If you've never run a business from home before, you'll wonder how it's actually done and sometimes, where it's done. Perhaps you are thinking about where your "office" you’d be physically located in your home. Be comforted to now that even if you live in a studio apartment, you can effectively arrange "office space." If you are lucky enough to have a extra room, alcove, or part of a finished basement, you're head of the game. And don't overlook a large closet either have met a number of resourceful salespeople who have converted one into a habitable, attractive and credible work pace!
When I started with Mary Kay, I immediately thought of myself as a businesswoman-a professional. That meant needed simple office materials, supplies, and organizations tools to help me run my business. Becoming a business woman also demanded that I'd have to sit down and arrange an office in the space available and make it work best for me. Took my career seriously and I was in business to succeed. I'll have to remain motivated and educated. I couldn't go half way but do everything I could to make my work space and working attitude a powerful combination. I started this way:
Time Management
There was a man named Ivy Lee who made a clever suggestion for his boss. Charles Schwab, that paid off in a number of ways. He created a time-efficient office system that was pure and simple, so simple, in fact, that it appeared it could never work. But it did! Mr. Lee received something like" $35,000 for his idea and it was this: If everyone wrote down the six most important things to do each day and did then one by one, time would be better managed and more could be accomplished.
There's a lot of psychology involved in listing tasks, doing them, then crossing them off the list. Also a lot of satisfaction in knowing how much you really are capable of doing. At the end of the day, you can peruse the list and see what kind of shape your day was in. Then evaluate how long it took you to do one task or the other, and decide how to be more efficient.
In addition, list making helps you get right to the point problem solve, and so forth, all by establishing priorities. Actual performance may vary from task to task, but what matters is that you identify your goals on a daily basis, and write them down. This is time management honed down to a fine art.
It's almost always better to start with the toughest, most important tasks and work your way through to the easier ones later in the day. This makes sense to me. You'll have to do the task anyway, so why not do it now! Don't overload the list, confuse yourself, or try to overachieve. Keep your lists manageable and realistic. That way, you will succeed.
A second crucial link to time management is this: Never handle a piece of paper more than once if you can help it. Mary Kay herself once gave me this advice, and I've followed it as conscientiously as I could over the years. It's also advice given by time-management experts, and those of us in business know what it can mean in getting through the day. I've discovered, and so will you. That sometimes a piece of paper needn't be filed and given undue importance, but tossed out. Any doubt, then toss it out. You can lose yourself in mountains of notices, newsletters, greeting cards, duplicates and triplicates of receipts, letters, memos, and bills and never see the light of day. File only that which is critical to keep order forms. Inventory orders, information about your recruits, commission schedules.
Time management also refers to making time work for you. One of the bigger problems people have who run a business from home is keeping structure to the day. Those who get up each morning to an alarm, leave the house to get to a job. Work, then come back home, pretty much have the day regulated for them by employers. Not so with the direct sales entrepreneurs working from home. When you are on your own it's very tempting to get up later (if you have no children or family member who need tending to) and do chores other than those for business. The attitude may be. "Oh, I have all day. I can do it later." It can become a habit to spend time doing nothing productive for your business unless you standardize your day to discipline yourself. Here's what I suggest.
Each Sunday night (if that is best for you) set up a weekly schedule, broken down by day and then by hours within those days. Construct a picture of a real work week ahead for yourself and follow it as best you can. This time management tip is one that is highly recommended by Sue Frederickson, a dynamic saleswoman with Discovery Toys. A mother of three small children. Sue keeps to her list of priorities, but emphasizes "you must keep business hours when you work at home. Let everyone know what your hours are and ask people to honor your schedule," she told me. "Unless you set up office hours, you'll get caught and find ways to frazzle yourself out. It's so easy to get off the track and deal with your family's needs first, or cut a business phone call short when you should really stay on."
Since one of the benefits of direct sales is setting your own hours, you don't want to let things get out of control so that you feel one responsibility (your family) is infringing on the other (your business), or vice versa. Barbara DerHohannesian, a key coordinator for Shaklee, based in Wellesley Hills. Massachusetts, summed up what pleases her most about her home-based business, now in its fifteenth year: "The flexibility to be with my family and succeed in business at the same time." Barbara specializes in helping others develop communication and leadership skills, along with guiding them in the interrelated time and personal-life management. (Many of us in direct sales ardently believe that if you can organize your work life so it's productive, it can have a beneficial effect on your personal life-for one. because your feelings of self-esteem go up!)
