Ask Victoria: What Should I Do First?

If you have an idea for a new direct selling company, you may be asking this question.

It’s easier if you have some steps to follow. Here are 12 of them:

1. 1. Chinese proverb: “The palest ink is better than the best memory.” Write down your idea to help give it clarity and as the proverb indicates, it will not fade if it is written down.
   2. Begin with an outline of what you think needs to be done. Start with a list of the major points and then get into more detail.
   3. Describe your product. Is it an actual product such as jewelry or make-up, or is it a service like a communications product? Jot down a complete description of how it works, what it does for the customer, and why this product is important. This information is valuable in many ways.
   4. Be aware of your margins. Margins are one of the most important aspects of your business. If your margins are not ample, your business is likely to be unprofitable.
   5. What is your budget? Most everyone who has started a business has struggled with a budget. The majority of new businesses lack sufficient funds. Perhaps this is the main reason there is a 50% failure rate in the first year. Prepare a budget to discover if your business is currently underfunded.
   6. Who else is involved? Do you have partners in your startup? Are they equal partners? Determine how much participation each partner will have and how the work/money/management will be divvied up.
   7. What compensation plan will you use? Compensation will be a key element to the success of your business. Like a three-legged stool, your reps, your company and you should all be satisfied with how each is paid. If one side is less or shorter than the others, like the stool, your business could tilt and then fall over and require rebuilding.
   8. Where will you get the money to start? That is the million-dollar question. The sources vary and for the most part, this is determined by you. Some borrow from family members or save for years. Others use charge cards and on occasion, people use their homes for collateral. The last idea is not recommended.
   9. Sole proprietor, partnership, corporation, etc? Deciding on your legal entity may have legal and tax issues. Deciding on which way to go should be very well thought out and researched.
   10. Have you started a business plan? A business plan is like a roadmap with a destination in mind and where you will stop along the way.
   11. Have you worked in this business before now? The more knowledge you have about your product and the industry, the better prepared you will be to achieve success. This doesn’t mean you won’t succeed. It will, however, help you to better understand what to expect.
   12. How many hours can you dedicate to this new business? To start a business takes countless hours and dedication. If you are not prepared to commit your attention, then perhaps you may want to rethink how to make your business successful.