How to Choose the Right
MLM for you!
(NOTE: This article use to be
called "How to Choose the Right Home Business", however, this article only
addresses how to chose an MLM/network marketing company. Choosing a
Home Business that is not based on referral marketing is an entirely
different subject, one I hope to cover soon.)
There are 5 major factors to consider when choosing the right home business
that will suite you. Each factor is critical to the success of your business. Those factors are Company, Management, Product, Compensation, and Team. Be sure that no matter which opportunity you choose,
that it is one that has the same moral values that you do, that it has
honesty and integrity, and that you
believe in the opportunity
A brilliant networker once wrote, " One of the most common complaints I hear from my members is "it didn't work for me." My reply is, "What is 'it' and why should 'it' work for you? Did you work for 'it'?" Another comment I hear often is, "I'll just wait and see what happens." Does that mean you are under the impression that [networking] is a waiting game?"
Keep in mind that there is
no such thing as 'Get Rich
Quick', because any thing that is worth having is going to take work. Too often people think that a business is easy. Let me dispel that myth. It will take work, time, energy, and a small investment. However, the business you choose if you follow these steps will be far more rewarding in the long-run than any
J.O.B. (Just Over Broke) could ever be.
1- Public or Private: An extremely old debate over whether a Privately held company or a Publicly held company is best. The debate starts from the idea that annual income reports are
important to understanding the financial stability of a company. Which they are. Public companies are required to publish these reports where private companies aren't.
However, Public companies also serve 2 masters... the share holders and the
members/affiliates/distributors/representatives. Because of this balance of positive and negative, there is no better or worse as far as Public or Private.
Private companies are often far more flexible and maneuverable to adjust to
market demand, where Public companies have to always think about their share
holders and what will put more $$$ in their pockets.
2- Well Capitalized & Financially Stable: In today's market place with all the ups and downs it is extremely important be find a company with flexibility, stability, and Capital. It is important for a company to have a low debt to income ratio. However, don't be fooled by those who say they are "Debt Free". Although debt in excess isn't good, neither is no debt or rather no credit. In times of development and times of depression having access to the proper amount of funds
(of any kind) is critical. In most instances where a company is touting "Debt Free" that company just can't get a
loan or investors. It's not that they don't need one or haven't tried getting one. It is usually the case that they either have bad credit or no credit and so they can't barrow. The ability to barrow money in times of development and depression is essential to stability.
It is also important that you look for a company that
isn't solely backed financially by the owner. The limit of their flexibility is
the size of their bank account, and although they may claim they have Millions
in the bank, unless they will provide financial records to back the statement,
often times they are exaggerating. Don't be fooled by "So and So
built XYZ company to $50 Million a month in 3 months", or "So and So
is part owner of 3 multi-million dollar companies", or "The XYZ
company is backed by a Billion Dollar parent company." Do your own
research... find out the facts yourself.
Companies that have existed for a
long time and have 50,000 or more distributors are likely running off cash flow
generated by product sales. That is why you'll here people talk about
joining a company that is 2-3 years old or older. Then you are likely to
be safe in assuming they are financially solid... however, that's not always
100% true. Bottom Line: Do your research.
3- Credibility: I like this one... but, this can easily be
faked. However, publications & write ups done by 3rd parties are a
real good way to see if they are faking credibility. Look for companies
with Awards, Articles, Memberships, and Appointments. These are all important indicators of a companies credibility. Although such things are not always a true indicator of credibility, in most cases a company with none of the before mentioned items isn't a good choice. Make sure that the company has integrity, honesty, and charity. Review there return
policies, and their policies and procedures.
4- Timing: In most every company there are good, bad, worst, and better times to become associated with the company. In most popular writing about this industry analysts say that there is a time called
'Momentum' where the growth of a company is in hyper warp. Momentum comes after the Pioneering phase and before the Stability phase. It is generally thought that by entering a company in the pioneering phase you might be able to stake a bigger claim, but that you are also going to face the most rejection and possible
failure. Companies are also more likely to fail. 95% of all
companies fail in the first 2 years. Momentum usually happens in year 2 or
3. By entering the Momentum Phase of a company the ground work has been set, there is less risk and tremendous growth occurs. And by entering the Stability phase of a company there is even less risk of the company failing, however, the company by this time is well known and rejection increases.
