SIX KEY QUESTIONS TO ASK BEFORE YOU SET UP A NETWORK MARKETING BUSINESS

"If you don't know where you're going, any road will take you there" - old saying.


As we come to the end of this series of blogs, it's time to review all six of the key questions. They were:

1. Do you have products which you believe in?

2. Is there a market for your products?

3. Do you have a Marketing Plan?

4. Can you see a long term future?

5. Are you willing to invest adequate finance?

6. Are you willing to invest enough time?

Each of these questions is discussed in more detail in my earlier blogs, immediately below this one. Please carefully consider each one and answer them as honestly as you can. They are important questions, and they need to be addressed by anyone going into ANY kind of business - they certainly don't just apply to Network Marketing.

I hope, after careful consideration, you can answer "yes" to each of them. If so, you are ready to go into business, and you are well prepared. I believe you have a very good chance of success.

The overall statistics regarding the success rate of new businesses can be quite depressing; but remember that most people starting out in business have never considered questions such as the six listed above. Most haven't really figured out exactly where they want to go, and the old saying quoted earlier definitely applies to them:

"If you don't know where you're going, any road will take you there."

If you have considered all six questions and can honestly answer "yes" to each, you know exactly where you're going and you're on the correct road to get you there. Those statistics are far less likely to apply to you.

I wish you all the very best and hope that you will really enjoy your involvement in this remarkably exciting Network Marketing industry.

SIX KEY QUESTIONS TO ASK BEFORE YOU SET UP A NETWORK MARKETING BUSINESS

6. Are you willing to Invest Enough of Your Time?

It's a truism that you shouldn't treat your network marketing business as a hobby - very few hobbies make money. And if you're intending to operate any business it requires personal commitment, just as it requires financial commitment.

The personal commitment required in any business is twofold:

(a) willingness to put aside enough time to make the business successful; and

(b) determination to consistently put in that time.


Putting Aside Enough Time

Make no mistake about it, the most successful network marketers put in lots of time to keep their businesses growing. This doesn't imply that you should give up your day job in favor of your new business; far from it, but certainly you need to assess how many nights each week you're willing to put aside. Obviously, the more time you can put into it the better.

Later, if your business really does take off profitably, you may well decide to give up your day job and put all your time into your own business. When that happens, you know you're going in the right direction.

The important thing in the short term is to develop a plan of the work you want to carry out each week (eg meetings, training sessions, administrative work, etc). You should then assess the amount of time you need to spend in order to complete that work.

Are you prepared to commit that much time? It will almost certainly mean skipping other social activities, and will involve a signifiacnt sacrific for you and your family.


Consistent Use of Your Time

Probably the worst mistake you can make is to work at your new business with enormous enthusiasm for a few weeks and then find that, for whatever reason, you can no longer maintain that level of work. If you make that mistake you will almost certainly fail.

If you are sure you want to set up your new business, decide now to maintain your personal commitment. It will almost certainly take some years, so be prepared to apply your time consistently for some years!


So before you decide to go ahead with your network marketing business, ask your yourself: are you willing to put aside the necessary time to make it successful, and are you prepared to sacrifice that amount of time regularly and consistently, probably for some years to come?

If you are willing to do so, you have successfully steered your way through question number 6. You are obviously taking your new business seriously, and I wish you every success!

SIX KEY QUESTIONS TO ASK BEFORE YOU SET UP A NETWORK MARKETING BUSINESS

5. Are You Willing to Invest Adequate Finances?

All businesses require financing, and your network marketing business will be no exception. Underfinanced businesses are generally unsuccessful, and again your network marketing business will be no exception.

The good news is that, compared with most businesses, network marketing businesses typically require a comparatively small amount of financial investment. Shops require expensive stock, equipment and staff, etc; a franchise business typically requires a sizeable (perhaps $100,000 plus) up-front payment, plus stock, equipment and staff, etc; a network marketing business on the other hand generally requires only a small up-front payment, a fairly small investment in stock and equipment, and no staffing costs.

Because the amount of investment required is so small, many would-be network marketers fail to take it seriously. This is a big mistake, since it leads to an underfinanced business and probable failure.

