Traditional Business and MLM
When I was just starting my MLM business 8 years ago, I often encounter questions that can easily be answered without even thinking. But every once in a while you come across inquiries that is really worth answering, and in this particular case, "write" about.
I once had the chance to discuss business with a friend of mine some years ago. He used to run a simple "Village Grocery Store" and some "Community Hardware" scattered here and there, and I could say that this friend of mine is very successful at what he does. During our conversation I told him that I am currently involved in an MLM business that markets health and beauty products and perhaps he could give me time to discuss the business to him.
Same as other people I know and meet almost every day; he quickly dismissed me and rejected the idea. He told me that he's already busy with his establishments and simply didn't have the time to add another venture. He asked me, why I won’t try putting up my own establishment instead of doing MLM. I responded politely and told him that "I already did". Some time ago I started this Liquor Store business and it lasted for almost 2 years. As I suspected, he went curious as to what happened after, and why I chose MLM over Traditional. I told him that running a Traditional Biz is somehow similar as to growing your MLM opportunity but also have their differences as well.
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A Traditional Business is an organisational entity which is mostly thought of as a store, restaurant or agency and it is designed to offer consumer goods or services. It is all about enormous transactions in order to pay off bills, salaries and also get the owners' worth in investment.
(ask.com)
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Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "downline", and can provide multiple levels of compensation. Other terms used for MLM network marketing, and referral marketing. Most commonly, the salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth marketing. Some people use direct selling as a synonym for MLM, although MLM is only one type of direct selling, which started centuries ago with peddling.
(Wikipedia)
(NOTE: I will only state some points regarding the similarities of a Traditional Business and an MLM Business ONLY. But will dedicate another blog discussing their "DIFFERENCES")
These are some similarities between a Traditional Enterprise and an MLM Opportunity.
1. CAPITAL
Both business models need a "Start-up Capital" to operate. This is what I did when I started my Liquor store way back. I invested P150, 000 for the construction of the store, paid for advance rental fees, spent money for inventories, utilities, supplies etc.
It's just the same as to my MLM business, wherein I paid for the cost of the "STARTER KIT" (this kit varies from company to company) that served as my Investment and gave me the rights to operate and distribute. I invested P21, 000+++ for that.
2. PRODUCTS / SERVICE
I was selling wines, beer, beverages and other related products at my store. I asked my friends to buy a thing or two from my store from time to time so that I'll have my so-called "regular customers" because I was just starting out and I want to promote my business to other people as well.
My MLM company was promoting health and beauty products. So as a distributor, I talked to my friends, relatives and other people I knew at the time to promote the products/service I have.
3. HIRING / INVITING PEOPLE
After several months, my store rapidly gained new customers and was actually doing great. So great that I have to add operating hours to cater the demand. I hired someone to manage the joint for me and paid for his services.
As I become more familiar with the concept of MLM, I learned that you have to build a team and invite more people to be your business partners rather than employees. This "team" will be the one to help you establish your business and eventually gain profit with.
4. TIME AND EFFORT
Everything that you want to master in this world needs "Time and Effort". As plants needs water and sunshine to grow, so as your business. I visit my store everyday to see if it goes well and if it is actually keeping up to my standards. I do the monthly inventory and auditing to see if I was earning. There are times that I read books and search Google for tips on how to run a business. I bought CD's and Business Magazines as well to cultivate myself towards being a businessman. I often visit fellow entrepreneurs to teach me how they improved their own businesses. I invested a lot of time learning rather than waiting for the end of the month to get my income.
As to my MLM business, I read books and attended countless seminars before I started earning. I even asked my team to attend special trainings as well. We focused on improving our skills and mindset by talking to people who became successful. MLM is not a get-rich-quick scheme but a get-rich-sure-scheme as what I've written on my previous blog. You need to start LEARNING before you can start EARNING.
5. GAIN PROFITS
I can recall from my accounting class that the main purpose of a business is to gain profit. It may be Traditional or MLM but the end point should always be that you’re receiving income and make it grow. Some said that there is no real income in MLM. Im sorry to contradict, but they are just so fully wrong. MLM, same as any other businesses out there, requires time, dedication, focus and effort to master the business. Some said that MLM Millionaires are just lucky children of God and the rest of us are just,.,. well, you know... "unlucky".
IN CONCLUSION:
There are many ways wherein a Traditional business and an MLM opportunity are similar with one another, and there are many ways that they are not. We just sometimes need not to be too sceptic and be open minded to what an MLM business really is and how it can be really profitable for people like yourself.
