Big Al’s How to Build MLM Leaders for Fun & Profit Book Review

I’m a big fan of “Big Al” Tom Schreiter.  I’ve read most of his books and one of my favorite books that he wrote is “How to Build MLM Leaders for Fun & Profit.”  The book is really loaded with some great tips.  Overall, I give it an 8 of 10 and consider it a must read.

“Big Al” talks about lots of interesting concepts that would really benefit any network marketer. What I want to do in the paragraphs below is share some of my favorite quotes from the book. Each quote is in bold an italics.  After each quote I will provide my own two cents.  The quotes are listed in no particular order.

# 1 Distributors come and go.  It’s how many MLM leaders you have that count.  Your strength, security and income depend on the number of leaders in your group, not the number of transient distributors passing through.  This is really good advice.  If you want to know if you have a good group, determine how many leaders you have.  How many people are showing their own business presentations?  How many people are independent of you?  How many people are actively building their own teams?  These are the folks that will ultimately determine your success, not the guy who joined looking to get rich quick.

big al book# 2 If you don’t have downline leaders in your MLM group you can never rest.  If you’re just building a team of distributors (followers) you will probably get burnt out and eventually quit.  If everyone depends on you and needs you to do everything for them, you will create yourself a low paying job. Your primary objective is to find and develop LEADERS.

# 3 The smart MLM superstars have several MLM leaders in their downline.  And their life is easy. This goes hand in hand with what I mentioned above.  I would personally rather have five leaders than hundreds of followers.  Leaders are the ones that will go out and do the work and actually build a group, with or without you.  When you have leaders you really do have leverage.

# 4 You may have to invest in several potential MLM leaders to get your superstar.  People will fool you.  Lots of folks will tell you they are a leader or tell you they WANT to be one of your top leaders, but at the end of the day they are just blowing smoke.  You have to watch people by their actions.  That being said, one good leader is worth a lot of money to you.  Remember you have to dig up a lot of dirt before you find gold!

# 5 Great MLM potential talent will come to you if you do your job right.  Lead by example.  Set the pace.  Do that and you will naturally attract other leaders to you.  People want to work with leaders.  Be that leader, even before you have a big group, and good things will happen to you.

# 6 The longer an organization exists, the slower it’s growth.  In most cases, your organization will grow the fastest in the first few years, when everyone is excited. As long as you always have new people joining your team, it will continue to grow.  Stop building or sponsoring and it will die a slow death.

# 7 Most leaders spread their efforts too thin.  They try to reach levels of achievement and ranks too fast.  Pace yourself.  This is marathon, not a sprint.  Build one or two legs at a time UNTIL they are rock solid and independent of you.  You can only work with two to five people at a time effectively.  It’s better to work with a couple groups at a time until they don’t need you any more, and then go start a new leg.

# 8 Focus on long-term steady progress. This is a great tip.  Nice and steady is what will win the race.  You must be persistent and consistent.  Grow your group a little bit each month and a good bit each year.  Do that for a few years and you will have a large team.  Rome wasn’t built in a day.  It takes time to get the momentum going.

big al book 2# 9 Personal letters are hard to ignore, especially if they are sincere and handwritten.  Send hand written notes to prospects and team members.  Most people get a lot of junk mail every day, but very few personalized letters.  I might get one personalized letter a month in the mail, if that.  Many other people are the same way.  When you hand write something, someone will read it.  Getting someone to read your message is more than half the battle, especially in today’s digital world.

# 10 You only need a couple of good leaders to make a fantastic income in MLM.  Most top earners make 90% of their income from one to three people on their team.  Chew on that.  One good person really can change your life.  These folks are hard to find, but they are out there. And when you find one it’s like winning the lottery.

# 11 Mail inexpensive for leads, then invest your printing dollars in the follow-up packages to these leads.  Use a two step follow up process.  Use low cost methods to generate a lead and then invest your money and send your lead a decent follow-up, information package.  Don’t just mail out information packs to anyone and everyone.  Only send them to someone who asked you to send them one.

# 12 Too many distributors join just for the money and forget about product value.  If the product doesn’t make sense neither will the business.  People who join a business to make money usually quit within 90 days or less.  People who join because they love the products will keep reordering whether they ever build a business or not.  That is where your residual income comes from.  Never forget that.

