As an entrepreneur I am sure that you have heard the terms MLM, multi-level marketing, or network marketing. Many of you have probably been introduced, first hand, to an MLM opportunity. And out of those, some of you have dove into the MLM arena. If you have joined an MLM, I invite you to leave your comments on the subject. For the rest of you that haven’t, I would like to take this opportunity to speak plainly about them without all the misconceptions, both good and bad.

What is an MLM? MLM is an acronym for Multi-level Marketing. Multi-level Marketing is a term that is used interchangeably with Network Marketing. Network Marketing, as defined by Wikipedia,  is a general term for a type of marketing that is usually performed by an individual instead of a company. It refers to the use of interpersonal or social networks to market products and services for business purposes as opposed to the more traditional and common practices of wide-range advertising. So what does that mean in layman’s terms? It is a marketing strategy whereby companies compensate individuals to sell on a one to one basis or a one to few basis. They typically do this in person or, at least, personally by phone, email, or other personal type communication.

Businesses that utilize a MLM strategy will generally create an opportunity whereby an individual can start their own business with little experience in that particular industry. Many of the business processes have already been designed, tested, and revised. Sales strategies are usually documented and other, more experienced, individuals within the company aide in your success. It is, in essence, a business and support team in a box.

Network marketing has received much negative press over the years. The reasoning is multi-fold. One reason is that businesses do not take the time and effort to truly build a complete set of business processes and document them for their participants. The sales process has not been fully vetted. The support required before, during, and after the sale is not in place. The product or service may have defects. And the list can go on and on. The business is focused more on selling the opportunity than selling the product or service they originally intended to promote. A second reason is that a great deal of money can be made in a relatively short amount of time. Because of this factor, often times the focus is on the short term sale and the easy, short term profit. So individuals who purchase a MLM based business are pushed to try and sign up as many people as they possibly can. By sign up, I refer to selling more MLM business opportunities. As a result, people run out to those who trust them and begin to sell their friends and family members on going into business for themselves. This often times causes the friend or family member to feel harassed or guilted into purchasing. Lastly, the new MLM business owner is fed a pipe dream by the person who hooked them in. They were told to invest a few hundred to a few thousand in this MLM business and you will be infinitely monetarily wealthy in months to a year or so. The dream is sold as a little to no effort required opportunity and money will just start pouring in. The people, like a sugar rush, go full throttle on their business and because they do not see these grandiose results with little to no effort, they quit and blame the company.

It may seem like I am building a strong case against MLMs and am set against them. Quite the contrary. I believe wholeheartedly in the power behind multi-level marketing as a business strategy. Any business can engage in a multi-level marketing strategy. Because of a few bad businesses or a few bad representatives, the entire marketing strategy should not be lumped in to one category and classify all MLMs as bad. If that were the case, no one would use a bank anymore. Many banks were fiscally irresponsible and went out of business in recent years. They helped in causing the financial crisis the US has been facing. But do people lump all banks into one category and classify all banks as bad? For the most part and for most people, the answer is “No.” They classify certain banks as bad or irresponsible and others as good or trustworthy. By the same token, MLM based businesses should be considered in much the same light. The businesses should be evaluated individually.

You should consider a few things when thinking about purchasing a business opportunity that utilizes a network marketing strategy. First and foremost, remember, this is a business. Many people fail simply because they do not treat their MLM based business as an actual business. If you ran a retail or service business in an actual location on Main Street, would you only sell to your friends and family? Of course not. No matter how big your family or how extensive your list of friends, you will eventually run out of clientele. If you are going to purchase an MLM based business, decide beforehand when you are going to work on your business. Decide whether this is a part time income or a full time income. Regardless of which one you decide, you need to set aside time on a regular schedule to work on your business.

Research the company that you want to purchase the business opportunity from. Are they more concerned with selling the business opportunity or their original product. Remember, multi-level marketing is their marketing strategy to get the word out on their product or service. However, their primary focus should still be on the product or service. Does the company have a good training and support program? Do you believe in the product or service? If you do not believe in the product or service, do not do it. You are setting yourself up to fail. How do you expect others to believe in a product or service that you, yourself, do not? Do they offer a money back guarantee on their product or service? Can you sell your MLM based business? Does their compensation plan seem feasible? Does their compensation plan fit with your goals. Some grant large sums up front with little to no money for long term whereas others have smaller up front compensation but you earn revenue over a longer period of time. Do reputable sources have positive or negative things to say about the company (this may vary according to market segment)? Remember, no company can please all the people all of the time. Consider the source of the information.

