Top 21 Tax Deductions for Network Marketers

As a network marketer, you can be eligible for great tax deductions, assuming you are treating your business like a real business and you have the INTENT to make a profit.

The IRS has clear rules about the difference between a hobby and a business.  In order to be eligible for tax deductions, you must ensure the IRS considers your business a business (by your intent, game-plan and efforts).  I suggest you go online and read those rules, or sit down with your licensed CPA to find out more.

The bottom line is that you don’t get to enjoy the tax deductions of having a business IF you aren’t treating your network marketing business like a real business.

What I want to do in this post is share some of the common tax deductions for network marketers in the United States (as of 2014).  As a quick disclaimer, I am NOT a CPA, bookkeeper, or tax professional.  I’m just sharing some of my first hand knowledge of doing my own taxes for more than a decade.

These deductions listed below are subject to change at any time, so make sure you visit the IRS website frequently or find out from your CPA.  Ultimately, it’s your responsibility to know what you can and can’t deduct on your taxes.  This article is for educational purposes only and is NOT financial or tax advice.

All of these “deductions” I’m going to share with you today are by no means exclusive to network marketing.  They are available to anyone who owns any type of business.  In fact, all of these deductions are right off the official IRS website and the Schedule C for your tax return.  I am simply sharing that information with you.

Here are the common categories on a Schedule C:

# 1 Advertising – This might include business cards, buying leads, participation in an advertising COOP with your upline, sample products, newspaper ads, or any type of online or offline advertising that you might do to generate leads, find prospects or make more sales.

# 2 Car and Truck Expenses – Basically, you can do a standard mileage deduction or you can do an actual expense deduction (the IRS site explains the differences).  I highly suggest you get a mileage log and track your business, personal and commute miles each day.  The IRS requires that you document your mileage.

In addition, keep all of your receipts for oil changes, repairs, car payments, gasoline purchases, etc.  At the end of the year you can decide between the standard mileage deduction or actual expenses.  In addition, you can deduct tolls and parking, when they are business related.  Some states (not all) even let you deduct part of your vehicle registration costs.

# 3 Commissions and Fees – This might include membership fees to your website, any commissions you pay someone for referrals, eBay fees, PayPal fees, etc.

# 4 Contract Labor – This category is for any independent contractor that you hire to help you with your business.  For example, maybe you hired someone to write some blog posts for you, to create a custom eBook cover, or to do a freelance project.  This is the category that would fall in.  Anytime you pay a person more than $600 in one year, you must provide them (and the IRS) a 1099-MISC form.  This is also what your MLM Company does for you (if you earn more than $600).

# 5 Home Office Deduction – This is a legal tax deduction, although a lot of folks are scared to use it! Basically, if you have a home office space that is used exclusively for your network marketing business, you can claim a home office expense.  For example, if that home office was 5% of the total space in your house, you could deduct 5% of your home expenses.  You definitely want to take some time and educate yourself on this one.  The IRS website does a great job explaining how it works.

# 6 Interest – Most network marketers won’t use this expense, but examples could include if you have a credit card that is EXCLUSIVELY for your MLM Business or if you took out a business loan for your MLM Business (not recommended).  In either case, it’s just the interest that would be deductible.

# 7 Inventory – This one only applies if you keep an inventory.  Not all network marketers have an inventory.  If you keep an inventory, you will have to determine your cost of goods sold.  This is basically where you take your sales, minus your inventory purchases, and combine it with your remaining inventory on hand at the end of the year.  Ultimately, you need to do an inventory on January 1st and one on December 31st, so you can make these calculations.  Do a quick internet search on how to determine “cost of goods sold” and you will have a better understanding.

# 8 Legal and Professional Service – Anytime you hire a lawyer, accountant, or any other professional (for business purposes), the fees would be placed in this category.

# 9 Meals and Entertainment - This category is a “touchy” one.  You can’t deduct your own meals, but if you take a client out to lunch and pay for their meal (and yours) you can deduct 50% of the cost of the meal on your taxes.  You can also deduct any food you buy exclusively for home parties to promote your business.  Some food is 100% deductible, but most meals are only 50% deductible.  Educate yourself on the difference between the two.

# 10 Office Expense – This would include any office supplies that are used for your business, such as ink, paper, toner, pens, staplers, paper clips, folders, etc.  Please note that if supplies are not 100% for business use, you can only deduct the percentage of the cost that is used for business purposes.  For instance, if you bought an ink cartridge and it is used 50% of the time for business and 50% personal, you could only deduct 50% of the cost.