Now a single parent of three daughters. Barbara has ways appreciated the "flex time" of running a business from home. "Not only have I been able to build a business." she said. "but it's also been good for my daughters to see that a woman can succeed. They see me in action, they know how I set goals and meet them. I've immersed myself totally in my business, knowing that I'm the only one who can make it happen. Because of Shaklee, though, I've had the chance to work and still be there for my family when they needed me."
Beyond the benefits of flexible time for business and family and actually setting a good example for your children there are other points to keep in mind to get the lost from your day:
- Keep tasks within a time frame. Without a deadline, you lay easily become distracted, discouraged, or overenthusiastic. Give yourself only so much time to do the job and then top.
- Politely get chatty friends off the phone during business hours by saying. "Let me call you back later." or tell your caller that you're in a business meeting and can't talk now.
- Do you function best in the early morning? Late day? Then it makes sense to do your most creative thinking, more detailed work, or physically demanding chores while your metabolism is at its strongest. Do some clever shifting around of appointments or tasks to best suit your nighttime or morning personality. If you are a morning person (or even if you're lot), try arising at 5:00 A.M. or 6:00 A.M. to see how much more you can accomplish before 9:00 A.M. You will be amazed.
- Some perfectionists might say that shortcuts short change us, but, if you're running a family and a business from home, most shortcuts are well worth the price. As your business becomes more active, think about ways to get from point A to point D without stopping at points B and C. Your time is valuable.
Now let's organize your office.
Putting Your Office Together
If you approach your "office" in the most professional manner, you can't lose. No more piles, just files. Think order once you organize whatever space can function as your office. You'll begin to see a sense of purpose take shape. Organization helps you run on the right track. Not only do I motivate you to work, it creates tangible evidence of you dedication that begins the moment your office is set up.
Setting Up
You'll need an area that can contain a desk or small table (my choice), a phone, some wall space for a bulletin board (to post memos, notices, and pictures of what you'd like to win or buy). You'll also need a filing cabinet or cardboard filing system to start.
Can you appropriate an entire room for your office? This is a luxury. But if you're like most of us, you'll do some were active juggling to set up a permanent space. You'll want to ease into your business day with as little readjustment as possible Reserve a desk or table that will be solely your business center that no one else may use. The same goes for the all space around one side of the desk; that's for the bulletin board.
You'll do best with a phone number that's yours alone. 'this is important to your business. Call the phone company and order a second listing in your name, at your residence. A good deal of business is transacted by phone. Nothing's more unnerving than having to bargain with someone who's using the only phone in the house so you can take an order or peak to a potential recruit. When you've got two phones at our disposal, you can be more efficient.
If you decide not to have a phone number separate from the families, that's okay. But remember this: People are more likely to find you if you're listed. In most direct sales compares, you can have a yellow pages (or white pages) listing when you have reached managerial level. For example, I can be listed under the Mary Kay heading in the phone book, along with other Mary Kay people who have qualified themselves by fulfilling a requirement from the company. As we mentioned earlier, each company will have a different qualification or "manager" or "supervisor" depending on the number of the recruits you've brought in, your retail sales figures, or both. If you do reach managerial level, it is your option to pay for and have a listing of your name under the company heading. Check with your company on its policy for phone book listings.
In addition, get an answering machine to handle calls when you're not in. This is much more professional than having your child (or other relative) taking messages, not to mention the possibility that they might forget to leave you an important message. If you're worrying about the extra cost of another phone, remember that if you use it for business, most of the charges are tax deductible.
Keep an Updated Card File or Address Book
When you're doing business, you need to find the people who contribute to it. Be sure you have the address and phone number of each client and recruit you work with, all the people you'd eventually like to contact for more business, and for temporary office help, a stationery store, typewriter repair shop, and so on.
Display Your Product
Display your wares if you've got the space. Since you are making money by selling products, you should want others to see what you're selling. Showcases or bookcase-size cabinet aren't necessary, nor is putting out every product in your line But let everyone know you're seriously in business by either lining up your products on a bathroom shelf or kitchen shelves (if you're in cosmetics or household products) or in small attractive boxes if you're a jewelry seller. Wear what you're selling, if that's appropriate to the occasion, or hang few items on padded hangers on the outside of bedroom closet doors. If you really have no room for display, leave your company's pamphlets, annual reports, magazines, or picture of the products on a desk or tabletop. You'll probably be entertaining guests a few times a month and talking about your business. Since we know visuals help, people may indulge in impulse buying or even sign up to work with you simply by seeing your products displayed.