# 13 If the product or service is not a good deal for the distributor on the bottom, he will drop out. Same as above.  The product must provide a real value.  If the only reason people are buying products is so they can qualify for a bonus check, you are really missing the boat.  The products ARE the business.

# 14 Mail only for leaders.  You can’t efficiently train and support distributors.  Leaders can give their own meetings, train their people, and be productive without your presence.  All they ask for is your coaching.  When you do direct mail like I do, focus your efforts on finding quality people: leaders.  You don’t want to recruit a bunch of high maintenance distributors who don’t do anything.

# 15 The quality of the person responding is more important than the number of people who respond.  Response rates are overrated.  At the end of the day quality always trumps quantity.

# 16 Almost everyone is a prospect sometime during his life.  However, he won’t be a prospect every day of his life.  Timing is key.  Just because someone tells you no today does not mean that they will be a no forever.  Follow-up!

# 17 Low volume, hand-written prospecting letters pull up to ten times better than photocopied or printed form letters.  Mailing 100 handwritten letters is probably more effective than mass mailing 5,000 letters to strangers.

# 18 In other words, they run a mail order business and send their MLM opportunity to their customers.  This is what I do.  I sell stuff on Amazon and eBay to generate a lead. Since they already paid for postage for the item they bought, I include information about my products and business opportunity.

# 19 Don’t get into the herd mentality by following the followers.  Be different.  Recruit where you competition doesn’t recruit.  Be unique.  Stand out in the crowd.  Use your own unique talents and abilities to grow your business. That’s what leaders do.

# 20 When giving a presentation, they try to present the opportunity from the prospect’s point of view. Your prospect is always wondering “what’s in it for me?”  Make sure that when you give a presentation the presentation is tailored to them, and their needs, and that it’s not all about you (or things they don’t care about).

big al book 3About the Book

The book was published in 1991 by KAAS publishing.  It has 127 pages and is available anywhere books are sold.  It is an out of print book so you might have to look online to find a copy.

Final Thoughts

In summary, “How to Build MLM Leaders for Fun & Profit” is an awesome book that every network marketer should add to their leader’s library.  It is loaded with wisdom about direct mail and finding leaders.  If you haven’t read it yet, you should.

What are your thoughts?  What is your favorite quote listed above?  Leave a comment below to let me know what you think.  I look forward to hearing from you.

Stream Energy and Ignite Energy Business Review

The goal of this article is to provide an independent Ignite Energy review. Please know that I am not affiliated with the company in any way and never have been in the past. All information was conducted from independent research online. Ignite Energy is a registered trademark, owned by the company.

About the Company

Ignite Energy, also known as Stream Energy, is a multi-level marketing company that specializes in energy services such as gas, electricity, identity protection and credit monitoring.

Since the de-regulation of the energy industry in the United States, consumers now have a choice about who they purchase their energy from. Although the energy is still delivered to the consumer the same way, consumers can shop around with different utility companies to find the best price.

One of those new utility companies is Ignite Energy, a subsidy of Stream Energy.

Ignite doesn’t manufacture any product or produce energy itself. Instead, it buys energy at wholesale prices and allows its independent sales force to sell the energy via the direct sales business model. The independent consultants focus on finding new customers and distributors, while the company processes the orders, sends out invoices and bills, tracks commissions and pays its distributors.

Ignite Energy started in 2005. In its first year, the company grossed $70 million in revenue. Since its inception, it has achieved phenomenal success. In 2009, the company revenue was $845 million. The company is well on its way to reaching $1 billion in gross revenue. Personally, I find that amazing. Very few companies reach $1 billion in revenue in that short of a time.

Not many MLM Companies reach $1 billion in annual sales.  What makes that feat even more amazing is that they only do business in six states and Washington D.C.  Those states include Texas, Georgia, Maryland, New Jersey, New York and Washington D.C.

What’s Great About the Company

What’s great about the company is that there are no products to inventory or sell. Instead, you simply get people to switch their utility company to Ignite Energy. Even better, just about everyone has an energy bill. And regardless of how bad the economy gets, most people will still pay their energy bill in order to keep their electricity working.

In most other MLM Companies, when money gets tight, distributors and customers will cancel their monthly auto-ship. Items such as pills, potions, shakes, and juices are luxury items.  Yes, they’re good, but they are a “want” item not a “need” item.  On the other hand, your utility bill is a commodity, must have item!