# 11 Supplies – Here’s what I found on the IRS website about supplies.

“In general, the cost of materials and supplies used in the course of a trade or business may be deducted as a business expense in the tax year they are used. In addition, the cost of incidental materials and supplies that are kept on hand may be deducted in the tax year of purchase provided that:

  • No records are maintained indicating when supplies are actually used,
  • No inventory is taken of the amount of supplies on hand at the beginning and end of the year, and
  • This method does not distort income.

Taxpayers should be careful to avoid deducting expenses as supplies when they are capital assets. For example, if the useful life of an item is significantly greater than one year it must be depreciated.

Supplies used directly or indirectly in manufacturing goods are part of the cost of goods sold.”

Source: IRS Website

# 12 Taxes and Licenses – This category is for any quarterly tax payments that you made to the IRS or any business licenses you purchased.  This category isn’t real common for network marketers.

# 13 Travel, Meals and Entertainment – This category is for any type of travel expenses to meetings, regional rallies, company convention, training events, etc. that are OVERNIGHT and away from your home.  They MUST be business related.

# 14 Utilities – This might include your cell phone, land-line or any other home utility used exclusively for your business.

# 15 Miscellaneous Expense – This would be any other type of legitimate business expense that does not fall into one of the categories mentioned above (or below).

Here is the link to the 2014 Schedule C on the IRS website.

Not So Common Deductions

Here are some other deductions that are on the Schedule C that you CAN deduct, although they aren’t very common for network marketers.

# 16 Depletion – This is on the Schedule C, but I’ve never used it and know nothing about it.

# 17 Depreciation and Section 179 – This is when you purchase an expensive item, such as a printer or laptop, and plan on using it more than one year.  The IRS won’t let you deduct the whole thing in one year, so you are required to depreciate it.

# 18 Employee Benefit Programs – This only applies if you have employees, which hopefully you don’t have!

# 19 Insurance – This would be any business specific insurance that you bought for your MLM Business.

# 20 Pension and Profit Sharing – This would be if you have created a pension program or profit sharing program FORMALLY for your business (employees or yourself).

# 21 Wages – This would be in case you had any employees on payroll.

Final Thoughts

I believe that every network marketer has the responsibility to educate themselves about taxes, and to learn what they legally can and cannot deduct. It’s your responsibility to pay what you owe, but not a dollar more nor a dollar less.

If this is your first time owning a business,  I highly suggest you sit down with a CPA or bookkeeper and have them help you get set up.  You should also purchase a few books on small business taxes.  There are plenty to choose from on Amazon.

Once you learn the basics about what you can and can’t deduct, what reports you need to do and what receipts you need to keep record of, your life will be a lot simpler.

What are your thoughts?  What are some of your favorite tax deductions for network marketers?  Leave a comment below to let me know what you think.

DISCLAIMER: This article is for educational purposes only.  Please consult with a trusted CPA or licensed tax professional before deciding what you can or cannot deduct.

MLM Compensation Plans: The Different Types of MLM Pay Plans

There are many different types of MLM Compensation Plans.  Every company has a “somewhat” different compensation plan than its competitors.  Look at any 10 companies and you will find 10 different pay plans.

Which plan is best for you? I’m not sure.  The pay plan you pick should support your short-term and long-term objectives.  For example, if you enjoy retailing and need immediate income, you might want to pick a pay plan with a good retailing commission.  And if you want “long-term” wealth creation, you want a plan that rewards you for building a large team.

The purpose of this post is to help you choose the right compensation plan for you.  Only you knows what is best for you, so please do your due diligence.

Prior to joining any MLM Company, you should have a thorough understanding of its compensation plan. You should know exactly how much you will get paid when you do certain things.  You should know what you need to do to earn $1,000 per month, $3,000 per month or $10,000 per month.  You should understand the retailing bonuses, fast start bonuses, team overrides, leadership qualifications, etc.

That way, there is no confusion or misunderstanding.  After all, if you don’t know HOW you get paid, how can you expect to be successful?

To take it one step further, I think you should pick a MLM Compensation Plan first, and then find a company that uses that pay plan.  I know that VERY FEW distributors will ever do that, but I think it’s a wise move.

In the paragraphs below, I’m going to take a few minutes to review the four most common types of MLM Compensation Plans in our industry. We’ll cover some of the pros and cons of each plan. Let’s get started:

1. Forced Matrix Plan: Forced Matrix Plans allow you to have a specific amount of people on your each level of your organization. You can personally sponsor as many people as you want too.  You are just limited to where you can place them in your group.