In most cases this may be true, but inherent in this idea is that a company's opportunity is only as good as it's age. There is, however, one other option, a company that never truly enters or goes through these phases. This is by far the best option. There are only
a few companies that I know of that don't go through phases like the above stated. These companies are solid, strong and flexible. They start out running, and never stop. They can do this because of the leaders in the
company and the vision that drives the company. These are the companies who have Founders and Management who are visionaries.
Staying ahead of the market trends, always focused on product quality and
1- Experienced: Those companies run by leadership who have been both
in the 'Trenches' and built large organizations combined with practical experience
in managing a successful MLM are those who will generally take a company
forward in a TRUE opportunity. It takes a visionary to lead a company continually through success. These visionaries must come from a background with no hype and hoopla, because objectivity and the understanding of how a business should be run is hard to find within this industry. Pick a company with leaders who have
a background in both 'MLM/Direct Sales/Affiliate Sales' and come from the 'Real
World' and who base marketing on realism not hype.
2- Visionary: Those who don't get tripped up on the day to day monotony of business and loose their perspective of where they are taking the company. To often companies get caught up in the day to day managing of a company
and they loose track of the mountain because of the trees. Ultimately these companies veer off course and into the history books as a reminder of the "Good old days." Only those companies who are lead by a visionary will last to create a life time of residual income.
3- Research and Development: R&D is what keeps a company ahead of the market. Without a management team that is always looking toward the next
innovation, product or change in product a company will quit growing. A saying said once, "If you're not moving forward, you must be moving backward." In today's ever competitive market place with new companies popping up all the time offering the latest lotion, potion, and notion the company who says it can't be done will ultimately be passed over by the ones who don't know any better and do it anyway. R&D is what gives a company it's edge.
However, there is a
balance. Product timing is very important. Implementing products too
quickly can cause confusion, while not ever introducing other products can cause
market burn-out. Find a well balanced company with a balanced product line
in their respective product industry.
1- Products people already use or TRULY need: If a company is trying to market a product that isn't already used by the general public
or that isn't in high demand the company will be forced to teach their marketing force how to sell. If a company has a product line that is used by the general public already
or that's in high demand, all that is needed is to provide information to people, with no
hard selling involved. This offers people the chance to just market, and share information about the company and allow the perspective customer the opportunity to choose with out the pressure or hassle of
hard ball selling.
Another way to look at this starts at the general budget
level of most people. If someone uses 'Discretionary' funds to purchase
the product steer away from that opportunity. However, if the product
being marketed falls into the 'Non-Discretionary' category or even 'perceived'
as falling into the 'Non-Discretionary' category you should take a
closer look. If the product will save people money from the 'Non-Discretionary'
side and put money back into the 'Discretionary' funds this is all the
better. You have to look at the competition too. Although Home Products
may have been a good category a few decades ago... the industry itself has
become over run with everyone marketing them... this is what we call a 'ME TOO'
product. Marketing a product that is in direct competition with hundreds
of other companies will make your job of marketing even harder. Find a
company that is marketing in a NEW INDUSTRY... or in a NEW Sub-Industry.
Finding a solid Unique Product Niche is a MUST HAVE in your search.
2- Reasonably Priced: In marketing a product the first key is perceived value. If you are marketing a product that is perceived to be only worth $10 and you are asking $20 no one will switch to your product. So, if the product that a company is marketing is reasonably priced in comparison to the general market it is a lot easier to build a business.
A flat across the board savings on a product people have to have is the
best. There is no Selling in this... just helping people save money on
something they are already using. Products that can improve a person
quality of life is also a good area to review.
3- Unique: Patents, Proprietary Formulas, or Innovative New Concepts are essential in the marketability of a company. Without unique products a company is in direct competition with other companies.
A 'ME TO' product. However, if a company has a product or service that can only be obtained through them that means that all customers wanting that product must come to them for it.
However, there is a problem. If the product is a soap or home care product
2 things happen. Often times people become brand loyal to their current product
and regardless of how unique your product may be, if those who are financially
challenged can get another brand other than yours at a less price, they will
regardless of how good your product is.
You need to find a company that is in a New industry
or Sub industry where
there is NO Competition, but a huge need.
