Money Money Money

(Okay, so I sure didn't mean to go, uh...FIVE MONTHS...between blog posts.

Life happens. Crud happens. Stress, kids, new job, another new job, spouse business/work struggles, kid behavior struggles...the list goes on for MANY of us. If your direct sales business has faltered, you are not alone.

Me...I'm finally back on the ground after a whirlwind of taking a new job, that I genuinely like, then going back to my previous employer but in the new position for which I had obtained certification last year. Confused yet? This also meant moving my part time housing,car, etc between two cities. I work in aviation, so I travel to my work city, work there for four days, then go home for three days.

That's where I've been since October. I apologize for dropping off the face of the earth. I've still got thoughts on direct selling, so back on topic from here on.)


So, the subject is money.

For most of us, getting into direct sales to begin with had something to do with money.

It might have been to earn some extra money to help family expenses, or maybe it was that free trip you could earn. Free or discounted products. For some, it was a big picture opportunity to be your own boss and get control of your free time while doing something you loved.

What quickly happens is the other side of the money equation when you get into direct sales...how much should you SPEND to grow your business?

And trust me, if you haven't already figured it out, there are LOTS of things to spend money on. Here's my top-of-the-head list just to start:

Business Cards (free with shipping at vistaprint.com FYI)
Catalogs, Order Forms, Reminder Cards
Inventory (some companies do, some don't)
Samples
Mileage
Self-Improvement/Training Seminars
Meetings and conventions
Promotional (Can get huge very fast and be unproductive...watch this one)

Back to the question. How much do you spend and when?

At first, my recommendation is the absolute minimum you can to get started. If the company offers different kits, take the cheapest. Why? Because it gives you the right to start selling. Once you are selling, you can begin putting a fixed percentage of your earnings back into the business however you choose. I generally recommend 25% of Profit into your personal "Grow My Business" account.

Now, "profit" means how much you make AFTER you deduct your expenses. Not your commission on your sales from the show.

Simple example. You do a $500 show on which you earn $125 in commissions.

Subtract from the $125 the costs of any of the following that apply:

Catalogs given away
Mileage to and from
Hostess Gift
Guest/Doorprize
TAX OBLIGATIONS (IF you owe taxes, don't forget you will pay all 15.5% for SS, Medicare/FICA, PLUS income tax)
Babysitter
Food you provide
Fees owed to company to process order

Now, you have a profit number. Take that amount, multiple it by .25 and set the result aside into your business account. As that pool grows, put those dollars back into the business.

Use the remaining 75% for the original reason you got into this business.

Should you ever overspend that account? Sure. I'm not completed opposed to "investing" in yourself, your business, etc. I just hate to see you do it without a strict accounting of the benefit so you know if it was worthwhile.

I also hate to see anyone spend themselves into debt trying to make a go of it.

Stay focused. Why did you get into the business?

Make sure you are doing what you started out to achieve!

And please don't forget, nobody makes any money unless product transfers hands.

SALES...the LIFE of the Party Plan

Good Selling and welcome back.

Kimberly

Follow me on twitter @kimberlybates

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