How to Start a Direct Sales Company

I hear friends and acquaintances eager to quit their jobs, saying they want to start their own companies. The first response is usually to take it slow and careful. “Do something every day, some things in the evenings, on weekends and holidays to push that business forward until you’re ready to burn through your own capital,” I recommend. When the important question is asked how to start a direct sales company, there are six things to consider:

  1. Is your concept unique? Entrepreneurs start as small fish in a big pond. If you’re planning to start a business, I recommend you ask yourself these questions: “What’s my niche? Why am I doing this? How do I distinguish myself in the field? What’s the innovation here? What am I fixing that isn’t fixed today?”

    The world rewards innovation, something new, something cutting edge.

  2. Do you have barriers to entry? Consider whether someone can easily copy your idea. What if someone comes along with more marketing resources and takes your work and makes it larger? Make sure you’ve put in place the available protections (trademark, patent, other intellectual property protections). What secret sauce can you add to make yours special that somebody else can’t do?
  3. Choose an emerging market. In the challenging economy, you want to be in a place that is growing. You want to be in a place where it has potential to have a long-term viability. As you reflect on how to start a direct sales company, always begin by making sure that the product and/or service market you specialize in is one that will sustain your vision.
  4. You need a good network. Your network should include your personal confidential network, like a MLM consultant, a good lawyer, accountant and marketer, along with friends and people who’ll give you a discounted rate until you grow your business. Also network with “disciples of change”–people who are talking about and promoting your product and thus spreading the word about your company. These become the foundation for your “go team” when you are ready to launch your direct sales venture.

    You can create your network while still in your job, getting involved in organizations that include your target customers and distributors.

  5. You have to have passion. Some call it passion, but it really is endless energy. You have to get up early, work late. It takes a lot of passion, a lot of energy; it takes a lot of yourself. And take care of yourself first so that you’re refreshed and that you have the energy.
  6. Have good credit. In this downturn, people aren’t managing their credit. You need to call creditors and rework your payment schedule or ask them to work with you on the interest rate. Invest in getting your credit on solid ground, even if you don’t plan to borrow money in the traditional sense. In fact, there is very little “tradition” left in lending practices. But one thing is certain, you need to maintain a good relationship with creditors so that they don’t mess with your FICO score.

When you have crummy credit, you have to go to private equity or angel financiers or venture capital. Then you’re giving someone else a part of your company because you don’t have enough credit to take out a loan. Funding with equity capital is a marriage. One you receive equity capital, you cannot fire your equity partners. They are with you for the long haul.

Always understand the inner-workings of your business. If it is still conceptual, run the mental scenarios until you see the company operating in your mind’s stage.

When you ask how to start a direct sales company, the answer will always flow from the basic starting point of the key questions I have offered here.


Terrel Transtrum is the Founder and CEO of ServiceQuest, a consulting and training firm of MLM consultants dedicated to distributor service and retention, and now a recognized leader in supporting launches and new ventures. Contact Terrel at

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