Chapter 3

Along about here competition began, for another man learned to throw a club and kill his game. Then another competitor discovered that a round stone was a more effective weapon than a club.

These hairy forbears of ours lived in caves until competition led up to the building of huts.

One day a savage discovered that while the skins of animals were hard to eat, they nevertheless made a good body covering. Another discovered that if the skins were tied about him it left his arms free to act. This man was the first tailor. He punched holes in the skin and tied the rude garment together with strips of skin. This first tailor was quite an important man among his fellows on account of his great discovery.

Some of these wild men were fleet of foot and had well developed cunning. They became expert hunters. On the other hand some of the less active, by the law of compensation, became more expert tailors, so trade was formed. The hunter killed enough for himself and the tailor, while the tailor made clothes for both of them.

In these days the woodsman lived on animals and the plainsman on vegetables mostly. So the woodsman traded skin clothing with the plainsman for grains and herbs, and this marked the birth of commerce.

Then dugouts and canoes were built, and thus our ancestors crossed lakes and seas and developed maritime commerce.

From away back in those dark ages up to the present time competition has stimulated mankind and spurred him on towards better conditions. The whole human race has benefited by each improvement which competition has brought about.

We have in mind a certain mail order house that up to 1894 had things its own way. Then it sold two to three million dollars worth of merchandise annually. A competitor came into the field, stirred things up, and now the old mail order house is doing eight to ten times as much business per annum as they did before they had the competition.

In the matter of competition we must early learn not to worry over competition, but to derive as much good from it as possible.

If a competitor does something better than you do, do not kick or protest, but jump into the band wagon and do the thing as well or better than he does it.

Price cutting is the simplest and most common phase of competition, but a better way to get advantage over your competitor is to improve your business by cutting off wastes and leaks, and reducing fixed and fancy charges so you can give your customers more quality and more quantity for the money.

In proportion as you increase the value you give for a dollar, just so you will find it easier to get the dollar.

Do not regard competition as hurtful to your business, but rather look upon it as a pace-maker for you.

If you had ten experts working for you studying how to improve your business you would certainly get benefit from it, but probably not enough benefit to offset the great cost of hiring these ten experts.

On the other hand, if you have ten competitors who are sitting up nights studying how to improve their businesses, you can get the benefit of their experience without it costing you anything.

The world is big and there is room for all, but old compensation says the prizes are given to the fittest.

If you are a laggard, if you are on the defensive instead of on the aggressive, get busy, wake up, do it now.

Advertising

Good advertising is good publicity. Advertising is the thing that makes your trade increase.

Everything you do in connection with your business and every act of yours outside of your business is an advertisement.

Reputation is an advertisement, so is honesty, politeness, correspondence, methods, catalogues, circulars and salesmen. Neatness is an advertisement, and so is promptness, thoroughness. And then there is another kind of advertising which is your statement in the newspaper. This is the printed kind of advertising, and this kind of advertising is the most common, in fact, when we suggest that you should advertise, it immediately comes to your mind that advertising is space in the newspaper.

Keep in mind, however, when we speak of advertising we refer to everything in connection with your business that makes an impression upon the public or the prospective buyer.

Some of the old timers refrain from printed advertising in newspapers, saying that the best advertisement is merit. Merit is a good advertisement, but it is mighty slow in its action.

If the inventor of the typewriter planned and built the machine in his barn without letting anyone know about it, if he kept absolutely quiet about his doings, relying on the fact that the typewriter had merit, it would never be known to the public unless he told about it. If the inventor of the typewriter waited for merit alone as the vehicle for acquainting the world with the merits of the typewriter, the world would never know of it, unless, perhaps, a fire inspector or an health officer accidently stumbled across the machine while inspecting the premises.

If the inventor waited for intrinsic merit to sell his goods, he would find that months and years would elapse before he could develop his business into profitable proportions.

If you have a good thing you must tell about it. Telling makes selling. Telling is advertising.

Professional men hold up their hands in horror when you suggest advertising to them. They tell you they don't believe in advertising, that it is not ethical, that it is not dignified. Doctors and lawyers are most notable in this respect. One of the first things of their code of ethics is "Thou shalt not advertise." They mean paid newspaper advertising. The man who originated this idea evidently did not have the money to pay for any, and it was a case of sour grapes.

Let us look into this matter of ethics and see whether the doctor and the lawyer really believe what they say about this matter of advertising.