For instance, a 5 x 7 forced matrix plan allows you to have five people on each level. After you sponsor your first five people, you must place all future distributors on level two or below. You’re still their sponsor, but they’re not on your first level.

Each one of your distributors can have five on their first level, and so forth. In a 5 x 7 matrix plan, you could potentially have:

  • 5 on your first level
  • 25 on your second level
  • 125 on your third level
  • 625 on your fourth level
  • 3,125 on your fifth level
  • 15, 625 on your sixth level
  • 78,125 on your seventh level
  • TOTAL 97,780 potential downline

The major advantage of this type of compensation plan is that you help your downline build a downline. You help lots of people earn small commissions, even if they don’t sponsor anyone themselves.

forced matrix plansThat can have a positive effect on retention rates in your team. When you place new distributors under someone else, they get a small check. You still get the biggest part of the commissions though.

Another advantage is that you have people in your upline helping you build a team, by placing people in your group.

The major disadvantage of this MLM Compensation Plan is that it breeds laziness and a “welfare mentality.” People expect you to put people under them. Furthermore, if you build a large organization beyond the payout levels, you miss out on lots of money.

In the above example, you wouldn’t earn one cent off people in your 8th level, 9th level and so on. Read more about forced matrix plans.

2. Binary Plan: With a Binary MLM Compensation Plan, you only have to build two legs. You have a left leg and a right leg.  In other words, you are limited to two people on your front level.

Once you sponsor your first two people, you are forced to place everyone else under them in your downline.  Basically, you are building a POWER LEG, where you place everyone you sponsor at the bottom most point of either your right leg or left leg.

Depending upon your MLM Company, you normally get paid on your weakest leg.  Every company does it a bit differently though.  Some companies do “cycles” when you hit so much volume in one leg and so much volume in your other leg.  For example, if you have 500 points in one leg and 200 points in your other leg, you would cycle and earn a commission.

The major advantage about this type of plan is that you get to help people build a team. It is a very supportive environment. As you place people under other downline members, everyone benefits.  In addition, you probably have people in your upline placing people on your team!

The major disadvantage to this type of plan is that people often get lazy. Most people will only join your team if you put them in your power leg.  In addition, they expect you to place people under them and build a team for them.  Also, with this type of compensation plan there is typically no “retail” aspect to the business.

In recent years, the binary compensation plan has grown in popularity.  Personally, I am NOT a fan of this compensation plan.  Read more about binary plans.

3. Breakaway: This is quite perhaps the oldest MLM Compensation Plan and it’s used by most of the large, successful MLM Companies (Amway, Nu Skin and Herbalife).

With a breakaway plan, your successful downline distributors “break away” once they’ve attained a certain achievement level in the compensation plan. Once they breakaway, their sales volume is no longer counted as part of your sales volume anymore.  Instead, you get a small percentage of that person’s group sales volume each month, normally three to six percent.

breakaway plansFor instance, Amway uses the breakaway MLM Compensation Plan. Once your downline distributors attain the status of Platinum (Direct Distributor), they breakaway from your downline.

Their sales volume no longer counts as part of your sales volume. Instead, you get a 4% monthly bonus off their volume (if you maintain certain requirements). When you help others achieve the same success, you also get additional leadership bonuses.

The major disadvantage of a breakaway is that you end up losing a large part of your downline. Yes, the people are still technically on your team, but you can lose out on a lot of money.  For instance, if you sponsor ten people and one of them accounts for most of your volume, once they breakaway, you could “lose” your achievement level in the company.

For example, if you are doing 30,000 points in volume in each month and John’s group accounts for 27,000 points of that volume, when he breaks away your volume is down to 3,000 points. If you have to maintain 5,000 points to remain qualified to get commissions from John’s group, and you don’t have it, you would potentially earn NOTHING from his group.

To succeed in this type of compensation plan you really need to be good at sponsoring and you need to develop several leaders to really maximize the compensation plan.

4. Uni-level Matrix: With a uni-level Matrix MLM Compensation Plan you can sponsor as many people as you want to on your front line (first level). In most cases, however, you are limited on how many levels deep you can get paid (initially).

For instance, you might get paid on your first three to five levels deep, regardless of your rank with the company. Anyone placed within those levels counts as part of your team volume.

unilevel plansHowever, to get paid on levels below that you must achieve a certain pin level in your company, sponsor a certain amount of people, or achieve a certain monthly volume.  If you only sponsor a few people and one of your people really takes off with the business, you could potentially miss out on a lot of money.

