Dearest readers, 2021 will still be a rough year for many of us. Sure, I have friends who are war refugees (there are other kinds of refugees so that is why I am being specific) who say our situation in Canada is not so bad because restaurants are going out of business due to lockdowns, not artillery and air raids; at least the buildings stay in one piece so someone with money will take over and offer products and service again fast enough for the economy to recover rapidly. Hmm, well yes I am very glad that the restaurants that closed down forever suffered that fate due to covid and were not bombed into oblivion with owners and employees still inside. However, accustomed as we are to the good life here and high standard of living (we work hard for it, keep corruption down, treat each other in a civilized way so we kinda deserve it), this is simply not good enough. We need to know how people can make money in this great country of ours in 2021. Some will need jobs; others are entrepreneurs who will want to start businesses even under these less favorable conditions. Now, most of those business minded people will no longer believe that scoring a huge loan to get their business going is the smart way to go, and banks may not be as eager to lend major funds to the most wide eyed, ambitious, can do attitude type of people for a service or product oriented business. So, what is a person to do? I believe the solution that will come next year and slowly take over a chunk of our economy will be an old solution but with a modern twist. Dearest readers, I am talking about the cottage industry. In this article, I am going to go over what cottage industry traditionally was in the strictest definition, an example of how a version of it worked well in recent history in certain countries, and how it may help people make money in Canada as well as change the social and economic landscape, more likely than not for the better.
By strict definition, a cottage industry is “a small-scale, decentralized manufacturing business often operated out of a home rather than a purpose-built facility.” More often than not, it was the model used by craftsmen such as cabinet makers, wood workers, and most other types of craftsmen creating finished products that were artistic and complex. Most of the cottage industry went away over time due to industrialization, but certainly not all of it. I am not sure if you have noticed, but over the last 5-10 years more and more people created successful home based businesses due to specialized machines becoming cheaper, more reliable and more sophisticated. Shirt presses (for custom tees and more), laser hair removal machines, 3D printers, CNC machines… all of these and more have empowered people to develop profitable businesses right from their own homes and avoid the dizzying commercial rent costs. Their personal touch, lower volume of work and great customer service delight customers, and their lack of pressure to pay steep rents and incur related commercial space costs allow them to keep quality up, keep prices acceptable to enough people, and give us finished products often with a more noticeable and appreciated human touch. Also, these types of cottage industry inspired businesses often source supplies locally and certainly spend a lot of money locally in general, and I am sure all of us can agree that is a good thing for our economy. The major difference between the cottage industry in the strictest sense and these modern home-based businesses, however, is that they have access to digital advertising plus standard word of mouth, they have a wider type of products they can offer including all-digital products, and they can offer services as well.
Can this really make a difference? Actually yes, apparently it can. I have it on good authority that cottage industry helped people out a lot in European countries, particularly in Eastern Europe, and it stuck around even as they entered their capitalist era. So, in many of these countries, it was known as domestic production or (at) home workmanship. After World War 2, the governments of these countries discouraged private enterprise but still had many farmers, craftsmen, tradesmen and other such people whose skills and experience lend themselves more to entrepreneurship and creating finished products at home that can be bartered and sold, the government left a loophole. I am told that this loophole was basically what they called a “public secret”. Basically, if you were a farmer and had extra apples every year, you could sell them to local people or take them to a town or city marketplace and sell them there. You did not plan to have an orchard, you just happen to have extra apples left over every year that you do not need. You sell them, you make money, and you pay no income tax on it. The government did not collect tax on it, but in return it needed a lesser safety net because hey, the people will find their own way to make extra money for their financial safety needs. Now, after revolutions and adoption of capitalism, some of these countries adopted laws that dictate your domestic business only has to pay income tax if it gets beyond a certain earnings level. Bottom line, besides allowing people to make more money and increase their financial security, it also empowered them to get into business with zero loans or very small loans, which also meant no bankruptcy necessary if they failed. It allowed people to test selling products on the cheap and learning carefully what works and what fails. They were also developing their sales skills.