It is a rare spectacle to find a lawyer who will not gladly give an interview to a newspaper reporter during some important trial.

The doctor gladly avails himself of the opportunity to read a paper before a medical society, and he sees to it that this paper is published in a medical journal later on.

Professional men belong to clubs, take part in public affairs, speak before people, work on committees, and actively take part in anything that will bring them in the limelight of publicity. They do this advertising themselves, yet they say they do not believe in advertising.

Uncle Sam builds war ships, equips his soldiers splendidly, conducts his business affairs with high grade talent, all this that the United States may be well advertised among our sister nations.

Advertising is absolutely essential to successful business. Not printed advertising alone but all kinds of advertising. The quality, the price, your aggressiveness, everything in your business is an advertisement, either a good advertisement or a bad one. It behooves you to see the advertising you do, whatever kind it may be, is of the good kind.

If you expect to remain in business a long time your advertisements must be good. Keep in mind that methods are advertisements.

One bad move, which is a bad advertisement for you, calls for two or more good moves or good advertisements.

Have everything, every detail of your business carry a good advertisement, that is, have it help your business.

Have every employe pulling on the same center tugs and have them all face forward, and your vehicle will move forward.

Buying

The buyer derives much information and much shrewdness by carefully watching the seller's methods.

Some buyers seem to think that bull-dozing tactics, cute lies and irritable manners make the seller humble, weak-kneed and non-combative. This is a great mistake.

The best buyer is first a gentleman. He keeps his word, he is patient and he knows his business thoroughly.

The buyer gains much by being open and above board with the seller. Let the seller know that your success consists in getting as much value as you can for the money, and that your continuous trade will result only through fair treatment.

Let the seller understand that the better he treats you in the matter of price and quality the better you will be able to treat your customers, and the longer you will be able to deal with the seller.

The moment a buyer shows bull-dozing methods, the seller is antagonized, and his object then is to soak the buyer.

The buyer who keeps his temper and goes at the matter philosophically is the one who wins out.

The buyer should explain to the seller that the seller can get the best of him once and may be twice, but not more than that.

The main thing for the buyer to possess is a most thorough knowledge of the goods he buys. Learn who makes the goods and where they are made, and get at the factory cost.

Then learn whose factories have the best reputation, and whose are the best fitted and established to make the goods you buy.

Remember you can afford to investigate. When you find a factory over-sold you will find that factory more independent. When you find a factory short of orders you will find them eager for your trade, and the chances are you can do much better with this factory than with the one that is behind on its orders.

Don't get excited, don't hurry. Speak gently. Know your ground. Cultivate a reputation for fairness rather than smoothness. Laxity and indifference in buying means that you are allowing wastes and leaks to creep in your business, and that you are placing a handicap on your traveling salesman, for goods well bought are half sold.

Expenses

If you get confidential with Mr. Bradstreet or Mr. Dun so that they will give you access to the inside history of the commercial concerns which have failed in business, you will quickly discover that in the majority of cases the cause of the failure was "too much expense."

It has become quite a common saying in speaking of failures that "the expenses ate up the profits."

Our friends Mr. Dun and Mr. Bradstreet tell us that there is about one concern in fifty which succeeds in business. If you will look at the successes you will find out that the proprietors were good buyers as well as good sellers but that the particular point that made them successful was their ability to make careful analysis in the matter of expenses.

The business man should have his expenses divided into as many classifications as possible. His payroll should be separated into various departments, office, salesmen, workmen, accounting, and so on; through all the items of expense the division should be made as finely as possible.

The proprietor should have a statement each week on his desk showing how every cent was expended. These items should be summarized monthly, and constant reference made to the items of expense in comparison with items of expense for the previous month, as well as items of expense for the same month of the previous year.

One of the pit-falls in nearly every business is "general expense" or "sundry expense." This department is a catchall for a lot of items, and it hides a lot of leaks and wastes in business.

You can't divide your expense items too minutely. The finer the divisions, the easier you can detect a waste of money.

The business man who has a statement of both receipts and expenses is in the position of the first engineer of an ocean steamer; he does not seem to be doing much and does not worry unless something goes wrong, then he shows his training and ability to mend breaks and repair weak places.

If the business man analyzes his sources of income into several divisions the same as he does his items of expense, he will find it an easy matter to correct errors that creep in the business. He does not have to worry about those items of expense which show minus, nor about those items of receipts which show plus.

