Men's judgments are a parcel of their fortunes.' ' Apply this to the subject of your proposed location and after having decided in your own mind, follow the capital-raising feature of the program just as eagerly as though you were sure you had the best location you could possibly get. Believing that idea yourself will add materially to your success in obtaining the money and also to your business success afterward.

'Judgment is forced upon us by experience.

— Johnson.

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"Man is not born to solve the problem of the universe, but to find out what he is to do; and to restrain himself within the limits of his comprehension." — Goethe, nHIS chapter is devoted to a mention and explanation of a few points about which it is necessary to have some knowledge before attempting to raise capital. We are going deeper into the subject of "your own fitness' ' for the actual prosecution of your business later in the book, but right at this point it is necessary to name the main things about which your investor will want to know. For, while we are going to show you various ways by which you may secure other's assistance in raising the capital, yet it is very true that the investor will want to see you personally, and unless you can do all the talking yourself, he will surely ask you some questions. The following points are most likely to come up as the subjects of conversation between yourself and the probable investor.