Become A Self-Employed Supply Distributor
by Lanette Zavala, MillennialEdge.com
During today's continuous threats of strenuous economic recession, the fickle demand for employees has resulted in more job lay-offs than employment. But the demand for a number of products and services can still open lucrative opportunities for self-employment.
Fortunately, smart strategic planning can lead to such operable small businesses as supply distribution. Large product wholesalers, retailers, and even small brokers maintain budgets to purchase from numerous distributors. If you have determined where there is a demand for your area of expertise, you will find the following steps helpful in starting your own distribution company.
1. This step has its own steps. Draft an organized business plan that will include your mission statement, start-up plan, budget, marketing strategy, production plan, and administrative activities. This will serve several purposes for your own business vision, any investor, business loan decision makers, and prospective customers/clients. Therefore, make it presentable, comprehensive, and straight to the point in each section. Avoid overly elaborating with unnecessary details.
First, you must define your business. Define its bottomline operation and define your projected key activities (such as supply purchases and sales) that will support the operation. What will you distribute specifically? What are the costs of your company’s intangible services, if any, relating to the distribution of the product(s)? Evaluate this before your start-up so that you will already have direction once start-up is completed.
Start-up entails lining up all your required certifications, permits, and accounts to do business. Obtain your DBA (doing business as), which is also referred to as an assumed name certificate. You can fill out a very simple application for this at a county courthouse for a small fee. Selling products also requires a state sales tax permit. Also, contact the Internal Revenue Service to obtain an EIN (Employment Identification Number). Open a bank account, which will require you to have a DBA and an EIN. Any other certifications and permits for operating your business must be researched and acquired.
Second, include a budget for all projected expenses, listing your own upfront investment. To do this effectively, research the standard estimates of various suppliers from whom you may have to make purchases. Also, include all facility costs, shipping costs and miscellaneous expenses.
Third, your marketing strategy is imperative to you business. IIn this section, you must define your plan on how to build and maintain your customer-base. To make a logical plan, determine where to best target your potential buyers. Which publications do they read? You may want to purchase advertising in that type of publication. Where do those buyers network? At tradeshows? Place upcoming tradeshows in your schedule. In a marketing strategy, define your market (the buyers and even other decision makers), determine where to target them, and determine with a realistic budget how you will reach them.
Finally, your projected production and administrative activities make up the everyday operations of your business. (Production for a supply company will very likely cost far more than administration unless you choose to work with a very expensive accountant for a good reason.)
2. Determine the sources of all your upfront investment. If you need a business loan for a new company, explore more avenues than banks – even if your credit is excellent. You will need a business plan and a financial statement at hand when discussing a business loan with any bank or independent investor. To meet independent investors, you will have to network strategically.
If you find yourself stumbling into pitfalls during your search, be practical. If you’ve lost your day job and can’t replace it with any other full-time work, then get a part-time job to pay bills as well as to fund your business. As you try to build your business with little to no financial help, do not waste any energy on pride. You may be proud of your degree. But if a lowly job is all that is available during hardship or necessity for your business, take it until your business can operate without it.
3. Network strategically with your business cards and build a prospect base. Build an attractive website and trade links with other sites that are likely to attract your target market. Attend tradeshows, as stated above, but also attend other events where you can meet people – pro ball games, book signings, golf tournaments, and events sponsored by your local chambers of commerce. Explore various directory listings in which you might want to list your company.
4. Make a price list and keep it updated every quarter. Create a spreadsheet of items that your field demands and, based on your research, keep estimated costs next to each.
To do business, you can not let pitfalls intimidate you. Those pitfalls come in many forms: many statements like, “No, we don’t want your services”, or “Loan Denied”, or “Your account has only a little money.” Key people who were difficult to reach over a six-month period can very likely cancel the one appointment they finally set with you. But you must be willing to try three times as hard as your competition and always strategize to get a foot in the door while continuing to strategize to keep the foot in once you’ve gained ground.