Additionally, the energy industry is a $500 billion industry. That means that Ignite Energy has the potential to become a multi-billion dollar company. The company only operates in a few states. Just think how big the company will be when it operates in all fifty states. In my opinion, this is a ground-floor opportunity with unlimited potential.

What I Don’t Like About Ignite Energy

The only thing I don’t like about the company is the $300+ fee to join plus the $29 ongoing website fee.  I personally believe that both of these things should be free for reps.  Some people might even argue that most of the commissions paid out are from people paying this large sign up fee and not from the monthly utility bills.

Another thing I don’t like is that the reps are so recruiting focused.  I know this has nothing to do with the corporate team itself, but the distributor “culture” is all about recruiting new distributors, not finding customers.  Obviously, it’s more profitable to the distributor to recruit another distributor, rather than find a new customer.

I’m by no means knocking the company.  No MLM Company, or regular business, is perfect. Every company has good and bad things about it.

How to Get Started

How do you get started with Ignite? To get started as a distributor, you need to find a god sponsor. Your sponsor is the person who shares the Ignite business opportunity with you and agrees to train and motivate you. In essence, they are your own personal Ignite coach.

Next, you agree to pay the $300 sign up costs (approximate) and also agree to abide by the company’s terms and conditions. Once you do that, you own your own business. Even better, you are in business for yourself, but not by yourself. You have support team to guide you and coach you.

Most new distributors are taught to initially work with their warm market, by making a name list of all of their friends and family.  They are then taught to contact these folks by phone, email or in person to introduce them to the business.

How You Make Money

How do you earn money with Ignite? It’s really simple. Your primary goal is to educate consumers about Ignite and get them to switch their utility account to Ignite. When they do that, you earn an immediate commission and you also earn residuals each month they continue to keep Ignite as their utility company.

You want to teach people why they should consider switching their utility companies. I believe most people will be open minded; especially if you can show them a way to save money.

The next thing you need to do is find people to personally sponsor as an Ignite distributor. As you sponsor new distributors, your goal is to help them find customers and downline distributors. As you grow your sales organization, you earn commissions and overrides off your group’s sales volume. The larger your group sales, the more money you earn. As you progress through the Ignite achievement levels, the company also offers leadership bonuses, cash incentives and other rewards.

The most successful Ignite distributors and top earners find lots of personal customers (at least 50 to 100) and build a large downline of distributors. They combine offline and online recruiting efforts to build their business. In addition, they treat their Ignite business as if they had millions of dollars invested in it. They work their business consistently every week, always looking for potential customers and distributors to partner up with.

Ignite Class Action Lawsuit

In 2014, there was a class action lawsuit placed against Stream Energy claiming that they sell through a pyramid scheme in violation of federal racketeering laws.  I have searched online and could not find the results of this case.  Here is the article that explains it in greater detail.

Ignite Competitors

You can also read a post I did about the top 7 MLM Energy Companies.

Top Leaders

Some of the top leaders in the company include Presley and Jeanie Swagerty, Steve and Diane Fisher, Greg and Heather McCord, and Randy and Marcie Hedge.  These leaders are all Presidential Directors, the highest rank in the company.  You can read more about them here.

Third Party Reviews

After doing some research online about Stream Energy, here are some things I found:

Ultimately, it’s hard to find unbiased reviews online.  Many reviews are written by reps or by distributors in other companies, so they are either extremely positive or extremely negative.

The best thing you can do is trust your own intuition and do your due diligence.  Be an educated consumer.

Final Thoughts

After reviewing the company, I believe it is a great business opportunity for someone who is willing to get involved, work hard, be open minded and think long-term. My best advice is to start out as a customer for your first 90 days.  Try out the service and make sure that you like it and save money on your utility bill BEFORE you decide to become a distributor.

If you think the service provides a good value then you should consider becoming a distributor. If you decide to become a distributor, pick your sponsor wisely.  Team up with someone who has been with the company for a while, knows what they are doing and is willing to help you succeed.

Finally, come up with a game plan, make a commitment and get focused.  This is not some type of get rich quick plan.  You have to work hard, be consistent and stick with it for a few years. Rome wasn’t built in a day.

On a side note, if you are currently (or formerly) involved with Ignite as a customer or distributor, I would love to hear your story. Share a product testimonial or success story by leaving a comment below.

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.