Nine out of 10 people who fill out a network marketing application will fail to build a viable business. Among that number will be people who do not take action and people who build a business yet experience a true business collapse.

The oft-quoted statistic allegedly from the Small Business Administration(SBA) that 9 out of 10 of all businesses fail within 10 years by comparison is not true.

According Brian Headd?s article from Small Business Economics 21:51-61, 2003: Redefining Business Success: Distinguishing between Closure and Failure, 66% of conventional businesses survive 2 years or more, 50% survive four years or more and 40% survive six years or more. Traditional small businesses do far better than the 90% failure rate quoted by people in the network marketing industry.

What is the difference? Is the network marketing model itself faulty? Many familiar sales models use the same business model as network marketing. Real estate sales are a prime example. Many top sales people across the automotive, pharmaceutical, travel and other industries have as their main responsibility to recruit and train sales people and in return are paid commissions based on the performance of their teams. It is not the model.

What is it then? Why do so many people fail in network marketing?

Working with people over the past 5 years and in speaking with other successful network marketers during the same time, I have been able to come up with 5 reasons:

1) The cost of entry is too low: The typical start up costs can range from 0 to $1500 dollars. Imagine the person who decides to open a traditional business and has to invest tens of thousands of dollars to do so. How might that person differ from the person who can put their business start up on a credit card? The person seeking to open a conventional business where the investment is high will develop a business plan. That plan will include a skills assessment, expected expenditures and projected revenues. If the prospective business owner realizes they have a skill deficit that is material to their business success, they will either set to work learning that skill before opening their business or they will provide funding and a plan to acquire that skill while they are in the planning stages and before they open for business. Now imagine the person who can simply put their start up costs on their credit card. For the majority of network marketers there is no planning beyond the initial start up. Most never ask of their sponsors or themselves what they may need to be successful other than the initial start op costs. They never ask what skills they lack. There are on-going business costs in addition to the start up costs and those costs can range from $100 to $500 dollars per month. Many do not make provision for on-going expenses. On-going business expenses tend to be regarded as expenses akin to the cable bill rather than investments in their business. The low start up, then, can be a stumbling block to success in business.

2) Lack of appropriate training: Unfortunately many companies and teams do not offer training beyond corporate events. In order to be successful network marketers must master a simple formula, the Inviting Formula, and they must use that formula 30 to 60 times per month. Without this formula many new and seasoned network marketers will invite the wrong prospects to review their information and find themselves disappointed by the results. The Inviting Formula is simple to learn and implement. Why is there so little training available in network marketing? I believe the reason can be found in the very reasons why people get started in network marketing. Take the wage earner who wants to fire his boss. He never wants anyone to tell him what to do again; he hates his boss and wants to be free. Take the corporate executive and the entrepreneur both of whom are tired of managing people and are looking to build a fleet of independent business owners that they never have to manage. Put both groups of people together in what is fundamentally a people business and what do you get? People who find that they have to do what they were trying to get away from in order to be successful and become free! YIKES!

3) Too many people are looking for the big income score and fail to appreciate the smaller sums of income they earn along the way. Most people get started in network marketing because of the big income claims. They want the six figures. If they don?t get ?em they quit. Here is a statistic that will knock your socks off. Anyone grossing $30,000 per year or more with their respective company is among the top 3% of income earners for their company. Here is another fact. The income earned through network marketing is tax-advantaged income. Income earned through a job is not. Anyone earning an additional $30,000 dollars per year in tax-advantaged income who fails to make significant strides in improving their wealth will never improve their wealth with $100,000 per year. Finally, the road to earning and keeping six figures and beyond is a 5 to 10 year process and there is no way around it. It is a process that requires growth and change in the areas of personal finance, emotional maturity, spiritual maturity, and personal association.

4) Low EQ, failed expectations, too much hype in the industry: Looks like I jumbled 3 different ideas into one point but they are actually all related. There is a lot of hype in the industry. Joe Smith the waiter to went from 0 to six figures in a year. Of course Joe Smith and his company forgot to mention that all of Joe?s family were involved in the industry of network marketing, that all were successful, and that Joe was working as a waiter just to figure out what his options were. That skills are required is just one of the ?inconvenient truths? of network marketing. The hype leads invariably to failed expectations. If people understand at the start that network marketing is really a business that requires a skill set fewer people would get started and more people would be successful. The organizations created would move from vertical sales organizations to consumer-based organizations as more people seek to become product users rather than business owners. Network marketing itself is an industry that attracts too many people who desire instant gratification. Daniel Goldman described the Emotional Quotient or EQ in his book Emotional Intelligence. He found that the greatest determinant of long term success was one?s ability to delay gratification.

