Starting a Network Marketing Business

There are many things to consider when starting a network marketing business, so first a reality check. If you start a business expecting to earn a wage from day one, no matter what business you’re in, it probably won’t happen. Additionally it is important to understand that as a business owner each week your income will vary and there will probably be some weeks where you won’t get paid at all. The main difference between a business owner and an employee is that while the employee continues to get paid a wage regardless, the business owner does not and when you start a business this is the sacrifice you must be willing to make. If you are not willing to make this sacrifice, your business (regardless of what it is) will be short lived. Business owners are generally rewarded handsomely in the long term but it is no secret among entrepreneurs that in the short term things can be tough.

A network marketing business is no different from any other business model and therefore it is important to emphasise that this business vehicle offers a long term financial solution and should not be considered a get rich quick scheme. If you are expecting to be earning thousands of dollars within your first few months in return for a part-time effort, there is a fair chance you’ll be disappointed and I would be cautious of anyone who tries to tell you otherwise. Don’t get us wrong, yes it is possible to earn very good money using a network marketing business in a short period of time, however for the majority of people it takes time.

This information is not to discourage people from looking at a network marketing business, as arguably it is the simplest and most affordable method of achieving financial freedom. Instead it is to educate and reinforce the message that network marking offers a long term financial solution and therefore you should be willing to make a long term commitment to get your desired results. The good news is that perseverance pays off, the sacrifices you make today, will pay you back many times over in the years to come.

The Initial Challenge for all Network Marketing Businesses

You’ve just start your new business and it would appear that you have already encountered your first challenge – cashflow. The biggest problem that most people will face early in their new business is that you seem to be spending money to help get your business established, but you are yet to see a return on investment (ie you’re not earning anything yet). Does this differ from any other business model? No, all new businesses encounter this same problem, particularly if they don’t have the financial backing to start with. The advantage of starting a network marking business is that it is probably costing you under $100/week to maintain, if you had started out renting a shop front or in a franchise, it could be costing you thousands. Additionally your network marketing business offers you an uncapped earning potential and a leveraged income and therefore it doesn’t get any better.

Any traditional business owner will tell you that when you first start your own business, you can expect it to cost you for the first couple of months (be in the red). In fact most small to medium size business are in the red for a number of years before they start to earn positive cash flow and this helps to explain why so many small businesses close down within the first 5 years. The good news is that unlike most business adventures, if you’re actively working your new network marketing business it shouldn’t take long before you to start to see a return on investment.

Understanding the Big Picture - Underpaid and then Overpaid

When you start out in any business it is important to keep the big picture in mind and understand that while you may be seriously underpaid when you first start out (eg work 10 hours to make $10) in the long term, network marketing also allows you to become seriously over paid once your business is established. Over time you could easily be earning $500 per hour. Essentially as your downline and customer base continues to grow, the power of leverage will allow your residual income to grow exponentially.

A good way to visualise this is process is in the exponential graph featured below.

People fail in business because they expect success to happen, what they fail to realise is the success comes to those who make it happen and in network marketing a consistent, part time effort, over time can reward you handsomely. There is no one in this world that could argue that the network marketing business model doesn’t work, as each day it helps to establish more and more millionaires. Anyone who fails at network marketing does so not because the business model doesn’t work, but because they (the business owner) chose not to go to work. People who drop out of network marketing do so because they either weren’t committed enough, or were not willing to persevere. Everybody in any given network marketing company has exactly the same products, the same comp plan and the same tools, the difference between those who succeed and those who don’t is the individuals commitment, dedication and persistence towards achieving their success.

Goal + Action = Result

Robert Allen is a famous author responsible for publishing the largest selling financial success books of all time. But if you take the time to listen to his story it was evident that Robert had the big picture in his mind all along. In 1980 Robert publish a book titled “Nothing Down: How to Buy Real Estate with Little or No Money Down” and although it became the greatest selling real estate investment book in history, Robert spent well over 1000 hours writing it before he made any money.

While Robert was making the necessary sacrifices to write his book he admits that there were teenagers at MacDonald’s earning more money than he was and although it took two years before the money started to role in, it was definitively worth the wait. Today, Robert continues to earn royalties and has been paid millions and millions of dollars in return for the time it took to write this book. Just like Robert, smart businessmen see the big picture and are willing to sacrifice short-term pain for long-term gain.

Going forward what does this mean? Just like any other business model in network marketing you will need to make a long term commitment to get results. Additionally you can probably expect that in your first couple of months that you will experience a negative cash-flow and that it will take time to establish your business. Keeping the big picture in mind, over time the growth of your business will start to become exponential as the power leverage begins to take effect. Only then will you be rewarded financially for all your ground work.

Essentially when you first start out in your network marketing business you will need to make a commitment for at least your first year and give your business the concerted effort it needs to become established. If you can get every new recruit to do the same, everybody in your organisation will be rewarded handsomely. Remember when prospecting your goal is to find the right people not just the willing.

Although we should work towards achieving the big picture it is important to remember that “perseverance is not a long race, it is many short races one after another.” Identify your long term goals and set little goals along the way to help you achieve it, overtime your pay check will start to grow exponentially.

Good Luck!

Next learn how to set your network marketing business goal (the right way), so that you know what you want to achieve and how you’re going to get there.

Learn what actions you need to consider when developing your network marketing plan of attack.

Return to the start of this Initial Training Chapter