Today, I want to share 20 things you should know BEFORE you start any type of business. I also want to share why I believe network marketing is a great option.
These are mostly lessons I’ve learned during my past 13 years as an entrepreneur, through my own mistakes and through coaching others to build a successful business of their own. They are listed in no particular order. Enjoy.
# 1 Most businesses fail.
Statistics vary, depending upon the source you cite, but it’s often said that 90% of all businesses close down within their first five years, and up to 50% fail in the first year alone.
Don’t believe me? Just drive around your town and see how many empty office buildings and strip malls there are.
Double check and see how many businesses that are open today were there five years ago?
The truth is, It takes a special person to build a profitable business that actually succeeds year after year.
It’s possible to achieve success in a business, but the odds are really stacked against you. Network marketing is no different. The opportunity is great but most people won’t make it.
This is how capitalism works. There will always be winners and losers.
# 2 Your product or service you sell is not your real business.
If you own a bakery, your baked goods are not your real business. If you own a barbershop, cutting hair is not your business.
Yes, you need a good product and service to succeed in business, but your real business is marketing your business.
As an entrepreneur you are a salesperson. Your job is to sell. The sooner you will accept that the better off you will be.
If you can’t make the cash register ring you won’t be in business very long. Until you learn how to close prospects and sell to customers, you will struggle in your network marketing business (or any other business).
# 3 The purpose of a business is to create an asset you can sell one day.
Many new entrepreneurs think of their business as a way of generating an immediate income. They really think of their business as a job.
That’s okay, but your ultimate purpose with your business should be to earn an income AND build an asset that you can sell one day for a big profit.
That means you need to have a business that does not rely only on you. You need systems and a business that would be attractive to potential buyers.
Network marketing provides immediate income, residual income and an asset that you can sell (in most cases).
# 4 Failing to plan is planning to fail.
Don’t start a new business without a business plan and marketing plan.
Spend some time, at least a month or two and do your homework.
Research the competition, forecast earnings and expenses, estimate start up costs, research potential names, research your industry, and get as much information as you can.
Collect the information and develop a game plan.
For every hour you spend planning, I’m sure you save a lot of time and money on the other end.
# 5 It’s better to start a part-time business than a full-time business.
I personally believe it’s smart to keep your day job when you first start your new business.
For the first year or two build your business part-time, on the weekends and at night.
Let your day job pay your bills and keep the financial pressure away. This will give you time to learn the ropes and see if your business model has the potential you think it does.
This is the beauty of network marketing, it’s designed to do part-time.
# 6 Be careful if you choose a business partner.
Picking a business partner is like picking a spouse.
You never really know what you are getting, but you want to do your best to make sure you find the right person.
A bad business partner can make your life miserable. If you get a business partner, make sure you get along, make sure you have equal responsibilities, and make sure you develop an “opt out” plan when you first get started.
Put everything in writing so each person knows what they are responsible for.
When it comes to network marketing pick your sponsor wisely.
# 7 Be prepared to earn nothing for your first one to two years in business.
Most businesses will not earn even even $1 profit for the first two years.
If you do earn a profit, it should be reinvested back into your business.
Think of your business like a newborn baby that needs to be loved and nurtured. This is why you need money in the bank to live off, or you should keep your day job.
Unlike most traditional businesses, the beauty of network marketing is that you can be profitable from your first month.
# 8 Learn which activities make you money in your business.
Most of the time you spend in your business are on activities that DO NOT make you money.
The sooner you can realize that sales and marketing are your #1 and #2 responsibility, the higher the likelihood of your success.
Your job is to sell, to generate leads, and to keep customers happy.
Every other activity should be delegated, outsourced or done during non-productive time.
In network marketing the money producing activities are showing the plan, following up, training your team, getting customers and prospecting.
# 9 Be prepared to work 80 to 100 hours per week.
Not every entrepreneur will need to do this, but most will.
In general, entrepreneurs work at least twice the hours that employees do per week. There is so much to do, especially in the beginning of your business.
Yes, you have to work smart, but if you’re set on a 9-5, or only working 40 hours per week, you are in for an unpleasant surprise.
Unlike most businesses, the beauty of network marketing is that it is flexible and you can work your business 10-20 hours per week.