5) Money In, Money Out: Many people treat Network Marketing as a Money in, Money out proposition. Imagine a black box. On one side of the box is the word ?IN? in bold letters. On the other side is the word ?OUT? in bold letters. It would be easy to think that just because you put money in, you should get money out. Investments rarely work out that way. See the trouble is that ?black box?. Something goes on in that black box that transforms inputs into outputs and therein lies the rub. As an illustration, I was on the phone with a prospect the other day. He said, ?I have been scammed so many times, what I need is a person who will work with me, show me the ropes, train me?are you that person?? My response was, ?yes, we have a training program that begins with our training manual. We have weekly calls and I will be meeting with you a couple of times per week and giving you assignments each time we meet. You won?t progress unless you do the assignments and attend the training calls?are you that person?? Stone cold silence. He never did answer my question. With my first company, I received motivational materials at a cost of $60 dollars per month but no training. In my second program there was training galore that I didn?t take advantage of. I thought my team?s system would build my business for me. When I realized that it wouldn?t, I had a choice, quit or continue. In order to continue I had to ask myself some questions, among them, What skill or skills do I lack? There are 2 skills required in network marketing A) the skill of inviting which has embedded in it the stills of listening, sorting and sifting and B) The skill of training which requires the skills of boundary setting and the skill of setting expectations. I lacked the skill of inviting. I learned my profession through experimentation, direct observation and practicing. I applied those same strategies to learning the skill of inviting and I went from sporadic checks to consistently earning multiple 4 figures per month. Ouida Vincent has been generating leads online for her primary network marketing business and teaching duplicable strategies to her team from her home for over 5 years. To pick up her team’s Light House Marketing guide to Network Marketing on the internet, go to http://www.passiveincomesecretsonline.com uk paid surveys

