Learning the Business
Milton Hershey launched his first business venture in Philadelphia in 1876, opening a confectionery shop and wholesale business. That year the city was hosting an international exposition celebrating the nation’s centennial anniversary. Hershey’s shop was located at 935 Spring Garden Street, a main pathway to Fairmount Park and the Centennial Exposition. Milton hoped to take advantage of the large crowds anticipated and his business card pictured the Exhibition Machinery Hall.
His first shop was too small and a few years later Hershey moved down the street to larger quarters at 925 & 927 Spring Garden Street for his retail business and also established a separate wholesale business at 532 Linden Street. Milton worked long hours. Sometimes he was so exhausted that he had to knock his head against the wall to keep from falling asleep on his feet. Many nights he did not go home, but slept at the store under the counter.
The Philadelphia market proved unyielding even to long hours and youthful ingenuity. He was turning out a good line of candy, but his investment was small. He had neither equipment nor staff sufficient for the mass production and quick turnover needed to make money out of penny goods. Though sales kept up with production, he was not able to produce enough to keep ahead of his bills. He fell behind in payments, and live in fear of impatient sugar dealers suddenly cutting off his raw materials.
Instead of concentrating on one product, Hershey produced a variety of goods in an effort to appeal to everybody. Besides candy, he sold fruit and nuts. He made ice cream. On the Fourth of July one year he paid a German Band to play in front of the store while he served ice cream at five cents a plate to the crowd.
With increased production, there had to be more help to keep his stock moving. In 1880 he hired Harry Lebkicher, who had been a clerk in a Lancaster lumberyard.
In 1881 his father, Henry Hershey, arrived. It is said he worked for four dollars a week, peddling Milton’s candy – not because he could have done better for himself, but because he wanted to help his son make a good start. Henry Hershey was a man both of imagination and of action. “If you want to make money,” he said to his son, “you have got to do things in a big way.”
To support his son’s business Henry Hershey designed a new a new candy display cabinet for his son to market and also developed a recipe for a medicated cough candy. In the December 1880 issue of the Confectioners’ Journal, Milton Hershey placed a large ad featuring the candy cabinets and cough drop candies.
Unfortunately there was not enough financing to support another venture and Milton Hershey slid further into debt each month. Hershey appealed to his mother’s brother, Abraham Snavely, for repeated loans but was soon rebuffed by his uncle who had little regard for Henry Hershey.
Within the year Milton Hershey’s first business venture would collapse in bankruptcy. While the end of this business was not happy, Milton Hershey learned many lessons about supply, credit, cash flow and the importance of limiting your product line that he would put to use more profitably in future business ventures.
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