by Ken Benjamin
Let’s assume you are still highly motivated and want to continue your quest to become a commissioned manufacturers’ representative. You’ll need to review the matter of primary concern — how much money does it take to get started and survive for two to three years?
I’m not sure anyone but you can adequately answer that question. The fact is that each of us has a different life style and it is as varied financially as there are individuals around us. I can safely say that you can’t have too much money in hand!
If you will permit me to digress a moment, I established my sales agency in the mid-1960s with $1200 in savings. I went to my local bank to establish a line of credit and outlined for them on paper a detailed business plan, what I wanted to do, how I planned to do it and the estimated start up cost. I basically sold myself to them relative to my confidence and chances of survival and success. After their careful evaluation the bank agreed with my plan and I had my requested $10,000 line of credit. I vowed never to use it, and I never did, but it gave me enormous peace of mind and security to know it was there if things didn’t go exactly as I had planned! (Update those numbers to current dollar values.)
Before you make a firm commitment, quit your job and plunge full steam into this new career, you must sit down and analyze your financial obligations as they exist today and into the foreseeable future.
What is the picture for the next two or three years relative to your personal financial obligations?
What have you committed yourself to for the next 36 months? Do you have an automobile that will require major repairs in the next 18 months? Is your wardrobe sufficient or will it require major additions? Are you expecting a new member to your family? Are there insurance obligations that will be coming up on a semi-annual basis that you’ve forgotten about? Are there student loans to be paid off? Will the house have to be painted in the next few months? Will the hot water tank have to be replaced, the driveway repaired, the apartment painted or the roof fixed, etc., etc.
All these expenses, plus a generous cushion for the unexpected should be programmed into your financial study, put down on paper as if you were making up a budget, and, for heaven’s sake — be realistic.
You need to be honest with yourself now, while it’s only a paper exercise. Later, after you’ve made the career commitment, sloppy financial thinking can result in a curse called failure.
Do it right, take all the necessary time to do it thoroughly and write it down with as much honesty to yourself as possible. This exercise will be a character building experience!
Next month, read about the discipline required in starting a manufacturers’ agency.
This article is excerpted from Make Your Future Happen, Ken Benjamin’s definitive guide to starting an agency.