Getting a Bank Loan For Your Mary Kay “Business”
One sales director is suggesting that new Mary Kay consultants use this letter to get a bank loan. Yes, she’s suggesting that the consultant actually present this nonsense to a bank loan officer. I’m afraid to say that this isn’t quite going to cut it.
To: Loan Officer
Business Proposal
I recently became a Mary Kay Independent Consultant and I am applying for a Small Business Loan to get started. Mary Kay is the best selling brand of facial Skin Care and Color Cosmetics in the U.S. and is the largest Skin Care Company in the United States.
Mary Kay Inc., provides women with an unparalleled opportunity for financial independence as well as career and personal fulfillment. As an Independent Consultant, I will conduct weekly Skin Care Classes. These classes will generate an average of $400.00 in weekly revenues. To get off to a good start, I must have sufficient inventory. The purpose of this loan request is to purchase sufficient inventory.
Inventory Package and Use:
Career Package $3600.00
(foundations, color cosmetics assortment and fragrance items)Office Supplies $150.00
(postcards, stamps, folders, cabinet, desk, etc.)Business Supplies $150.00
(literature, order forms, sales tickets, display trays, vanity tray/mirrors, brushes, sponges, product samples)Tax on Inventory $500.00
Total amount needed to start my business $4,400.00
More products are sold in a Skin Care Class when they are available to the Customer. Women prefer to take their product home as opposed to having them delivered later. Having products on hand will increase sales and related revenue. All income from this Business will be maintained in a separate bank account. Money earned from the related sales of this inventory will be earmarked to payoff
this loan and reinvest into my business.Thank you for understanding this application request.
Respectfully,
xxxx xxxxx
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Comments (18)
Lazy Gardens
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Conversation between Credit Union Loan officer and new Consultant:
Loan Officer : Do you have any previous experience in the cosmetics business?
IBC : No, but my Director says the product sells itself. All I have to do is smile and squirt.
Loan Officer : Do you have any previous experience in any retail business?
IBC : No, but my Director says no experience is needed.
Loan Officer : How many similar businesses are competing with you for customers in your market area?
IBC : I don’t know, but my Director says because we have no territories that the possibilities are unlimited. I can sell wherever I go. Isn’t that exciting!
Loan Officer : In addition to the expenses you list here, what are your projected operating expenses for the first year?
IBC : I don’t know, but my Director says I can make up to 50% profit on each sale. That $3600 in inventory will turn into $7200 in no time at all!
Loan Officer : Have you identified your target market?
IBC : My Director says it’s anyone with skin.
Loan Officer : You claim that you will be generating an average of $400 in weekly revenues. Where did that data come from? Does Mary Key Corporation track sales to end users and provide this data to their consultants?
IBC : No, but my Director says I will make $400 a week. Isn’t that good enough for you?
Loan Officer : We’d love to see our money out there working for you, but we loan to businesses that have a chance of success. You are not ready for a loan yet. Here’s URLs to information from the Small Business Association about starting a home-based business, researching the market, due diligence, and some information on local night classes in small business management. We’ll be here when you are ready.
IBC (under her breath as she exits) : Wrinkles to you, you dream-stealing negative Nellie!
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Scrib
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“IBC (under her breath as she exits) : Wrinkles to you, you dream-stealing negative Nellie!”
Heh; reminds me of what professional hawker David Cooper taught in one of his MK-related sessions:
“…Now the next time you have an interview that did not go the way that you wanted it to go, right out there before you get to your car, look back at the house and go weenie, weenie, weenie, weenie…if you are on the phone and someone didn’t do what you want them to do just
hang it up and go, weenie, weenie, weenie, weenie.”
Just all part of the wondrous self-improvement benefits Mary Kay is supposed to offer, ladies and gentlemen!
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Cristina K
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I am actually a consumer credit underwriter and I can guarantee you that little “proposal” will do absolutely nothing for a creditor. We like cold hard facts and proof of repayment ability.
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seeing the truth
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Lets not forget that the first thing they do is run to check your credit score. And you have to bring in proof in income just not hear say
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seeing the truth
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sorry it should have read to bring in proof of income
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advertisingchick
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I’m sorry but I just had a good ole’ LOL in my extra large cube at my 9-5 JOB!
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Keyta
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I am speechless. Hopefully the loan officer is kind to the poor IBC. This proposal (used loosely) is laughable.
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A Reader
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Just out of curiosity, I went to the website of personal finance guru Dave Ramsey and typed “Mary Kay” into the searchbox. The first article that came up was a question about a woman who had invested $4K into Mary Kay inventory. She wanted to know if she should re-invest her profits to keep up inventory. Dave replied that she should deplete her inventory to pay off the loan, and then only order on an as-needed basis. His final comment made me laugh: “Let Mary Kay carry the cost of the inventory.”
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A Reader
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Sorry, meant to say “borrowed $4K,” not invested 4K.
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seeing the truth
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I love Dave Ramsey and my husband and I have been following his plan and love it. And he is honest and what he says is true, you should only order as needed. But MK makes it almost impossible to do that and that is how they make a killin’ off of the IBC
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multimom
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I LOVE Dave Ramsey. Of course he would see Mary Kay as the scam it is.
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Scrib
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We have that transcribed!
http://www.pinktruth.com/2008/03/financial-management-guru-dave-ramsey-on-mary-kay-inventory/
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bellaone
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My God, I read the transcript and he is so right on. What he said was amazing…let the company deal with the inventory. RIGHT ON.
That interview was very typical of Mary Kay, I am afraid. Someone taking out a loan to purchase things they haven’t even sold yet without doing any research on marketing and demographics and all that craziness. I heard somewhere that when McDonald’s opens up a new site, they do a whole bunch of research on the area to make sure its going to be profitable. Makes sense to me.
Really, with the internet its really no problem waiting for something to be shipped to you. I purchased this super cute bag from Istanbul. I waited and it came today. So what if I waited? I don’t know of anyone who doesn’t mind waiting.
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mrkitty
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So, I guess according to this “business proposal”, since women supposedly don’t like to wait for their orders to be delivered (quick! send that memo to Amazon!), the consultant is planning to carry $4800 worth of product around with her in her car?
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pinkpeace
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Dear God. I would have rejected the letter based solely on the random capitalizations.
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bellaone
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Did this garbage actually work for anyone to get a loan? Anyone with any common sense knows you don’t go into a bank and demand a loan on a business solely with some crazy letter. I would be embarrassed to give that letter to ANYONE.
Then again, the MK folks have “ways” to get you money if you can’t do it yourself.
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raisinberry
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Nah they don’t expect those letters to work! They are for the IBC, to give the appearance of legitimacy. Let’s face it…if they used that letter even one time they would know it wouldn’t work…right? So the fact that it still circulates tells you it is another piece of bogus legitimizing in the minds of consultants…its all about “taking your business seriously” like websites that don’t generate income and profit level that isn’t, and selling retail only don’t you dare sell at a table at some craft fair!
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MLM Radar Detector
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What bank issues the Mary Kay affiliated credit cards which SDs try to “help” new IBCs obtain for inventory purchases? Seems to me the CC issuer would have shut down that line by now because the default risk was too high.
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