How to Run a Direct Sales Business on a Shoestring Budget Part 2

JasonC —  June 27, 2013 — 2 Comments

Check out Part 1 of this series for answers to a number of common questions.

Running a business may seem like a daunting task for someone who has never done it before. Especially when you hear stories on a regular basis of people starting up a small business only to find it actually loses them money. And more money the longer they’re in it.

It doesn’t have to be that way, though. Choosing the right company goes a long way, and there are several good ones out there. Thirty-One Gifts is a great example.  Then follow these pretty simple rules to avoid getting in over your head:

7 Rules For Running Your Direct Sales Business On A Shoestring:

1. Don’t spend money on anything in the business unless the business generates income  to purchase it.

2. Don’t buy (and show) products people don’t want!

3. Host your own in-home parties using yourself as the hostess.

4. Talk to other consultants, find out what expenses they think is actually worth the cost.

5. Make use of every incentive the company offers.

6. Fundraisers are your friend!

7. Make a budget for your business, and stick to it!

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Now, let’s dig into each of these a little deeper:

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7 Rules For Running Your Direct Sales Business on a Shoestring:

1. Don’t spend money on anything in your business unless the business generates income (profit) to purchase the items.

It’s natural to get excited about a new endeavor and want to go “Whole hog” (as we say in the south). But with the 31 Sign-up Kit, you really do have everything you need to get parties booked, held, and really get things rolling. Let your business buy the items you may need to expand.

This serves not only as a sort of “brake” to the temptation to overspend in your enthusiasm for the business, but also as a motivator to have more, and more successful parties.

You really can be super successful in this business and it doesn’t take a lot of up-front money. But patience, as always, is a virtue and will go a long way towards guiding you down the right path when it comes to both the cost of your business and the likelihood of your long-term success.

2. Host in-home parties and pay attention to what items people are excited about. Don’t buy stuff people don’t want.

While it is true that a customer is more likely to buy an item if they can see it and touch it, you do NOT need one of everything or every pattern in the entire catalog (much less one of everything IN every pattern!) If you find at parties many of the attendees are asking about a particular pattern or item and you don’t have it, make note of that. Create a list of products or patterns that seem to generate excitement from your guests. Plan those purchases.

3. Host your own in-home parties using yourself as the hostess.

Treat it just like you would if you were hosting a party for another consultant for another business. Send out real invitations. Set goals on attendance. Invite people you think will really come. Make it personal. (Don’t just send out a generic invite on Facebook and never follow it up). Use your hostess rewards to add items for your kit that you identify in #2 above.

I think too many people have “Drop-in Open Houses.” In our experience, they just don’t work. Have a real party instead. If it’s drop-in, there is no commitment to come. A party invite with RSVP is a commitment.

Don’t forget to make use of your hostess reward credit. This is the best way to expand your kit for FREE.

4. Talk to other consultants, especially directors and above, and find out if an expense is actually worth it.

Generally, other consultants are going to be pretty honest about what they find valuable to invest in with their business. Preferentially take advice from girls who are and have been consistently successful. Someone who is just starting out may well just be guessing.

5. Make use of all of the incentives the company offers.

There are opportunities to earn updated kits, add-on kits, special items, and all sorts of other things. Keep yourself informed by reading (at least weekly) Thirty One Today. Talk to your upline. Read all that correspondence you get from the company and your upline. It IS worth your time.

6. Fundraisers are your friend!

Some people, when starting out, avoid fundraisers. “Why would I want to host a fundraiser where I do all that work but then give away all my commission?” Good question. Simple answer: use yourself as the hostess and earn BIG money in free items. The sales also count toward any incentives for which you qualify. Plus you earn favor with whatever group you are supporting! If that’s not a win-win-win, I don’t know what is!

7. Make a budget for your business, and stick to it!

At some point, if you’re not using a budget, you’re really quite honestly flying blind. Make sure you are always spending far less money on items and supplies for your business than you are bringing in. And preferably work only with money in hand once you’ve purchased your new consultant kit.

  • Heather

    Great tips! I’m definitely on a shoe-string myself!

    • JasonEC

      Thanks, Heather! If you have any other tips or questions, please share!