You have embarked on the journey of self employment. The time flew by. You meant to keep track of all your income and deductions but you just did not know where to start. Now, it’s tax time and you are worried about the 1099’s that are starting to appear in your mailbox.
Stop worrying. It is not as hard as it looks.
With your Federal Income Tax Form 1040 you are going to need to file a Schedule C – Profit and Loss from a Business.
First, you will want to gather your bank statement, credit card statements and cash receipts that are related to the business. Using excel you can make lists of each of the categories I am about to discuss here. These totals will be places on the various sections on the tax form.
Next, gather all your 1099s and statement of accounts from clients/companies you received money from but did not receive a 1099 from. All income has to be reported.
The actual instructions on how to enter a 1099 will vary according to what tax program you are using. There will be a section, usually “Income” where you enter W-2’s. A 1099 will work in the same manner. The tax program should have a special section to enter the 1099. You will fill in all the information.
It will then take you to the Schedule C and it will go line by line. You will fill in these blanks from the totals you calculated on your excel sheet.
So what exactly can you deduct?
Advertising expense, including business cards
Auto expense if you use your car for your business
Commissions and fees you pay to others for work
Depreciation of office equipment
Self employment medical insurance coverage
Business insurance such as fire, theft, flood or other casualty.
Legal and professional fees
Rent or lease of office space
Business related meals, entertainment and travel
Keeping good records will help you keep track of these deductible expenses. Making tax time much less stressful and who doesn’t like that idea?
This is your business and you do not need to do anything that you do not want to. That said, a lot of people do not walk around with a chunk of cash in their pocket, especially when heading to a direct sales party. This is why a lot of people use cheques or a credit card to make their purchase.
If you are worried about a cheque bouncing, you have a few options.
Go to the customers bank and cash the cheque
Hold the product until the cheque clears – Ask you bank how long this will tank
Have all cheques made out to the hostess and have the hostess write you a cheque (the thought is your customer is less likely to bounce a cheque to a friend)
Refuse to take cheques
I strongly advise that you take the risk of a cheque. In the four years I have been in direct sales, I have had one cheque bounce, and that was a result of a bank error. The customer already knew about it when I called her and had no issue paying the bill and the fee in cash.
This is a tricky question as we are not in control of what we sell when we are in direct sales. The company dictates the colours, the style, the size and the products that are available for us.
But there are ways that you can work with this and still be successful with your direct sales career.
Depending on how you work your presentation, it is fully possible to avoiding discussing these products. This is especially true if you focus on a best seller list or your favourite products presentation. You may still choose to have these items with you at a demonstration but just not discuss them.
I personally have a few items that I do not showcase when I do a party. But, I still have one or two in my kit with me in case someone asks about them. That said, I do not necessarily know much about them. But no one has asked me about these products as of yet in two years.
My first question for you is what are you doing all day? Do you have applications like Facebook, Twitter, games or even email open all day? These can suck you and take your productivity down to 0. I would recommend shutting them down including your email and working on other projects. You may be wondering about email, but I will explain.
An hourglass (Photo credit: Wikipedia)
Email is a time waster as you either get a lot of messages or you get none. If you get none and you keep hitting the refresh button, you are wasting time. If you get a lot, chances are you are pouncing on each one when it comes in to deal with it. This wastes a lot of time as you lose productivity switching from task to task.
What I recommend: turn off you email and only check it every hour or two. You will be more focused and resolve more issues when doing this. I have done this myself and found it definitely made a difference!
A to do list and a timer are your friend. Make a list of what you want to accomplish that day and approximately how long it will take. Set the timer and off you go! If you have time leftover, start the next task. You could end up with spare time at the end of the day and then you can play.
If you take a break to check Facebook or other items, set your time for this too and stop when it goes off. These can suck you in and two hours will go by without you noticing.
Did you know that re-order labels have power? Absolutely! Can you tell me with certainty that ever product you sell to a customer stays with that customer and never goes anywhere else? Probably not. That is the perfect reason for reorder labels! Let me share a few stories.
Product labels with handmade paper (Photo credit: Boby Dimitrov)
Recently I ended up going to a friend’s house and noticed that he had the brand of candle that I sell on his counter. I made a comment and he said he got it from someone else. I said oh, okay and was looking at it (he isn’t very good at candle care!) and flipped it over. Imagine my shock when I saw that it had MY label on it! So I had to ask who he got it from and he told me. She is one of my customers who orders once or twice a year and she actually cleans house for him and left him this candle.
Who knows whether he would have contacted me to order a new one but the point is, the candle did not stay with the purchaser and it travelled to a new potential customer.
Another new to me customer bought some of our cleaning products and did not have a source for more. I believe that this had been a gift to her and there likely was no re-order label on it. So instead, she found me through our website and placed an order. Three hundred bucks later she is a happy customer as she has more products on the way and I am happy as I have a good sized sale. But imagine the consultant who sold that initial bottle without a label and missed out on that awesome sale.
Do you have any stories like this that you can share? Do you think re-order labels are a good idea or a waste of time?
The best way is to start with a method where you feel comfortable. A few suggestions though:
1) Host your Own Party – Have a party yourself and invite everyone you know. If people already know the product, this is a bit easier to get people to turn out, especially if they like it. Regardless, ask them to come, check out what you are selling, and tell you what they think about it.