The costs involved in setting up your network marketing business will vary depending on the particular requirements of your supplier company - and will be larger again if you have more than one supplier company as discussed in question 4. Typically they will include costs such as:

- a start up fee
- stock
- web site(s)
- marketing equipment
- business cards and stationery

Before you make the final decision to go into business, make sure that you compile a thorough estimate of both the up-front costs and on-going costs which will be required in order to operate an effective business. Then confirm that you have access to the required funds AND are willing to use them.

If - and only if - you can give a positive answer to these questions, you are ready to proceed to the sixth and final question.

SIX KEY QUESTIONS TO ASK BEFORE YOU SET UP A NETWORK MARKETING BUSINESS

4. Can You See a Long Term Future?

On the surface this may seem a 'nothing' question, but in reality it is an important one to ask - are you confident that your business has a long term future?

Although it has had some spectacular successes, the Network Marketing industry has also had a large number of spectacular failures. Realistically, of all the many NM-companies operating today, the vast majority probably won't be operating in 10 years' time.

It's important therefore to assess as carefully as possible the future of any company you intend to align with. That company will in effect become your supplier, and any business needs to have reliable suppliers if they want to stay in business.

Why do Network Marketing companies fail? There are a number of reasons, but the most likely causes are:

(a) Lack of market traction. Their products may be insufficiently attractive to the market. They may be too similar to other, already established products. Or they may even have been on the market too long and are losing their appeal (all products go through a cycle of growth, maturity and contraction - some just take longer than others). It is therefore unwise to depend too much on a new and unproven company, and in the case of longer-established companies a close look at the future of their products is in order.

(b) Lack of financial or organisational stability. I've actually seen network marketing companies which were so successful that they couldn't cope with the growth they generated, and went out of business! It's not always easy to get a good picture of the stability of a company, but a very close look at the management of the company is definitely in order and strongly recommended. Do the directors have a good track record? What is their past history?

(c) Lack of integrity. If your supplier ever decides to move away from the network marketing distribution model and transfer its allegiance to retail distribution, you clearly are not going to have a long-term relationship. This has been known to happen in the past, and it will doubtless happen in the future. It's hard to predict, of course, but again a good close look at the track record of the current directors is strongly recommended. Even then, if ownership of the company should ever change hands, problems could emerge over time.


These are just a few of the things you should consider. The future is always difficult to assess, but it's important to do the best you can. Very often as 'distributors' we tend to look upon our supplier company almost as a parent which can do no wrong. We soak up their marketing hype and we put our complete faith in them. This is very unwise. Remember again that your responsibility is to run your own business, not that of your supplier, and act and judge accordingly.

One possible way to ensure that your business stays in business is to work with more than one network marketing company. This may sound like heresy to some, but it makes good sense to hedge your business bets. Not too many shops sell only one product or product range. I would never recommend signing up with multiple companies offering similar products - to me that would be unethical - but offering two or more completely different types of products from different suppliers could be a very attractive option.

It's certainly an option worth considering. After all, you do want a long term future, don't you?

SIX KEY QUESTIONS TO ASK BEFORE YOU SET UP A NETWORK MARKETING BUSINESS

3. Do You Have a Marketing Plan?

If you're happy that you have the right products and that there's a market for them, there is one more very important question to ask on the marketing side: do you have a Marketing Plan? Being satisfied that a market exists for your products is important, but then you need to work out how you're going to reach that market. It is not a good idea to go into a new business without seriously considering this.

Network Marketing companies will tell you that the way to do this is to make a list of your relatives and friends, who you will then proceed to sign up. There's nothing wrong with doing this of course, and it might even succeed - if you're lucky enough to have the right kind of relatives and friends.... But even if you do, you'll run out of friends and relatives before too long. You're also likely to experience some rejection from your friends and relatives, and in many cases this has prompted network marketers to give up their business in disillusionment.

So your Marketing Plan needs to go a little deeper if you want to be successful. After all, IBM and McDonalds didn't succeed just by selling to their relatives and friends, and I don't even know of any shops which have been successful simply by selling to friends and relatives. Why should our business be any different?

In developing a Marketing Plan you should address at least the following questions:

* What is my target market?

* How big is the market?

* What market share can I reasonably aim at? (ie my sales and marketing goals)

* How will I reach the market and achieve that level of market share?