If someone you sponsor builds an organization 30 to 50 levels deep, you leave a lot of money on the table (if you aren’t a leader yourself). However, if you are good at sponsoring people, you can build a wide and large organization. Remember, width gives you profitability and depth gives you security.

Final Thoughts

In summary, all MLM Compensation Plans have pros and cons. None are perfect.  My best advice is to make sure that you thoroughly understand the company’s compensation plan, before you get started with the company. You must have a clear understanding of how you will get paid.

In addition, you must be able to explain the compensation plan to your prospects and new distributors. If it’s confusing to you, it will be confusing to others as well.

If you are a good leader, salesperson and recruiter, you can make money in ANY company. Most companies are designed for the heavy hitter and mass recruiter.  On the other hand, if you struggle at selling, recruiting and leadership you will probably struggle with ANY company you join (until you develop those skills).

I really believe that your short-term and long-term goals should influence what type of company you join.

What do you think?  What is your favorite type of compensation plan and why? Which one do you participate in?  What do you like and dislike about it?  Leave a comment below to share your thoughts.  I look forward to hearing from you.

Book Review – Networking: The Natural Extension of You by John and Giselle Sexsmith

One of my good friends (my sponsor) recently suggested I check out the book “Networking: The Natural Extension of You!” by John and Giselle Sexsmith.  The authors are some of the top earners in Nu Skin, having earned more than $20 million in network marketing.

I read the book over a period of about three days and really, really enjoyed it.  It’s a lot different than most MLM books.  There is no hype or fluff.  The authors have been there and done that and they share some of their best success tips.

It’s well written and it’s a quick and easy read.  I do believe the book is out of print, but I found a used copy on Amazon for just one cent!  Talk about a deal.

What I want to do in the rest of this post is share 40 of my favorite quotes and ideas from the book.  Each quote is in bold and italics.  At the end of each quote I will offer my own thoughts on the idea.  The quotes are listed in no particular order.

# 1 Perhaps the most difficult choice you make in your life is how you trade your time for money.  Most of us are taught from the time we are small children that we should get a good paying job and trade of hours for dollars.  For most people, this is the only way they know how to make money.  The truth is, time is your most precious asset.  Your goal in life should be to make the most amount of money in the least amount of time possible.  Network marketing allows you to do that.

networking book cover# 2 Everything great that we have ever done in life has been a team effort.  Nothing worth accomplishing in life is an individual effort. We all rely on the support of others to lift us up. Our spouse, family, kids and co-workers all have a critical role in our success.

# 3 The best way to build a better world is to build a better you.  When we focus on personal development and improve ourselves we can grow.  For life to get better you have to get better. For life to change you have to change.

# 4 It’s harder to fail than to succeed.  If you make a commitment and stick with something you will eventually succeed.  The only way to fail is to quit or do nothing at all.  Success is actually quite simple.

# 5 If you truly desire to build a successful business, you must be committed to take action. Commitment is the most important word when it comes to success in network marketing.  You must get started, make a commitment to move forward and never quit.  Most people don’t make that level of commitment and that’s why they don’t succeed in their business.  When you are committed, nothing will stop you.

# 6 Not taking action will lead you down a path of misery, doubts and regrets.  It’s better to attempt something great and fail than attempt to do nothing and succeed.  You never know what you will accomplish unless you try.  You can’t wish your way to success.  You have to work your way to success.

# 7 I knew that the reason I had enthusiasm then and why I still have it today is because I am committed to take action and to take it now!  Whining, worrying and whimpering will never lead you to success.  You can make excuses or you can make money, but you can’t do both.  Let your actions control your motivation rather than letting your motivation control your actions.

# 8 We like to think that great things just happen in life, but if you want to really succeed, you have to plan for it.  Nothing worth accomplishing is easy or will just fall in your lap.  Ultimately, you need a game plan and you need to roll up your sleeves and do the work.  Set a goal, develop a plan and get to work.

# 9 Making specific plans is a common trait of all peak performers and high achievers in this business and every business.  You need a daily action plan and long-term plan for your MLM Business.  You need a business plan.  Failing to plan is planning to fail.

# 10 It is important to recognize that it takes time, energy and a lot of hard work to get to a level of success.  Success is not easy.  It requires hard work and sacrifice.  If it’s worth accomplishing you’re going to have to sacrifice something to get there.  You won’t build a big business overnight.  It takes several years (or more) of consistent effort to do that.

natural extension of you# 11 It all comes down to paying the price and being willing to move from one step to another in sequence.  Do the work, make the sacrifices and stick with it.  Create a game plan and take your journey one step at a time.

