Home Party Plan Basics: Hobby to Business

Author: Susan Squier

Home party plans (a.k.a. direct sales businesses) rake in millions of dollars each year and vary in products from candles, pocketbooks, toys, jewelry, make-up, and more. Why can't your hobby do the same, too?

With enthusiasm, a solid plan, and a good product anyone can start a direct sales business...

Direct sales business profits increase each year because home parties are beneficial for everyone involved.

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 just for 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 lives a more well-rounded life.

Consultants make new friends, earn an income, build business contacts, and develops self-confidence—all for doing something she really loves... shopping!.

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 and loving what you do and what you sell will shine through to your customers. And you know what they say... 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 a product line that keeps customers coming back. The return on your customer's investment should be immediate, or near immediate. In other words, your product's arrival should be no more than three weeks from the 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. Then set up your office.

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 your immediate contacts. Inform your contacts that you've started a 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.

Then, 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.

Advertise in your local parenting publications, newspapers, and magazines. 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.

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.