2) Ask Someone to Have a Party – Depending on what you are selling, you may be able to get someone to host a party for you. Ask your parents, your friends, someone. This helps you get a comfortable start, but also allows you to start expanding your circle of possible hostesses.
3) Open House – Another great thing you can do is have an open house. It is a come and go event for a few hours and people just drop in, check out the product, and hopefully order. Invite everyone you know and invite them to bring a friend. You might even want to offer a small gift if they bring a friend. Some people give the hostess benefits away (do a draw for different things – purchase, booking, friend, etc).
4) Vendor Events – If you cannot get anyone to host, or do not know anyone, you can try a vendor event. But be warned that these can be hard to use for bookings or sales, and every event is different.
5) Classifieds – As a last resort, you can try the local classifieds. Make sure you adhere to any rules your company may have about advertising.
Are you planting seeds with everyone that you encounter about your direct sales business? These seeds relate to purchasing, hosting and even joining if they are so inclined. You have interactions and conversations with a variety of people every day and you could be passing up all sorts of people who are interested n your product and would love to be involved! Set a goal to use one of these methods every day to talk to someone about your direct sales business.
A Friendly Stranger
“You are so friendly and fun loving! Have you thought about having your own business? You would be great!”
Life of the Event
“You are such a fun person! Have you considered a career where you can party, have fun and make some new friends? Could you get excited about that?
The Put Together Person
“You seem to have a talent for (pick something sincere and business related). I would love to show you how that can be turned into your own business. I cannot believe that I get paid for doing something I love!”
“My business involves having fun and (type of product). I show people how to turn a love for (type of product) into a rewarding and profitable business. Do you know someone that would be interested in this type of business?”
Get into the habit of planting direct sales opportunity seeds, set a goal to approach at least one person, but actually to approach three people, every day. Make a note of who you approach and what the outcome is. Fill your business card holder before you head out as once you get started, you may not want to quit! This technique is best used in person and you may want to practice some of the wording beforehand. Words have power!
When it comes to doing a direct sales party or event and the paperwork I bring along, sometimes I feel that I am hauling an entire desk! But over time, I have learnt to streamline and do not bring nearly as much as I used to. I can carry it all in one bag that would be about the size of a grocery bag which allows me to bring in my demo products and paper in one trip.
This is what I carry:
Pencil Case – Pens, pencils, business cards, name tag, calculator
This is it. It sounds like a lot, but when it is packed up, it is not so bad. Now is a great time to stock up on things with the back to school specials on! I picked up a pretty folder for a buck and I have seen pencil cases and staplers on sale as well. Don’t forget the pens!
When it comes to writing your ads, there are words and sentences that you can use to assist you to make your ad more powerful. Here are some things to consider.
Title – It needs to capture the attention of your audience and make them want to read more about what you offering. It does not have to be long but something that gets attention. “Join my team” is likely not going to encourage people to read but “Join my Million Dollar team!” may get more interest as they see the word “Million” and want it.
Value of the Offer – The body should make sure it answers whatever is promised in the title. For instance, if you saying “Join me and earn a car” the body should say something about how they are going to earn this car. You also do not want to discount other important factors such as it is a selling job and whatever else you feel is relevant.
Unique – Why is your offer unique from those other ones out there? Is your company the only direct sales company that allows their consultants to earn a car? If you make this claim, it is important that you know it is true as if there is another company has this same incentive, you can be sure someone will let you know about it. And depending on who they are, they may want to make sure the rest of the world knows that you screwed up.
Power Words – There are words out there that are powerful and therefore, you also need to use them sparingly. For instance, “Free” is a power word, but if people use it too much it loses that power and people tend to ignore it.
This is just a bit of information to help you write your direct sales advertisements more effectively. To do a really awesome job, take a bit of time to do more research and soon your ads will be converting like crazy.
Make sure you check the posts – Advertising Part 1 and Advertising Part 2 – on how to write an effective direct sales opportunity advertisement.
When you are interviewing a potential direct sales sponsor, there are a lot of questions that you can ask. I have spent more than an hour on the phone with a potential recruit and still not necessarily gotten through all their questions. These questions are just some ideas to help you get started but chances are you are going to come up with more beyond these.
How long have they been with the company?
Why did they pick this direct sales company?
Why do they want to build a team?
What are their sales like?
Do they have a favorite product?
What is the commission rate?
Who processes credit cards?
If you need your own credit card merchant, is there a vendor that they recommend or the company uses?
Who pays the hostess benefits?
Do you offer your hostess a gift?
Is there a set shipping rate or can you set your own?
Who collects any sales tax that may exist where you live? How does it get to the government?
How long does it take for the product to arrive at your door?
Do you get paid the night of the party or the following month?
Can you earn your kit for free?
How many people are on their team?
What kind of training do they provide?
Do they do any type of recognition?
What do they feel their strengths are as a sponsor?
What do they feel their weakness is as a sponsor?
Do they know if there are any meetings in your area that you can attend if they are not local?
Does the company offer fundraisers?
What are the benefits to building a team?
How much do you make off your team?
Can you earn free trips/products/vehicles/house with the company?
Are there any questions you ask a potential direct sales sponsor that I have not covered in the above?