Veeder was born and raised nearby, on his father’s 3,000-acre ranch, which he now owns along with the knowledge that no one can run a ranch that small in western North Dakota and make it pencil.The connotation is quite clear: "make it pencil" = "make it profitable." But I had never heard that phrase before. Never.
To Google, which yielded instances of the usage, but no explanation until I added "etymology" and managed to locate definitive information in an old favorite site - Language Log, which cites the OED referring to the use of "pencil" as a verb as early as the 17th century. But the examples given are generally those of "pencil out," with a concluding sentence that the phrase must arise as a result of "the (not) well-known phenomenon of out-ellipsis..."
The discussion thread there also focuses on "pencil in" and "pencil out" - with a bonus of a link to a Wiktioinary list of "phrasal verbs with particle (out)" (who would have guessed there are so many?).
I'm still left a bit puzzled by the use of "to make it pencil" in that initial sentence. Is it a regional phenomenon? I've lived in the Midwest, Boston, Texas, Kentucky, and Missouri without ever hearing anyone speak the phrase. Nor have I seen it in literature. Perhaps it falls under the category of professional slang in the business community. Any thoughts?
Addendum: It didn't take long. An anonymous reader offered the following:
I use this phrase quite often, and was surprised by your unfamiliarity. When I use it, it is in the context of evaluating a prospective (in my case investment real estate) transaction. To determine whether an investment can justify its purchase price, a number of variables must be considered and manipulated to forecast future performance. In my case, these are things such as changing interest rates, occupancy rates, etc. Rather than perform these calculations in the more permanent pen, and pencil is used so that one could erase & plug in different number for those variables - each of which affect the rate of return on the a potential investment. Thus, to decide if a project makes sense, it must first "pencil" - meaning that the most obvious variables have been taken into account, and the potential income still justifies the purchase price. Of course, most of us use spreadsheets and computers instead of actual pencils nowadays, but the principle remains the same.