Many businesses fail because of the misguided mindset of only taking steps forward. Building a business isn’t an easy forward stride, but instead is more like a cycle: two steps forward, one step back. Think of your business model as containing two processes: Sales (steps forward) and buying inventory (steps backward). Everyone wants to see money coming in, but many hesitate when it comes time to see money go out; even if the “backward” motion leads to a continual increase in overall profit.
Instead of viewing the process of buying Inventory as money going out, view this step as money being recycled or reinvested into your business by covering the cost of the inventory that you are selling. Go green by reinvesting your profit into new styles and new accessories which will bring in new customers and even more profit!
Reinvesting into your business can be frightening when you don’t know how to. Before you invest, you need to decide how much money you want to invest in your business and how much you want in return. Let’s take a look at an example of reinvesting into your business with a goal of earning $300 per month in disposable income:
Step One: You invest in your business by purchasing 50 pieces of new inventory. By the end of the first month, you sell all 50 pieces at $5 per piece and earn a total of $250.
Step Two: You reinvest and recycle the $250 you earned and purchase 90 new pieces of inventory. By the end of the second month, you sell all 90 pieces of inventory and earn a total of $450.
Step Three: You reinvest $368.50 (you pocket $81.50 from the previous month’s profit) and purchase 134 pieces. By the end of the third month, you sell all 134 pieces and earn a total of $670.
Step Four: Out of your $670 profit, you purchase 134 pieces for $368.50 to replenish your inventory (you pocket $301.50 from the previous month’s sales). By the end of the month, you sell all 134 pieces and again make a retail profit of $670.
By maintaining this cycle of selling 134 pieces per month, you are able to not only cover the cost of replenishing your inventory, but are also able to pocket an easy $300 every single month. Take your investment further by increasing the amount you put in, so you are able to take more out.
Don’t forget to capitalize on online parties and sales through your replicated website! Online parties are a great way to maximize your efforts because not only can you host two parties at once, but you don’t have to cover the cost of inventory sold through your online party. That is straight profit! Online parties by no means should replace conventional Paparazzi parties, but should be used as a tool to enhance the Paparazzi experience.