# 12 This business is much like a space craft taking off where almost 90% of the effort and fuel consumption comes in the first few seconds of lift off.  Building the foundation of your business is the hardest part.  Your first year or two in the business will be spent building the foundation.  Once the foundation is built properly the rest of your business will get built pretty quickly.  Look at skyscrapers.  It can take a year or two just to build the foundation and then just a few months to build the rest of the building.

# 13 The only way to really make it in this business is to move quality products to end users. This business is NOT about recruiting.  It’s about creating volume in your team.  You can recruit people until the cows come home, but if no one uses or sells the products you won’t make any money.

# 14 If you want to succeed you must be willing to fail.  Dare to be great.  There is no guarantee of anything in life other than taxes and death.  Don’t be scared to take calculated risks.  Fail your way to success. Temporary failure is a big part of the journey to success.

# 15 Many people simply do not want to take any risk and just want to stay where they are. Your comfort zone is your biggest enemy.  The opposite of excellence is good enough.  Don’t let your comfort zone keep you from achieving your dreams.

# 16 Remember that you have to focus on the positive with people regardless of their performance.  Believe in everyone on your team.  Inspire them.  Show them that you care about them as people.  Do that and good things will happen.

# 17 If you are focused on the money aspect only, you will not last very long in networking. People first and money second.  That is the philosophy you want to live by.  Build relationships and treat people well and the money will follow.

# 18 If you want to be a winner you must associate with winning people.  The people you hang around today will determine where you end up in five years from now.  Hang around positive people who lift you up and have what you want.  Never forget the power of association.

# 19 The culture within your network is crucial to your long-term success.  Ultimately, you need to create a culture in your team.  Create an environment where people are encouraged and they feel like they belong to something much greater than themselves.

# 20 Too many individuals get into networking because they feel it will be fast and easy money.  No business if fast or easy money.  All businesses come with some level of risk.  If you want easy money go to Las Vegas.  If you want long-term money or a great Plan B, start your own home based business.

# 21 If the people you sponsor into the business see you working hard and paying the price for success, they will likely follow your example.  Set the pace.  Lead by example.  Be so busy staying in the trenches that you inspire your team by your actions.

# 22 Support must be a parallel commitment.  The distributor must invest as much time and effort into their business as you do.  Never do more for a team member than they are williing to do for themselves.  Match people’s efforts.  Don’t build their business for them.

# 23 You must also be very careful to make sure that you don’t spend your time with people who are putting zero effort into the business. Work with the people on your team who are in the trenches doing the work.  Spend 80% of your time with the 20% of the people doing the work.  Live by the 20/80 Rule.

# 24 New insight and knowledge is the greatest gift you can give a distributor.  Share your wisdom and knowledge with your team.  Teach them everything you know about the business. Whenever you learn a great idea, don’t keep it to yourself.  Share it with others.

# 25 Don’t do things for your distributors that they can do for themselves.  Don’t create a welfare or entitlement mentality on your team.

# 26 There are many ways to make a total commitment to this business, but far and away the best is to burn your bridges, don’t look back and drive it forward.  If you really want to make it big, sell out to the business for five or more years.  Don’t give youreself an exit strategy, or you will seek it out.

# 27 If you want to succeed in this business you must have an abundance of an abundance mentality.  What you think is what you get.  Be optimistic.  Look for the good in things.

# 28 It is critical that you make a distinction between being busy and being productive. Successful people are productive.  Anyone can be busy.  Successful people manage their time wisely and get things done.  In a commission based pay system or business it’s your results that matter most.

# 29 If you take care of the minutes, the days, months and years will take care of themselves. Manage your time wisely.  It is your most precious asset.

# 30 You must have strong self-discipline to be self-employed.  Too many people think that being self-employed is easy and a very casual lifestyle.  Owning a business is NOT for everyone.  It’s hard work and takes a lasting commitment  The rewards are worth the sacrifice, but it’s definitely not for everyone.

# 31 People who say they have a time management problem are really just experiencing a lack of focus and direction. When you know what you want and you have a big goal in front of you, you will find a way to make it happen.  People make time for things that are important to them.

table of contents# 32 Procrastination is the most lethal killer in network marketing.  When you procrastinate your business dies a slow death.  You can’t think your way to success. You have to take action and do the work.

