Choosing A Real Deal Company
In previous posts I have mentioned the importance of choosing
the right company, and a critical step in your odyssey will be to find a
company. But which one? It’s a tough choice ahead. Hundreds of
companies vie for your attention, most of them start ups. And among
those startups, the failure rate is high.
Over 96% fail within the first year, according to the estimate by
“Inside Network Marketing” author Leonard Clements. This is based
on his analysis of company listings in surveys and trade publications.
There’s no way to remove risk from the entrepreneurial process
whether in network marketing or in any other business, but if you
follow the procedure for evaluating MLM companies outlined in this
chapter you will be equipped to make an informed decision. A bottom
line question would be…Why is MLM often portrayed as the perfect
I have heard from men and women that network marketing is the
perfect business. It seems logical that many people in the business
say this, since a statement like that could draw new people into the
business. “This really is the perfect business!” could be just what a
prospect needs to get the courage to make the decision and join a
network marketing company. But is that all it is? Just a great
statement to be used in an attempt to close people, or is there
actually any truth to it?
Of course not everybody shares this positive image of the industry.
Many people think quite the opposite of network marketing. Bus loads
of people would laugh when someone would refer to it as ‘the perfect
business’ because they don’t even consider it a business in the first
They might still have the picture of a bunch of housewives gathering
around the kitchen table to sell each other plastic cups and lingerie as
a hobby. Obviously not everybody evaluates a business by the same
criteria, but with global revenues exceeding 100 billion dollars, it just
doesn’t fit the description of a hobby anymore. It’s serious business.
Fortunately, a lot has been written on the subject over the years, by
people both outside and inside network marketing. Robert Kiyosaki is
a good example of a successful entrepreneur and best selling author,
who has not made his fortune in network marketing. He isn’t even in
the business. But he is a strong advocate of the industry because of
its power and potential. He also explains why, in his opinion, this
industry offers the best chance of success for an individual that wants
to start a business these days.
He claims that network marketing companies have a system in place,
much like a franchising formula, that has proven to produce results if
you stick to the system. If we have established that network
marketing is indeed a business, the question still remains: “How
perfect is it?” To answer this question, let’s look at this from the
perspective of someone that wants to go out and start a business.
If you were to start a traditional type business, the first thing you need
would probably be money. In many cases a lot of it, so you would
need to talk to a bank. Of course this bank is not just going to throw
money at you until you convince them that your business has a good
chance of success and that you are a good candidate. You may even
have paid a professional to put together a solid business plan. So
before you make your first dime, you are spending valuable time and
money to even be considered to get the money you need from the
Let’s say you qualify and you get the money from the bank. Then you
go out and start your business.
You rent the space for your store or office and, in doing so, you have to put down a deposit for the first month or two and you probably have to sign a contract for a minimum duration of your lease. This will account for at least a couple of
thousand dollars. Then you have to get the furniture and equipment to make your business actually look like one.
Depending on your type of business, that can range from hundreds to
many thousands of dollars that you must spend just to get your
business up and running. But of course it doesn’t end there. You’ll
have to take care of and pay for: insurance, advertising, accounting,
legal fees, taxes and a host of other things that you may not have
anticipated, but will prove to be necessary nonetheless. In most of
these cases, it will take someone else’s knowledge and that someone
wants to get paid for his or her services.
Now you may realize that with all of these things to take care of,
you’re required to work your business full time. And this is not full
time like 40-60 hours on a job. Most entrepreneurs work 60-80 hours
or more per week. Still, you can’t be in the store all day and do it all
by yourself. So you decide to hire someone to help out. Here comes
the nightmare of all companies: Employees.
They’ll work hard when you’re there and slouch when you’re not.
When they show up late or call in sick, you have to open the store.
And they’ll never work as hard as you do, because it’s not their
business, it’s only their job. Nevertheless you must pay them before
you can even pay yourself. And then we haven’t even discussed all
the outside factors like: competition, government regulations,
technology, customers that refuse to pay and too many more issues
A change in any single one of them could put you out of business in
no time. The sad truth is that over 90% of all new businesses go out
of business within the first five years of their existence.
Yet how much money do you put on the line to have a chance in a business like this?
Let’s compare this with the business of network marketing and see
what the differences are. If you start your own network marketing
business the initial investment is very low; probably less than $700.
You don’t need an office or a store to rent because you work out of
your home. There may not be a need for extra insurance, legal fees
or expensive marketing advice, because all of these things are taken
care of by any good network marketing company.
Most companies also offer valuable training at minimal cost that will
vastly increase your chances of success. You can start your business
part time and you can work when and where you choose. Perhaps
the most important advantage of the network marketing business
model is the leverage it offers.
You can leverage yourself by sponsoring others into your business
and helping them build a business for themselves. Yet these people
on your team are not your employees, they each have their own
business. Therefore they’ll be more motivated to work because they
are not working for you, they are working for themselves. This way
you can build a network of thousands of independent distributors
scattered all across the globe through different levels in your
organization that you can benefit from.
It’s like having thousands of stores all over the world without having
to pay rent on any of them. Does this make network marketing
perfect? No, of course not. Nothing is perfect but anyone who
seriously evaluates network marketing can’t help but come to the
conclusion that it offers some remarkable advantages over traditional
In Our next post we will look at how and why Margaret a Mother of 5 made the decision to change her Life Path.