With a finely divided sheet of both expenses and receipts you can quickly determine where the profit is coming from and where the leaks appear.

If an expense item shows plus, you can run down that item and see reasons for it and endeavor to bring down that expense. If a receipt item shows minus, you can run down that item and endeavor to increase the receipts.

The writer has a little printed card on his check book and it reads "Drive the axe into expenses." It is a constant reminder to stop the wastes.

The only real success that comes to the business man is the profits at the end of the year, that is, the amount of money he makes net.

It is easier to increase profits by cutting the expenses in many cases than it is to increase profits by increasing sales. And here let us remark that on this subject, as well as all the other subjects we are writing about in this series of articles, we have in mind the matter of common sense, temperate action. Extremes carry things too far. You must not cut the expenses beyond the point where it seriously interferes with the sales.

If you are interested in this matter of expense, and you certainly should be, take up your items of expense for last month or last year, go over the cost of help, the cost of raw material and the cost of manufacturing; go over each branch of your expenses, analyze the items carefully, look into every point thoroughly, and we will guarantee that at the end of your analysis you will see where you can save a respectable sum in the operation of your business. In going into this matter of expense, do not take all the items at once, but take each item up separately and go through it thoroughly.

Do not assume that you are paying too much for everything, but use good sense and good judgment and see that you get your money's worth. Take the item of wages. Look over the individuals in your employ, and you will see a place, for instance, where two persons can do the work three are now doing. Remember, it is generally true that where two persons are engaged in handling a certain department and they are overworked, the tendency is to give them additional help. When this is done you will find thenceforth all three are busy. In other words, each of the two persons who were formerly overworked ease up and do less work the moment the third person is given as assistant. You have noticed that where you put three employes to do the work formerly done by two, it is almost impossible--if you take the employe's word--to get two employes to do the work after three have been doing it.

The work should push the employe. The employer should get full capacity of his employes.

Look over your pay roll and make up your mind that here and there you are going to employes and ask them to help you save money, and at the same time you will let them earn more money for themselves. You will find that this plan works admirably.

For instance, if you have three employes getting $10.00 a week each; go to the two who do the most work and say to them: "If you can do the work of this department with one less employe I will give you each $3.00 a week more." In this way you will pay two employes $13.00 a week instead of three employes $10.00 a week each. This will save you $4.00 on that particular part of your payroll. If you save proportionately all through your payroll it will make a decided profit in itself.

Saving can also be made in the payroll by taking one of the heads of the department into your confidence and letting out the work to him by contract, offering to give him one-half, or one-third or one-quarter of the amount he can save in his department.

It is surprising to see how different his argument will be when his pocket is affected. For instance, in the past he explained to you that his department is behind in its work because he has not enough help.

He has been asking for more help right along, but never asked that some of the help be laid off.

If, on the other hand, you say to him you will give him one-third of what he can save in the matter of wages in his department, you will instantly notice that his whole argument and attitude change. He discovers that he has ability to pick out employes who do the most work, and lets out the four-flushers and idlers.

Remember, that as a rule the best paid employes are the cheapest. You can well afford to pay the heads of your departments more wages if they can save you more money.

A manufacturer should divide the number of completed articles done per day or per week by the amount of wages paid, and find out what the wage item is in each department per article.

Suppose that under your present system it costs you eighty cents in wages per article in Department A, sixty cents per article in Department B, etc. Explain to the foreman of Department A that it is now costing you eighty cents per article for wages in his department, and to the foreman of Department B that wages are costing you sixty cents per article in his department. Tell these employes you will give them one-third or one-half of whatever they can save in their departments. You will find Department A will cost you from seventy to seventy-five cents per article thereafter, and Department B from fifty to fifty-five cents per article, and in the meantime the foreman of the department is making more money for you, and likewise making more money for himself, than under the old system.

This matter of expense is most important, and should have the most serious attention of the proprietor.

Advice

One of the things most frequently asked for and yet one seldom made use of, is advice. Ninety-nine times out of a hundred the man who comes to you for advice as a matter of fact really wants to have his own opinion confirmed.

Do not go around with a pocket full of advice offering it to everyone. If you advise a man to change his habits or manner of life he will resent your proffered aid. The best way to give advice is to take another fellow for example and hit your friend through the illustration of the other fellow. Let him discover the point himself rather than let it appear that you are telling him the thing.