4- Consumable: This is what creates Residual Income. The Consumability (ability to be used up/ or need to repurchase) of a product is what generates repeat purchases. A person buys a
product or service, they like it, they use it, they want more, and then they pay for
more, month after month - year after year. Because the product or service is unique they have to get it from you, so you get a repeat customer. The power of residual income comes in to play when you have multiple people purchasing
this product or service every month, every year forever from your initial effort. This, however, can only be realized if people will actually use the product or service. That is why the product or service the company markets must not only be unique, consumable, and less expensive but also of the highest
quality and a product people HAVE TO HAVE.
5- Highest Quality: Without a better quality product or service people can just go to the nearest competitor and buy their "Garbage." It is essential to the potential of a business that the product or service be of better, higher quality than what you can get elsewhere. A company that can show that their product or service is better, and not just say it is, is a strong candidate in this category. Be sure that the products or services that the company is marketing isn't breaking any regulation. Make very sure that any claims made by the company about their products or service are within all applicable regulation. Without compliance with these regulations any company is subject to elimination.
1- Low Qualifications: Far too many networking companies today have created unfair compensation plans that force failure.
Any business is built on the profit margin that a company has. All networking companies start by cutting that profit into two pieces, one piece for them and one piece for the compensation plan.
Then many companies will create large and mostly impossible qualifications that force 'Breakage' to occur. 'Breakage' is money you have earned but because you don't meet all the qualifications, the company doesn't pay you ALL that you have earned. That 'Breakage' goes to the company!
a- Comp Plan Design
b- Volume Requirements
c- High Sponsorship Requirements
d- Large Customer Requirements
c- Status Levels
2- Two Kinds of Compression:
Compression of Levels (Comp
Plan with 4 or less levels)-
A DON'T WANT! The problem with Compressed plans is that they rob you blind in the back end. The typical compressed plan pays out
something like this: 14% on Level 1, 45% on Level 2, 10% on Level 3 and some
kind of infinity bonus (mostly blockable) for the back end. That means when someone does good in your group, you loose out. (What incentive is there to help those people in your business then?) Usually this causes a person to focus on getting as many people on her/his highest paid generation as possible. This causes a lack of team work. It is important to value everyone in your business the same no matter the generation.
Compression of Volume- A MUST HAVE! Compression of volume is the
idea that you get paid through a generational rather than level payout.
For example you may have a Unilevel that is 7 levels deep. You might have
a few legs that are 8 or 9 levels deep. But without compression of volume
you would loose out on these 2 levels. With compression of volume you get
paid a full 7 QUALIFIED Generations which means you could get paid on a
guaranteed 7 positions deep regardless of what level those positions fall on.
3- No Glass Ceilings: Volume requirements create Glass Ceilings.
These Ceilings on income slow growth and hurt Leaders. For example some
companies tell you that you can only make $1000 per month at the
"Director" level or perhaps you can only make $500 a month as a
"Marketing Executive". These caps are unfair. If you
generate the volume you should get paid the full plan potential without the
cap. ONE EXCEPTION: Binaries are based on volume cycles.
1/3-2/3 or 1/2-1/2 balance on either leg. A cycle can be any time frame: a
day, week, month. They will cap in a Binary what is possible with 1
position during any cycle period. This is actually a GOOD thing in
binaries. It helps to stop "Creapage" a deadly mathematical flaw
in the original concept of the binary. Study a binary carefully before
4- No Limit on Income: There are a few plans with a limited structure that block you into a limited income.
A few solutions to this problem are in creative bonus structures... Matching
Bonuses, Leadership Bonuses, Coded Bonuses and Infinity bonuses. However, the
qualification to reach these special bonuses need to be realistic. Someone
who has chosen Networking should be able to get 12 others if they follow the
right steps to build the business. The statistic of 2.8 being the # of
people the average person sponsors is based on statistics of the Masses.
The bottom line is that not everyone
is cut out for MLM. Only sponsor those who are serious about perusing
this, and not someone you have to talk into it. Be sure you pick a plan that has no limits on income. Make sure that your potential is unlimited.
5- Part-Timer/Full-Timer plan - Find a Balance: Some plans pay a lot of up-front money, but poorly in the back-end of the plan, and vice versa, poor up-front money and big back-end money. When a plan pays well up front it is usually called a
Part-Timers plan, because a part-timer can work it and get results quickly. Where
a plan that pays well in the back-end is usually called a Full-Timers plan, because a full timer will get to the back end more quickly where all the profits are. Make sure you choose a plan that has a balance of both. A good income for both Part-Timers and Full-Timers.
One key to look at is the bonus structure. Bonuses help fill in where there are money gaps.
