Many direct sales retailers have a lot of questions about whether or not they should invest money into their direct sales business. Here is an article from James Pelton discussing 4 tips we came up with on investing in your business.
Tip #1 – Investing in your direct sales business is necessary for growth
One challenge that many small business owners have across all industries is very little formal business training.
I know for me personally, when starting Mobile Text Alerts, this was a huge challenge. Many times when I was faced with different financial decisions, I floundered quite a bit, not really certain on what to do.
One revolutionary moment for me in my business thinking, was when I realized that to make money in my business, I needed to spend money in my business.
This was counter-intuitive for me. I was raised to be very frugal, and this made it difficult for me to spend money on different aspects of my business.
Eventually, after years of floundering, I learned (the hard way) that investing in your business doesn’t cost, it pays.
Once I was willing to spend the money necessary on key aspects of my business (Sales, Marketing, Tools, etc), Mobile Text Alerts really took off.
Corporate finance 101 will tell you that businesses should spend their initial profits in reinvesting, and your company should be no exception.
We see many direct sales consultants that have a lot of troubles, because they think business principles don’t apply to their business.
But the most successful consultants see direct sales for what it is, a business like any other, and they apply business principles to their business to make it profitable.
Nervous about taking risks, especially in fickle economic times, the hesitancy to invest money is understandable. Spending money can be painful, but the result of not making investments in your business can be worse
Tip #2 – Please, please, please be careful going into debt investing in your business
We have seen too many direct sales consultants ruin themselves financially trying to invest in their business with loans.
Once in a while, it works out (See Brittanie’s story). But her story is an exception, not the rule!
For every consultant we see succeeding with debt, we see probably five that fail.
We wouldn’t recommend completely against leveraging debt, but please be very careful. Speak to a business advisor or someone with a financial or business background before taking that plunge.
Tip #3 – If you don’t want to use debt, come up with extra cash
If our first two tips are true: 1) You need to invest to succeed and 2) You shouldn’t go into debt to invest, what do you do if you don’t have any money? Are you doomed to failure as a consultant?
Not necessarily. Although no longer a consultant herself, we really appreciated Slap Dash Mom’s article about another direct sales company (LuLaRoe), 7 ways to fund your LuLaRoe Investment. We thought these were some great ideas for making some extra cash that you can invest.
Tip #4 – Always be investing in yourself
It doesn’t matter how much money you have, one investment that will always pay off is investing in yourself. Whether it be sales training, eating healthy, reading a book, whatever, it will be worth it.
And fortunately, with the internet at your fingertips, learning can be absolutely free.
Check out Frugal Entrepreneur’s list of Free Business Courses and Training.
I hope this list has been helpful for you! Please feel free to share this article, or comment below with any tips you think would be helpful to add.