# 10 Just because you are a good employee does not mean you will be a good entrepreneur.
This is a tough one for most people to swallow. Just because you are good at doing something does not mean you are qualified to to start a business that does the same thing.
I learned about this concept from Michael Gerber and it is so true.
As an entrepreneur you are the strategic person.
As an employee, you are the tactician.
Those two jobs are very different.
Doing the work the business does and running the business are two COMPLETELY different things.
The beauty of network marketing is that it will teach you how to become an entrepreneur. As I see it, it’s the best business school around.
# 11 It’s important to invest in your business education.
You need to be a student of your business. You need to study sales and marketing. You need to learn everything you can about business and about your industry.
You need coaches. You should attend workshops. Find a mentor. Read daily. Subscribe to trade journals. Start learning and never stop. Invest a few hundred dollars per month on your business education.
For the two years in your MLM Business learn everything that you can! Be a student of your business.
# 12 Choose a GOOD location.
If your business is a traditional business and needs a building, make sure you choose a good location.
A good location is worth the extra money it costs.
A bad location can destroy you, even if you have a good product or service.
The beauty of network marketing is that you can do it from anywhere in the world. All you need is a phone and internet connection.
# 13 Pick a business you enjoy.
Some people will disagree with this, but I think it’s important to enjoy your business.
Since you’re going to spend so much time doing it, it should be something that you enjoy and gives you fulfillment.
Starting a business just to chase the money isn’t normally a good idea, especially if you don’t enjoy the day to day work.
If you don’t enjoy network marketing and working with other people, don’t do it!
# 14 Owning a business is not for everyone.
Many new entrepreneurs quickly find out that owning a business of their own is not what they thought it would be. And that is okay.
The long hours, the uncertainty, financial challenges, risk of failure, stress and countless other things are not for everyone.
For some people, just having a 40 hour per week job and a steady pay check are a much better deal. It just depends upon the person.
Network marketing might not be for you, but you’ll never know unless you give it a good six to twelve months of hard work.
# 15 Find a team of advisers.
All entrepreneurs need good advisers. At a bare bones minimum, you should have an accountant, lawyer and a good insurance agent on speed dial.
It’s also important to have a mentor and business coach. Find the best ones you can afford.
In network marketing, you get a group of free advisers: your upline! Choose wisely.
# 16 You can’t do everything yourself.
You can’t be a one pony show. Don’t even try to do everything yourself.
The sooner you can outsource, delegate and hire others the better off you will be in your business.
You should only focus on the strategic work of your business, and the sales and markeitng.
Everything else should be done by someone else, or done by you during non-productive hours.
If you are the business, you don’t own a business, you own a job.
# 17 Make sure there is a demand for your product or service before you start a business.
If you have a neat product or service, do a small test with it BEFORE you decide to make a business out of it.
Set up at a flea market, convention or trade show and find out if people even want to buy your product, and at what price.
# 18 Just because you have a MBA or Advanced Degree does not make you qualified to own a business.
If anything, having a degree will hurt you in your business. At no time in college do they teach you how to think like an entrepreneur. If anything, you are taught how to be an employee.
Running someone else’s business, and starting and growing your own business are completely different things. Network marketing offers an equal opportunity to all.
Owning a business is a lot like dating. It’s fun and exciting in the beginning, but that eventually fades.
There will come a day that you won’t enjoy your business as much as you did in the beginning.
In fact, you might even grow to resent it or hate it. Just know that upfront. Anyone can stay excited about network marketing for 30 to 90 days, but it’s the person who can stay excited for many years that does well.
# 20 Too much start-up money is a bad thing.
I truly believe that it’s better to start a business and have very limited funds than it is to have a bunch of money. When you lack the funds, you must think outside the box and get creative.
When you have a lot of money to start a business, you will normally end up wasting a lot of money on things you don’t need.
The beauty of network marketing is the low start-up costs. In most cases you can get started for less than $100.
In summary, these are 20 things you should know before you start a business: and why network marketing is a great option. I hope you found the information helpful and I would love to hear what you think. What is your favorite tip on this list? What things can you think of that I did not include? Leave a comment and let us know.