Making ¢ent$ of it All

• May 18th, 2007
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This is a training presentation given by my Director’s Senior Director. I think it is EXCELLENT advice for managing a home-based business–no matter what the product is!

MAKING CENTS OF IT ALL

Consumer Debt: you purchase something which immediately loses value once you leave the store.

Business Investment: you invest in a money making venture where you earn a “return” on that investment greater than what you put in. (we make 100% return on investment!)

First Step:

Have $ to manage! This comes from keeping the main thing the main thing. Your “job” in Mary Kay is to put this product on women’s faces. When you do your job you will have money. Even McDonald’s won’t pay you if you don’t show up to work.

So – have a booking goal every week and stick to it. How about a daily vitamin – book “one a day” and you‘ll blow your mind at the results you’ll have in 90 days! Remember to play by the rules and book twice what you want to hold (just like the Doc’s do).

2. EVERY cent must go into a dedicated Mary Kay account. You make not take out one dime before it has been deposited. If you choose to use one account it should be a checking account.

3. Do NOT pay yourself until you have reached an appropriate amount of inventory to run your business.

4. Borrow (like all businesses do) to get what you need. Then simply make a SET monthly payment toward that investment to pay it off. The interest is as tax deduction.

Here is my suggestion based on the amount of investment you owe on:

$2000 - $100/month $3000 - $150/month $4000 - $175/month

$5000 - $225/month $6000 - $250/month $7000 - $300/ month

Assuming you are paying approx. 13.5% interest on the money at this rate you will pay off your investment in approximately 30 months (2+ years). Amazingly fast compared to a typical business (30 years).

5. Use this simple formula to handle the income (ex. $300 class)

a. deposit all - $320.25 (including tax)

b. 50% (of $300, forget tax) to replace inventory = $150

c. 5% for sales aides (sec II) = $15

d. 5% for Preferred Customer Program = $15

e. 40% Business Earnings = $120 – this is your profit

Your LOAN payment comes from the first profit you earn in the month. If your business takes a dip due to life circumstances, be sure to do enough reorder business to pay your loan. TRACK YOUR RETAIL GOAL.

6. There is an “Expense Tracking Form” and a “Business Tracking Register” in your Career Essentials if you are a detail person.

7. Create a sales ticket for EVERY product that leaves your shelf. (pers. Use, demo, hostess gift, sales, etc.) DO NOT FRONT PRODUCT OR $ TO YOUR TEAM.

8. Be conservative with your expenses. You do not need new office furn., a copier or a fax machine.

9. The more expenses you have, the less profit you have. Deducting something as a tax write-off does not cancel out the loss of profit. Be sure you invest in the right things (training, business necessities, etc.)

10. Use a CPA who is experienced in direct sales.

11. Place receipts for expenses in an envelope. Then take receipts and place them in an expandable file folder by labeled sections from the Expense Tracking form. Add up section by section for total expenditures. (IRS doesn’t care which month they occurred in)

12. UNDERSTAND HOW YOU MAKE MONEY – We make money 2 primary ways. We build a customer base (focused on basic skin care) and we build a team. The bigger these two get the bigger your income. Book one a day and you will soon find that you have hired help to track these things for you (smile).

Tags: Money Management