Sept 8, 2014
DISTRIBUTOR QUESTION OF THE WEEK:
Q: If you could only pick 1 group of professionals to call about SOC what group would
A: Tough question. Certain questions are great but the answers will lead you down a dead end path. I can answer but it won’t serve you if you want to grow in your business. I have found that the reason most ppl fail in network marketing is that they focus on the wrong things. Change your focus, change your results. The questions we ask guide our focus.
Q: What question should I ask to follow in your footsteps?
A: Now THAT’S a great question!
Q: OKAY . . . “What should I focus on?
A: FOCUS ON:
The future: Not the past . . . when you focus on the past, you get more of the same you are trying not to repeat
Creating: You are responsible for the future of your company. Just like Steve Jobs was responsible for Apple’s future. You attract the team and the volume you want. That’s what determines your income. It’s not a lottery. The past does not equal the future.
Action: There are lots of struggling analysts and pontificators. Action will always win. Outwork everyone else. 1-3 presentations per day.
Leverage: Leverage people. Leverage Time. Leverage Tools. How can you do more with less?
Personal Development: Align with those that have done it before you and are striving to get better and better each day.
THE BUSINESS OF THE BUSINESS:
There is a business behind the business. There is the “doing” of the business
and then there is the running of the business. The book, “The E-Myth” by
Michael Gerber talks about how people that start businesses usually do it because
of something that they love (and it’s usually not about running a business). For example
I might love to write books but I have no interest in running a business. The more successful
I become, the more business skills that are required to keep my writing business going.
You may have signed up in network marketing because you love people and you love sharing the
product and the opportunity. And then one day you find yourself growing and making money.
Now you must hire an assistant and be an employer. You must learn to invest your money
and figure out how to handle your taxes. Your lifestyle begins to expand and then all of a sudden
you are faced with running a business. And you didn’t sign up for that class!
There is a business to the business of network marketing.
You must budget for company events, cards, taxes and marketing.
TAXES: One of the really cool things about having a home based business is that you get
to deduct many expenses. So after you receive your income, you can deduct those expenses first
and then you only pay tax on your profits. It’s very important that you find an accountant that likes
network marketing and encourages and supports you. Your accountant will be worth his/her weight in
gold and the right one will save you a lot of money. View your accountant as an investment. And there
is a RETURN on your investment. The worst thing you can do is to have an accountant that doesn’t like
MLM. They can be very discouraging and you’ll get enough of that without your advisors contributing to it!
SET ASIDE MONEY FOR TAXES! When you are operating at a loss, it doesn’t matter too much but once you
start receiving a residual check, you may go for a few months with minimal expenses yet your income continues
to roll in. If you don’t set aside money for taxes you can get yourself in some real trouble. Make sure and take
at least 20% of your profits and put it in an account. Check with your accountant and decide if you will be paying
taxes quarterly or annually. I set aside 30% of my income each month and then we send a check to
the government quarterly. I have friends that have ignored this aspect of the business and then 5 years later
they get a real surprise when the government catches up to them. Trust me, you don’t want to be in this situation!
BOOKKEEPER: I delayed this decision for years and after I finally got a bookkeeper, I wondered why I didn’t do it sooner,
First of all, I’m really bad at it and I don’t like doing it. Secondly, my time (and yours) is best spent working the business vs
balancing the books and paying the bills. Find someone that loves doing it and is good at it. For most people this is a huge burden lifted.
It was THE BEST FINANCIAL DECISION I MADE TO HIRE A BOOKKEEPER! A good bookkeeper will communicate with you
accountant and do an annual bi-annual or monthly Profit and Loss Statement for you as well. Get referrals . . . start small if you
need to, but the sooner you do it the better you life will be! I found a financial planner in a Robert Kiyosaki book and she referred me
to her bookkeeper. She has been with me now for 15 years and is probably the most valuable member of my team!
BUDGETING: Most people (including me) start their network marketing business part time and slowly build it up over time.
