Thursday, December 20, 2007

Business Lessons from the Cleaning Lady

Recently Pink Truth posted a directors explanation of how you can make money even if you don't have very much to start with.

She (the director) made some good points and some suggestions that are probably unsavory to most.

She also listed some numbers that were very confusing to me. I don't know where she (the director) came up with these numbers, but it was very hard to follow!

Naturally "babynurse" logged a laundry list of potential expenses (some one-time, some recurring) as though you need to count on incurring these expenses regularly??!?!

But just now (12:55am) SUEC hopped on and said;



"I thought that MK is "an investment" then why if it is a (edited) investment is it depreciating faster than my new car I just drove off the lot? Investments are supposed to APPRECIATE, not DEPRECIATE in value!!

Good point about all the over hidden fees... Oh and babynurse's math has so much more truth and credibility!

Add, all that plus "You can't afford to not have childcare and a housekeeper" to that laundry list of "PROFIT" and there you have it... I have news for you... I work as a Housekeeper for MYSELF and I make $25/hour plus tips!! People actually call me with work, not run and avoid me!!

Now that's a "BUSINESS"... You shouldn't have to call customers to basically beg them to buy something from you!!!
They should be begging you!!

OH... PCP... It's a Joke!! I have never sold a dime using PCP!! That's why it's called "JUNK MAIL!""

I couldn't help posting this with some thoughts of my own.

1. I am not sure if you understand the concept of investing here, but you can not apply a depreciating or appreciating label to this kind of investment.

Your equation should look more like - Assets − Liabilities = Owners Equity

I fear this will be lost on most of us, but if you are curious, Wikipedia explains it like this:

At the start of a business, owners put some funding into the business to finance assets. Businesses can be considered for accounting purposes to be sums of liabilities and assets; this is the accounting equation. After liabilities have been accounted for, the positive remainder is deemed the owner's interest in the business. Thus, in accounting terms, ownership equity is the remaining interest in all assets after all liabilities are paid. If valuations placed on assets do not exceed liabilities, negative equity exists.


I suppose that you are asking, "if my "ownership equity" is supposed to be appreciating, why is it in fact depreciating?"

If that is what you are asking, I believe we would need to study your personal business model and individual practices to determine "why".

2. Babynurse was talking about something completely different...You can't say it was MORE anything. It would be like you saying, "I like chocolate", and me saying, "I hate TV" and someone saying, "what David said has MORE truth and credibility". Makes no sense!

3. More expenses that are not necessary. AND then we get to it. Apparently, cleaning houses for a living is a BETTER example of a BUSINESS than Mary Kay. Apparently, if you clean houses people will come out of the woodwork begging you to clean their house. I am curious, SUEC, how long did it take you to have enough clients paying you $25/hr to make a living doing it?

I really dislike when Mary Kay people say, "just quit your job and Mary Kay will bring the money to you". But I have a friend that cleans houses. She recently moved and sold her business in her old location and tried to start one in her new location. This plan FLOPPED. Any time you start a new business, it takes time and energy to develop clients.

I wonder, based on Pink Truth math, do your clients pay you for the time you spent finding them? Do they pay you for the time you spent on the phone, delivering flyers about your business. etc? How long does the average house take to clean? If you spend 1hr per house per week, and want the seemingly standard $1,000/wk you have to hit 40 houses every week. I am sure you do not get paid for all the driving between houses, your cleaning supplies, etc.

I am not saying that cleaning houses is any better or worse than selling Mary Kay, I AM saying that for all the complaints on Pink Truth about Mary Kay, it seems incomplete for you to say that you make $25/hr with no explanation of your expenses or the time it took for you to build your business to a point that you were able to make a living.

Judi recently asked here, "Why, if Mary Kay makes so much money, would you not quit your current job?" I think if we were to study the house cleaning business model, we would see a similar necessity to build slowly while relying on an alternate source of income.

Any thoughts?

SUEC, do you read here? If you do, I am sorry I did not ask this question on Pink Truth, but I was banned. I would love to discuss this with you here! Feel free to drop a line!

12 comments:

  1. Dont worry I doubt if any of the PT'ers will come here to debate this topic. The shelf life of cosmetics and skin care and the worth of a car cant even be compared. You drive a car and you put cosmetics on your face and if the product sells its gone in 2-3 months. Cars dont go up in value like homes. I dont understand these women even if they spent 1200wholesale they could move that product in two months if they wanted to (hoping that the majority of it is skin care and not color) I agree you cant move tons of color unless you discount it or make it a part of the package (roll up bag etc..) This is why if I were a director I would suggest that the color to be purchased would be neutral or tawny colors so there is not a myriad of bright or dark colors especially for corporate women.

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  2. Invest. Verb. 1a: apply or use (money) espcially for profit (fromthe American Century Disctionary (paperback) c. 1995

    Therefore, by definition, any money used to purchase inventory with the expectation of selling the items for more than what was paid is an INVESTMENT.

    Dave, you are entirely correct when the Cleaning Lady makes her claim about making $25/hr as if that is her net profit after expenses, taxes, etc. Unfortunately, you can also hear overblown claims of making $5K, $10K or more per month on radio advertisements.

