|(c)2015 The Made In America Movement|
Yesterday, I talked to you about what you need to prepare to see if owning a business is right for you. Today’s lesson is about 3 different types of business you can own. It is really 2 types of business you can own, but I decided to split the second business up and to 2 different types of business because it all depends on what type of business you want to own.
The first type of business is called a direct selling business. These are your Avon’s, Tupperwares, and other companies like them. They mostly sell products, but some sell services like insurance. This type of business is perfect for the person who doesn’t know how to start a business, or not sure owning a business is right for them. The reason why owning a direct selling business is perfect for the unsure person, is for 1) that company has taken care of all the legal matters when you start a business, and 2) all of the marketing materials and products are provided for that person. However, a direct selling business may not be right for you, if you know what types of products you want to sell, your market share (the people who you think will buy your product), or if you have a patent for that product which you would like to sell. The other drawback to having a direct selling business, is you are like a shareholder in the company, but sort of an employee of the company. You do have to sell what the company offers to its customers. In other words, you cannot invent a product and sell it under that company name.
Currently, I sell for the Longaberger company. They have been in business since 1973 and they make baskets, pottery, and other home good items that complement the baskets and pottery. I have been a consultant with them since October 2001. Anything that involves any legal matters, which I, fortunately, have not had with them, they will take care of it. However, I do have guidelines that I need to follow legally, or I will have my contract pulled. They are simple little matters, such as using the trademark labels and logos at craft fairs, marketing materials I make on my own, and fundraisers. I also have to be careful about sponsorships as well. I do get discounts (25% on current products, 20% on retired products), my commission is 20%, and I get a monthly 1% commission override for any person who signs up to be on my team, and has earned $1000 in sales their first month as a consultant. I can also earn incentives, such as trips and free product. I earn sales through home parties, individual orders, online sales, online parties (such as social media events), and fundraisers.
The next business I would like to talk about is entrepreneurship. This is the only way I can best describe it. In this business ownership, you own 100% of the business, meaning you are the decision-maker of everything. There are 2 different types of entrepreneurship you can go into. The first one is product base, where you supply the product. The Second one is based on service, where you supply the service. It doesn’t matter what type of business have in this category, 1st 3 steps you take when starting a business is 1) what is your product or service 2) name of your business 3) was this for. Next, there are the legal matters to take care of, such as registering your business with your state, if you are in the United States (I am not familiar with and to international business startups), getting a tax ID number, and getting a business/vendors license for your state. (Again, I am not familiar with international law for each country.) Be prepared to hire an accountant, a business advisor, a web designer, and maybe have a lawyer on speed–dial. You may not need a lawyer, but it helps in case you need any business law advice.
Currently, I am also a sole proprietor for my company, P. Lynne Designs. I envisioned it in 2007 while I was working for a scrapbooking store called Archiver’s. I, as well as other customer associates, kept getting questions on making the products (meaning cards and scrapbooks) in-house, and they pay for the finished product. Archiver’s sold supplies to make the finished products and showed customers how to make them in the form of a class. They were not a hallmark or an American Greeting Card Company for pre-made cards either. That is when I got the idea to make them myself. Once I had the idea, which the company is both a product and service company, then I came up with the name MDN Creates. (I am not going into details on how I came up with the name in this blog post.) I officially opened for business in November 2009, but I had a slight problem. Archiver’s had changed the employee handbook to state that no employee may not start any business of any kind while working for the company. This also meant that if I was to stay with Archiver’s, I would have to quit as a Longaberger consultant as well. So in January 2010, I made the painful decision to leave my position at Archiver’s. I mentioned in a post 2 days ago about the mistakes I made when I left the company.
I mentioned that P. Lynne Designs was a dual company, meaning it was both a product and service company. The product portion of the company is that I am a stationer, creating designs for cards, scrapbooks, invitations, and other stationery products. The service portion of the company is sitting down with the client, and helping them decide what kind of product they want according to their taste in design. It is still a work in progress, because I just register the company with the state of Ohio a few months ago, as well as getting my vendor license. This is something I did not have to do when I started selling Longaberger products, which I still do. The other service portion of P. Lynne Designs is freelance services, where I write blog posts, research documents and write them, and graphic designing with Photoshop, Lightroom, and Illustrator. I know it sounds like a lot for this company, but I am pleased with the results so far, even though I can do more.
So this is an overview of the different types of businesses you can go into. There is one more that I failed to mention to you, and that is the role of the nonprofit company. I will get to that another day. But for right now if you have any questions, you can always find an expert on the subject of entrepreneurship for owning your own company.