Before the recession came along, earning extra income from home was something that was often used for extras or non-essentials or was optional because the primary incomes of the household were enough to cover the essentials.

With the recession, and the layoffs, cutbacks and downsizing accompanying it, extra income from a home business or . . . → Read More: How The Recession Is Causing A Tsunami In Working From Home]]>

Fallout From The Recession

Before the recession came along, earning extra income from home was something that was often used for extras or non-essentials or was optional because the primary incomes of the household were enough to cover the essentials.

With the recession, and the layoffs, cutbacks and downsizing accompanying it, extra income from a home business or working from home often means the difference between getting by and going without in one or more areas.

Working from home or running your own home based business could be the best way to keep your family afloat during tough times; taking a second job may not be much of an option when first jobs are so hard to come by.

Why Work From Home

You may be one of those who can change their workplace without changing your employer. In a poll of more than 3,500 employees in France, Germany, Italy, Russia, Spain and the UK, the average commute time was 70 minutes per day. That would be a significant time savings if the type of work you do can be done partially or completely from home.

Asked how they use the time saved by not commuting, the largest proportion (56 per cent) said they spent time with their family; followed by 45 per cent who just ‘relax’; and 42 per cent who do tasks or attend appointments they otherwise wouldn’t have time for.

In the U.S. the nationwide average drive-time is 24.3 minutes, which means that Americans now spend more than 100 hours a year commuting to work, according to the U.S. Census Bureau’s American Community Survey.

Even if your first job can’t be done from home, extra income is still the biggest reason for working from home, and may provide savings in other areas.

Working from home, you minimize or eliminate travel time and expenses such as fuel and wear & tear on the car getting to and from the 2^nd job.

Working from home, you minimize your time away from the family, or possibly even increase your family time.

When you work from home, you don’t have to dress for work, saving money on clothing.

The option is there of not having to pay for childcare since you are at home.

Since you’re at home, you don’t have to buy lunch, coffee, and snacks from the vending machine.

How To Work From Home

Whole books could be and have been written about how to pick a home-based business or a work-from-home job.

If you’ve never considered network marketing as a business before, I urge you to watch Tim Sales’ video called Brilliant Compensation where he outlines the beauty of this method of business.

I also recommend that you sign up for the “7 Days, 7 Insider Secrets” email newsletter at www.AlansMLMTips.com, for some important pointers for any type of business.

It’s All In How You Look At It

Many years ago two salesmen were sent by a British shoe manufacturer to Africa to investigate and report back on market potential.

The first salesman reported back, “There is no potential here – nobody wears shoes.”

The second salesman reported back, “There is massive potential here – nobody wears shoes.”

It seems like every book I’ve read says you should begin your network marketing career in this fashion:

1)    Find a great company with a wonderful product

2)    Find an awesome sponsor within that company who can mentor you to success

3)    Go to work with your sponsor

4)    Learn the ropes

5)    Make money while you . . . → Read More: Network Marketing – The Chicken or the Egg?]]>

The Books Say The Egg

It seems like every book I’ve read says you should begin your network marketing career in this fashion:

1)    Find a great company with a wonderful product

2)    Find an awesome sponsor within that company who can mentor you to success

3)    Go to work with your sponsor

4)    Learn the ropes

5)    Make money while you learn

6)    Find others to duplicate these steps

That would be the egg.

But The Chicken

Might look like this:

1)    A friend or relative tells you about the company he’s working with

2)    You sign up because you like the product or the company or your friend

3)    You don’t know what to do and neither does the person who signed you up

4)    You tell a few people about it and nobody else is interested

5)    You quit

Or maybe like this, which it did for me:

1)    My brother tells me about the company he’s working with

2)    I sign up

3)    With the help of my brother’s sponsor, I sign up someone

4)    That person makes several sales

5)    I get excited and try to repeat steps 3 & 4

6)    Number 3 runs out of warm market to talk to and loses interest

7)    I move on to another job and while not losing interest, don’t network market for several years

8)    I read books, I start and run my own traditional business

9)    I sign up for another network marketing company and fail

10)     I keep running my business

11)     I read more books

12)     Etc.

