How I Went Bust

JACK MOSHER June 15 1946

How I Went Bust

JACK MOSHER June 15 1946

How I Went Bust

This veteran got his own business — and lost his shirt. Now he hopes you'll benefit from his mistakes


THE EDITOR has asked me to state the facts, and here they are:

A year and a half ago, after a spell in uniform, I decided to go into business for myself.

The idea was to make furniture to order in the basement of my home.

My first order brought $250—netted $150 pay for my work.

At the end of nine months I moved into larger quarters, began to expand rapidly.

That was less than a year ago.

Today I am broke. My shop is closed up tight and I owe $6,500.


“Sixty-five hundred dollars?” people ask. “But how could you ever manage to lose that much in so short a time?”

“It’s simple,” I tell them, “if you don’t know how to handle money. And if you didn’t have it in the first place.”

Actually, when I started out, all I had was $5C0 and an idea.

The idea was to do something about furniture. Making things had always been a hobby with me. My grandfather had been a blacksmith, my dad a carpenter, and while still in short pants I built ship models.

As I grew older the idea grew with me. During slack periods when I was writing in New York, I used to haul a lot of lumber into the studio on West 55th that I shared with a sculptor and set to work making furniture, an ideal form of occupational therapy. And while still engaged to be married Norma and I built what we now call our bridal suite. That’s just background. I figured I had what it takes to become a sort of latter-day Duncan Phyfe.

The $500—.my gratuities and war savings—went into rigging up a shop in the basement of our home and maintaining a household during the two months required to do this. A former fellow officer in the Navy, who wanted a bedroom suite, provided us with a first order.

Coming home that night back in November, ’44, with his deposit cheque for $100, Norma and I couldn’t help feeling that we were practically made. All we had to do was build the stuff.

Filling that first order took nearly two months of careful planning, ordering and building, a period during which calluses replaced blisters, experience began to have quite some affect on ideas. Out of it we received $150 for nearly 300 hours of hard labor —50 cents an hour.

Danger Ahead!

THEN.—although we didn’t spot it at the time— the first danger signal flashed, when a friend of mine, who heartily approved this attempt to revive hamd craftsmanship, came out to the shop one day with a chap who was handling publicity for a worker’s model home.

“Here’s your big chance to get your furniture before the public, Jack,” he said. “We can give you publicity that’ll bring you hundreds of orders. You’ll be established overnight.”

I said, “Okay.”

In the publicity campaign which followed, the story of our particular postwar effort was spread all over the newspapers. CBC parked their most impressive sound truck spang in the middle of the back yard, did a broadcast right from the shop, with our original piece of equipment—a buzz saw contrived from some scrap metal and an old desk— providing the proper industrial background noises.

After that people began to stop me on the street. “We heard you on the air the other night,” they said. “You must have quite a shop down there in your basement.”

And so we had. But just the same I had to go out and borrow $1,000—thereby acquainting myself with the term, chattel mortgage—and hire someone to help me finish that first really big order—the furniture for the model home.

The someone turned out to be Johnny, a solid, hard-working Scot, descended from a long line of cabinetmakers, who had just completed serving five years as a special air frame mechanic in the Air Force. I remember telling him, “I’m the worst businessman in the world, Johnny. But I think we’ve got an idea here that’s worth something.” Then we set to work.

The order called for a bedroom suite and some living room pieces. But this bedroom suite had to be different, to illustrate the principles of modern functional furniture.

So the bed pulled out, to save space. The head of it was a combination bookcase, radio, night table and storage vault. Milady’s vanity didn’t have anything as ordinary as top drawers. It had makeup pits. The gentleman’s chest had a drop front desk and a top that lifted to reveal compartments for handkerchiefs and socks. There was even a place for the odds and ends you dump out of your pocket when you come home at night.

The same space-saving and built-in entertainment features characterized the living room pieces.

What at first seemed nothing more than a studio couch with wooden arms, revealed bookcases, sewing compartments, a magazine rack back of the cushions. The combination radio and record player had storage space for records, books, as well as the dozen and one other things that clutter up the average living room.

Sounds grand, doesn’t it? But the trouble was we were producing from scratch, designing as we went along.

Motor car manufacturers will tell you that the first model of a new car costs upward of $100,000— often closer to a quarter million. And even when you are working in wood, with practically no overhead, a model can still cost plenty.

So it was a good thing, in a way, that just then my brother decided to take his wife and family back to Australia, where she came from—for this necessitated selling the family home. The $1,273.18 I received as my share after the mortgage had been lifted just about paid off the loss I’d taken in our experiment in furnishing a workingman’s model home in modem style.

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How I Went Bust

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Further danger signals began to (lash—in rapid succession—very soon after that.

The model home effort had created a lot of talk, mostly favorable. A local merchant, who had been asking my wife every time she went into his shop when I could start on a bedroom suite for him, finally got to me.

