Factors Of Success For A Home Based Business
There is only one success–to be able to spend your life in your own way.
-Christopher Morley
First Things First
# 1. Can we agree that what we wanted when we started a home based business was: to own our own business with no overhead, no employees, or other hassles of traditional businesses.
# 2. Can we agree that the reason people join any home based business is to: Create a lifelong reliable, willable, residual income.
Then say what we can’t forget is the one lifelong principle: The 80/20 Rule.
Examples:
- If you have 10 doctors, 2 will make more money than the other 8.
- 20% of the people at church or any organization will end up doing 80% of the work.
This is something we can agree on, correct?
Now on to the factors that determine your success with a home based business…
A Solid Company Track Record
Most MLM companies fail and go out of business within the first five years. Most of the folks pitching the opportunities are just “glorified sales reps” hawking overpriced products.
Many of the top leaders of new companies are given positions at the top and in most cases are paid to come and bring their organizations.
A Financially Sound Company
Most MLM Companies lease office space and purchase a computer program, logos, labels, product, etc. and have no real investment. They do not manufacture anything!
Examples: Fortune High Tech Mkt., Market America, 2/7 Inc., YTB Travel, ACN, and many of the juice companies. Some might own their buildings but still do not have a major investment and when the going gets tough, the owners have made their money and close the doors leaving their distributors high and dry, and BROKE!
A Company With Strong Management
Most MLM companies, especially the newest ones that started within the last 10 years were started by a group of MLMers who came from other companies thinking they could manage a company. Most of the owners also own the downlines and make their money both ways. Examples: Some of the Juice companies, Liberty Health and others.
A Company With Unique Consumable Products
Most of the juice companies only have 3 or 4 products and most are made, bottled and labeled by a jobber. In other words most are made by one or two California companies for less than $4.00 or $5.00 a bottle and sold for $35.00 to $40.00 to the distributor and customers. Their people are distributors, they have to sell a large portion of what they buy.
The companies who just sell services have nothing unique. Some companies try to add a few nutritional, skin care and home cleaning products to try to build a residual income into their plan.
A Company With Competitively Priced Products
Forty dollars for a bottle of fruit juice! Give me a break! Many charge twenty nine to fifty dollars a month for a company sponsored website. A good example is Amway/Quixtar, they do have some good products but they usually cost 2 to 3 times what grocery store products cost. Other companies are just jobbers and have to build profit into the price of their supplier’s prices.
A High Reorder Rate
People with Amway usually have about a 12% reorder rate. Many of the Juice companies have about a 25% reorder rate.
Can you really build a residual income with that kind of reorder rate?
How many folks do you think are going to pay $35 to $40 for a bottle of fruit juice when the budget gets tight…or pay close to $150 for a box of Amway XX Vitamins?
A Low Personal Production Requirement
Can you ask your Mother to spend $160.00 a month for a fruit Juice and be on auto ship to get it? She has to order that much.
Or can you ask a young couple with 2 or more kids to spend that kind of money a month and still have to pay for a website?
Some of the Juice companies want you to purchase a case for both husband and wife and one to give away for samples and be on auto ship for that also.
Auto ship is a sinking ship!
A Low Entry Fee
Many companies want you to come in “right” for $1,500, $2,500, even $5,000 to start if you are a “hitter”.
Rexall which is no longer in business got folks to start for $5,000. Even Mary Kay and Beauty Control want you to spend that much to start.
Some will let you start for $30.00 to $50.00 but tell you if you really want to “play”, you will need to find a way to get the big packages.
A Low Attrition Rate Of Customers
Most companies are like a VP of one of the juice deals told one of the good folks in North Carolina who he was on a 3-way call with, “You just have to put them in faster than they go out.”
A company must provide good reasons for customers to continue to use their services. Such as affordability, quality, value and integrity.
Timing
After a MLM deal has gone through an area, folks will not even listen anymore. A good example is Amway. For years, even since the 70’s, they have not been able to mention the name Amway when approaching potential prospects. The same thing has started happening to the Juice companies, ACN, Pre-Paid Legal, YTB Travel and other MLM companies.
No Breakaways
Think of the 80/20 Rule. In the Breakaway Plans, when you find a player and they build quicker than you (which is what you are looking for), and they pass you, they break away from you. If you cannot replace their volume, you lose most of the commissions you were earning.
Binary Plans are the new Breakaways. For example: they tell you that you only have two legs to build, so you bring in a player and put them in one of the legs and your Mom in the other. After a month or so the player has 200 customers and your Mom has 10. How many do you get paid on? Just 20! Why? A binary goes against all of the rules of a successful business. You only get paid on your weakest leg and the same number of customers from the strong leg. You get paid on your Mom’s 10 and only 10 of your player. So what does that do? It encourages you to work with your Mom to try to chase or equal the volume of your player, instead of working with the player to build a large business.
Who loses? Everybody but that company!
NO RISK
Some reports say that 98% of the people who start in MLM deals do not make a penny.
In fact, they lose money.
Do you want to put your mom or your church friends at that kind of risk? It’s not just about the money they lose. It’s also about the time that they cannot get back, and their reputation.
Conclusion
Those are all of the factors of success for a home based business. Did you think there were only four or five? Yes, you can get by with four or five of these factors. But the reality is, if you want a real, lasting successful home based business, the company you are dealing with needs all of them.
If you want to get involved with a company that has all of these things, get back to me and we can talk some more.
Contact Tim Beaudoin
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