Are you funding your entire network marketing business out of your own pocket? Is your savings account or paycheck from your job the source from which you pull working capital to stay in business? I know for a fact that nearly every network marketer is doing it this way and it is a HUGE mistake. In this article I’m going to explain the major challenges with doing it this way and how you can overcome it within the next 24 hours.
If you were starting a traditional brick and mortar business, most likely you would obtain a loan from the bank large enough to both set up and fund the entire operation. This goes on until the business kicks out enough cashflow to pay for itself, which allows you to be free of the loan debt at some point. The loan pays for inventory, employees, equipment, tools, advertising, insurance, etc. No traditional business could be funded from someone’s savings account or paycheck which is why this is the normal process.
In network marketing however, since the investment to get started is so low and the overhead is even lower, there is no need to obtain a loan or working capital from some outside source, but that doesn’t take away the fact that there are expenses in which working capital is needed. There’s gas for your car, auto-shipment of products, tickets to events, marketing materials, you name it. What we as network marketers don’t think about when we get started on day one is that there are ongoing expenses that have to be funded in order to stay in business.
Here is exactly where most of us are right now. The main reason we started the business in the first place is the desire for more income because typically our jobs aren’t enough. We see the pay plan and get excited about the potential, and we take money that is already “short” to start the business. So, we begin in a state of financial need and don’t realize that it’s about to get worse. Now we have to take MORE MONEY that we ALREADY DON’T HAVE to buy stuff that we absolutely need but it’s putting tremendous pressure on your household. The average auto-ship is usually between $200-$500/month and that’s an expense that we didn’t have before starting the business. Where’s the money going to come from to pay for that? Answer: our paycheck or savings account.
Not good. This is what I call taking a loan out against our own money. Why do I say that? Because when you get your commission check from your company, upwards of 80% or more is going to be eaten up to replace what came out of our check or savings account throughout the month, which means you don’t see a pure profit. You have about 60-90 days to turn a profit so that you can stop taking out loans against your own money, and before you start to have thoughts of quitting. Remember, you came into this whole deal already financially strapped and were hoping that this new business would be the answer to your prayers. So far, it’s feeling more like a financial curse.
I used to be in this cycle and I saw a lot of good people walk away from their business because of this, and I’m here to tell you that it doesn’t have to be this way. You can fund your entire business from those who tell you “no” or may even be involved in a competing company by leveraging affiliate commissions. Done correctly, affiliate commissions can run on auto-pilot and don’t require any of your time or attention. They become the funding source for working capital that fuels your entire business AND your normal household expenses. I utilize 16 different independent funding sources which generate a few thousand dollars per month in cashflow (not loans) that I redirect for every expense necessary. Now, I don’t take money from my savings or paycheck for the basic business needs, and the commission check from my company is 100% profits in my pocket. There couldn’t be a smarter way to run a business than to have cashflow to cover everything and not have to pay it back, wouldn’t you agree?
Larry Beacham
The Stonecold Millionaire
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{ 6 comments… read them below or add one }
Larry,
This is great info – I’d love to hear more about your strategy to leverage affiliate marketing…
The article title says “How To Get Your “No’s” To 100% Pay For Your All Of Your Business Expenses And Do It Willingly”. I think I missed the part where you explain how your “No’s” will “Do It Willingly.”
I’m not sure I’m completely following this. Do you mean that when someone says “no” you send them to a page or site that is promoting affiliate products? I’m not involved with network marketing; I make most of my living with affiliate marketing. Why not just use affiliate marketing as your business? To me it seems like a simpler way to go, and can be very profitable.
Great article, Larry.
Want to impress the hell out of people (myself inluded)?
Give everybody a general outline of how it works (you and I both know that it is really simple, but there are ‘gurus’ charging hundreds of dollars for this 3-5 step process).
Mention the skills necessary to do this. You can even post affiliate links where people can learn them (tons of info products out there). OR… offer to teach people for free if they join your downline.
Finally = let everybody know what your “16 different independent funding sources” are.
…
..
.
I’m prospecting for an upline leader and I have yet to see anybody be fully open-book with their methods.
Hell… maybe I’ll do it.
-Mike-
Larry,
I have only heard of affiliate marketing and sort of have an idea of what it is. If it is simple to do it could be for me. It it gets too complicated or takes any more of my time then I can’t do anything more.
Good post and could certainly use the money.
Debra
Great post Larry!
Do you promote your affiliate programs through article marketing? Different affiliate programs have helped my business but I’m not sure how to promote them.
Thanks,
Tami