He wanted all the tricks. “My bedroom,” he said, “is something more than a place to sleep. I want to be able to show it off.”

So Johnny set to work, with me barely able to keep up with the drawings, for by this time most of my days—and nights—were occupied by administrative detail.

The air was full of ideas and suggestions. Everybody agreed we had something. The bank started to take more than a cursory interest in our account. We began to receive letters from real-estate firms dealing in ideal industrial sites.

Then the “what you need” boys began to work on us.

“What you need,” one said, “is about $20,000. With that much, you could set up a little plant right here in town. Really get rolling.”

After a good bit more of this, I began to talk to myself. “You’re pioneer stock, boy. Your grandfather cleared most of this townsite with his own two hands. It’s time you put the family name back on the local masthead.”

I borrowed a car and explored the vicinity of Greater Toronto, looking for a spot to put my shop. But that was June of ’45. War contracts had not yet been terminated. Every vacant building was occupied. My position was further aggravated by the fact that I had to vacate my original basement premises—it had been a condition of selling the old

home. Finally, I found a place in Mimico.

It was not precisely to my liking, but since I had to choose between dropping the idea or moving in there, I chose the latter. And I got another $1,000 from the bank. The fact that my new overhead was $125 a month —$85 rent and $40 for light, power and phone—compared with a top of $25 in the original basement workshop didn’t seem to matter a hoot. It was something, I felt, that we’d make up for as we went along.

The main thing, now that the die was cast, was to get going.

We Set Up Anew

Setting up was fine. I liked that, even though it did take two whole months and most of the $1,000 advanced by the bank. When we finished, we had quite a place.

In the basement the old reliable handmade buzz saw had been replaced by a more powerful model with all the latest gadgets. It was close to the material racks. We also had a sander which we had built ourselves at a cost of over $300. The material went from this lower level up through a hatch to the main deck, where visitors could see the furniture being put together right before their eyes. In one corner was a small paint room, in another an office and drafting room. Between these, finished pieces were on display while awaiting delivery. The balance of the space was taken up by a band saw, a dowelling machine and benches of various sizes against a background of tool and material racks.

Then, since three men—I’d hired two more in the setting-up period— seemed pretty lost in nearly 2,500 feet of floor space, I hired two more. After all, I told myself, we’d need them once the orders started rolling in. The net result was definitely convincing.

“I get the impression,” declared a friend of my wife, who had been a senior accountant officer in the Navy and was not easy to fool, “that this is a going concern. Somehow, you’ve managed to combine a workshop and showroom in a way that reminds one of a stage setting.”

And it wasn’t long before a weird drama in industry began to be acted out there.

The curtain raiser, so to speak, was provided the day a woman walked in and said she wanted a bedroom suite. Like so many others who had heard of the different stuff we turned out, she wanted all the tricks—and then some. So she and I sat down and dreamed up a suite that solved every known—and a couple of unknown— bedroom problems.

There were twin beds, with drawers under them and built-in features in the heads. A night table provided space for radio and books, as well as out-of-season storage—that is, space to put summer clothes in winter and vice versa. The vanity had make-up pits instead of top drawers, a tilting mirror that served as a lid—and also as a radiator cover. The matching stool had storage space under the seat cushion.

The designing on that job kept me busy for nearly a week. Then there were measurement« to take, trips back and forth between the house and shop, discussions, developing and discarding ideas to take care of her particular needs — and frequent changes of mind. Even going that far, that job so far had cost the firm $100.

Then special material ■— woods, mirrors, hardware — had to be ordered. Naturally, it was not all available for several,weeks and construction had to be held up, from time to time, awaiting the arrival of more. Actual manhours on the job, until it left the shop, cost a little over $250, the material itself $200.

• That’s $550 so far. When we add overhead—for by this time that original $1,000 borrowed back in March, the second $1,000 and the rent, light and power of our premises, as well as incidental cartage charges and special trips made to town in search of material all enter the picture—costs zoom up to $850.

And that isn’t all. The room in which the suite was to be placed revealed the quirks that go with age. The floor wasn’t level; the walls weren’t plumb. So making the job fit involved any number of painstaking operations, added another $100 in time and material and overhead.

In short, that job cost us in the neighborhood of $1,000 and brought exactly $600.

More Outgo Than Income

As time went by there were quite a few more like it. So it was not surprising that we should soon begin to suffer from acute shortage of funds. Even rather generous deposits on the part of customers failed to fill the gap between starting and finishing a job, and certainly no amount of working capital would long have continued to fill the equally serious gap between the total received and the extraordinary costs.

Each time the problems were the same—a job so different that it taxed even my hard-working, ingenious fellow craftsmen, and pay that fell far short of meeting the costs of the order. The customers, although I fancy few of them realized it, were getting delivery on strictly made-toorder articles at prices no higher than they would have paid for massproduced items in the stores downtown. It looks plain enough now that we should have called in a cost accountant and hoisted our prices high enough to make a profit. But we didn’t.

