Welcome to Day 2 of my MLM Boot Camp.
There is a popular saying that 97% of all network marketers fail. I personally don’t believe those statistics.
I think these numbers are skewed because people join our industry for a variety of different reasons. Some people join to be part of a social club and meet new friends. Others simply want a discount on their products. Some folks join because they want to make enough money to get their products for free each month.
Some people want to supplement their income with an extra few hundred dollars per month. Only a small percentage of the people who join our industry (less than 5%) want to to do this full-time!
The 97% failure rate includes all of the people mentioned above. As I see it, calling everyone who doesn’t make BIG money in our industry a failure is fundamentally flawed, especially if most people didn’t join to make the big money.
If you were to honestly evaluate the failure rate of people who work their business 20 hours per week, every week, for two to three years, the failure rate is actually quite small. Of course, I don’t have the statistics to give you the exact percentage.
What I do know from personal experience is that less than 5% of the people I’ve worked with actually treat it like a real business, and work their business consistently each week. I’ve also found that those 5% of the people normally do pretty well in the business.
If you’re struggling in network marketing you need to be honest with yourself. How serious are you about your business? Honestly? Do you have a written business and marketing plan? Do you have a work schedule? Is your calendar booked with appointments? Are you doing the activities you know you should be doing, every single day: retailing and recruiting?
Ultimately, you have to decide if YOU are going to treat this like a hobby, or treat it like a real business. Until you make the decision to act AS IF you have ONE MILLION DOLLARS in your business, you will never make the big bucks in network marketing.
In the paragraphs below, I will cover some of the common reasons people struggle in our industry. I hope you will take the time to evaluate yourself in each area. Keep in mind this is just my opinion.
Reason # 1: Poor Cash Flow
The # 1 secret to success for any type of business is good cash-flow. If you always have more money going out than money coming in, your business is doomed for failure.
To succeed in this industry, you need to get a grip on your cash-flow. Additionally, you must be able to help others make a profit within their first 30-90 days, or they will quit.
That’s one of the most important reasons you need to retail some products and build up a customer base! Customers give you immediate profits. Maintain 5-10 loyal retail customers and you will be profitable from your first month in the business.
You should also track your expenses, have a separate checking account for your business, and keep an updated monthly profit and loss statement. Just like any other entrepreneur, you should know where your business stands at all times.
Reason # 2: No Leads
Although there are many different ways to get leads, the best way to get leads is to generate your own leads. If you have a constant flow of 2-10 new leads coming into your business every day, you will position yourself for success in your business.
Most people have no clue what to do after they work through their warm market! You really have two options. You can chase people, beg, pressure and try to sell them on your opportunity, or you can take the time to learn how to get people to contact you first.
Show me someone who can generate leads 24/7 on demand and I will show you someone who will succeed in any business. Some of my favorite ways to generate leads include blogging, podcasting, video marketing, postcards, drop cards and doing events.
Reason # 3: Unrealistic Expectations
It’s sad that I have to include this on my list, but it’s true.
People are funny. They will work in a job for 10-20 years and be completely broke, yet they join our industry and expect to make big bucks their first month, even if they only work their business a few hours. I just don’t get it.
This lottery mentality destroys tons of new distributors, normally within their first 30 to 90 days.
Sponsors need to “keep it real” with their new people and tell them whether or not their goals are realistic, based upon the time-frame of the goals and the person’s actions and skill-set. They need to let their prospects know that all businesses take time to make a profit.
Most businesses in the real world take a couple of years just to get profitable, and five to ten years to become successful.
As a sponsor or upline, we must also make sure our new distributors have realistic expectations. Having a big goal is fine, IF someone is willing to work hard over a sustained period of time to get it. However, if they expect big results right away, they are only fooling themselves.
Reason # 4: No Mentor
All successful entrepreneurs have a mentor, normally several. You will be no different, if you want to succeed in your network marketing business.
You need to work with someone who can teach you how to be successful, using proven techniques. This person doesn’t necessarily need to be your sponsor, but you do need to find a mentor (preferably in your upline) who is successful and knows what they are doing. You also want someone you can get along with, who is accessible and is WILLING to help you.
Most people join this industry and try to reinvent the wheel and do everything on their own. This is a HUGE mistake as I see it. Remember, network marketing is a TEAM SPORT.
I believe that the person you partner up with is even more important than the company you choose. If you don’t have a mentor in your current company, you can find mentors through books, online videos, and blogs. Some of my favorite mentors are:
Reason # 5: No Daily Mode of Operations
We are all creatures of habit. We all have daily routines for our lives. We wake up at a certain time, eat the same breakfast most days, drive to work the same way each day, get off work the same time, watch the same television shows, etc.
To succeed in our industry you need to create new habits. You need a work schedule and game-plan for each day, so you know exactly what you need to do each day to grow your business.
One of the biggest reasons people tell you they can’t join or build the business is because they don’t have enough time. I’ve found that IF the business is important to them, they will make the time for their business.
The truth is people make time for things that are important to them.
