Is It Really Different?

Is Network Marketing Different from Any Other Business?

Today I was talking with a group of women.  Some of them already run their own businesses while others are thinking of leaving their jobs to run theirs. It was a mastermind event where we shared ideas, struggles and tips.

The question they had for me was “Is network marketing different from any other business and if so, how?”  They asked because I was running my own business for nearly 20 years before I came across network marketing and changed careers.

To answer this question, we first looked at Robert Kiyosaki’s explanation of how people make an income (Cashflow Quadrant 1996, The Business of the 21st Century 2010)

Kiyosaki explains how people on the left side exchange time for money to earn their income while those on the right side either have a business where a lot of people working together creates the income or they have investments making money for them.

I had been employed(exchanging time for money) and, while I loved being a midwife, I did not enjoy the rules and regulations of the system.  I didn’t enjoy being told when I was allowed time off and for how long. And I didn’t enjoy being told how much I could earn and when I could be promoted. I became self-employed.

I absolutely loved being self-employed. Now I could be a true midwife.  I could get to know ‘my women’ and we could make decisions about their care together. I could now decide how many clients I would take; how much I would charge and when I could go on holiday.

The down side was I realised the business (my clients) owned me.  I was never finished work. I was still exchanging time for money.  The only way I could increase my income was to work more hours or increase my fees.  Working more hours became impossible once I had as many clients as I was able to work with and I was already on call 24/7. Many of us in self-employed business find ourselves caught in the same way. We’re working more hours than we really want, and we don’t want to increase our fees.

I was paying what I could afford into a pension plan and discovered it wasn’t enough to allow me to retire any time soon.

I pondered and pondered on how I could work less or eventually retire. Kiyosaki points out that the only ways to work less is to either own a business where other people work for you or to invest so money works for you.

I didn’t have the capital or imagination to start a ‘traditional’ business or a franchise.  Starting my midwifery business had cost me £3000, which is a tiny investment compared to most businesses and franchises. I didn’t have extra money to invest.

That’s when I agreed to look at network marketing.

Eureka!  I could start a business with just under £200 and if I didn’t like it or couldn’t make it work I could use up £200 worth of products and walk away.  No big loss. On paper it looked workable. I did a lot of research (in another blog) and, somewhat sceptically set to work.

At first it felt just like a self-employed business: the harder I worked the more money I made.  I learnt that good selling (unlike being a sales person) is educating people about your product and leaving them to make their own decision to buy or not. I learnt not to expect a sale!! The result was that I became good at finding customers who wanted what I had to offer and good at looking after them.

I wanted more.  I wanted a business.

So, I began to recruit a team to work with.  Then the principles of network marketing kicked in: the company pays you commission on the turnover of your whole business.  This means it’s worth taking time training the people you recruit to make money themselves. When they make money, you get paid by the company for your efforts.  If they don’t make money then you don’t either. It’s totally a win, win, win situation. Now I had a business and was getting paid more than the time I put in.

I don’t have to hold stock.  I don’t have to pay employees. I have minimal overheads. I pay for my own training – and it’s not that expensive and it’s the sort of personal development I want. I decide my hours.  I decide when I’m going on holiday. And I still get paid.

I still am paid way more than the time I put into the business.  Once we made extra to our needs we invested.  Now money is working for us. Now we are truly more on the right side of Kiyosaki’s Cashflow Quadrant although I still choose to look after customers and put some time into the business because I love it.

And that’s how network marketing is different from a normal (self-employed) business.