The matter of advice is a very hard thing to properly understand. You advise another to do a certain thing, forgetting in the meanwhile, that if you were in his position your view-point would be his and not your own. You play your strong qualities against his weak ones.

It is easy enough for you to advise a drunkard not to drink, but difficult for you to understand his view point on the subject if you are not a drinking man yourself.

Giving advice usually comes about because we see a weakness in others. The opposite of this weakness is a feature in our own make-up.

The business man who is constantly asking advice is advertising the fact of his uncertainty of his own actions. Your great problems must be decided by yourself.

The one thing that separates the sheep from the goats, and success from failure, is the ability to analyze, study and weigh problems for yourself, and to make decisions for yourself.

The law of compensation comes in here again, for in proportion as you have self-reliance and good judgment your success will be measured.

You may rely upon it that if you go about seeking advice, you will get two kinds of advice--First: the advice that concurs with your own preference or decision; and, second, the kind that is in opposition to your views. You accept the first kind because it tickles your vanity, and you throw aside the second, saying the advice is prejudiced.

Don't ask advice. Size up and weigh the problem yourself and use your own best judgment.

Reading

The business man who goes along day by day without taking on any responsibilities or without tackling more difficult problems, finds he does not progress.

The man who gets into a rut and reads light, frothy literature all the time--the kind that is pleasing to the imagination, the kind that leaves no permanent impression--does not progress mentally.

Reading should be like eating, we should have the dessert as well as the substantials. It would be a great mistake to eat dessert alone, and it is certainly a mistake to read light, frothy reading matter alone.

One of the prime requisites to a successful career is concentration of thought. Few things will dissipate thought as much as over-reading of newspapers.

The newspaper starts in with the first page, and by the time you have finished the last column oh the last page you may have read a hundred articles, each one of these articles touching on a different line of thought. The daily newspaper contains climaxes of all kinds. Each article is a distinct change of thought. The daily newspaper gives us statistics, sorrow, laughter, crime, passion, death, lies, humor, and so on all through the gamut of the scale of human experience.

The man who craves the newspaper soon finds his line of thought frequently interrupted, side-stepped, drawn, cut off and dispersed.

Abundant evidences are at hand where the book reader acquired the daily newspaper habit and reads the daily to such an extent that it is impossible for him to read books thereafter. He has broken his continuity of thought, and when this happens book reading is impossible.

Everyone should read two or three or more books at a time. One should be an interesting book, whether history, story or comedy, so long as it is well written and along lines that will hold one's interest. One should read one book after another of this sort as a dessert for his dinner, as it were, but along with it he should eat substantial food in the nature of substantial reading.

Do not read yourself to sleep at night over a light novel. Read your novel for an hour or so; then take up your old philosopher or scientist and read a page, or as much as necessary to find some thought clearly expressed so that it will be burned into your mind. That thought will remain and will be of service to you in years to come.

Read daily newspapers scantily. Read items concerning the business you are engaged in. Read the doings of Congress and the important events of the day. Go over the head-lines, if need be, and eliminate all those shocking stories of crime and sordid influence. Do not let yourself get into the habit of reading the details of horrible crimes and bad impulses and criminal acts. Skip over all the details of hangings and murders. They are weeds in the mind that choke up the beautiful flowers of thought.

Remember, everything you read depresses or elevates, and in proportion as you accustom yourself to read substantial matter so in proportion you will progress in this world, and have a flood of thoughts at your command when requirements come upon you calling for clean-cut expressions.

You will write better letters, you will converse better, you will enjoy social intercourse better if you read helpful reading matter from books and read newspapers very sparingly.

Argument

Not once in a thousand times will one man convince another in an argument, and the benefits you get if you do convince the other fellow will not compensate you for the waste of energy expended on the other nine hundred and ninety-nine times when your efforts failed.

You convince a man against his will and he is of the same opinion still.

There is a mighty lot of difference between argument and reason. You may accomplish more by dividing your case into one or two good reasons and telling your adversary that you will not argue the case, but you will let him look at these reasons, and when he takes it up logically you will have no fear of his conclusion, for truth must triumph.

While argument itself is a footless proposition, it is infinitely more so if your argument is with those of less mental calibre than your own, for by the law of compensation, in proportion as a man is ignorant, he makes up in perversity and lack of analytical ability.

Do not stoop to contend with those who have no standing, mentally, morally or physically. It is a waste of time.