Now, in 2021 Canada, you may wonder how this iteration of cottage industry might explode and continue to grow for the foreseeable future. Also, you may wonder how this differs from a second job or a side gig. Well, let us go over the latter first. A second job or a side gig is when you work for someone else by performing a limited function within a bigger system. In the cottage industry, you own your entire work and the final product as well- it is all yours and you push it in the market as you see fit. Oh, and is cottage industry another name for a home-based business? Well, that depends on the amount of investment necessary. The reason why the version used in socialist countries worked so well was precisely because people could not get into huge upstart debt just to start making sales. While our Western consensus is that this is bad because it limits you and so on, in many cases it is actually a blessing in disguise because some ideas should really never be financed and if you have one of those ideas, you will not have your life destroyed by debt if you cannot get a huge loan to begin with. Oh, and by the way in business you go through a good deal of bad ideas until you get a winning one. So, with that paradigm shift, people will start to explore rather aggressively what they can do from home with a few thousand dollars and free time some evenings and most weekends. Once masses of motivated people put their minds to it, amazing things will happen. This, however, will accelerate the most when home-based food businesses come back onto the scene stronger than ever before and increase in number. Do you really think that the provincial and municipal laws discouraging people to make and sell food from home are for our benefit? Please! I still remember reading about a few fast food restaurants in a certain part of Toronto downtown being permanently shut down because of rats running around and worse. Do you seriously think that any marginally good soul out there who knows how to cook well and at least marginally cares for their fellow man, woman and child would make food out of a home-based kitchen infested with rats?!!! Hell no. A home based modern cottage industry food business will always care way more than that about people and their wellbeing. Naturally, we have to reach herd immunity or something like that before the home-based food businesses can rise up and spread (once again), but once they do you will see budding home chefs selling their goods from home, growing carefully from there instead of taking out hundreds of thousands of dollars worth of loans when maybe, just maybe, it would be a bad idea to do so if you really think things through. Getting into this much debt just to make food and make people happy may have been fine pre-covid, but not any more. People will realize they need to cut through the red tape with their own scissors and get out onto the market from their own home. People offering products and services to each other will become more frequent and more commonplace. In Canada, there is still some shyness about it compared to other countries. Well, not for long. We will get used to it, and we will be better off for it. It will bring local communities close together again as well. You will know who in your neighborhood makes great cookies and birthday cakes, who makes amazing jams and preserves, who does custom laser cut greeting cards, who upgrades PC’s cheaper than Geek Squad, who sells amazing butter chicken or an entire pot of stew that you can spread over a few weeks when you do your meal prep. If you ever wanted to know how to empower the communities and push back against corporations while finding meaning, owning your finished product and making money from it, well this is one damn good way to go. Suddenly, you will realize that you end up going to franchise store and restaurant chains less, and that your shopping habits might change as well- likely for the better because some things we use and consume should not always be mass produced, or at all.
There you have it, dearest readers- something to think about when it comes to our economy in 2021 and old opportunities made new again. Let me know what you think if you want, and have a safe rest of 2020.
This is my last post for 2020, so dearest readers: Happy New Year! :):):)
By strict definition, a cottage industry is “a small-scale, decentralized manufacturing business often operated out of a home rather than a purpose-built facility.” More often than not, it was the model used by craftsmen such as cabinet makers, wood workers, and most other types of craftsmen creating finished products that were artistic and complex. Most of the cottage industry went away over time due to industrialization, but certainly not all of it. I am not sure if you have noticed, but over the last 5-10 years more and more people created successful home based businesses due to specialized machines becoming cheaper, more reliable and more sophisticated. Shirt presses (for custom tees and more), laser hair removal machines, 3D printers, CNC machines… all of these and more have empowered people to develop profitable businesses right from their own homes and avoid the dizzying commercial rent costs. Their personal touch, lower volume of work and great customer service delight customers, and their lack of pressure to pay steep rents and incur related commercial space costs allow them to keep quality up, keep prices acceptable to enough people, and give us finished products often with a more noticeable and appreciated human touch. Also, these types of cottage industry inspired businesses often source supplies locally and certainly spend a lot of money locally in general, and I am sure all of us can agree that is a good thing for our economy. The major difference between the cottage industry in the strictest sense and these modern home-based businesses, however, is that they have access to digital advertising plus standard word of mouth, they have a wider type of products they can offer including all-digital products, and they can offer services as well.