# 33 When you are viewed as a friend and trusted person your success rate will increase dramatically.  People like to do business with people they know, like and trust.  Build good relationships with people and provide value.

# 34 Remember that you are trying to build individuals to be successful presidents of their own companies. Your real job is to build leaders.  You want people who are independent of you and can think on their own two feet.

# 35 The marathoner also knows that by focusing on steady, gradual growth he can build individuals who will have the stamina to go the distance.  This is not a sprint.  Nice and steady is what wins in the long term.  Yes, you can have short bursts of energy, but the real key to long term success is just being consistent and steady.

# 36 You will find that longevity in the business is one of your greatest assets.  Sticking with the business and industry for the long haul is more than half the battle.  The longer you stick around, more and more good things will happen to you and your business.

# 37 It’s far better to be a rising star than a shooting star.  You never want to reach your peak. Keep climbing the mountain.  Keep learning and growing every day and every month.

# 38 You must have the ability to stick to your goals long after the mood in which you created them has passed. Enthuisasm comes and goes.  Most people will lose their excitement for the business within 90 days of joining.  It’s the actions you take AFTER your excitement fades that will determine whether or not you become successful.

# 39 True leaders help every team member feel like they are part of the championship effort. Create a great culture in your team.  Let your team members know you aprpeciate them and that they are a valuable part of your team.

john and giselle sexsmith# 40 Many of your best people will enter only after you have shown them what a strong commitment you have and how much you want them to succeed in the business.  Your best leaders five years from now will be people that tell you NO today.  Keep pressing forward.

Final Thoughts

In summary, these are 40 of my favorite quotes and lessons from John and Giselle Sexsmith’s book, “Networking: The Natural Extension of You!”  Overall, I give the book an 8 of 10 and consider it a must read for any network marketer.

What are your thoughts?  What is your favorite quote listed above?  Have you read the book?  If so, did you like it?  Leave a comment below to share your thoughts.  I look forward to hearing from you.

Your First 90 Days in Network Marketing: What to Do

Today, I want to talk about what to do your first 90 days in network marketing.  This information will benefit anyone in our industry, but it is designed for the brand new person. Even if you aren’t brand new yourself, this is good information to share with your new team members.  I highly suggest new distributors do all of these things as quickly as possible.

# 1 Try Out a Bunch of Products

When you join a company, place a big order your first order.  Don’t just order the minimum.  Try out a bunch of different products.  You want to find out which products you like best and how much you like them.  If you only order one product you won’t be very familiar with the product line.  Order at least five to ten products your first order and try new products every month, for your first few months.

This will help you build up your product story and it will give you a better understanding of how the products can help other people.  Most companies offer at least a 30-day money back guarantee so if you find a product you don’t like just return it and get your money back.

Remember, if the products don’t make sense, neither will the business!  You should also sign up for auto-ship.  It’s a must do if you are really serious about building a successful network marketing business.

# 2 Determine Your Why

You’ve probably heard people talk about this before.  Determining your WHY is very important. Your why is WHY you are doing the business.  Maybe it’s to earn an extra $500 per month so your wife can stay home with the kids.  Maybe your why is to earn an extra $1,000 per month to save for retirement.  Maybe your why is to create a Plan B, so you have options a few years down the road.

Whatever your WHY is, write it down on paper.  Post it on the fridge.  Keep a copy of it in your wallet. Keep a copy by your nightstand.  Read it daily.  This will keep you going through the good times and bad times.  Without a strong why there’s a good chance you will give up and quit your business within your first 90 days.  Don’t underestimate the power of writing down your WHY.

# 3 Set Some Goals

The next thing you want to do in your first 90 days in your network marketing business is to set some goals for your business.  All businesses need goals to shoot for.  At a bare bones minimum you should have one month, 90 day, one year and five year goals.  Write down how many people you want to sponsor, what rank you want to be, how big you want your team to be and how much money you want to make.  Write all of this down on a piece of paper and share it with your spouse and sponsor.  This will be your guidepost, what you are aiming to achieve.

# 4 Develop a Game Plan

Your next step is to develop your plan of action.  Think of this as your marketing or business building strategy.  Talk with your sponsor and upline and find out how THEY build the business. Check out a few different ways of building the business and pick ONE method that makes sense to you, that you feel comfortable doing.  Examples might include home parties, events, one-on-ones, Facebook, or anything else.

Your game plan should be simple and easy to follow. Ultimately, you want to come up with two or three activities that you must do every day to move your business forward.   An example game plan might be to prospect two new strangers, to call three leads and to follow-up with one person.