Evaluate the person who is offering you the business opportunity. Are they passionate about the product or service they are selling? Are they more focused on the product or service or are they more focused on just selling you a business opportunity? Does their information sound logical? Anyone who is passionate about their business, whether they are passionate about the product or passionate about selling the business opportunity, will want you to join in and share their passion. However, the individuals that are going to care about your success and want to help you will give you time to evaluate their claims. Do your evaluation thoroughly but do not be inconsiderate of their time either. 5 to 7 days of constant research and due diligence is normally adequate enough to make a decision. An individual who wants you to succeed will want you to feel completely comfortable with your decision to invest in the same business opportunity they are so passionate about. Also, consider whether or not you think you can work with the person who is offering you the opportunity. You will rely on them heavily initially. If you can’t work with them, you are hindering your success.

As with any industry, there are good and bad multi-level marketing based businesses. Also with any industry, there will be trustworthy representatives and untrustworthy representatives. There will be good as well as bad press as well. Multi-level marketing based businesses can make people instant millionaires as well as instantly broke. I have known people who have lost vast sums of money investing in bad MLM based businesses and I have met some of the greatest successes in the world who have made millions in less than a year investing in good MLM based businesses. I believe in the power of the multi-level marketing strategy and have invested in some myself. My main point of advice is to consider the decision carefully. Consider it as carefully as you would any other business investment. And be comfortable with your decision regardless of outside stimulation or support. It is, after all, your business.

Tags: business, mlm, multi-lelvel marketing, network marketing

On May 21st, 2009, NorthStar Global, Inc. (one of our vested companies) will be featured in the post “How To Scale A Business” on The Toilet Paper Entrepreneur. I encourage all readership to visit The Toilet Paper Entrepreneur website and read the post. It may contain just the tip you are looking for.

Tags: business, memo, toilet paper entrepreneur

If you are contemplating starting your own business, regardless of whether this is your first or your 10th business, regardless of whether it is home based, a brick and mortar operation, or Internet based, you must have a mission statement.

A mission statement is your whole reason for being in business. It does not have to be long, complicated, or entwined with fanciful wording. The one thing it must be is true. It must be true for you. Or, if you have a partner or partners, it must be true for you (collectively).

You mission statement should encompass two parts – the spiritual part and the business part. The spiritual part should detail how you will enhance value to the public. The business part will describe the profit generating ideal of the company.

The spiritual part of your mission statement should state how you will give back. How you will provide value to your clients irregardless of money. How you will enhance or better the lives of your clients. For a mission statement that only focuses on money will fall short and the company will be seen as greedy, for that is what the mission statement will reflect.

The business part of the mission statement describes your business goals. Who or what you aspire to become. It will state the achievements that will ultimately lead you to earn revenues and make profits. A mission statement that only focuses on the spiritual part will be seen as a charity, for that is what the mission statement will reflect.

Imagine a hypothetical company that makes thingys. Their mission statement could be as follows:

Thingy, Inc will produce the highest quality thingys and dominate the major portion of thingy market share in the US. Our thingys will be affordably priced and our customer service will be unparalled which will grant our clients more value in their purchase, maximizing their dollar, and creating a more peaceful buying experience.

The mission statement is not fanciful. Thingy, Inc will keep things inexpensive and provide excellent customer service. This is the spiritual part of the mission statement. The part that thinks of the client first and concentrates on giving them value. Thingy, Inc will dominate the major portion of the thingy market share in the US. This is the business part and describes the target market geographically (the US) and the position (first place) for which Thingy, Inc strives for. And we accomplished all of that in two sentences.

Your mission statement, as I said earlier, must be true. If you do not plan on providing excellent customer service, keeping the thingys affordable, or generate plans of action to accomplish first place in the US market, your team will not support your mission and your clients will see right through the farce. You must make it true and it must comprise both aspects of spirit and business.