You need the discipline to set aside one to two hours per day to build your network marketing business and you need to have a “to do” list when you work. You must focus on the money producing activities during that time and you must work your business every day, no excuses. (See an example daily mode of operations).
Reason # 6: Not Working the Numbers
This business is a numbers game. It is a business of exposures. You can’t talk to a few people, get rejected and then say the business doesn’t work.
The people who succeed in our industry are the ones who make the most exposures. PERIOD. The only difference between the person on stage at your company’s event, and you, is that they made a ton more exposures and got a lot more rejection than you did.
If you aren’t talking to new prospects each day, you won’t make it. This is one of the most common reasons people fail in MLM.
Until you’ve approached at least 1,000 people about the business and/or products, you haven’t even given yourself a fair shot at success.
Reason # 7: The Wrong Mindset
One of the biggest struggles most people in our industry have to overcome is the wrong mindset about their business.
Most people who enter our industry have been employees their entire life. There is nothing wrong with being an employee. The world needs great employees. However, to succeed in business, you need to learn how to think like an entrepreneur.
Thinking like an employee when you are building a business will actually hold you back. Most people with an employee mindset only know how to trade hours for dollars. When they work their business 10 hours and don’t get paid for 10 hours worth of work, they get frustrated and quit. Or, they call it a scam.
Your business is not a job. It’s a business. Big difference. As an entrepreneur you are building an asset with an equity value. You are building residual income, not linear income. It’s going to take time to make this happen, probably a few years.
Another mindset challenge a lot of people deal with is low self-esteem, worthiness issues and low confidence. That described me when I first joined the industry in 2002. You’re going to have to work on your mindset and attitude, and focus on your personal development.
To be successful, you will need to change. You need to improve your attitude, mindset, people skills, leadership skills and countless other things. THIS WILL TAKE TIME.
Fortunately, you can learn as you earn. We all enter the business with a different level of experience and skills. It’s the people who master the skills and mindset the fastest that typically do the best.
As Jim Rohn says “work harder on yourself than you do in your job.”
Reason # 8: No Focus
It’s hard to peel two potatoes at once and be successful. Most people spread themselves way too thin, by trying to do too many things at once.
I’ve been there. I still own several businesses. It’s hard to keep up with all of them at times.
When it comes to MLM, most network marketers try five or ten different marketing or advertising strategies at once. Or, they switch companies every 60 to 90 days when they aren’t getting the results they desire. Or, they try to build multiple companies at once.
Focus, consistency, and discipline are the key to success in life and network marketing!
You need to pick one strategy to grow your business and then take MASSIVE ACTION until you have it mastered. Pick one business and focus on it exclusively. Very few people can successfully build more than one business at a time.
Reason # 9: Not Leveraging Your Own Talents and Abilities
I believe a lot of people in our industry fail because they are forced to build the business in a way that doesn’t mesh with their personality or talents.
You might not agree with me on this one, but I do not really believe in systems and duplication, even though these are two of the most popular words in our industry.
To be quite frank with you, I believe that all of us are different, with different talents, abilities, and strengths. What works for one person might not work for someone else. Forcing everyone to use one system to build a business doesn’t make a lot of sense to me.
Some people like working their warm market. Others don’t. Some people love home parties, others don’t. Some people like blogging, others don’t. Some people like events, others don’t. I personally believe there are many different ways to build a business.
I believe it is your job as a sponsor to find the best way that works for you AND to help each person on your team find a way to build the business that works for them.
No matter how YOU build the business, your best people are going to do their own way anyway. Look at the top earners in any company and the one thing they all have in common is that they all built the business differently from each other.
Yes, you should have a system for your new people to follow. But don’t get mad if they want to do their own thing! Teach each person to leverage their own talents in a way that works for them.
Figure out what you are good at and come up with a game plan that works for you.
Reason # 10: Working with the Wrong MLM Company
Although the company you choose isn’t the most important thing, some companies are MUCH better than others. Some companies have strict policies about how you can promote their business opportunity online and offline.
Other companies have crappy compensation plans. Some even have a non-compete clause that keep you from doing multiple projects.
You need to find the right company at the right time. You should do research on your potential network marketing company like you would if you were investing $100k in a franchise.
You have to know what you are getting yourself into. Ideally, you want a company with a product or service you are extremely passionate about. It also helps to team up with a company that is still under radar and not a household name. Ideally, you want a network marketing company that is around 5 years old, but still in the pre-momentum phase.
You should also know that most top earners have been with SEVERAL companies BEFORE they found their forever home. So if you don’t do well in your first company, don’t give up. There is probably something out there that is perfect for you. You just have to find it.
In conclusion, these are the 10 most common reasons people fail in network marketing, as I see it. Obviously, there are many other reasons too.
I learned a long time ago that knowledge is power. Just knowing these common reasons for failure can give you a major advantage over people who don’t know about them. Make sure you study this list and evaluate yourself in each area. Identify areas you can improve upon.
In tomorrow’s message, I will give you the top 10 things you need to do to succeed in network marketing. Have a great day!