You may be able to start a makeup direct sales business for no initial investment; but those typically turn out to be more like discount memberships. Let’s face it, is it realistic to expect to start a business for free? No, I didn’t think so either. In fact, a majority of direct sales companies require new independent consultants to invest in a starter kit when they join. On average a start-up kit for a direct sales business averages about $50-$300.
Keep in mind that this startup kit is just that – a startup. It will get you going. You won’t be able to be successful in growing and maintaining a business with merely the startup investment. It’s like if your child wants to be in competitive gymnastics. Just the initial $200 for the pay to practice fee isn’t going to cover it. There will be extra expenses such as the cost of hand grips, leotards, uniforms, practice outfits, contributions of food for the tournaments; oh and let’s not forget the weekly ballet lessons that are now required for most competitive gymnasts. And we’ll toss in a little more money for the coach’s gift while we’re at it.
It’s the same with a direct selling business. The initial investment is never enough to last more than initially. For this reason, it is imperative to do your research before you sign up. Find out what other investments may be involved to start a business. Ask potential sponsors what other expenses you should anticipate. Look at the contents in the startup kit and then decide if the business supplies and products included are ample enough to get started.
Some consultants work hard to save enough to budget for the starter kit. One of the reasons direct sales is so appealing is that it provides an avenue to earn extra money toward the family budget. If the additional expenditures are not discussed up front, it could be a rude awakening, when the consultant truly doesn’t have any extra capital to add to the business.
I’m not necessarily talking about a large sum of money; but rather in many cases less than $100 additional. Though whether it’s $10 or $100 more than originally budgeted, if there aren’t available funds to invest, it really doesn’t matter what the amount. Perhaps it’s easier to understand this concept with some real examples.
Most of the extra initial investment will likely involve marketing. Does your starter kit include business cards? If not, plan for that expense. If you plan to mail any catalogs you’re going to need to budget for envelopes, labels and/or ink stamps and postage. A starter kit will get you started, but if no one knows you have it, it’s of little value.
Do you sell a product that is conducive to making or distributing samples? You may need to budget for supplies to make samples – for example if you’re in the candle business factor in the cost of wax, molds and zip lock baggies. Other companies may have samples available for purchase.
Consider initial inventory. Many starter kits include a small sampling of products, yet most veterans will tell you that you would do well to have a few more products on hand so that your customers can get a better idea of what you’re selling. Factor in the investment of additional products.
It may sound cliché but indeed it does take money to make money. It’s not reasonable to anticipate starting a business for under $100. A word of caution about cutting corners: some new consultants determine that there really isn’t money in the budget to invest in professional business cards so they make them on their computer. Even those aren’t free - ink and card stock are expenses. More importantly is the cost of lost business because of the unprofessional image you are sending with the cards you printed off your inkjet printer.
Those who are not in a financial position to invest the minimum required to start a business, may want to consider postponing business ownership until there is a bit more available start-up capital.
Before you join a company, ask a lot of questions. It’s wise to discuss expenses – any smart business person would want to know how much capital is needed to get started, and then plan accordingly so that you’ll be able to grow and then maintain a thriving business.
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