The direct selling industry is one of the few business sectors that empowers people by offering independent career options. Although one can rely on standard pay and job security in a corporate environment, the benefits of entrepreneurship are second to none. The nature of financial management in direct selling depends on several factors. Besides, considering the dangers of the COVID19 pandemic, investing in direct selling opportunities is ideal and inculcates personal development at the highest level. However, on the bright side, direct selling brands are showcasing the benefit of entrepreneurship. For example, QNET, a globally renowned enterprise, offers business possibilities to be your own boss. Also, with a diverse product portfolio, QNET direct sellers are at liberty to choose, frame independent business decisions and start their entrepreneurship journey with a bang!
What is Financial Management?
Several factors contribute to the success of a direct selling brand. Be it capital, human resources or technology; everything plays its part in competitiveness to sell and adapt to agile business environments. Financial management means the allocation, planning and directing of financial resources like capital funds and business policies. Now, one may ask, what are the objectives of financial management?
To begin with, the primary goal is to ensure an adequate supply of funds for smooth business operations. Secondly, financial management strategies can direct funds wherever needed and reduce operating costs. For example, in direct selling, capital investments and product sales must be recorded for effective product/service delivery. This helps the brand capitalise on paid promotion and execute networking events.
Financial Management Vs. Financial Independence
A career in direct selling can be challenging considering the number of competitors. However, with the right guidance and transparent business guidelines, one can achieve success as an entrepreneur. There is a clear distinction between financial management and financial independence. For starters, the primary goal of financial management is collective success. Meaning, with a common objective in mind, entrepreneurs can effectively manage capital resources and direct them towards customised experiences.
On the other hand, financial independence is individual in nature. With millennials digitally mobile, the emphasis must be to add value to life rather than earn a living. Therefore, becoming financially independent can boost personal development, the ability to face challenges, focusing on long-term aspirations and embracing the meaning of entrepreneurship!
For example, aspiring direct sellers have the freedom to work remotely, bank on an alternate source of income and learn at their own pace. At QNET, distributors work with a group of direct sellers. Every distributor earns a part of product sales in the form of step commissions or business value points. Therefore, a flexible compensation structure can help entrepreneurs move up the ranks and build a business from scratch!
Let us now move forward and analyse financial management in direct selling.
Categorise Your Income Vs. Expenses
Running a business is no walk in the park. With external factors like competition and market trends, brands must constantly improvise and adapt. In terms of financial management, the secret is to optimise capital and increase business growth. For example, as a start-up business, entrepreneurs must categorise their investments and expenses. This helps them compute monthly/quarterly averages and focus on business operations. Predicting overhead costs can help brands improve financial stability in every department.
Fixed Costs and Variable Costs
Financially, there are many costs involved while running a business. For example, the rent, electricity bills, phone bills, website management, and e-commerce platforms are fixed costs that a brand incurs every month. On the other hand, product distribution, registration fees, or any other fluctuating expenditure comes under variable costs.
Record Your Financial Details
The nature of financial management lies in accounting. Be it customer data, product sales, money coming or going out of your business, it is important to document and keep track of income and expenses. This helps entrepreneurs to financially stay equipped and make strong business decisions.
Rewards & Recognition
The secret to financial planning or management is to allocate resources so that primary business operations are not affected. Diversity in a direct selling company has many advantages. For example, it can lead to dynamic business ideas, a better understanding of customer perspectives and effective analysis of market conditions. The nature of financial management is to stay vigilant and reap the rewards. To set an equilibrium in a distributed workforce, entrepreneurs must reward and recognise their teams.
For instance, at QNET India, distributors are rewarded in step commissions and business value points that help them move up the ranks. On the other hand, it is important to set aside funds for unforeseen situations. Therefore, invest in entrepreneurship at QNET and be your own boss!