The Reality

I’m guessing that most people reading blogs about network marketing or home businesses or work from home jobs have experienced some version of the chicken scenario; jumping in and trying to figure it out.

The ones who persist through the failures and keep learning eventually discover that there is a reason most books give you the first version, i.e. the egg: you increase your chances of success by doing things in that sequence.

It doesn’t mean the chicken is wrong, or the pig or the cow or the bull moose; if you keep your eye on the goal, you’re going to get there. (For more on the goal, see my earlier post “Why, Oh Why.”)

I want to help you speed up the process.

What Do I Do If I’m already A Chicken?

Keep going! The only thing that can stop you is if you quit. If you know where you want to go, you can get there. As Jim Rohn once said, “working hard on your job makes you a living, working hard on yourself makes you a fortune.”

The difference between the first chicken who gave up and the second chicken (me) is that I didn’t give up. I kept working on myself, reading books, finding mentors, etc.

If you’re already in a company and you’re happy with the products but not so much with your sponsor, find a mentor, read a book, learn how to talk to people. Develop the skills and attitudes you need to attract people into your life, whether mentors, teachers, or business partners.

What If My Company or Product Isn’t So Great?

Hey, it happens. The initial hype can generate enthusiasm for a company or a product that isn’t that good. Don’t throw out the baby with the bath water! Find a better company/product and go to work.

Not only will your attitude be better, your honesty with yourself and your prospects will improve and so will your results.

For more info on how to pick a company or a product, see my post called Five Things To Evaluate, or go to www.AlansMLMTips.com for free emails on how to pick them like a pro.

Another Quote

“Would you like me to give you a formula for… success? It’s quite simple, really. Double your rate of failure. You’re thinking of failure as the enemy of success. But it isn’t at all… you can be discouraged by failure / or you can learn from it. So go ahead and make mistakes. Make all you can. Because, remember that’s where you’ll find success. On the far side.” – Thomas J. Watson, founder of IBM

I really didn’t think I was going to spend any more time on the basics of picking a network marketing business to work from home with, but an email I received this week changed my mind.

It was an email asking me to check out a company that this individual thought was . . . → Read More: Network Marketing and Product Sales]]>

Where Does The Money Come From?

I really didn’t think I was going to spend any more time on the basics of picking a network marketing business to work from home with, but an email I received this week changed my mind.

It was an email asking me to check out a company that this individual thought was a “winner” and wanting to know what I thought about it. Since one of the things I do to continue my own education is check out other companies, I did go to the website and look around a bit.

Doing so got me to wondering if people have any clue where the money comes from in a business – traditional or network marketing – either one.

What does a company get paid for? Anyone want to take a guess? Yes, you there in the pink blouse? Sales, you say. Well, close, anyone else? Okay, you there in the cowboy boots. A product or service. That’s right!

The only thing a company gets paid for is delivery; delivery of service (think electrical company providing electricity, lawyer providing legal service, phone company providing phone service) or delivery of product (anyone not know what Wal-Mart, Target or 1-800-FLOWERS sells). Every company is in the business of delivering something, whether it is a service, a product, advice or access to information.

Some people think it is sales because that is where the money usually changes hands, but what is that money paying for? It’s paying for the past, present or future delivery of the service or product.

You may be asking by now, what the heck does this have to do with network marketing? (Or, maybe not, you might be brighter than I was when I first started in business for myself.) But bear with me, I’ll get to the point shortly.

What Does The FTC Say?

In a 2004 United States Federal Trade Commission (FTC) Staff Advisory letter to the Direct Selling Association states: “… The critical question for the FTC is whether the revenues that primarily support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture.”   – Kohm, James A. (January 14, 2004) (reprint). RE: Staff Advisory Opinion – Pyramid Scheme Analysis. Federal Trade Commission.

In plain English, that means that if you make money from recruiting other people into the program without any product or service changing hands, you might be in a pyramid. On the other hand, if nobody makes any money from recruiting, it’s probably not a pyramid.

If the product or service sale is obviously separate from signing up for the business, it’s probably not a pyramid.

