Home party plans rake in millions of dollars each year and vary in products from candles, pocketbooks, toys, jewelry, make-up, and more.
Why not your hobby too? With enthusiasm, a solid plan, and a good product anyone can start a direct sales business, otherwise known as
home party plans.
Home party plan profits increase each year because home parties are beneficial for everyone involved, such as:
- Hostess programs are designed to please and reward each hostess. At the end of each party, hostesses shop for free and also receive
discounted rates--all for simply inviting a few friends over.
- The guests get to shop in a relaxed and friendly environment. Does it really matter if you invite your friends out for a day of
shopping at the mall or a day of shopping at your house? It does if you get more than great conversation out of the deal!
- The consultant makes new friends, earns an income, builds business contacts, and develops self-confidence—all for doing something
she really loves shopping!.
As I walk around craft fairs, I often wonder why some of the crafters aren’t offering their products in catalogs or at home parties. If
you, like I, have considered a home party business, these tips may be beneficial:
Choose Your Product Line
When choosing your product line, pick a product you enjoy, after all, you'll be making a long-term commitment to your business. Loving
what you do and what you sell will also shine through to your customers and enthusiasm is contagious.
You can choose one product and develop a line using a variety of colors and styles, or you can choose to develop a line of products.
You can make your products yourself, hire help, or buy wholesale. Whatever you choose, you’ll want products that can be made or purchased over
the long-haul. You want to build a rapport with your customers and one way to do that is to offer a product line that keeps them coming
back. Return on your customer's investment should be immediate or near immediate. In other words, product arrive should be no more than
three weeks from time of purchase.
Choose A Business Name
Choose a name for your business that is easy to remember. Choose a name that can grow with your business. Keeping the same name is
important because it builds name brand recognition which makes word-of-mouth advertising easy.
Obtain A Business License
Decide whether or not, you will be a sole proprietor, a corporation, or a limited liability partnership. A sole proprietor is the
easiest format, but doesn't offer the best protection. And since sole proprietors don’t need to apply for a Federal Tax Identification
number, just a state sales tax license, they're often asked to give up their social security number which can increase the possibility of
identity theft.
Corporations and limited liability partnerships require more paperwork to get started, but offer far better protection for your business,
and your family—which is very important since you'll be using a lot of contractors to keep your business running.
Make A Schedule
When working for yourself, it's easy to let little distractions keep you from accomplishing your goals. Making a schedule helps you stay on
track and get everything done on your to-do-list. On your schedule, list the days you will:
- work in the office,
- train new consultants,
- hold home parties,
- make, develop, or order products,
- package shipments,
- and so on.
By keeping a regular work schedule, you will be more productive, which in turn will increase profits.
Determine Your Profit Margin
- Determine your cost to make or buy your products.
- Determine your cost to deliver your products.
- Determine your operation costs.
- Determine how much you can afford to pay your consultants.
- Decide the selling price of your products.
Write An Operating Manual
An operating manual not only helps you develop a functional plan for your business, but it helps newcomers help you run an efficient
and profitable business. When writing your operating manual, keep these tips in mind:
- What contracts and other legal documents must your hostesses sign?
- When will consultants be paid and how will they be paid?
- What don't you want your consultants to do when marketing your business?
- How should consultants demonstrate your products?
- How and when should consultants receive payment for products?
- How should consultants deliver products?
- What is your return policy?
- Will you ship products or only deliver to the hostess?
- Will you offer free shipping over a certain dollar amount?
- What will your shipping price be based on? (each product or dollar sales)
- How will the hostess plan work? (credits for merchandise sold, credits for number of guests, credit for number of orders, etc.)
Get Ready To Open For Business
After you have an idea of how your business will run and what you will sell it's important to obtain the materials you need to get started.
Start by making a list of all the things you’ll need to run your business: office supplies, products, catalogs, colored paper, brochures,
flyers, order forms, packaging materials, bank accounts, etc.
Book Your First Party
When you first start out, you won't have any consultants, so you'll be doing the first few home party plans yourself. Since you'll be the
owner and the consultant, you'll need to find a hostess. The first place to look for a hostess is to contact everyone in your address book.
Inform them about your new business, but more importantly, tell them what's in it for them. Tell them about your hostess plan and stress
the free stuff they can earn simply by allowing their friends and family to shop in their homes.
Book as many parties as you can. You can never have too many parties booked. Cancellations and rescheduling are a big part of any business.
Advertise Your Business
Don't just rely on people you know. Advertising is the key to a successful business, so start talking about your new business to
everyone you meet. Hand out brochures and flyers every chance you get. And when you get a “no thank you”, consider it one step closer
to that yes. And don't forget to advertise in your local parenting publications, newspapers, and magazines.
Seek Professional Help
Once your business begins to show a real profit, when you make changes in your business strategies, or when you begin to hire outside help,
including hostesses, secretaries, or warehouse workers, seek professional help. By hiring outside help, from those who have the knowledge
you don't, you guarantee less headaches in the future.
About The Author:
Susan Erica Squier is a freelance writer.
*This article is NOT available for your publication.
For reprint rights or comments/questions about this article, please contact the author.
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