Ask Victoria: How much does it cost to start a direct selling company?

July 20, 2010 By admin Leave a Comment

This is a good question to ask, but a difficult one to answer because there isn’t a single magic number to give you.

I can tell you that our clients have launched their businesses for as little as $20,000 and as much as $2,000,000. To help narrow the cost, here are some questions to answer:

Have you written or are you writing a business plan? A business plan can help with the creation of a budget.
Does your business plan include a line item budget? You need to know the estimated costs of each expenditure to arrive at a total.
How much will you spend on your initial inventory? Generally speaking, this is frequently 25-35% of the total budget.
Will your first employees be paid or unpaid? Salary overhead can be small or large as a percentage of your budget.
Do you know your margin multiplier? This is one of the variables that affect the length of time required before your business will be profitable and cash-flow positive.

The more you know about your business, the better your estimate. Information about your specific business is absolutely required to determine the amount of money needed to start your business.

While some businesses begin without a business plan, we believe that writing a business plan is important. Research has determined that people who write business plans also do other important planning tasks.

You can start simply with word processing and spreadsheet programs, or purchase software like Business Plan Pro.

Writing a business plan may help you to look at all the pieces and the entire picture. It should give you a detailed analysis of what needs to be done and how much it will cost.

Your local Small Business Association (SBA) office may have business plan examples and other information to help you to move forward.

Business plan books and software can help you with the important basics of all business plans, but they don’t tackle the unique aspects of home party plan or network marketing businesses.

Sylvina Consulting’s insightful book, Start Here: The Guide to Building and Growing Your Direct Selling Company includes a complete chapter on business plans.

Now available in English and Spanish.

If you haven’t launched a direct selling company previously, remember to get professional help in reviewing or amending your business plan and budget. Otherwise, you may find out at an inopportune time that your business plan or budget may be insufficient.

Sylvina Consulting can help you with your business plan and/or budget. If you have questions or need help, please feel free to contact me at 503.244.8787 or email me at victoria@sylvina.com.

Jay Leisner, the President of Sylvina Consulting, is a top compensation plan and direct selling expert, a trusted adviser to new and established network marketing and party plan companies. For more than 30 years, Jay has enjoyed assessing and improving network marketing, party plan and referral marketing companies across the globe.

Jay Leisner and Victoria Dohr authored the top-rated book for new and young network marketing, referral marketing, and party plan companies, "Start Here: The Guide to Building and Growing Your Direct Selling Company".

Available in English and Spanish. This startup guide contains 250 pages of wisdom that will guide you through the right steps to start and continue on your journey to build a successful direct selling company.

You will save thousands of dollars and hundreds of hours of your time using the information you will read in our book.

In 1986, Jay began his career in direct selling by working for a major direct selling software provider. First as a software developer and later as a project leader and a business analyst, Jay worked closely with new and established network marketing and party direct selling companies to provide them with software solutions to meet their unique requirements.

Jay contributed in many ways to the success of large implementation projects for many companies. Jay also worked with dozens of smaller companies to assist each of them in various capacities to provide them with the systems they needed to help their businesses to grow faster.

Along the way while working with them, he learned the secrets of successful direct selling companies and the challenges faced by them. In true entrepreneurial spirit, Jay’s decision in 1999 to start Sylvina Consulting as a direct selling consulting company was driven by what he saw was a need for answers, advice, and solutions.

In 2004, 2006, 2009, 2014, and 2018, Jay gave presentations on compensation plans, recognition, and field leadership development at conferences held by the US Direct Selling Association.

He traveled to South Africa in 2015, 2016, and 2017 to conduct workshops on compensation plan design and recognition programs for member companies of the South African Direct Selling Association.

In 2017, Jay spoke at the Canadian Direct Sellers Association Meeting on the importance of recognition.

More than just a compensation plan expert, Jay is exceptionally skilled at advising new and established companies on business strategies. Before offering advice or solutions, he asks important questions to understand each client’s specific concerns and goals.

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