You should also develop a one page business plan.  This is a very important exercise, so don’t skip it.

# 5 Make a Commitment

Without a doubt this is where most people in our industry mess up.  Regardless of how big or how small your goals are, you need to make a commitment to stick with the business.  Rome was not built in one day.  Good things take time.  This is not a get rich quick or way to make IMMEDIATE money (not in most cases anyway).

Make a commitment to stick to your game plan MINIMUM two years and preferably five years. If you have the attitude that you are going to just try it out or dabble with it, do yourself a favor and quit now. If you started any other type of home business you wouldn’t dabble with it. You wouldn’t start a restaurant and dabble with.  You wouldn’t open a store and dabble with it. You would sell out to it!  Be committed.  Making the decision to be consistent and stick with it is the best decision you can make.  Five years from now you will be glad that you did.  Read more about sticking with MLM for the long haul.

# 6 Get Your Business Tools

All business owners need tools.  A carpenter has their hammer, nails, tape measure and saw. As a network marketer you should have some basic business building tools.  This includes business cards, a day planner, samples, information brochures, prospecting CDs and more. These tools will help you grow your business.  Don’t be cheap in the tools department.  You want tools that can do the heavy lifting for you.  If you don’t know what tools to get, ask your successful upline.  Here is a list of suggested business tools.

# 7 Get Plugged In to the System

Your next objective is to get plugged in to your upline’s system. This is nothing more than their methodology of building the business.  The team probably has a training manual, an email distribution list, weekly calls, local meetings and more.  Your goal is to plug in to this training. It’s designed to keep you motivated, teach you the ropes, and help you get started right.

You might not use this system forever, but I think it’s important to follow your upline’s system, especially if you’ve never done MLM before.  If your sponsor (or upline) doesn’t bring it up, just ask them what you need to do to get plugged in.  They will point you in the right direction.

Learn more about the system I use to build my business and how I support my team.

# 8 Schedule Business Hours

The next thing you want to is set scheduled business hours.  If you’re like most people, you have a job and other responsibilities.  That being said, if you want your business to grow you have to set aside some time to work your business every day, even if it’s just thirty minutes a day.  Set aside a set time you can work the business.  Do it during your lunch break.  Another option is to get up an hour earlier or stay up an hour later.  Make the time to work on your business every single day.  Success won’t happen by accident.  Just find a set time each day that works for you and stick with that.

# 9 Work On Your Personal Development

I believe you should work on your personal development beginning your first day in the business.  Read books and enroll in automobile university.  Learn everything you can about selling, marketing and network marketing.  Be a student of your business.  That’s what successful business owners do.  They study everything they can about their industry, and they try to improve a little bit each day.

Make a commitment to read at least 15 minutes every day.  While you are in your car (or truck) replace the radio station with training CDs and business CDs.  This will help get you success minded and will help you develop your skills.

The quickest way to make more money in this industry is to improve your skills.

# 10 Find a Mentor

In most cases, you’ll start out working with your sponsor.  That’s great.  If they’ve already quit the business since they sponsored you (this is quite common) find someone in your upline who is successful and willing to help you get started.

If your sponsor is clueless, call upline until you find someone who knows what the heck they are doing.  You want a mentor to help you during your first few months.  It really does make a difference.

Your mentor will give you guidance and feedback.  They will help you grow and solve your own problems.  They will teach you what right looks like.  Learn more about how to find a MLM Mentor.

# 11 Contact Everyone On Your Name List

One of your first projects in the business is to make your name list.  If you can’t come up with at least 500 names, I don’t think you are putting enough effort into it.  Having a name list of 50 to 100 people is better than nothing, but the bigger the name list the better.

If you come up with a big name list, you should find plenty of people to become customers and distributors on your team.  Make it a point to contact at least five to ten people a day (from people on your name list).

Get through the names as quickly as possible.  This will help you get off to a great start.

Learn how to create a name list and how to contact your warm market.

# 12 Get Off to a Fast Start

Your goal is to get off to a fast start.  Remember, this will be the story that you share with other team members in the future.  You want to set the pace for your group.  You want to create some momentum in your team.

What should you expect in your first 90 days?  Well, if you follow the advice mentioned above I don’t see why you shouldn’t be able to sponsor at least 6 to 12 people AND find five to ten customers within your first few months.  Yes, individual results will vary.  But I’ve never met anyone who was serious, committed and DID THE WORK that didn’t get positive results.

I’ve met a lot of folks who did nothing, and as a result, got bad results.  Getting off to a fast start will position you for long-term success with your company.