Lastly, your mission statement must make attainable statements that your team can support. You can’t make the claim that you will be the only thingy manufacturer in the world and have every human on earth as a client. Although this is technically possible, it is highly improbable. Your team will see its improbability and will not support the mission. Without your team’s support, your clients will not support your company.

The mission statement is the first step to organizing your entity. And it is the document from which your entity will derive purpose. The mission statement will be to your company what the Declaration of Independence is to the United States of America. Take your time but don’t stress. Ensure that it is true, believable, and contains both a spiritual and business part and you will be off to a great start.

Tags: business, mission statement, spiritual

Guest post by Cristian Dorobantescu.

With the current financial turmoil and investors pulling up quick on the US stock markets some eyes are turning towards investments abroad. The simple reason is that economies that are not very connected to the US economy or are just in a plain growing period, feel the US crisis in a somehow filtered way.

Of course, if we are talking about Europe, well, Europe is clearly connected to the US market. And we have a saying here, if US sneezes, Europe will cough. Still, Europe and mainly Eastern Europe is not affected in such a radical way as US, partially because the European Union took drastic measures to limit the impact. If you add to this a partially similar Western culture, then investing in Europe might not be a very bad decision.

Now, before you take your backpack and start to hike in Europe looking for business or investments opportunities hold your horses until you learn something about doing business over here. That’s why I’ve decided to skip the part with why it would be a good idea to invest in Europe (or even better in Eastern Europe) and just talk about the differences, or at least a few of them.

To start, while European Union puts together most of the European Countries, just like US does on the American Continent, each country in the EU behaves differently.

• Each country speaks a different language. While English is the de facto business language for the consumer markets you should localize whatever you are selling, and let me tell you, we are talking about at least 6 major languages.
• European Union has put in place a common legislation, but each country has it’s own set of rules. Moreover, the European Legislation tends to be a little more restrictive and sometimes there are more regulations to follow.
• Consumer behavior is very different from country to country. Depending on what country are you putting your foot in, demand, pricing and overall acceptance of a product might be totally different. For example, Germany could be a good choice for expensive products. Greece works better with cheaper products.
• European Union provides several sorts of funding to sustain parts of the economy. There are several programs to sustain small businesses and even programs in which a certain EU country is supposed to receive funds from another country.
• As an opposite current, Venture Capitalists, Angel Investors are not so widely spread. Sometimes Europe can be less entrepreneurial.

On a more generic note there are other things to take into consideration as well.

• Not every US product or service is suitable for selling in Europe. For some, just the shipping cost to Europe ads to the product price more than the market could accept. For others, the products simply don’t fit with the demand (like for example it would be quite impossible to sell big SUV in Europe because the streets, roads and distances are much smaller)
• Lots of cultural differences. While Europe belongs to the Western culture, things over here can be completely different. For example, people pay a lot more deal of attention on heritage, history and nationality.

There are a lot more differences to talk about, and obviously more than I could cover on this blog post. So what should you do next? My experience in blogging about local economies taught me the following: you should get a glimpse on doing business in Europe from statistics. http://www.doingbusiness.org/ does an excellent job on showing valuable statistics on the business everywhere. Then you should get a glimpse of the real life business environment from business blogs. After that, take your backpack and see for yourself.

---

Cristian Dorobantescu is a strategic expert with experience in small business development and entrepreneurship, delivering successful out-of-the-box initiatives. His special interest in business development processes helps him establish a strong and personal relation with companies willing to create a successful business model in Europe. The efficient entrepreneurial speech and the result oriented approach gives him the ability to surpass the European cultural differences.

He previously worked on distribution channel development, sales and marketing, company branding and client relations for International companies.

