Tips for Succeeding in a Network Marketing Business
I was thinking of making the title “How to Succeed in Business” because maybe these tips could be applied to any business and not just network marketing (or MLM). Business is business, right? I’m going to write and see if I can think of something unique to network marketing… if I do, maybe I’ll rewrite a bit… but in the meantime…
have your own brand
The first step to being successful in business is to have your own brand. If you are Joe, the XYZ distributor, you are promoting the XYZ company. Create your own brand…maybe Joe Smith, Network Marketing Trainer, or Joe Smith Company; something to set yourself apart from all the other distributors in your company.
add value
If you just say “You can buy from me too,” you’re not adding value. You must add some kind of value. For example, a while back we made great looking sneakers and sold them as a product. By rearranging the product the way we did, we add value to the product.
If you do home deliveries, write books, check with other network marketers; you are adding value. Maybe extras you could charge for. Extras are definitely what customers want, otherwise they will simply look for the lowest cost product that is closest to home.
have your own product
In network marketing, we typically represent a company and its products, but…we could potentially have our own product, like a cookbook featuring our products (for example). We have our own “Attraction Marketing” or “Black Box Recruitment” site, which is a free service, but counts as a product in itself. You could also consider our blog as a product. Brainstorm what kind of products you could offer to your customers or others who might join your business.
consider your image
Image is very important in business. Have your own business name. Positioning yourself as an expert. Being just an expert in something is even better. Have a resume that people want to associate with. Not necessarily a Word resume, but achievements you can point to. If you don’t have related achievements, you can create lists of achievements over time.
Avoid negative things that can tarnish your image. Treat your customers well. Don’t do illegal or unethical things. Be prepared for challenges and carefully consider your options.
Make numbers matter
While all of the above is the foundation of a good business, numbers are the measure of success. The most important thing is profit. Earnings are your business income (income) minus expenses. Without profit… at some point… no business can survive.
Cash flow is also an important measure. While sales (or commissions) are great, keeping cash in your business is life and death. We often sell on credit, that is, we invoice someone, and if it takes too long to pay, it can be extremely stressful. If we run out of money, we’re out of business.
We can improve cash flow by selling on a margin. Margin is selling price minus cost divided by selling price…usually given as a percentage. For example, an item that costs $10 sold for $15 has a 50% markup. Many items are bought or manufactured at a very low cost and are sold at a 100% markup or more. The higher the margin, the better. Especially when you get to the point of having to cover a slow paying customer.
For example, you sell to a customer for $10,000 per month with a 100% margin. That means your cost is $5,000. If they pay in 30 days, once they have paid the first time, they have two months’ costs covered. So your business survives for two months before you need more cash (for example, just because we’re not considering other expenses). If your margin is lower, you are more at risk of running into cash flow problems; if it is higher, you have less risk. Your optimal margin is something that is different from company to company.
Now, if you’re just earning commissions, margin doesn’t mean much, you just need to keep your commissions well above your business expenses.
If you’re using an accounting package like QuickBooks, you’ll want to keep an eye on your profit and loss statement and your cash flow statement.