Before starting a home based business, it's important for you to decide if multi-level marketing (MLM) or network marketing is the right business model for your situation. The first question you have to answer is, "Why am I starting a home based business?" If you pick the vehicle thinking the vehicle is going to make you rich, you're making a terrible mistake and wasting your time, effort and money. Getting rich is a matter of mindset that then affects your bank account. It's a reflection of your skill in the art and science of marketing, not the business model that you choose to get you there.
The first thing to do when choosing a home based business is to evaluate your needs. Needs are very different than wants. You have to determine whether you need funds for use now or later, because most home based businesses will only do one or the other initially.
If you need money now, I would tell you starting an MLM or network marketing business is probably a bad idea. Most MLM or network marketing programs are designed to create residual income, and for that reason, your number one most important focus should be longevity. With most network marketing companies, you should plan on spending more money acquiring new customers and associates than you receive in up front compensation. In time, the residual income you receive should make the business profitable.
There are some real advantages to MLM or Network marketing businesses. If you do it right, at first you're starving and all of a sudden your income just takes off. You start tagging all the levels, the compensation plan just lights up and you start making a bunch of money. And then as long as you keep going, it's a lot of fun because you're getting paid many times what your time investment is in that business. In other business models, it's much more difficult to get that income explosion. Another great advantage about MLM or network marketing is you can start the business for far less than a retail program. Also, you don't have the typical overhead like a storefront or a lot of equipment and most of the time you're not responsible for any of the customer service or fulfillment of the product at all. These are some fantastic advantages to an MLM or network marketing business.
If you need to be profitable now, you should be looking at something you can market on a retail basis. You should look for a product with the greatest possible markup and profitability per transaction. That allows you to spend more money on customer acquisition and still be profitable. You could also decide to contract your services cleaning buildings, landscaping yards or cleaning carpets, to generate the money you need to live on now. Of course, the other thing you can do if you need money in the next 90 days is to get a job and work for someone else.
Retail gives you now money, but the down side to retail programs is you may need to invest a good chunk of money up front and you'll be doing all the work initially yourself. So, if you get sick, just like with a job, you don't get paid and your business can die. That's another reason many home based business owners look at an MLM residual income businesses.
When you start to evaluate various businesses, think about it this way. If I start a retail business my margins are going to be really high but my cost of entry is also going to be higher than with network marketing or MLM. If I go with MLM, it is dirt cheap to get in and I don't have to buy any equipment, but my pay or commission per transaction is drastically less than retail. Instead of 100% markup, you might be looking at 10% on that first transaction.
So, before you choose a home based business, determine your needs and your ability to play the game. Pick the business model that best meets your needs. Remember that it's not the business model or company you choose that will ultimately make you wealthy. It's your mindset and your mastery of the art and science of marketing that will get you there. Resist the impulse to make a rash decision based on emotion, and use your God given sense to evaluate your individual situation and then make the best decision for you and your family to improve your financial lifestyle.
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