    Regarding the website cost, I think that $50 year ($25 for a new consultant) is extremely inexpensive. No, we don't get a ton of brand-new customers coming to my wife through her PWS. I'd say we average 5 per year that way. Our current customers, especially the out-of-state ones, order from it all the time. And yes, just because the customer placed her order online does not mean the consultant cannot call and "upsell". We do it all the time.

    Of course, to make best use of the website, you need to be able to accept credit cards, which means paying $30/year for ProPay, and then having a 2.69% + 30 cent fee on each credit transaction, but that is nothing compared to what it would cost to lease a credit card machine and the fee charges with those machines are much much higher.

    I got a kick out of pinkpeace complaining about having trouble finding the lipstick shades. Looks like her screen is 800x600, and she forgot about the scroll bar. She also obviously didn't click on the "lipstick is back!" button, where recommended lipsticks are broken down by skin tone.

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  3. I don't understand how they think the product is depreciating. If you buy something and sell it for double what you paid for it, um...didn't it just appreciate?

    And PCP...a joke? Well, if you don't call anyone and ask if they got the catalog, yea, it would eventually become junk mail. My experience with PCP has been, the people I work with and see daily who are on my mailing list hunt me down at work and show me what they want to try from the new catalog. People I don't see regularly don't typically order unless I call them. Yes, if I don't call them, they won't call me either...hmmm...

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  4. I have a few things to add:

    1. It IS pretty silly that many directors claim you need a housekeeper and nanny to be a success. This definetly depends on how much you are working, if you have another job(s), etc. Why you need a housekeeper if you are supossed to become a director in 20 hrs a week is beyond me.

    2. I agree with pinknight about building business. The only business you can open where people will flock to you is a fast food franchise. And inventory is nothing compared to the start up capital needed for that investment!

    3. I also agree that no one should quit a job to do MK...why? See number 2! It takes time to build up to a "full time" MK income. And if you never choose to, that is ok as well.

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  5. I think some people read Miracles Happen and go wild. Mary Kay Ash did mention in her autobiography how beneficial it is to hire help. OK. Fine. That is the only place I've seen it in writing. It's her opinion. Somehow it got presented as the key to a successful career. I never quite understood the housekeeper bandwagon. I could see someone who's become a solid director hiring help, but not a beauty consultant working part time. Just my two cents on that topic. :)

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  6. speaking the real truthDecember 20, 2007 at 2:01 PM

    make some good choices!

    We always hear about the crazy expenditures or ways that people were unwise with their MK money, let's talk about some good things.

    If you need a housekeeper or office help, try bartering with MK products. That costs you half as much out of pockets. That is what I did when I was a new director and still working another job.

    I just finished last quarter as a Pearl, and yes I sold a ton! I took the American Express Gift card and it will pay for most of my lodging at Leadership when I split my room with my 2 buddies. I am also using points for my airfare, so Leadership will not cost me much at all.

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  7. speaking the real truthDecember 20, 2007 at 2:05 PM

    Being a cleaning lady is fine, but remember, if you don't clean houses, you make nothing. That is one thing that I love about MK, I can be making money even when I am sick or on vacation. Also, when they lose a client, it takes a big chunk out of their income if they do not replace that house right away.

    Two different gals in my unit cleaned houses before they even began a MK business. They complained to me about the physical toll on their bodies.

    Folks, the bottom line is that MK is not for everyone, and that's okay. There is good and bad to any job, especially from differing perspectives. I do not enjoy cleaning house, some people do. I would not enjoy being a dental hygienist either, but others love it. I love what I do and respect others who love what they do.

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  8. speaking the real truthDecember 20, 2007 at 2:09 PM

    Colleen, I have to disagree with your comment about not selling much color. I sell a lot of it. I have some clients who only purchase color, and some who only purchase skin care, and some who use it all.

    I have ran through almost all of my color and am helping a friend who WAS way overstocked to move hers. Hers is a long story about how she wound up with so much product, but I will tell you that her director was not what I would label a "good director". She is now an adoptee in my unit and I am teaching her the "right way" to do MK. She doesn't blame the company for what went wrong in the past, and still loves MK.

    Colleen, you are right that we should order more of the neutral colors, they are always the best sellers.

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  9. Way off topic, but has anyone read PT today. It was mind numbing. Everyone knows I do not love MK, but I think whoever wrote that article went off the deep end. You cannot possibly compare MK to a sexual predator.

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  10. Are they doing that AGAIN??? The first time I saw PT was probably a year ago and there was an article comparing MK to an abusive spouse or cheating spouse. And then another time I was on there and they had a sexual predator comparison. And I think they did the sexual predator comparison earlier this year as well. It seems to be a recurring theme.

    I agree Judi, totally off the deep end and crossing a line.

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  11. I will have to look again to be sure, but I think the sexual predator comment started with blessed.

    He disclaims it as, "I am not comparing MK to a sexual predator, but...."

    meh

    I'll start a post on it hold on for a second

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  12. Monkey see monkey do MK the pink sexual predator...so sad!!! Speaking the real truth, I guess we can agree to disagree I dont see the color moving that fast except for lipsticks I guess I have to get on that bandwagon. Thanks for your input

    ReplyDelete

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