Paper route: Introduction to Business

Honorable mention

by John Cody

Ease of Entry

In our town there were about 10 paper routes and usually one or two would turnover annually. Typically, paperboys, only boys, would start at around 11 years old and quit when they entered high school. To get the job, one hung around the drop off area. The drop off area was a central point in town where the circulation manager would drop off bundles of newspaper each afternoon. While hanging around, the aspiring paperboy would help out rubber banding and arranging the papers in the carrier bags. Eventually he would help some of the carriers on their routes, get to know the manager, and finally take over the route.

If the paper was thin, typically on Monday and Tuesday when there were few ads, paperboys would box the paper and organize the papers in the carry bag.  Boxing involved folding the paper without using a rubber band. This was cheaper because paperboys had to buy the rubber bands. The negative of boxing was that on long tosses, the boxed papers tended to sail and often times ended up in the bushes or even the roofs of the customers. When  the paper was thick with ads, then a rubber band was used to fold the paper. This was more costly but the tosses were more accurate.

Capital Expenditures and Operating Expenses

Capital expenses were minimal. One needed a bicycle with butterfly handlebars. These handlebars enabled the paperboy to drape the carrier bag loaded with papers on the handlebars. A bicycle with drop handlebars would not work. Also one needed a good carrier bag with the capacity to carry 70 to 95 papers. The bags had two pouches, one in front and one in back. An alternative to loading the bag on the handlebars was to drape the bag over the shoulders, with half the papers in the front and half in the back. Since most routes were five or six miles, five days a week, the paperboy would also incur operational costs such as bicycle brake pads and bicycle tires. annually.

Operations

My route had about 90 customers. One had to memorize which houses on a route were customers, typically about 40 percent. After a while you knew all their names. One would ride down the middle of the street, little traffic in those days, and fling the paper with either hand. It helped to be ambidextrous. Some picky customers insisted that the paper be “porched,” so those throws had to be accurate. We always kept one spare paper, just in case. If we did not use it we would bring it home for our folks. If the customer complained, say the paper was thrown in the bushes or sprinkler, the circulation manager would phone us at home and we would hop on our bike, ride to that customer’s house and hand deliver the spare paper. Too many complaints were the main cause for dismissal.

The paper had to be delivered daily, except on Sunday, and there were no excuses. If for some reason you were unable to make the delivery it was your responsibility to find a substitute.

Receivables

At the end of each month the paperboy would go to each customer’s house to collect. My paper, the Evening Outlook, cost $1.50 a month. Since I had 90 papers, I owed the Outlook $90 a month and I kept $45. I would collect in the evening. The customers would usually give me $2 and always expected me to give back the change. Only during Christmas would I receive tips and then often as much as $50 to 60.

We would carry the cash, no checks, in a pouch and pay the circulation manager at the first of each month. No exceptions ever, which meant we had to be diligent in collecting from our customers.

Marketing

The circulation department was constantly encouraging us to get more people to subscribe. Every year the newspaper would hold a circulation drive and reward the paperboys who increased the number of customers on their routes. The most effective motivation was not money but, instead, an outing or a trip. It was usually an all expenses Sunday at Disneyland with the other winners. This was an example to us as to how recognition and trips are stronger incentives than plain cash. Trips and recognition have proven to be successful for most salespeople and entrepreneurs. Paperboys learned that one must continue to grow market share or risk losing your position.

Conclusion

A paper route was a great introduction to business. The barriers to entry were low capital investment. Costs were minimal, as were operational costs. Efficient distribution of the product was the responsibility of the paperboy and required memory and logistical skills. Increasing circulation was stressed, so constant marketing was important.  Collecting receivables on a regular basis was necessary for survival of the route.

I’m not sure if all successful businessmen of my generation had paper routes as boys, but I bet many did. I learned more business skills as a paperboy than I did in two years at MBA School. B

 

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