This gets tricky to evaluate sometimes because less ethical companies try to obscure it.

Where Does The Money Go?

In a traditional business, money gets allocated to various parts of the business; so much for basic overhead (rent, lease or mortgage; lights; phones; water; trash service; etc.). Then so much for marketing and advertising, so much for salaries, so much for the sales force, accounting department, the actual production of the product or service, and so on, to cover all the various functions that make a business go.

In a network marketing business, money gets allocated the same way. But it gets divided up differently. In a network marketing company, you still have the basics of putting the company there, just like with a traditional company. There has to a headquarters, production facilities, lights, phones, etc. But all the money that a traditional business puts into marketing, advertising and sales gets put into the compensation structure to reward the independent sales force for their work promoting the company and the product and making sales.

Traditional Business (Brick & Mortar)

Now, I’m probably belaboring the obvious, but here are a couple examples of traditional businesses.

TV Repair Shop – rent, test equipment, advertising, employees’ salaries, electricity, phone service, internet service, heating/air conditioning, water, trash disposal, shelving, computers, TV parts, etc. plus profit. Product  = repaired TVs. People pay for repaired TVs which pays for all the foregoing.

Flower shop – rent, advertising, employees’ salaries, electricity, phone service, internet service, heating/air conditioning, water, trash disposal, shelving, computers, flowers, vases, baskets, balloons, greeting cards, ribbons, stuffed animals, etc. plus profit. Product = beautiful ways of saying thank you or congratulations, Happy Birthday or “I love you.” People pay for those, which pays for all the foregoing.

Network Marketing

The network marketing company itself has to pay for the home office, the home office employees, rent, electricity, phone service, internet service, heating/air conditioning, water, trash disposal, product development, product delivery, etc., but theoretically no marketing or advertising. (Most companies do some marketing and advertising to their sales force, that’s you and me, to keep them motivated, interested and in the know about company plans.)

Then there’s the independent sales force. You/me/they sell the product or service the company provides which brings in revenue for the network marketing company, which in turn pays you for those sales.

Examples:

Mona Vie – sell a bottle of their nutritional drink and get paid for it.

Pre-Paid Legal – sell a legal plan and get paid for it.

Primerica – sell an insurance plan and get paid for it.

Seems Simple, Doesn’t It?

But, some companies don’t keep it simple like that.

One company I investigated paid a residual commission on cell phone service that your job was to find customers for. That’s legitimate. Where it got murky was that they paid commissions on the purchase of the website you needed to do business on line, they paid commissions on the sale of their promotional magazines, and there was a bonus on signing someone up for the business. Near as I could tell, most of the money was not being made on the sale of the cell phone service.

Point! I said I would get to the point shortly. Here it is, the company this individual wanted me to check out was a grocery company. You pay a one-time fee to sign up, I think it was $200. You recruit others into the company, who pay their $200, after five people cycle through under you, you get $500 of which part of it goes back to start your new “cycle” and part of it is paid to you in the form of a voucher.

The selling point was that this $200 voucher, which you could earn as often as you could sign up five people, would pay for your groceries and so you’d never have to pay for your groceries again.

Now stick with me here, if nobody ever actually buys groceries except with their vouchers, and you can’t get vouchers without recruiting people to work with you, what are you getting paid for? If you answered that you are getting paid for recruiting, go to the head of the class.

They are selling it as a business where you can earn free groceries, but in reality you’re getting paid for recruiting people. Which means when enough people complain to the FTC, they’ll look into it and shut it down. The people who haven’t had time to recruit anyone when the FTC shuts it down are out their $200.

For more on pyramids and scams and how to detect them, you can look at Pyramid, Scam, or For Real.

Free Groceries? Or Free Information?

One of the 7 Insider Secrets is what kind of products to look for, along with what kind of company to look for.

It’s really a great set of criteria to evaluate a company with. Go to www.AlansMLMTips.com and sign up for the “7 Days, 7 Insider Secrets” email newsletter.

