Chapter Four. How to Begin Operating

There is nothing mysterious about the formalities of starting a business. If it is your intention to use your own name without the "company" attached (i.e. John Small) then you are in business the day you print the first letterhead or place the first advertise­ment. Registration papers are required by most states if the business is to be conducted under an assumed or trade name, such as the ABC Mail Order Co. or Jim Small Prod­ucts Co. Usually these registration papers are obtained for a very small fee at the local County Office or City Hall. Obtain three extra copies, as it will be necessary to deposit one with the bank, another with the post office where your money orders will be cashed, and of course you will want a copy for your own records.

It is best to use the services of an attorney if the busi­ness is to be conducted as a corporation or partnership. He will take care of all the details and you may start the min­ute formalities are over.

Working from Your Home

Unless local zoning laws forbid, you may start right from home. If local ordinances do prohibit the operation of a business in your residential area, then rent a post office box for a small monthly fee. A better set-up would be for a business friend to permit you to use his address as your own.

Renting Mail Order Service

Many of the large cities have commercial mail address services which may be rented for a nominal monthly charge. Mail may be picked up from these offices, or for a very small additional sum, forwarded daily to you in a large envelope. Of course, these are temporary devices un­til the business prospers and is able to stand by itself; it will then be more convenient and efficient to have your own office.

Postal Permits

A mail order business, soliciting orders exclusively through publications, radio or television, might do with­out postal permits, but as there are few companies that do not use business reply envelopes or cards, or do not mail in bulk under special reduced rates, it is best that these permits be obtained at once. The added cost of first class mail would drive borderline companies right out of busi­ness. This fact will become apparent when later chapters are studied.
Here are the permits to obtain:

1. Bulk Mailing Permit

This permit, under law, requires a fee of $10.00 (sub­ject to Congressional change). It enables the mailer to take advantage of the lower postal rate for bulk mailing—a cent a letter, or 1,000 letters for $10.00. (At present writing, there is pending in Congress a bill to raise these rates to $15.00 or even $20.00.) The same 1,000 letters would take $30.00 worth of postage if mailed first class. At present rates, this means a saving of $20.00 per thousand. If the saving seems trifling at first glance, it must be remembered that even the small mail order companies, specializing in direct mail, rarely mail less than 100,000 letters per month. The difference between the first class and bulk rates (3rd class: 44-66) is now $2,000.00 per month or $24,000.00 per year. Annual mailings of one to five, and even ten million are not uncommon, and here the savings are indeed sub­stantial.

2. Permit to Use Precancelled Stamps

Once the bulk mailing permit is obtained, it is neces­sary to decide whether you will use precancelled stamps, metered mail, or envelopes with pre-affixed stamps. The likelihood is that in the beginning it will be less tax on the pocketbook to use precancelled stamps. Letters sent under this classification are unsealed.

At least 200 letters must be mailed at one time, and the envelopes arranged and tied by zone. Detailed infor­mation is obtainable at your local post office. Approved envelopes which appear to be sealed, selling under trade names such a "Cent-a-Post," and "Penny-Savers," are pre­ferred by many mail users. The flaps are sealed after the material is inserted, but one side has been left open for postal inspection at the time of manufacture. Any good printer has a complete line of these special mailers.

3. The Business Reply Envelope and Card

Who has not, at some time, received a solicitation for business, charitable contributions, magazine or newspaper subscriptions, that did not conclude with the very famil­iar, "Just mail your order [or remittance] in enclosed, post­age-free [or no postage required] envelope"? Probably the most famous piece of mail is this clever gadget for making it easy for the customer to spend his money for merchan­dise, sight unseen.
The business reply envelope is used where a remit­tance is asked for with the order and for offers of a per­sonal nature where privacy is desirable. The mailman collects the fee for business reply cards and envelopes upon delivery.

To facilitate the business of getting your permit, it is suggested that a proof be first obtained from your printer with the permit number left blank. Upon submission of the proof to the postmaster, he will assign the number and usually grant the permit on the spot. The printer can then insert the number in the proper place and proceed.

Of course it is desirable to have a printed letterhead but the use of rubber stamps is permissible, where funds are limited. Again this must be regarded as a temporary expedient; a rubber stamp just does not rate with a neatly printed letterhead for winning and maintaining customer confidence.

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