Everyone’s daydreamed about starting their own business. Pursuing your passions, being your own boss, and setting your own schedule and expectations. Like most fantasies, though, challenges lay just beneath the surface of that glossy ideal. Look beyond the entrepreneurial vision, and you may feel overwhelmed by the start-up effort, time, knowledge, and money. The truth is, it’s not about where your business could take you—it’s where you take your business.
Small business owners’ efforts are impressive. They generate over 40% of U.S. economic activity. And owning a business is a realistic path for many.
A common hesitation for many would-be entrepreneurs is the cost associated with opening and maintaining a small business. From start-up costs to advertising, hiring, managing inventory, paying government fees, and an endless list more, it can be daunting to take the first step. All this risk and they may never see a payout—or worse, they could be saddled with debt.
But there’s a way to be a business owner with considerably less risk: direct sales. Under the direct selling model, entrepreneurs become distributors for another company. They earn a percentage of their sales to customers without many of the costs and obstacles of a traditional startup. And when you start a direct selling business, you can find products and services to sell that resonate with you.
Although the overhead costs of direct sales is lower than a traditional business, there are still financial factors to consider. Let’s look at the most common expenses to start a direct selling business.
Before You Begin
Direct sales companies typically have start-up or registration fees to get your business up and running. An initial minimum purchase may also be required to “activate” your business. Costs vary from company to company, so add up all the potential expenses to tally how much you’ll be spending before you earn.
And since you’re considered an independent contractor, you’ll want to review license and permit requirements to ensure you’re in compliance with local and state law.
One of the biggest cost benefits is not needing on-hand inventory to start a direct selling business. If you want product samples—many direct sales companies offer variety or sample packs, smaller sizes, or lower quantities to share with potential customers. Keep in mind to develop an authentic, personal experience; you should also use the products yourself.
Tools of the Trade
Small business owners depend on digital tools to track expenses, sales, taxes, and other key information. See what resources your direct selling company offers and ask other business owners for recommendations. Up your game with embossed business cards, a laptop or tablet, a webcam and mic for crystal-clear online meetings, business-casual clothing for events—the ways you can invest goes on.
Find Your People
Your company may offer in-person or digital events where you can learn from industry experts and network with other business owners. And plenty of third-party companies, like the Direct Selling Association (DSA), host valuable presentations and meetups. Events may be free or have an entrance fee, and there could be travel-associated costs, but it’s worth it if you make a priceless connection or glean invaluable insight from a presenter.
Putting Yourself Out There
More and more, the world revolves online, and a professional website is no different than a physical storefront. Some direct sales companies, like USANA Health Sciences, Inc., allow distributors to create a website that mimics the corporate page and shopping experience. This is a great way to present your business to customers as a professional, high-quality, and trustworthy brand.
Advertising is also an investment to consider. Local listings, blogs, sponsored social media posts, Google Ads—there are a million ways to capture the eyes of potential customers.
Time is Money
Consider the time you’ll need to invest. Starting any kind of business is hard work, and there’ll likely be lessons learned along the way. When diving into direct sales, you can work as little or as much as you’d like—nearly 90% of those who start a direct selling business work in their spare time, under 10 hours per week. This flexibility is priceless for those who have a full-time career or balance other responsibilities. There’s no wrong way to operate, so long as you’re realistic with your expectations.
Go Out and Make It Happen
The entrepreneurial spirit is a strong driving force for a lot of people. Whether you wish to own a traditional company or are looking to start a direct selling business, you now have a better idea of the benefits and costs you’ll likely encounter as you create your business your way.
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