Make A Profit In Direct Sales
Everyone joins their direct sales company to make a profit.
Yet very few party plan consultants have a written direct sales marketing business plan, much less think in terms of profit.
How To Make A Profit
Profit is the amount of money left after expenses. Profit is your take home pay.
Rather than thinking of your business goals as the number of parties to perform or a certain commission to earn, decide what profit you need to succeed in reaching your goals.
After you know the profit margin then work backwards to determine the commission required and the number of parties you should perform to attain that.
Set A Business Goal
Let’s say your goal is to earn enough money to pay the mortgage and also to have a bit left over for fun money.
The mortgage is $738 and $150 for yourself would be really fun!
So your take home pay or profit after expenses should be $888.
What Are Your Expenses?
What is the cost of doing business?
Supplies, printing ink, office equipment, hostess gifts, personal development, accounting fees, software…. anything that is specifically for business.
I recommend that you start with 20% of your desired income then track it to get a more accurate number moving forward.
You may think that 20% sounds too high but honestly, long term that will be a good number.
Keep in mind that you will be updating your office, going to conference, etc. so plan on it and set the money aside even if you do not use it month to month.
When your computer crashes or you lose your tablet you will be glad you did!
Make A Profit
$888 x .20 = $177.60 expenses per month
$888 + $177.60 = $1065.60
$1065.60 commission-able sales will allow you to reach your goal of paying the mortgage and having some personal money left over.
Just divide your gross commissions by your show average and allow for a 25% cancellation rate and now you know exactly what you have to do to make a profit that will take you to your goal.