Quote

I always wanted to be somebody, but now I realize I should have been more specific.  – Lily Tomlin

A couple of years ago, I read a report of a survey done by Len Clements in 1991 by Market Wave, his marketing research firm. While brainstorming for an idea about home businesses for this post, I ran across a note I had made at the time suggesting to myself that I make a website . . . → Read More: I Can’t Do That, I’m Scared]]>

A Survey

A couple of years ago, I read a report of a survey done by Len Clements in 1991 by Market Wave, his marketing research firm. While brainstorming for an idea about home businesses for this post, I ran across a note I had made at the time suggesting to myself that I make a website out of the results of this survey.

The survey was done on over 6,000 people who were not at that time business owners, and had never been business owners. The question asked was “If all obstacles were removed, would you like to own your own business?”

An astonishing 85% said yes, they would prefer to work for themselves. I say astonishing only because getting 85% of any diverse group to agree on something this wholeheartedly must mean there’s something to it.

Another way of looking at it, as Mr. Clements himself says, the other 15% must have misunderstood the question, or why wouldn’t they prefer to work for themselves.

WOW

This almost makes me want to go out there tonight and start applying the 3 foot rule. (In case you don’t know, the 3 foot rule means you prospect or try to recruit anyone within 3 feet of you.)

If 85% of the people want to work for themselves, let’s get to it. How can we possibly fail? Just start talking to people, right? How hard can that be?

Hold On A Minute There, Buckwheat

If you’ve tried the 3 foot rule, you know as well as I do that you don’t get 85% of the people within 3 feet of you interested in your opportunity. In fact, I felt lucky if I got one in 100 to express any interest. Hmmm, there must be something else at work here.

Now granted, there can be things you’re doing that are driving prospects away, such as being needy, having a lousy presentation, poor sales skills, etc., etc.

However, after seeing that 85% figure, Mr. Clements got interested in what kept people from starting a business if they wanted one. If that many people want to have their own business, but don’t, there must be some pretty compelling reasons preventing them from starting.

So, he did further research.

Things That Go Bump In The Night

After further inquiry, it was discovered that people had some basic fears about starting their own business. And the same four fears came up over and over and over. Not everyone had all four, but everyone had one or more of these four.

1)    It takes too much money

2)    It takes too much time

3)    There’s too much risk

4)    I don’t know how

Those were the four fears that kept those 85% from following their preference for owning their own business and working for themselves.

What’s Holding You Back

If you’re here reading this blog, you’ve overcome at least some of your fears of starting your own business. Aside from mlm or network marketing, do you know of any other business model that 1) has low start-up cost, 2) gives you the ability to start part-time or spare-time while you get it started and profitable, 3) has low risk, and 4) teaches you how to do it?

If you are thinking about starting your own business or are looking for your dream business, sign up for the free 7 Days – 7 Insider Secrets newsletter and learn how to find a company that maximizes your chances at success.

Acknowledgment

I wholeheartedly urge you to read the entire article that I’ve excerpted here. It’s (c)2008 by Len Clements.

Humor

A group of professional people posed this question to a group of 4 to 8 year-olds, ‘What does love mean?’

‘Love is what makes you smile when you’re tired…’   Terri – age 4

‘Love is when my mommy makes coffee for my daddy and she takes a sip before giving it to him, to make sure the taste is OK.’   Danny – age 7

‘Love is when you kiss all the time. Then when you get tired of kissing, you still want to be together and you talk more. My Mommy and Daddy are like that. They look gross when they kiss’   Emily – age 8

‘Love is what’s in the room with you at Christmas if you stop opening presents and listen.’   Bobby – age 7

‘During my piano recital, I was on a stage and I was scared. I looked at all the people watching me and saw my daddy waving and smiling. He was the only one doing that. I wasn’t scared anymore.’   Cindy – age 8

‘My mommy loves me more than anybody. You don’t see anyone else kissing me to sleep at night.’   Clare – age 6

‘Love is when Mommy sees Daddy smelly and sweaty and still says he is handsomer than Robert Redford.’   Chris – age 7

‘Love is when your puppy licks your face even after you left him alone all day.’
Mary Ann – age 4

‘You really shouldn’t say ‘I love you’ unless you mean it. But if you mean it, you should say it a lot. People forget.’   Jessica – age 8