I was thinking of making the title “How To Succeed In Business” because perhaps these tips could be applied to any business and not just in network marketing (or MLM). Business is business right? I am going to write and see if perhaps I come up with something unique to network marketing… if I do maybe I will rewrite a little… but in the mean time…
Have Your Own Brand
The first step to succeeding 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… perhaps Joe Smith, Network Marketing Coach, or Joe Smith Company; something to differentiate yourself from all the other distributors in your company.
If you are just “You can buy from me too”, you are adding no value. You must add some sort of value. For instance, a while back we made great looking baskets and sold them as a product. By reorganizing the product the way we did, we added value to the product.
If you do home delivery, write books, consult with other network marketers; you are adding value. Perhaps extras that you could charge for. The extras are definitely what customers want, otherwise they will just go for the lowest cost product the 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, such as a recipe book that features our products (for instance). We have our own “Attraction Marketing” or “Black Box Recruiting” site, which is a service that is free, but it counts as a product itself. You could also consider our blog a product. Brainstorm to see what kinds of products you could offer to your customers or to others who might join your business.
Consider Your Image
Image is very important in business. Having your own business name. Positioning yourself as an expert. Being uniquely an expert in something is even better. Having a resume that people want to be associated with. Not necessarily a Word resume, but accomplishments that you can point to. If you do not have accomplishments that would relate, you can build lists of accomplishments over time.
Avoid negative things that could tarnish your image. Treat your customers right. Do not do illegal or unethical things. Be prepared for challenges and consider your options carefully.
Make The Numbers Important
While all of the above are foundations of a good business, the numbers are your measurement of success. Most importantly profit. Profit is your businesses revenue (income) less expenses. Without profit… at some point… no business can survive.
Cash flow is also an important measurement. While sales is great (or commissions), keeping cash in your business is life or death. Often we sell on credit, i.e. we invoice somebody, and if they take too long to pay that can be extremely stressful. If we run out of money, we are out of business.
We can improve cash flow by selling at a certain margin. Margin is the price sold less cost, divided by price sold… usually provided in percentage form. For instance, an item that costs $10 sold at $15 has a 50% margin. Many items are bought, or manufactured, at a very low cost and sold at a margin of 100% or more. The higher the margin, the better. Especially when you get to the point of having to cover a slow paying customer.
For instance, you sell to a customer for $10,000 monthly at 100% margin. That means your cost is $5,000. If they pay in 30 days, once they have paid the first time you have two month’s worth of cost covered. So your business survives for two months before you need more cash (for example purposes only because we are not considering other expenses). If your margin is lower, you have more risk of running into cash flow issues; if higher, you have less risk. Your optimal margin is something that is different business to business.
Now if you are only earning commissions, margin does not mean much, you just need to keep your commissions well above your business expenses.
If you are using an accounting package like QuickBooks, you will want to keep an eye on your profit/loss statement and your cash flow statement.