Page 15 - One Thousand Ways to Make $1000

Raising Money to Start a Business

Many a man with a good idea hesitates to start in business because he lacks
capital. Capital is important, and it cannot be denied that a lack of it is one of
the principal reasons for business failures. However, lack of capital need not
hold back a determined man. The old saying, “Where there’s a will, there’s a
way” still applies.

Sometimes a money-making idea is so good that men who have capital will
“grub stake” you in starting your business. Many famous businesses were
started in just this way. Hires root beer is a case in point. Charles E. Hires
discovered the formula for his root beer in a farmhouse back in 1877. One
morning George W. Childs, publisher of the Philadelphia Public Ledger, sat
down beside Mr. Hires in a street car. “Mr. Hires,” he said, “why don’t you
advertise that root beer of yours?”

“How can I advertise?” said Mr. Hires. “I haven’t any money.” “Advertise to
get money. Come around to the Ledger office and I’ll tell the bookkeeper not
to send you any bills for advertising until you ask for them.”
Mr. Hires was a man of action. He knew that without venture, nothing could
be gained. He accepted Mr. Child’s offer. An inch advertisement ran daily
from that time on in the Public Ledger. Slowly, but steadily, it began to pull.
When at last the profits from the advertising were sufficient to justify Mr.
Hires’ asking for his bill, it amounted to $700. But it was a good investment.
It provided the capital upon which the Hires’ business was founded. For ten
years Mr. Hires plowed all his profits back into advertising, keeping only
enough out for a bare living for himself. He became one of the largest
national advertisers in the country, with annual appropriations amounting to
more than $600,000.
When a product has good repeating qualities it is sometimes possible to
interest advertising agents in extending credit in order to get a business
started. If an idea offers mass advertising opportunities, some of the larger
agencies may accept stock in a company to offset the advertising bills.
Among the well-known products now on the market which have been started
in this way, or which are partly owned by advertising agencies are:
Pepsodent, Barbasol, Bon-Ami, Sapolio, Palmolive soap and Van Camp’s