Q&A with Nancy – Profit from your business

Q: I have been doing MK since 12/27/10 and I have put everything I make back into my business, thus, leaving me to wonder at what point I will or should stop and pay myself. I came in with a full inventory and I’m still establishing my customer base. I see other consultants that move fast with their business and really wonder if I’m doing something wrong. I often wonder if other consultants have the same thoughts and concerns. I love what I’m doing so I guess that is what really matters. ~ Gail Capper

A: Dear Gail, yes, other consultants struggle with the same thing. Sometimes at the direction of their Director or from their own ideas of how to build the business, they invest in inventory and training but show very little profit in their business.

My take on it is that you should be paying yourself from the beginning. If you don’t have profit, you don’t have a business, you have an expensive hobby. I don’t know exactly how the breakdown works or should work in MK – so I’m going to share with you a hypothetical from my business.

If I sell $1000 in my business, this is an example of how I would divide it:

$250 taxes (rough estimate)
$250 business expenses (inventory, training materials, admin help, education, website, etc.)
$500 my personal income

Then my personal income gets broken down into different accounts as well. (Play, Give, Long-term Savings, Financial Freedom account, etc.)

If I needed $2000 to cover my monthly expenses, then I know I would need to generate $4000 sales in my business.

It sounds like you keep dipping into your “income” to cover your business expenses. I would challenge you to find ways to make the money you need for inventory (having a “summer blowout sale” on items you already have on hand) or to attend Seminar rather than dipping into your income.

Without this kind of discipline, you won’t see a profit in your business which ultimately is not sustainable.