A great startup entrepreneur figures out how to take limited resources and leverage them for maximum benefit. In the beginning
this can be a challenge when there is little to no money coming in. At the same time, for a business to grow, you must make
some kind of investment in it. Be frugal if you must but make sure and invest where you’ll see both short and long term returns.
It’s a given that you’ll need updated technology like a computer and a smart phone. Normally I don’t advocate the use of credit cards
unless you can pay them off within a month or two however I believe you can make an exception with a computer and smart phone because
they are essential business building tools. Remember, these expenses can be deducted from your taxes! The variable expenses you will have
should be paid off each month so you should budget accordingly. There is a difference between an expense and an investment.
An investment can grow your business. An expense is a cost. Focus on investments.
At least 20-30% of your income should be invested back into your business.
1). Cards and Gifts
3). Personal Development
I generally am pretty sloppy about this and do a very bad job of managing my investment in the business. I usually invest first and then figure out how I am going to pay for it later. This isn’t always a great idea. But sometimes you may want to take a calculated risk based on your level of confidence about what could happen if you make the investment.
The non-negotiables in my book, are Convention, at least one Treat-Em-Right Seminar, and a monthly budget of cards and gifts. So if you do all 3 here’s what it could look like:
$200/mo for cards and gifts = $2400
Convention = $2000 (tickets air and hotel)
TreatEmRight Seminar = $1000 (Air and Hotel)
TOTAL $5400 or $450/mo
You may not make this right away but as far as putting yourself in a position to succeed, I highly recommend you do this. In 1995 when I joined my 12th network marketing company, I spent about $5000 my first year and only made $1000. My second year I broke even and my third year I turned a profit. But I invested in myself and in my business. Keep in mind, with your tax write-offs, you can actually show a loss but be in a profitable position because of your deductions.
OUTSOURCING: This was a challenge for me for years until I really started studying the habits of successful people as compared to the habits of unsuccessful people. I learned that virtually all wildly successful people learned to outsource everything that someone else could do for them. They focused on growing the business and the “busy-work” was always handled by someone else. I grew up in a working class environment and this was not the norm. So it was very difficult for me to let go of the things that working class people do . . . like wash my own car, write my own checks, do the yard work, wash the windows, clean the house. I had to relinquish my attachment to doing these things myself. I had to start small because I didn’t have the financial resources in the beginning but over time I had other people doing these things for me. Alecia cleans my condo in Vegas. Malin cleans my condo and waters my plants in Jerome. Christie and Carrie do my bookkeeping. Ed washes my cars. Warren does my taxes. Megan has been handling many of my emails and calls, etc. I hire other people to fix things that need to be fixed. I FOCUS on building my business! It wasn’t always this way. In the beginning, I hired a house cleaner once a month. Try it once and you’ll experience how good it feels to free up that time! If you are not organized, pay for an hour of coaching with a personal organizer! They are worth their weight in gold! As my income grew, I added more and more new members to my team to handle the things that I didn’t like doing or things that were taking parts of my day! This is one of the most important lessons you can learn.
Balance is somewhat of a myth. We all strive for it but it seems that when one thing is in balance something else is out of balance. You may have to create imbalance for awhile to get the result you are looking for. You wouldn’t even be working your business if everything were in balance . . . and once you have some success, you’ll find that there will be a new imbalance between where you are and where you want to go in your life. For example, let’s say you were completely out of balance financially and your goal is $10,000 per month. Once you start making $10,000 per month, the $1200/mo apartment you are living in doesn’t make so much sense any more . . . so you decide to upgrade to a $3500/mo condo and you find yourself out of balance. So we move in and out of balance in many areas of our lives . . . Relationships – were in and were out of them. Homes, we upgrade, we downgrade. Spirtitual – were broken, were healed. Our kids are born and then they grow up and leave. Money flows in and out of our lives. So you see trying to achieve “Balance” is pretty tough . . . If you do feel balanced, it’s usually only for a moment. True balance is found in embracing the adventure of change in our lives . . . it’s inevitable. Remember, “lift” is a result of an imbalance in air pressure. Instability (imbalance) creates the imputis of positive change. So if anything, we must strive of the imbalance that moves us to positive action.