I hope this will help many. You can run a great business if you handle your money properly. We all hear about the 60/40 split. This is recommended by the Company and it is a good way to run your Mary Kay business but it is important that you understand how it works. Poor money management is one of the biggest reasons we loose consultants. For making things simple, I am going to say at the end of the week I showed $1000 in sales on my weekly accomplishment sheet ( after discounts and not including taxes) that means you would take 60% of the sales which would be $600 to use to place your MK order to replace the product on your shelf. For the most part 50% - 55 % will be to replace Section 1 inventory (approx. $500) and the remaining 5 - 10% for Section 2 products.
Now the part that many get confused with, the remaining 40% is not yours to just go and spend. From that 40% or approx. $400 in this example will be split like this:
First you would make any credit card or loan payment, then you would want to set aside whatever portion you need to save to pay your quarterly taxes (now this will more than likely be directors more than consultants.) Now if you are going to go to Seminar or Career Conference, etc… figure out how much you should set aside in a savings account for these events. The best part of this is when you the event registration time approaches, you don’t have to worry about where the money is going to come from because you already have it in the bank.
Then, what is left is your paycheck. If you are not happy with the amount that is there for your paycheck, you don’t get to go over and take the money from the 60% side because you didn’t place your order yet, actually in the real world this would actually be consider “embezzling” and it is a very bad thing and can get one in a lot of trouble But you might ask “But, mk4me, what are you suppose to do?” The answer is simple, you increase the number at the top, the sales numbers.
I strongly encourage my unit to get in the habit of paying yourself at least wholesale when you will remove product for yourself, it will keep your money straight and please don’t think that “you personally” already paid for it, you didn’t your business did. We must realize to look at your business a real business.
It is also important that once you collect money don’t keep dipping into it because by the time you get to the bank to make your deposit, it will most certainly be gone.
It is very important to keep track of all your expenses and all your mileage, you will want to be able to take advantage of any and all benefits for self employed business owners. Another important point to remember is if you do have any amount financed, if you have money available, don’t let it sit in the bank until the pay date, pay 3 to 4 times a month, it might not be a lot, but paying frequently helps drop your balance on that we are accruing interest.
It is extremely helpful to have a checking account, savings account, and credit or debit card specifically for Mary Kay. That way you don’t intermix your personal money and your business money. I don’t leave a balance on my credit card but I do use one to place my orders. The one I use gives me frequent flier miles so I can usually earn one or two free airline tickets a year so the cost of Seminar and Leadership is greatly reduce.
Watch what you buy, I have heard people say, “oh well, it is a business expense, yeah…but…..your still gotta pay it. .
I am sure I missed many points I will probably end up adding after I get some sleep but right now, my eyes are closing on their own so I think I will call it a wrap and go post it!! Hope this service as a “help” for some.
For Further Reading...This Week On Pink Truth - Click Here
Pros and Cons of Mary Kay - Read or Contribute or Both!
First Post - Why I Started This Blog
The Article I Wrote For ScamTypes.com (here) (there)
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