There are many ways to reach your market, and approaching your friends and relatives may well be one of them. Different businesses use a number of sales and marketing techniques to reach their market, including such things as:

- media
- other advertising
- sales representatives
- web sites (but remember that they only work if you can get people to go to your site)
- emails
- other forms of internet marketing
- sales letters
- sponsorships
- business cards

Apart from not-for-profit organizations, every business exists for only one purpose: to make profits. Hence every business needs to make sales. And please be assured that Network Marketing businesses are no exception. Every business needs to have a Marketing Plan which the owners are reasonably confident in. Never forget the old saying: "if you don't know where you're going, any road will take you there".... Without a Marketing Plan your business will probably go nowhere - and almost certainly it will go in the wrong direction!

So before you decide to go ahead with your network marketing business, please make sure you have a Marketing Plan which sets out you marketing goals and how you'll get there. And please make sure that you are confident that the Plan will work...

Six Key Questions to ask Before You set up a Network Marketing Business - #2: Is There a Market for Your Products?

If you're totally comfortable with the products you'll be offering, the next critical question to ask is whether there is a market for those products, and if so how strong that market really is.

If your products are new in the marketplace this does create a difficulty. My business experience has been that it is extremely dificult to gauge the marketability of a new product. Some offerings which I thought would be really successful and were price-competitive turned out to be total fizzers; while others which I'd have thought would never sell proved to be really successful. Obviously you will do the best you can to judge the likely success of an offering, but in the end the market consists of human beings and they can be quite unpredictable.

So if you are thinking of going into business with a brand new product range there is a significant risk involved. One way of minimising the risk is to survey people in your neighbourhood to get their assessment of the attractiveness of the products. This can help, but again beware: people sometimes tell you what they think you want to hear! On one occasion I set up a complete overseas operation on the basis of positive results from a very comprehensive survey, only to find the people who said 'yes' to the survey were not at all as enthusiastic when it came to actually buying and paying...

You may decide it's worth the risk and that you'll back your own judgment. That's fine of course, as long as you recognise the business risk involved.

Another, possibly better solution is to go with a product range which has been on the market for some time and has an established customer base, ideally elsewhere. This should enable you quite quickly to assess its general marketabilty.

Assuming the products are generally selling well, the next question of course is whether the market has already been well tapped in your area. Ideally you don't want too much competition, but if the market is big there may be no reason to fear a reasonable amount of competition. Unless your product is already a household name, most people you talk to will still probably not have heard of it!

These are just a few of the issues which you should consider before deciding to set up your new business. If you're not comfortable that there is a good market for you, do not go ahead. If you're happy that there is, it's time to consider the third critical question.......

SIX KEY QUESTIONS TO ASK BEFORE YOU SET UP A NETWORK MARKETING BUSINESS

Network marketing can be exciting and great fun, and it can be highly profitable. However it is also a business in which many people lose heart and fail. No one wants that to happen to you, so I've developed a check list of 6 different questions which you should ask yourself before you make the big decision to start your own Network Marketing business.

Maybe you have just come from a really impressive meeting, at which the business opportunity inspired you to look seriously at becoming involved. That's great, and I wouldn't want to discourage you in any way.

However it is important to remember that a Network Marketing business is indeed a business, just like any other type of business. It doesn't matter whether you're setting up a grocery shop or starting a network marketing business, the same principles apply and need to be taken into account.

With this in mind, I have developed these 6 key questions for you to consider. There is too much material to blog in one go, so I'll discuss the first one below and cover the other 5 in additional entries over the next couple of weeks.


Question 1 - Do You Have Products Which You Believe In?

This might sound like an obvious question, but it's actually very important indeed. If you go ahead with your new business, you are going to be spending a lot of time working with your product range. So it's critical that they're products which you both like and believe in.

If you're not totally committed to your products, you'll find that your business will quickly cease to be enjoyable. And before long, your business will cease to be.....

Equally bad, if you don't totally believe in your products, you're going to feel uncomfortable when you start selling them. No one with principles can last long in a business of that type. And always remember that the sole purpose of every business is to sell its products. In the case of Network Marketing, you will probably also be selling a business opportunity, but this too is a product and will be centered around your product range.

So the first question is very important: do you really believe in the products you'll be selling?

If the answer is "NO", don't go any further. Start looking for a different business. If the answer is "YES", it's time to consider the second question, which I'll discuss here tomorrow.