Can this really make a difference? Actually yes, apparently it can. I have it on good authority that cottage industry helped people out a lot in European countries, particularly in Eastern Europe, and it stuck around even as they entered their capitalist era. So, in many of these countries, it was known as domestic production or (at) home workmanship. After World War 2, the governments of these countries discouraged private enterprise but still had many farmers, craftsmen, tradesmen and other such people whose skills and experience lend themselves more to entrepreneurship and creating finished products at home that can be bartered and sold, the government left a loophole. I am told that this loophole was basically what they called a “public secret”. Basically, if you were a farmer and had extra apples every year, you could sell them to local people or take them to a town or city marketplace and sell them there. You did not plan to have an orchard, you just happen to have extra apples left over every year that you do not need. You sell them, you make money, and you pay no income tax on it. The government did not collect tax on it, but in return it needed a lesser safety net because hey, the people will find their own way to make extra money for their financial safety needs. Now, after revolutions and adoption of capitalism, some of these countries adopted laws that dictate your domestic business only has to pay income tax if it gets beyond a certain earnings level. Bottom line, besides allowing people to make more money and increase their financial security, it also empowered them to get into business with zero loans or very small loans, which also meant no bankruptcy necessary if they failed. It allowed people to test selling products on the cheap and learning carefully what works and what fails. They were also developing their sales skills.
Now, in 2021 Canada, you may wonder how this iteration of cottage industry might explode and continue to grow for the foreseeable future. Also, you may wonder how this differs from a second job or a side gig. Well, let us go over the latter first. A second job or a side gig is when you work for someone else by performing a limited function within a bigger system. In the cottage industry, you own your entire work and the final product as well- it is all yours and you push it in the market as you see fit. Oh, and is cottage industry another name for a home-based business? Well, that depends on the amount of investment necessary. The reason why the version used in socialist countries worked so well was precisely because people could not get into huge upstart debt just to start making sales. While our Western consensus is that this is bad because it limits you and so on, in many cases it is actually a blessing in disguise because some ideas should really never be financed and if you have one of those ideas, you will not have your life destroyed by debt if you cannot get a huge loan to begin with. Oh, and by the way in business you go through a good deal of bad ideas until you get a winning one. So, with that paradigm shift, people will start to explore rather aggressively what they can do from home with a few thousand dollars and free time some evenings and most weekends. Once masses of motivated people put their minds to it, amazing things will happen. This, however, will accelerate the most when home-based food businesses come back onto the scene stronger than ever before and increase in number. Do you really think that the provincial and municipal laws discouraging people to make and sell food from home are for our benefit? Please! I still remember reading about a few fast food restaurants in a certain part of Toronto downtown being permanently shut down because of rats running around and worse. Do you seriously think that any marginally good soul out there who knows how to cook well and at least marginally cares for their fellow man, woman and child would make food out of a home-based kitchen infested with rats?!!! Hell no. A home based modern cottage industry food business will always care way more than that about people and their wellbeing. Naturally, we have to reach herd immunity or something like that before the home-based food businesses can rise up and spread (once again), but once they do you will see budding home chefs selling their goods from home, growing carefully from there instead of taking out hundreds of thousands of dollars worth of loans when maybe, just maybe, it would be a bad idea to do so if you really think things through. Getting into this much debt just to make food and make people happy may have been fine pre-covid, but not any more. People will realize they need to cut through the red tape with their own scissors and get out onto the market from their own home. People offering products and services to each other will become more frequent and more commonplace. In Canada, there is still some shyness about it compared to other countries. Well, not for long. We will get used to it, and we will be better off for it. It will bring local communities close together again as well. You will know who in your neighborhood makes great cookies and birthday cakes, who makes amazing jams and preserves, who does custom laser cut greeting cards, who upgrades PC’s cheaper than Geek Squad, who sells amazing butter chicken or an entire pot of stew that you can spread over a few weeks when you do your meal prep. If you ever wanted to know how to empower the communities and push back against corporations while finding meaning, owning your finished product and making money from it, well this is one damn good way to go. Suddenly, you will realize that you end up going to franchise store and restaurant chains less, and that your shopping habits might change as well- likely for the better because some things we use and consume should not always be mass produced, or at all.
There you have it, dearest readers- something to think about when it comes to our economy in 2021 and old opportunities made new again. Let me know what you think if you want, and have a safe rest of 2020.
This is my last post for 2020, so dearest readers: Happy New Year! :):):)