First step: Figure out what makes your notebooks better than anyone else's -- or at least better than most of the folks who will be competing against you. (If notebooks are otherwise hard to obtain in your area, that would count... but I suspect that isn't true for most people who have Internet access. "Handcrafted" adds a bit to the value, if they're also made well. "Made by a kid" may help convince adults to buy when they otherwise wouldn't.) Second step: Figure out how much it will cost you to produce them. Figure out how long each one takes to produce, multiply by a reasonable hourly wage, and add that to the materials cost. Figure out the "missed opportunity cost" -- how much interest would the same money earn you if invested elsewhere -- and add that. Add the cost of the materials -- and time -- you'll need to spend advertising and delivering the product. This total is the absolute minimum you can sell the books for and earn that wage. If it's more than you think people would pay for the notebooks, you have two choices: either accept a lower wage and hope you can increase the price later once your product has established a reputation and people start actively looking for it, or accept that you have a losing business plan. In the latter case, you can go back and repeat from the beginning, making the books either better or less expensive or both, and recalculating whether that makes the business viable. Note that there may no way to make an adequate profit with this product. You may need to either change products, or accept that this is a hobby rather than a business and plan on just breaking even or "losing money slowly". Or look at working for an existing business rather than starting your own. Third step: Once you've established that you have a product worth selling, and one that you can sell at a decent profit, think about how many you expect to sell. If you can only sell about 15 of these before the market is saturated, and your net profit per notebook is $1... well, is it worth the effort of trying to set up a small business, advertise it, and so on when all you'll get for your effort is $15? These same principles apply to larger businesses too. For example, the rule of thumb for locksmiths is that it takes 10,000 people to support one locksmithing business. If you're in a town of 20,000 and there are already two locksmiths operating, starting a third will just mean you all go broke.
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An interesting rule of thumb. Do these numbers apply to small business in general, or is there some kind of formula to calculate a genre specific guideline?
No. Those numbers relate only to locksmights. The numbers will be different for each kind of businesses. Take gas stations for example, or maids or preachers.
So 10 000 people support 1 locksmith and 1 locksmight, or is it 10 000 for each? ;D
Watch it, or we'll smight you mightily... <grin/>
To produce a formula, you'd need some sort of estimate of how much the average individual, in an average year, spends on a given kind of business or service... and how much the average profit is on those sales. Generally, industry groups/publications do have some sort of estimate, or some experience gathered from the folks in that field... but I can't offer any suggestions on how one would develop this from first principles.