With a substantial reserve we could have afforded to carry on like this for a while, gradually getting our costs down and prices up to where they should be for such exclusive products.

But we didn’t have such a reserve. And so, a little more than three months after moving into Mimico, I went back to the bank. I was able to show the manager that we were getting the business. In six weeks, despite the obstacles outlined, we had turned out $1,800 worth of stuff. Feeling certain we could make it if we only had the time and the money, I asked for another $2,000, submitting a plan for its use.

The only thing to do, I felt at the time, was to turn out six identical bedroom suites, of good quality and incorporating the best ideas developed during nearly a year of constant designing and redesigning. In other words, we were ready to go into semimass production, as most custom shops have done.

But the manager said “No!” Politely, but firmly, he told me it was time I put some money into this thing myself. I had a good deal of respect for him—and still have—but I couldn’t very well overlook the fact that I had already put my gratuity, savings and home into this thing.

Had I been the type that never pays out $2 unless he can see $4 coming in, I’d have gone back to Mimico th?\t afternoon, closed up shop and taken my loss. But I went back there and carried on building. So I lost not only my shirt and pants—I threw my underwear in after them.

Comes the Bailiff

Naturally, a good deal happened from then on, and some of it is well worth remembering.

When I announced that I could no longer meet the payroll, some of the men took what they could and got out. One hauled me into court. Another brought me before a National Selective Service Board—and came off second best.

But the rest of them stuck to the bitter end—and it was mighty bitter. In a desperate last-minute move to rustle more business, we began to advertise. We were in display, classified, and on the air, extolling the qualities of our cocktail bars and cellarettes. We called it our Xmas Rush, and to make these articles we cleaned out the scrap pile down to the last splinter.

But most of the people came only to look and say, “Wait till we get our Christmas shopping done. Then we’ll be back.”

There wasn’t much Christmas

shopping done around the Mosher household, I can tell you. I managed to get enough money to take care of the men, but that was about all. And when, after New Year’s, those people did come back—along with a lot of others—it was too late.

To be sure, we still had a shop. And the place still gave the impression of being a going concern. We still went on turning out stuff people liked. During that final month, in fact—and the memory gives me much pride—we delivered the very best pieces w'e had ever made. But we were near the end of the route.

One afternoon toward the end of January I walked into the shop to find the bailiff and his huskies stationed in one comer, my own loyal hands in another corner.

“Sorry!” declared the bailiff, who’s really an awfully nice guy when you get to know him. “There’s a matter of three months rent and—”

“I know,” I said.

He looked around, at the workmanlike row of benches, the tools and the material racks, and the solid examples of craftsmanship that were produced right up till the last. “You have a nice place here,” he said. “It’s too ruddy bad.”


I’m glad, in a way, that I wasn’t around the day the men tore it all down. Going back there now is like visiting the spot where someone you

love is buried, if you’re a guy like me.

But because—like the bailiff—I’d feel it was too ruddy bad if such a thing happened to any brother veteran, I’m going back once more and try to answer the question you must be asking, if the story hasn’t already answered it quite well enough.

Why did the business fail?

The number one reason, I think, was myself. And should you care to put me in the witness box you’d elicit the following significant biographical facts:

(1) Good upbringing. Well-educated along academic lines with a flair for the arts and crafts.

(2) Taught school eight years.

(3) Cramped in a classroom, finally ran off to the West Indies in search of adventure.

(4) For 12 years wrote magazine articles and fiction for a living, dealing chiefly with entertainment world.

(5) Served as special liaison officer in Navy.

There is nothing here, I swear, to suggest a knowledge of dollars and cents, production costs, fixed overhead, markup and shop time—a knowledge without which no business of any size can hope to succeed. That’s why I failed, even though I have that knowledge now—learned the hard way.

I know, for instance, that proceeds for the year ending March 31 last

were exactly $4,775, and that we spent over $9,000 during that same period, including about $2,500 that I threw in myself and $2,250 borrowed from the banks (I’d got one small loan besides the big ones). Wages paid, including the $1,200 I paid myself—less than $25 a week— amounted to $4,753, or nearly as much as was received from sales. Material cost another $2,500, rent ran away with $540, hydro and telephone with $250, cartage took $300, advertising $225, new equipment, including small tools and replacements, $550. And we managed —please note—to reduce our bank loans $550 during this same hectic period.

During the past month I have made arrangements to refund, out of my personal income as a writer, about $1,700 in customer’s deposits, which went down with the ship. In time I must also pay $3,000 in commercial accounts contracted by the firm and return the $1,700 that is still owed to the banks.

All of which adds up to the $6,500 mentioned in the beginning of this article. And I can’t think of any better way to pay that off—and perhaps make a little something out of the business for a change—than returning to my original plan. At the moment, my wife and I are scouring the countryside around Toronto, looking for a small holding where we can combine magazine writing and, in a small way, furniture making.