There are many reasons why people fail in network marketing.
However, instead of looking into each of these causes, the purpose of this article is to explain what people MUST know when they start their network marketing business so that they will have a better chance to succeed.
This is what you must know in order to succeed in your network marketing business:
1) What is your “job” scope?
2) What is expected of you in your “job”?
3) What you should expect in your “job”?
Network marketing is a business and not a job! In fact, in the network marketing or MLM circle, the acronym J.O.B. stands for:
- Just Obey Boss (Work on a job and take orders from the boss.)
- Just Over Broke (Work on a job, get paid, and after you pay all your bills, you’ll be just over broke.)
- Journey Of the Broke (Work on a job and you’ll likely end up broke after working their whole life!)
- Jump Out of Bed (Hit the alarm clock and jump out of bed each morning to get yourself ready for another day’s work.)
So, what am I talking about?
WHAT IS YOUR “JOB” SCOPE?
Say, you check out a job on a classified ad. You’ll be looking at the job title and then the job description. Some ads are so small that you really wonder what’s involved. So, you write that perfect job application letter, update your resume and secure your interview. And besides the salary that you’d most interested in, you’d be finding out the duties and responsibilities of the job.
Bottom line: You know the scope of your job when you get one.
Now, when you start out in your network marketing business, do you know your “job” scope?
As a network marketer, this is your “job” scope:
- Understand your product and offerings
> Learn about the products especially those that you want to focus on (if your company offers a wide range)
> Find out the unique selling proposition of your products. In other words, what are the benefits of your products?
> Be a product of your products so as to know their pros and cons and you’ll be able to share from first-hand experience.
- Understand the company, its mission and vision
> Find out when and how was the company started
> Find out who owns it and who’s who in the management team
> Find out where are the regional offices (if any) and visit some of them if possible
> Know the company’s mission and its vision
- Understand the compensation plan
> Study the compensation plan and know how to explain to others clearly
> Know the merits of your company’s compensation plan and how it compare with other compensation plans.
- Understand the network marketing industry
> Find out about the network marketing industry and how it started
> Study the difference between legitimate network marketing and illegal pyramids
- Build your network through duplication
> Realize that network marketing is not sales but a “people” business
> Build your network through your circle of influence and relationship, friendship, partnership and leadership
> Provide training and support to duplicate your downline business partners
> Multiply your efforts so as to grow your business exponentially through the power of LEVERAGE
WHAT IS EXPECTED OF YOU IN YOUR “JOB”?
Once you got that job and started working, you are expected to learn and pick up your skills from your seniors and your peers and even from your subordinates.
It is in fact not much different in network marketing. And these are the things that are expected of you:
- To get into a “business” mind set
> Realize that since this is a business, you must take responsibility as a business owner
> As you are your own boss, you owe it to no one except yourself whether you succeed or fail
> A business takes time to grow, so be patient with yourself
> Network marketing is a “get rich sure” and not a “get rich quick” business
- To practice the “success” mind set
> Set your goals and plan your strategy, then take action
> When you do not get the results you want, don’t give up easily but adjust your strategy and take action again
> Keep adjusting your strategy as necessary to achieve the results you want
> In this business, you cannot fail if you practice the “success” mind set
- To have the right attitudes
> In network marketing, you can only succeed if you help others succeed
> Use less of “I, me, myself” and think about how you can add value to your prospects and partners
> Be prepared to walk the extra mile and get busy once your network starts to grow
> How fast your network grows depends on you as you are the leader of your own network
> Whatever you DO, not whatever you say, is duplicated by your network
- To learn the “business” skills
> It’s not money that makes you rich, it’s business skills
> Learn the basic business skills that you need to make this business work
> These are essentially inter-personal and communication skills encompassing prospecting, inviting, presenting, closing, following up, training and support
- To share the business with others
> If you had started a traditional business with $100,000, would you open your door to do business everyday? Yes, of course.
> Network marketing is a word of mouth business. Thus, to do business means you simply tell others about your products or services.
> When you share your business everyday, you are in fact opening your door to do business everyday.
> Sharing your business is just making a referral. Do not confuse it with selling. A good example is to refer a friend to a restaurant because you thought the food was great. However, you most likely won’t know how they cook or what ingredients the chefs use. You just loved the taste of the food or perhaps the service there.
WHAT YOU SHOULD EXPECT IN YOUR “JOB”?
Once you got that job and started working, you are expected to learn and pick up your skills as soon as possible but not instantly. (Unless of course you already have relevant experience in a previous similar job.) So, you actually go through a probation period of 3, 6, 12 or even 24 months. And then, initially, there’s so much to learn and so exciting. However, this wears out as time goes by…
It is in fact not much different in network marketing. And these are the things that you should expect:
- There is a learning curve
> No matter how simple your product or compensation plan seems, there is simply a learning curve
> If you are starting network marketing from scratch, you need time to learn and develop the “business” and “success” mind sets as well as your “business” skills.
- Your initial excitement will not last long
> Your initial excitement when you join a network marketing company can only last for 1 to 2 months
> So, you need to maintain your enthusiasm by building your belief and commitment by attending meetings, training, reading or listening to audio, etc
- Replenishment is necessary
> People come and people will go whether in jobs or in network marketing
> As this is inevitable, you need to constantly replenish your network by sponsoring new people till you reach a critical mass whereby the growth in your network exceeds the attrition rate. I have written an article, “How To Create A Surefire Stream Of Prospects For Your Network Marketing Business” which you can download from http://www.rogerloh.com/mlmtips
- There will always be rejection
> No one has a 100% record in sponsoring no matter how good they are.
> Realize that rejection is part of the “job” and that they are rejecting the opportunity, not you
> Dismiss the rejection by chanting, “Some will, some won’t, so what, someone else is waiting”
> There are many reasons why people reject your business opportunity. It could be due to money, time, family or personal problems, fear of rejection, fear of failure, etc.
> There is a ratio like 1 in 10 will join you after you share your business with them. So, the key is to share with as many people as possible. And the good news is that your ratio will increase.
To recap, this is what you must know in order to succeed in your network marketing business:
1) What is your “job” scope?
2) What is expected of you in your “job”?
3) What you should expect in your “job”?
In summary, your job is to share your business through word of mouth with your family and friends. So, learn to share as much as you can and you will get better each time.
However, the decision to join you or not lies with them, not you Roger Loh, spent many years setting up computer networks and is a network marketing and Internet marketing entrepreneur. Visit: Blog (Internet Marketing) Blog (Network Marketing)Free Wordpress Plugins