6- Profit Sharing Concepts: Leadership, Support, & Training are extremely important and so is profit sharing for providing such. Pick a company that will reinforce good team building ideas and
practices with profit sharing or bonuses.
7- Bonuses & Benefits: Car Bonus, Trips, and advancement bonuses are all extra goodies that a well developed company will provide. This is usually a sign of a stable company. Although these are not a real focus point they do help separate the cream from the milk.
8- Customer/Marketer: It is important to the success of a business for a regular customer to have the option at any time of marketing the products/services or business.
Far too many companies MERGE the customer and the marketer. This is deadly
to the long term income you can create. If the customers are entered into
the compensation plan and take a spot with in the comp plan 2 things
1- These spots are gaps in your income. They neither produce
a downline or a customer but take a valuable spot that could be producing.
2- When a leader chooses to retire from the business, those distributors who are
the foundation of his/her income start falling out. Too Much Month at the
end of the money and they no longer continue to buy product so your group starts
falling apart from the bottom up.
Find a company where the customer
doesn't get entered into the downline and where a Marketer and Customer are kept
separate, but that a Customer can become a Marketer at any time.
1- Experienced Team: Because of the explosive nature of the home business industry it is easy to get swept
off your feet by smooth talking, hype, and hoopla. Often forgotten is the need of a support team and a system. One might have the best of companies, management, product, compensation and still not have a successful business because of the lack of a strong experienced team. Don't let the blind, lead you (the blind). This will cause unhappiness and failure.
2- Huge Group Support: Training, Leadership, and Support by a group or
by the company is a must. One good up line will easily get spread too thin without a group
or a good company to help support his enthusiasm and fantastic growth. You may have a great up line but with out a group
or the company supporting you and that up line it is easy to become overwhelmed and extremely busy. This will cause an average person to feel like they have to back off and slow down, which will eventually kill their business. Make sure that in the course of getting started that the group
or company does the first 4-8 appointments with and for you. This is a sign of a true system and organization.
3- Word for word system: As a person grows in this industry they will pick up the skill needed to be very proficient at their business. The problem however is getting the new excited and enthusiastic members of the team as skilled as the pros. Well, it wont happen over night, or in a month, or even in some cases a year. That is why a word for word scripted system for a person to follow is so important. Often times the reason for failure is cause by the lack of direction. A Word for word system with scripts and directions that is discussed with a new team member can be one of the most powerful things in any business. Make sure that the Team you pick not only has a system but that they will show it to you before you start the business.
4- Technical Support: Every good team will be able to plug you into conference calls, voice mail, e-mail, discussion lists, websites, fax on demand, 3-way calling, conference calling ,
automated online marketing systems, and many other technical support tools that will help your business grow. Be sure you have the tools you need to be successful.
A good company will either provide many of these for FREE or at a significant
5- Automate Online Marketing
System: This is a fundamental point often over looked. In today's
fast paced world a system that will assist you in developing your business
online is a must. Lead Capture pages, Automatic Email Follow-up,
replicatable websites, lead loading, and presentation site (not just an
information site) are all critical pieces in building a business. Choose a
team or company that provides this for you
2 Other Just as important, but commonly forgotten Points -
1 - No Large Monthly Requirements: The average person lives month to month. This mean that they most likely wont have the monthly funds for large product requirements. Although monthly requirements are important in creating a residual income the requirement should be reasonably small to start with. This will allow the a chance to earn a few checks before being required to purchase a large amount every month.
A good starting estimate is $75 or below a month.
After one has reached a point where their monthly product cost is covered it is
then okay to start using a larger quantity of the product for better personal testimony
of the product. $100 per month is a good average. Also, it is very important to only join a company with a product you already use OR
one that you NEED.
2 - No Large Start-up cost: One good way to determine the marketability of a home business is by the amount it costs to join.
It needs to be less than $400 to join. If it costs more than $400 it is going to be out of reach for the average person. A lot of companies require an inventory or a large purchase of product to join. These companies are out of touch and mostly unethical.
There are a lot of money grabbing, money hungry, get rich quick, hyped up, scams, and schemes out there. Do detailed research.
The right Company, Management, Product, Compensation, and Team combined with work, time, energy, commitment, dedication, motivation, and excitement will create anyone the success that they desire. Now, Go and be
Give each area a 0, 1 or 2!
How does your company rate on
a scale of 0-10?
Good Luck on