Part of the allure of network marketing is that it allows opportunity seekers to participate in a home based business for a lot less than it would cost for a traditional brick and mortar business. You still want to be careful that the actual cost of running and sustaining a home based network marketing business fits within your household budget.
Before you (and your spouse) commit to a home based business you want to be certain of three things; can you afford the initial cost of joining, can you afford the recurring minimum cost of participation (monthly sales volume requirements to qualify for commissions), and can you afford the additional operational costs (training aides, sales aides, seminars, advertising costs, etc.)?
Initial Cost. Most companies have several entry options. You may feel pressure to sign up at the highest, most expensive entry option. While there may be some benefit in doing this, it may not be the most practical thing to do. For example, if you can’t sell the product or service and you can’t recruit a downline, you may end up with a trunk full (or a garage full) of wasted product. In general, if you’re new to network marketing you should start at the lowest entry point possible and learn everything you can about the business and advance at your own pace. Some companies (not very many) will allow you to join for free. Ask your prospective sponsor if the company you’re considering allows this.
Recurring Costs. Most companies (if not all) feature an auto-ship program which allows you to satisfy the minimum monthly volume requirements required to qualify for commissions at your level. As long as this fits within your budget this is a great way to ensure you stay qualified. Analyze the company compensation plan and the policies and procedures to see all the details of how the company you’re considering handles this. Distributors have been known to lose large commission checks because they weren’t qualified for the month for one reason or another.
Operational Costs. Most MLM companies offer training aides, sales aides, workshops, seminars, etc. Some of what they offer is free. Much of it is not. In addition you will be required to spend money marketing and promoting your business. You can do all this on a shoe string budget so don’t think you have to take out a second mortgage to market your opportunity. There are many affordable (and free) methods to promote your business.
Bottom line; don’t wreck your life, don’t wreck your marriage and don’t derail your children’s future education. Take the business seriously but live within your means. Re-invest your profits (not your mortgage payment) to help the business grow and learn about personal development online or at the library for free until you can afford to pay for it.
P.S. If someone ever tells you that you should buy nice suits, lease an expensive car, and sacrifice for a Rolex to give prospects the impression that you are successful in your business (fake it ’till you make it) you should head for the hills!
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