He enjoys writing the Small Business Entrepreneur blog (www.energybyte.com) and the Entrepreneur interviews blog. (www.entrepreneurship-interviews.com)

---

Tags: business, cristian dorobantescu, europe, european union

As you may know, I was listening to the audio book by Robert Shemin, How Come That Idiot’s Rich And I’m Not? I enjoyed the audio book and recommend others to read the book or listen to the audio, as I believe it to have good information. While listening to the audio book, Robert Shemin brought up something that I am going to elaborate on. He was discussing starting your own business to increase one of your asset classes. And one of his recommendations was an online travel agency. It’s funny, because the one he recommends is the same one that Barfield Management, LLC and many of my local entrepreneurial colleagues invested in. That’s my disclosure statement. I’m invested in the opportunity I am about to elaborate on.

Last October (2007) Barfield Management, LLC purchased an online travel agency. By January of this year (2008), the business was already in the black. Cost of entry is relatively low at $500. The montly recurring expense is $50 for your booking engine and website maintenance, hosting, credit card processing, etc. And there are two distinctly different avenues to generate income from. But there are more benefits than income to this business. I will summarize various benefits in this post. For more information, you can click on the links at the end of this post to download some informational PDFs I created, go to BarfieldTravel.com and utilize the Contact Page, or click the Sell Travel link on BarfieldTravel.com.

First we’ll cover revenues. When you purchase your virtual travel agency, you have the ability to sell other travel agencies (network marketing style) or sell travel directly from your website. Commissions vary depending upon travel provider and type of travel purchased. Most airlines only pay $5 per ticket. But crusies pay a percentage of the ticket sold and your take is normally between $150 to $300. Selling travel agencies will net you $50 for the first 6 and then $100 for each one after that (on agencies you personally sell). There are performance bonuses that range from $1000 all the way up to $1,000,000. And you can take the bonus as company stock. This is great because (currently) capital gains on stock share profits is only 15% as opposed to the income tax you would pay on the same amount. The percentages and payment structures can be described in more detail to any interested party.

By owning and operating your own travel agency, you are now technically qualified as a travel agent. I recommend you take the training afforded to you in order to be a more well informed travel agent. But as far as taxes are concerned, you are a travel agent. As a travel agent, when you travel to explore new places and try new things, the cost is now an expense of your business. As an expense, you can now deduct your travel. Consult a tax advisor for specifics. But anyone who tavels and/or vacations more than once a year can normally deduct more than the yearly cost of the travel agency ($50/mo x 12 mo = $600).

Reduced travel expenses. You receive commissions on your own travel. So, not only are you getting better deals on your travel, but you also get commissions on the travel you purchase. In addition, there are free and greatly reduced offers you can take advantage of. Most crusies give you one free ticket for each group of 8 that you sell (at one time). So, gather friends and family to go on a big group cruise and get your tciket(s) for free and get paid. They save money becasue your prices are cheaper, you get your ticket(s) for free, plus you make a commission off of the tickets sold. That is called a Paycation and is a Win-Win situation. Familiarization trips, or Fam Trips as they are called in the industry, allow you to go on drastically reduced price trips. Only you and your travel business partner (spouse, friend, family), if you have one, are allowed to go. But you can go on Tahitian excursions that normally cost over $3000 for less than $1000. Resorts want you to visit and be happy so you receive first class treatment and have to try out all the amenities, for free.

Your travel busines is sellable and willable. And there are many other perks, life insurance, health insurance, guarnateed payments, residual income, etc, that you receive the more you gorw your business. This is not a get rich quick plan. So, don’t let the numbers fool you. I personally know people that have made millions from this and I also know others that only have the business for the reduced travel and tax benefits. Little old ladies, famous musicians and even professional sports teams (KC Chiefs) have the very same travel agencies that I am describing. It’s a $7 trillion industry. If you work a little, you will make a little. If you work a lot you can make a lot. As with any business, as it grows you have the ability to work a little and make a lot. But, at least initially, you will need to put for effort like any other business.

For more information, visit BarfieldTravel.com and click on the Sell Travel link to watch some informational videos or send questions via the Contact Page.

Informational PDFs titled according to interest. If you have mulitple interests, some information will be duplicated across the PDFs.

 

• Entrepreneurs
• Deduct Your Vacation
• Save On Travel
• Travel Professionals
• Leisure Rental Owners
• Created For Army – Information Applies To All Branches
• Supplement Your Income While In College

 

---

Tags: Barfield Travel, business, paycation, tax deduction, travel agency