Simple Organizational Systems
To me nothing's more perfect an organizer than the homely file folder. My file system is pretty much a conventional system, with all folders kept in alphabetical and month-by-month order. There are so many streamlining ideas to keep business accounts, especially now with high-tech computers at our command. As your business grows, you'll discover the best system and software for your purposes, your kind of product and the projected volume of your business.
Finances
No business can function without a few financial ground rules. For a direct sales operation, you'll need to spend some money to earn some back. My suggestion is to start this way: if you have a joint checking account with your spouse, or even if you have your own account, open a second one under your name too. Any bank will tell you what's required for a "special" checking account and it's most likely a small expense or you.
This checking account should be used entirely for business. It will reflect some of the money you'll be depositing from profits and allow you to pay your expenses, such as, needed inventory. If you need cash to buy stationery or stamps, pay for photocopying services or for any item that involves selling your product, just write out a check to "cash." keep track of what you do with your business money in a small book you label "cash outlay." Keep track of where your profits are going and establish good records for tax purposes. Taxes is no one's favorite subject . . . but things can work out better than you thought in this matter. Here's a overview of why you may actually enjoy knowing what the IR will allow you if you run a business from home.
Tax Benefits: How To Keep More of the Money You Earn
There are many benefits that come with a career in selling and there is one benefit that's dear to every direct seller' heart-a wide range of tax breaks for operating a business from your home. I recommend that you mention this to an' possible recruit. Before I began selling Mary Kay, I was drawing a number of taxed salaries-from my TV show, modeling speaking to women's clubs, and so on and I had no idea what an exceptional "perk" these tax breaks could be.
Without showing elaborate tax forms charting inflation rates vis-a-vis the shrinking dollar. I'll describe some bottom line information about the advantages of a home business. Here's how it works.
A few years ago, Congress enacted some laws to help businesses, doing so to create an "economic recovery." These "incentives" were tax breaks, in other words, deductions.
In my case, getting these tax breaks was an additional incentive for me to start in direct sales. At first, the list of deductions sounded too good to be true, but when I considered it in terms of running a small business, it made perfect sense All direct salespeople who can, take these deductions.
We live in a free enterprise system, where we work, invest, spend and save money. In this system, we can be employed by big business or go into business for ourselves. By doing so we are - as entrepreneurs - actually encouraged and supported by some laws. Why? When we go into business, we are taking a chance-risking something for eventual gain-and by doing so, creating capital, providing employment, and participating in and stimulating the economy.
I used to believe that nothing could be more secure than letting paid a salary. You know the feeling: Here's this amount of money at the end of the week or the end of the month or the end of a free-lance job. The government, predictably, is happy to take its share in withholding taxes, while the state and local levels ask for a cut too. In many cases, a worker may be paying twenty-five to sixty percent of his (or her) weekly salary to taxes, depending on the salary and number of dependents.
Going into business for yourself, though, puts you in a different category. This is the difference between you the salaried worker and you the entrepreneur. You the worker are someone who is on salary at a company-and that company must pay health benefits, retirement, and such. You may be productive but you are costing them income, unless you are at its high enough executive level where you actually produce income for them. But when you're an entrepreneur, at your desk with your phone and your folders and your calendar, the government is willing to give you a break so you can hopefully stay in business and help stimulate the economy.
By becoming a direct sales person working at home, you do it yourself in the same position, though on a lesser scale, as my major corporation in the country. You, too, can take similar tax deductions. For example, when you work for a corporation, you could have the "perk" of an expense account. On a specified day, according to the company's schedule, you'll be expected to tally up your expenses-lunches, taxis, and so on-and put in a voucher for the total sum. The company then issues you a check for that amount. They're reimbursing your entertainment or travel which you did on behalf of company business. The company reimburses you for an economically sound reason. They figure, "Let's pay back Miss Greece for her traveling expenses to meet a prospective client." Why the company will then use your voucher as one of their legitimate deductions when it's tax time.
As an entrepreneur, you may not get quite the scope for tax breaks as a huge company, but the ones you get counted. Will you be traveling to see a retail customer or to recruit? I have taken many four- and five-hour drives to meet with potential recruits and people already working for Mary Kay. Gas, oil and car depreciation are valid deductions. Will you be entertaining those same customers or prospective recruits at brunch or dinner? These are deductible expenses for your business.
