Doing Some Research On Your Next Business Opportunity? This Is What You Need To Know...
When time is your most valuable asset you need to assess a network marketing company with the same due diligence as you would if you were investing a million dollars into an investment.
In this checklist are 6 battle tested assessment steps to take before you jump into a new business opportunity with a new network marketing company, and invest your most valuable asset: TIME
STEP 1. Assess The Owners & The Company Structure
Check out the company owners and their track record in business. Have they had success in business? What level of success have they had? Have they been in business before, and have they been in the industry long? Do they have a proven track record?
Look for forms of recognition from reputable organisations to validate their business acumen. As the saying goes “fish rots at the head”. If everything else looks good in assessment but the leadership/management are not capable of driving the ship – you can be assured this will become a problem at some stage.
Ask questions about the financial setup. Is the company debt loaded? Do they own assets in the business? Understanding the financial health of the company is essential. If the company is financially “unhealthy” they will have issues in the future for expansion, innovation, product research & development, potential commission structure issues and risk of going out of business.
Is the company privately owned? Is there multi-ownership? Is it a public company? Does it have investor backing?
I have had experience with a company that had a great product, but the owners were backed predominately by investors. During tough economic times, the owners changed the commission structure to provide its investors with the returns they were expecting. Similarly, public companies decision-making processes can be slanted towards favouring shareholder returns. For me, a privately held single ownership company is the best model in this industry because you can have more connection with the ownership and decisions made.
Are the owners visionary leaders? Do they have a realistic plan? If you are going to commit your most valuable asset (TIME), you need to believe in the vision and their long-term strategy.
Your decision on WHO you join with is important. People join people! Make sure you join with a visionary leadership group, who have already achieved what you want to achieve, have excellent training, are active in the field, are available to connect with and innovative.
STEP 2. Assess Products To Promote
It is essential to find a product/service that aligns with your values and is something that gives you confidence that you are making a difference. For me, everything could look great, but if the product was cigarettes, then I could not make the business work because I have never had a cigarette in my life and I believe that they are not great for your health. This is a significant decision so do your research.
Look at what all the biggest companies in the industry sell. Success leaves clues. For example, in my case, I have found the most successful selling products have been in beauty, skin care, wellness, personal care, nutrition and anti ageing.
Understand over 85% of participants in network marketing are female so make sure they are female friendly products.
Unique, first to market, new technology are great stimulators for product lines because they allow you to generate interest easily. If it is just a stock standard product that has no wow factor, then people will always judge price and often buy from a supermarket. You need to be in a position where if somebody wants this innovative product then they have to buy from you.
The price point is extremely critical. It will be one of your most significant objections. If it is a new technology and an incredible product but more expensive, then you will come up against this as an objection often. A quick audit in a department store can give you a good guide on how a network marketing company’s product compares in value. For example, compare the product type, core ingredients, stated benefits and pricing to assess the difference in value.
Ultimately, the product/service must work well and do what it claims to do. The network marketing industry is built on word of mouth. People need results, so if the product/service does not work, then you are wasting your time.
Want More Wealthy Network Marketer Content Like This?
STEP 3. Assess Global Footprint
In today’s economy with the internet, social media and smartphone technology you need to play on the biggest playing field you can. This requires important due diligence. Thinking that a company has a big global reach because of its online presence is a BIG trap that people fall for. Sales might look good for a company and they may say “we are open for business in 20 countries” but 80% of sales could still all be in their home country.
Firstly, there is a difference between how many countries a company does business in, and how many countries they are open in. Some companies will ship a few thousand dollars a month from head office, and say they are open there for business.
Ask these questions…
How many countries do they have an office and corporate staff in? In how many countries do they do more than $100,000 a month in sales? How many countries do they do more than $1,000,0000 a month in sales? Are the products registered in those countries? What type of income would their top 10 distributors in those countries earn?
In a good global opportunity, I would like to see at least 30 countries doing more than $100,000 a month, which suggests there is viability in those markets, and there is some traction. Then at least 10 countries doing over 1 million dollars a month, which shows those markets are profitable and have traction.
Preferably, there are markets open on each continent, and there are successful leadership teams in each market.
STEP 4. Assess Income Opportunity
Some people get fooled here and get all tied up in the mathematics saying things like “my compensation plan is better than yours”. It may be mathematically true, but your earning capacity will be determined by the sum of the opportunity.
For example – as a 7 figure earner in the industry – if I was to do everything I do now, but changed from youth enhancement to cigarettes, I would fail, because even though the compensation plan may be the best – the product is not. Similarly, you might have a mathematically better compensation plan, but your product is too expensive. Or you might only do business in 4 countries which limits your compensation reach. Or it might be too mathematically good and the company goes broke from paying out to much.
The perfect payout is around the 50% mark. You need a situation where you can potentially create 7 figure earners under your leadership, and the company can be profitable and healthy.
I look at the balance of the comp plan. Is there enough up front to attract the people wanting to earn $500 a month running a party or referring to a few friends each month? You need some good commissions for this type of distributor. However, if you have a 7 figure vision you need to see parts of the compensation plan that will be attractive to a big leader who wants to earn that rock star income.
Ask how many people are earning the type of money you would be aspiring to earn. For example, in my first company, there was not one 7 figure earner. That meant I needed to be the best to not even earn my desired income. You just want to know what is the standard in the business you are assessing. Ask if there are people who have attained your desired monthly level in each country market. You want to know that it is working everywhere or you could be looking at “fools gold”.
Ask if there are any criteria required to earn 100% of the commission you are entitled too. For example, some companies may require you to enrol 2-3 new people each month to earn 100% of the commission.
Your commission is likely to be good if you have great unique products that are well priced and shipped to as many countries as possible, that is backed by a great management team steering the company in the right direction.
STEP 5. Assess Technology & Innovation
Business in network marketing is often governed by the everyday average person. So you need to make the business as easy as possible for anyone and everyone to participate. Therefore, the ease of use of technology and innovation is critical for success. You want to know if the company you’re looking at provides the tools and technology to make it easier for their distributors to get the word out. For example:
– A very good looking website that is easy to navigate and is informative for potential customers.
– App technology that allows you to run your business with or without website access.
– Tools such as video’s that people can share with their prospects. If your prospect – who wants to build a business – is new to entrepreneurship, they may not have the selling skills of advanced network marketers, however, every person has the ability to share a video and let the tools do the selling on their behalf.
STEP 6. Assess Timing
In a recent network marketing survey, it was asked: “what was the number one thing that made you join that company”. The overwhelming answer was “the launch”. However, for me, a launch is simply the icing on the cake. You can not bake a cake with one ingredient. Everything else needs ticking off before I consider the launch.
In over 15 years I have seen so many companies launch into markets with the hype, and 18 months later they are non-existent because under the surface there were not enough boxes ticked.
If a company is launching, I also want to know if is it DSA approved, which is like a governing body that oversees and protects the industry. You need to tick all the appropriate boxes to be accepted. Most companies that have DSA membership usually are a safe bet and are legitimate opportunities.
Like any start-up company, the first five years is risky. A high proportion of businesses that start do not make it to 5 years. So if it is a startup, or year one, or two make sure you double down on your due diligence.
Remember, time is your biggest asset. If you make a mistake by selecting the wrong company then you are wasting your time.