# 13 Be a Sponge

Your goal is to be a sponge and learn everything you can.  Learn from your mistakes.  Learn from your sponsor and upline.  Learn from the books and tapes that you study.  Realize that most people spend four YEARS in college learning BEFORE they can even apply for a real job. Realize that most traditional jobs have an orientation and training period.  Accept that you will need to go to MLM School for your first three to six months in the business while you learn the ropes of the business.  If you’ve never done the industry before there will be a learning curve. Embrace it and learn everything you can.

# 14 Have Fun!

Have fun.  Don’t take yourself too seriously.  Don’t make the business high stress.  Realize upfront that you have a lot to learn and that you will make some mistakes as you learn.  Look at each day and each experience as an opportunity to learn something new.

Final Thoughts

There you have it folks. These are my best tips covering what you should do your first 90 days in your network marketing business.  I believe that if you follow this advice you will get off to a solid start that will allow you continued success in the business.

Remember, your first 90 days are critical.  And when you sponsor other people into the business their first 90 days are also critical.  Make sure you have a game plan for yourself, and for your team.

What are your thoughts?  What do you think people should do their first 90 days in network marketing?  Leave a comment below to let me know what you think.

Automobile University: Getting an Education Listening to Tapes and CDs in Your Car

I am a big fan of automobile university.  I first learned about this concept about 12 years ago while I was an Amway distributor.  My sponsor told me the best way to learn about the business was to listen to tapes and CDs while I drove to and from work or did errands.  He told me that I could learn everything I needed to know to become successful in the business just by listening to tapes instead of the radio.

At first, it sounded a bit funny to me, probably because I had never heard about doing this before. Within a short time of making the switch, I became amazed at the results.  It’s as if everything I heard on the tapes became programmed in my subconscious mind.  My product knowledge and business knowledge definitely improved.  So did my confidence and attitude.

Automobile university is basically the PROCESS of learning a new skill by listening to tapes or CDs while you drive.  Rather than listening to the radio, you listen to something that is educational and/or inspirational.  You could listen to tapes or CDs about ANY topic that interests you.  Some examples might include:

  • Parenting
  • Relationships
  • Leadership
  • Communication
  • Business
  • Marketing
  • Network Marketing
  • Personal Finance
  • Health and Wellness
  • Or Anything Else

You could focus on one subject exclusively, or learn about a variety of different subjects.

I was once told that it takes 10,000 hours to become an expert at something.  I want to take a minute and show you how you can become an expert at something just from listening to tapes and CDs while you drive to and from work.

To give you an example, I’m going to assume that you commute one hour each way to work, Monday through Friday.  Rather than listening to the radio during that time, you are committed to learning a new skill.  So, you decide to listen to a tape or CD during your commute.

Over the course of one year you would achieve the following:

  • 2 hours of tapes a day for five days a week is 10 hours
  • 50 weeks a year at 10 hours per week is 500 hours

Within one year you would listen to 500 hours of information about a topic.  Within five years you would listen to 2,500 hours of information.  Within 10 years you would listen to 5,000 hours of information.  And within about 20 years you would listen to 10,000 hours of information!

Think about how much you would learn by doing that.  What if every tape you listened to was about a certain topic? I would argue that you could become an expert at just about anything in life, within five to ten years, JUST by enrolling in automobile university and replacing your radio station with some type of self help, personal development or business related tape or CD.

Last time I checked, the radio station never PAID me to listen to their music.  But you could definitely increase your pay and make more money with the knowledge you learned from the CDs and tapes! Chew on that.

That’s really powerful when you think about it.

What if you did this with your network marketing business?  What if you listened to a tape a day about sales, marketing, leadership, recruiting, prospecting, following-up or a variety of other skills that would help you grow your business?

Don’t you think your confidence, knowledge and abilities would improve?  Do you think your business would grow.  I know it would.

What if you could get your team members to do the same thing?  Don’t you think their business would grow?

Final Thoughts

The bottom line is that automobile university is a powerful to develop new skills and become an expert at something.  Best of all, it really doesn’t cost you any time because you are learning the information while you drive to and from work, or while you are doing errands.  I like to consider it a passive learning technique.

If you haven’t enrolled in automobile university yet, I highly suggest that you do, especially if you want to have a successful career in network marketing or something else!  Ever since I started doing it twelve years ago it has really paid off.

What are your thoughts about automobile university?  Leave a comment below to let me know what you think.  I look forward to hearing from you.