Becoming a direct salesperson working from home makes you a businessperson with the identical goals, theoretically, a giant corporation. The goals are to make a profit, stay in business, keep growing. By doing what they do, you can do clear deductions similar to theirs.
The government likes to know you're in business with the intent-and that's the key word-with the intent to make a profit. Anyone going into business should know that the first year or so in most cases, won't be unusually exceptional. But ever though you've invested very little in your inventory, you may because of a variety of circumstances, make a minimal kind of profit during your first few years. Let's say you earned three or four thousand dollars a year from working part-time at home in your own business. You'd have many more deductions and therefore an opportunity to keep more of that money than if you'd earned three or four thousand dollars in salary.
The home business tax breaks are many and you'll need the advice of an accountant to sort them all out when it's time to file your returns. Meanwhile, here's a sampling of what a direct sales business can do for you. Although the numbers will be different by the time you read this book (because of the new tax laws), the following should give you a good idea of how running a business from home may be profitable:
Deductions and Benefits Involving Your Spouse and Children
These numbers may help clarify what you're paying out in taxes if you're married and filing a joint tax return.
An average couple, paying standard income taxes, may take such valid tax deductions as medical expenses and charitable contributions. But basic expenses such as rent, telephone and so on cannot usually be considered deductible under typical conditions. However, if one or both have jobs and also start a direct sales business, a business that will provide a second source of income -this couple is then eligible for a variety of different and legal deductions. A percentage of your total yearly rent and mortgage payments is among them. Because of those deductions, the couple may get to keep more money and put more money back into the business to encourage its growth.
These deductions are just one incentive for married couples to start a direct sales business. Another is "retirement." Many salaried people have begun putting away $2,000 each year in an Individual Retirement Account (IRA), which has been non-taxable up to now* The self-employed may also have a Keogh Plan-a special tax shelter for the self-employed. A few years ago, the maximum you could deposit
(Please check with your accountant regarding IRA changes in the new tax law of 1986) in your Keogh per year was 15 percent of your income or $15,000 whichever was higher. The sum has gone up to $30.000-a terrific opportunity for direct sales entrepreneurs to shelter a large percentage of their incomes.
If you are the parent of a typical child, you'll be dipping into your handbag more times per day than you'd care to count. Children need new sneakers, want extra spending money or a computerized toy, need school uniforms, want to go to the movies and out for dinner, need lunch money, want their ears pierced. What if it's tough for you to meet all those financial demands?
A teenage child with some resourcefulness may go out and get a part-time job. Younger children can also pick up the odd job but it's a bit harder for the ten- or twelve-year-old to rely on steady income on a part-time basis coming in every week. One solution:
With a direct sales home business, your children can work for you in your company. The government allows each of them to earn a certain amount per year without filing a tax return. If you had a big business, with a large volume of products going in and out, you could decide to pay a younger child $ 10 a week for a few hours of doing simple jobs like stamping envelopes. Pay your child by check. At the end of the year, you can deduct all those checks as expenses paid out for an assistant. If you have a teenager, you can delegate more responsibility to him or her-answering the phone, taking orders and more. This child can earn $50 or so a week for legitimate office work. These salaries are deductible for you and the children are learning to contribute to their own lives by working . . . while helping you out and earning money. You're not just giving them allowances.
Children can generally do the following for a direct selling business: pack boxes, ship out packages, stamp envelopes find flyers, deliver products, set up a room for a meeting, clean it up before guests arrive, take orders by phone, even handle the phones if you're out of the office for the day or traveling for the week.
Most important in hiring a child is to keep the salary level in balance with the size of your business and the actual work load.
Cars and Travel
The IRS is very fussy about the deductions you'll want to take for using your car for business, so always keep receipts. If you use your car exclusively in your business or work, you may deduct all of the cost of its operation. The deductible items include the cost of gas, oil, tyres, repairs, insurance, depreciation, interest to buy the car, taxes, licenses, garage rent, parking fees, tolls, and so on. You'll want to keep fastidious records about where you went, on what day to see whom and why. Keep a travel diary and note the mileage, for example. if you're going either to meet customers or recruits, or even if you are attending a seminar related to improving your business.
And now for the trip itself as a self-employed person, you can deduct all travel-related expenses-motels, hotels, meals. If you visit one of your distributors in another state and take your younger sister along for the ride, you can deduct your portion of the trip, but not hers. Keep separate receipts. (Of course, if your sister sells, too. then the whole trip is deductible. For the same reason, you may want to sign her up so that any calls or visits to her can be on business, too.)
