This part of “Direct Selling Wisdom in 100 Words” series (*) focuses on direct selling start-ups during these difficult times.
The question was:
“Explosive start, growth, sustainability of growth, profitability, cost efficiency, positive cash flow… For a typical start-up in direct selling during these days, which one would you pick as the most important? Or is there another area that you would emphasize the most?”
Below are comments from a group of persons of expertise form the industry:
Shilpa Ajwani, Founder and CEO of unomantra
“The year 2020 has brought with it a more level playing field as both big and small companies faced unprecedented challenges. This is a good time for innovative direct selling companies to start up.
They should focus on explosive growth to catch the attention of potential salesforce seeking extra income and consumers wanting effective products for their homes and well-being. While gaining momentum needs to be the first priority, the leadership must create strategic initiatives that focus on creating a unique culture coupled with robust systems for retention and leadership development using both high touch and high tech enablers.
This would lead to positive unit economics and sustainable growth.“
Mona Ameli, Founder and Managing Partner of Ameli Global Partnerships
“While devastating in many ways, the pandemic has created an interesting mix of opportunities and challenges for many start-ups within our industry.
From remote and virtual interactions for both employees and field, to more versatile digitally-based business approach for both customers and consultants, the start-ups have benefited from far greater advantages of agility and flexibility compared to their legacy traditionally-run and technology-strapped counterparts.
But the key challenges of careful risk-management and strategically-planned sustainable growth model that can effectively distinguish key fundamental changes to the business from temporary circumstance-based momentum remains a core area. A core area of focus for those looking to create a long-term, financially stable and scalable business.”
Emily Barr, Owner of Orbis Consulting
“I feel sustainability of growth is a key for start-ups, and the means to achieving this is through a strong initial ‘go to market’ strategy.
This strategy needs to emphasize corporate recruiting, because for a new company one will not be able to rely solely on organic field growth. Identifying the most effective ways to use your recruitment budget is critical.
The good news, in our post pandemic world many individuals are looking for supplemental income opportunities. Whether due to income loss or added free time, there is a large, captive audience waiting to hear what you have to offer.”
Mark Beiderwieden, Founder of DiSSECT
“The current crisis shook many households with the realisation that their trusted income stream & lifestyle are more vulnerable than they assumed.
This “new reality” is creating a new segment of direct selling participants seeking to protect their future that are both well informed and cautious when considering where to put their trust. Expectations are high, and must be met with realistic, value-driven promises coupled with attractive income, all supported by a solid foundation of quality service, training and sales support.
The current growth potential is real! Never before has the focus on business fundamentals been more essential in order to realize this potential.”
Craig Fleming, CEO/President at Direct Sales Experts
“Currently we are launching 5-7 new direct selling companies each month and the key differentiator between highly successful companies has always been communications.
In order to successfully launch your new business, we encourage entrepreneurs to start with a well written strategic business plan. A plan that communicates your mission, vision, values, culture, unique selling proposition and key ‘go to market’ strategies.
Once written, you now have a roadmap that can be easily communicated to all team members, eliminating confusion and misunderstandings. This clear focus helps everyone understand what the future looks like and the steps needed for success.”
Doug Hepfer, President at Hepfer & Associates
“Sustainable growth has been the focus of the most successful direct selling start-ups for as long as I can remember. Sustainable growth can deliver the exponential sales increases that drive super-start launches, without the risks of compensation plans that are highly weighted toward explosive distributor recruiting.
Focusing only on profitability often leads to under-investment in the infrastructure you’re going to need when your company passes its next revenue milestone.
Balanced growth built on strong distributor trees supported by growing customer sales has been the key to long-term success for the most successful new direct selling companies of the last decade.”
Dan Jensen, Founder of Dan Jensen Consulting
“Sustainable growth is vital for every startup. How? Think long term.
Have a great product that knocks the socks off people who experience it. Priced right.
Have great training systems that produce predictable results when applied.
Have an amazing compensation plan that makes it worth their time at 1 hour per week or 40 hours per week.
The elephant in the room is the question, ‘Is it worth my time?’”
Jay Leisner, President of Sylvina Consulting
“None of those are most important. For a direct selling startup in today’s pandemic world, what is most important is the ability of a company’s representatives to transact business entirely online (selling, recruiting, team building, leadership development, etc).
Of second importance is the need to sell products or services that people will buy even if they are not earning any money through the company’s compensation plan.
Third, I would list having company executives who are focused on both the needs of the field and the needs of the company.
Finally, I would list patience as next in importance.”
Alan Luce, Senior Managing Partner at Strategic Choice Partners
“Start-up companies face any number of significant challenges: Not enough cash, often little operational skill among the founders, and lots of investment is needed in technology, registering intellectual property and development of a product line. When they do not know what the best sellers might be, they tend to over compensate by offering more products. In most cases it is the better practice to offer fewer items with a larger count of each item.
In recent years the rise of excellent third-party warehousing and pick, pack and ship operations has removed the headache and the start-up costs associated managing logistics. This is another area where the founders usually lack expertise. The third-party logistics option saves money, time and worry.
In my experience, poor inventory management is one of the most common reason why start-up companies fail.”
Daryl Wurzbacher, CEO of ByDesign Technologies
“In successful startups, the common trend we are seeing is long-term thinking. These companies are launching with advanced tools for their representatives, investing time in building out digital assets libraries, and keeping the field focused on the next step and the next rank versus EVERYTHING needed for success.
They are also listening to customers and paying attention to the things that matter to them, like transparency, ethical supply chain, and quickly adapting to shifts in demand.
We are also seeing more companies doing industry research: Reading blogs, listening to podcasts, and contacting mature companies for tips. Those startups who take advantage of the available resources tend to avoid costly mistakes/missteps that could have deterred their growth.”
(*) Click below links for previous articles in this series:
Looking Ahead to 2020 – Part 1
Looking Ahead to 2020 – Part 2
Recommendations in Times of the Global Pandemic
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