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Wednesday, January 17, 2007

Network Marketing Indicators for Evaluating a Home Based Business

In my last post I talked about company growth and timing and their importance
in a home based business opportunity.

In this blog we’ll talk about some of the indicators I would look for in evaluating the viability of a home business especially in network marketing.

You see a there are a lot of good and great companies out there, however being a great company does not make a great opportunity.

Think about this statement, “most people and companies are out to protect their own turf.” Most distributors and companies are not totally honest with people, but then again most of them without realizing it are not totally honest with themselves. This is not surprising as most people have a blind spot to what they don’t want to see. Like a love relationship that has gone south usually one partner won’t let go. They won’t acknowledge the relationship is over.

Plus if you’re a company or a distributor making a good income in a company and you see where your sales growth was either stagnant or in decline the previous year are you going to acknowledge to new distributors that the real opportunity may be over with your company?

I doubt it you still have a family to feed and bills to pay. It can be even harder for a company as a distributor can always jump to another ship. The company is the ship – it can’t jump to another ship, it’s trying to stay afloat. It certainly isn’t going to say anything to run distributors off.

The point in all this is you can’t judge an opportunity just by listening to the company or the distributors recruiting you. They’re usually only going to tell you about how much money you can make or how great the product and opportunity is. Does this mean they are being dishonest – no not hardly. While they’re always going to be some dishonest people and scam artists, the vast majority are going to be honest or what they perceive to be correct. But think of it like this, most of the time these distributors have just seen an exciting presentation and are real jacked up about their particular opportunity. Here in lies the problem in most instances. Most people are not well trained and educated enough to accurately judge an opportunity.

It’s kind of like the stock market. How many people are well-informed investors?

The point is never judge an opportunity just on what an excited distributor says. Now if there are a lot of excited distributors that’s a good reason to look further for the evidence that substantiates you being excited and perhaps you becoming involved.

So here are some important items what you want to look for.

1. Does the company publish a list of advancements on a monthly or regular basis? Basically this is a list of people who’s businesses are growing. This is a very accurate indicator of the health of a business opportunity. The more people you see here the better the opportunity. Also you want to look at the trend of this indicator. In other words are more people advancing today than 6 months ago for example. Of course be sure to take into consideration certain business cycles. For example November and especially December are notoriously slower months than the rest of the year.

2. What is the current sales growth of the company per year and is it increasing or decreasing over past years? Once again here the higher the better and if the growth is in the neighborhood of a Bank Money Market Certificate of Deposit (CD), well I’d pass.

3. Does the company publish an annual income statement of what their distributors are earning on average? Once again if the company is doing great they will typically greatly publicize it. On the other if a company focuses on accomplishments several years old while not talking about the present be weary. You don’t care if the company was voted hottest company of 2002. The Oakland Raiders won the AFC Championship and went to the Super Bowl in 2003. Do you see what they did this year? Four short years later they finished with the worst record in the entire NFL.

I hope this has been extremely helpful. In my next writing we’ll dive into types of Network Marketing companies. Basically the type of products they are marketing.

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