If you have a second home-one you own-and do business from there sometime during the year, you can deduct all travel-related expenses to and from it.
You can legally write off $2 5 worth of gifts for each person who is a customer of yours, or, in fact, to anyone you do business with. That makes gift giving doubly nice. It's a huge expense. For example, at Christmas to buy so many presents for the people who've been your loyal customers and/or supportive recruits and associates? Big business usually does it another way. With Christmas bonuses and presents like boxes of imported chocolate or twelve-year-old Scotch. A friend received a wonderful glass bowl from Tiffany's for Christmas from her boss-a lovely present and she was touched. Yes, her boss was thoughtful and generous, but so too was he counting that Tiffany's receipt in his gift deductions.
You can too.
At-home Tax Breaks
Remember this: "double-A" deductions. They can mean a lot to you when doing your tax planning for your home business. Because you operate a business from your home, you're eligible to deduct certain expenses if they're related to running and maintaining that at-home office. Keep scrupulous accounts and seek the advice of an accountant before filing, to be sure you fulfill all requirements for the IRS.
The home-office deductions are numerous-and begin with the actual room itself. If you are using an entire room for an office, there should be no problem; when using a portion of the room, the IRS is happier to know there's a partition set up to separate living quarters from actual office space. If you've got a big business and use your finished basement or other room for business entertaining, storage of your products, conferences or even small seminars, this area qualifies, too as a deduction. In all, you can deduct from 20 to about 50 percent or so of your monthly rent (or mortgage or maintenance costs), depending on the size of the office space as a percentage of the entire house. Fuel, electricity, even a portion of the grocery bill can be deducted if you're doing entertaining for business at home. (You can also deduct up to 25 percent of second home costs, as of this writing, including deductions for entertaining, fuel, and so on.)
These bills are ones you'd have to pay regardless of whether you've got a flourishing business at home or not. With the addition of a home office, expenses are converted to deductions.
The bigger your business, the more you can include expenses related to improving your property-when they involve areas that would be used for business, that is. For example, you may be able to deduct landscaping your property or putting in a pool (you must show evidence that you transacted business poolside). and redecorating and renovating the room or rooms you use for offices. But until you reach these levels of prosperity, you can take deductions for some of the basics in running the office itself:
The phone: the basic charge per month is deductible along with the number of calls apportioned to business (as opposed to personal calls). This is if you're using the family phone. A business phone, along with all your long distance calls meant for business, is 100 percent deductible.
Telephone answering machine and typewriter: both can be depreciated over a number of years-25 percent per year is typical.
Office supplies: any stationery, business cards, stamps paper clips, stapler, pens, manila folders, clipboards-all of these are totally deductible. Save every receipt-even one from a photocopy service for one letter.
As you set up your business and make it work, put income back into it or invest, you'll discover additional deductions The more involved you become in the business-making it grow slowly from a sideline, extra-income producer to a full time opportunity-the more the business will dictate your life style. Over the years, you can be living well, but paying much less tax than if you were making an equivalent amount at in salaried job.
Direct sales is an exciting business opportunity, and the tax breaks will not usually be the prime incentive for starting out. But even though taxes or retirement benefits aren't of primary consideration in choosing a career, it's worth your attention in terms of savings and income for the future . Choose your company well, and examine all the benefits available to get the most from the business you'll be creating
A Final Thought
Funny thing about the future, we begin with an idea of what our lives will be like and sometimes along the way, there's a turnaround-a surprise in self-discovery that takes us down an unexpected path. I started out with the idea of achieving at something while doing my best. I found my calling in sales and I built a life that's fulfilling and still challenging.
I'm representative in many ways of many women. I've encountered most of the problems that women face, particularly the dual responsibility of building a career while caring a family. For me, direct selling was the answer to balancing in life between business and family.
One last word of advice . . .
When you start your business, stay cool. Be flexible. Keep our sense of humor. Ultimately, be willing to allow yourself a number of failures and setbacks. Be kind to yourself when they happen . . . and don't lose faith! Count on yourself and our abilities and be there with your energy and commitment 100 percent!
I offer all my warmest wishes to you and expect that when you start in direct sales, you'll understand why I think this is he business for the future... and I hope, for you too. I look forward to hearing about you in the business very soon.
