The Truth About Network Marketing and Can They Work?

Network marketing and multi-level marketing are some of the most talked about business models, and usually in a negative way. Why is this so?

Usually most people fail in network marketing due to the fact most people are not business owners. Most people do not want to do the things that successful business owners do. Hence the reason they do not own their own business. So when this person who has an employee mindset, jumps into a network marketing business, and struggles at the beginning, what are they going to do?

You’re right, quit. And do you think they are going to say that they were responsible for the unsuccessful attempt? Of course not, it was the business model. Network marketing and MLM’s just don’t work! That’s what the majority of people will tell you.

The truth is, yes there is a lot of shady MLM companies out there. There are also a lot of shady businesses in all industries out there too. MLM’s just get talked about more because more “everyday” people get involved with them.

So do network marketing and MLM companies actually work?

They answer is yes most do. It really depends on the product, the business model, retention rate, the company, investment etc.

What should you look for in a network marketing or MLM company?

The company should have a strong track record, been around for more than 10 years preferably. Consumable products, so cleaning, bath and body, food etc. That increases the monthly re-order rate. Low start-up cost. If the company asks for a big amount up front, just to join, it would raise my eyebrows. I would hope they have a good reason to do so, but usually not. The retention rate should be high. The higher the better. Anything over 80% is high enough to build a business in network marketing.

Those aren’t set in stone, but are really good guidelines to assess a company before joining them.

The thing with building a network marketing or MLM business is the fact that you have to work on your mindset and attitude as well. Don’t expect to sign up, tell a few friends and then start making thousands of dollars a month. Usually doesn’t work that way. You have to create a mindset that you going to get out there and network with people. Even approaching people you don’t know. Get comfortable with selling, get comfortable with communicating, get comfortable with leading.

All of these things come into play when your building any kind of business.

Good luck on your adventures!

Having Business Interruption Insurance Is Important

When you start a business, you put in a substantial sum in buying resources and office equipment, property and stock. All this, involves a fairly big amount of your money. But, the fact is that along with investments and profits, any trade has its own share of uncertainties attached to it. These risks might at times be a cause of major loss. Certain conditions like fire accidents, natural calamities may damage your industry premises or equipment and force you to close the operations momentarily.

In such situations, there is definite loss of income. But, there are certain expenses that are mandatory and have to be met. Thus, to protect your business against such perils, it is always sensible to buy a policy that covers all kinds of risks involved in your business. A cover of suitable value would serve as a shielding tool for the purpose. When a tragedy strikes, the location may be temporarily unusable. Your company will not be producing profits and may continue to incur fixed costs. For situations like this, business interruption insurance comes to assistance.

Did you know that standard property indemnity does not cover the loss of income due to the temporary closure of the trade? However, business interruption insurance can be incorporated in the property indemnity to cover this loss. There are a whole lot of things that this policy covers. To start with, it covers the revenue your company would have made all through the period your business location is unusable. Remember that this amount is determined by your historic financial records.

The policy also covers the costs and expenditure acquired by your business even though the location is out of use. Again, these fixed costs are determined by breakdown of financial records. Along with this, the policy also covers the outlay incurred in having to move and operate from a temporary location. It also covers the ‘extra expenses’ that may be incurred by keeping the location open. However, keep in mind that extra expense coverage is offered by insurers to lower business interruption costs.

The fact is that business interruption insurance is probably the most valuable coverage your business can have. Though it is easy to forget that revenue cannot be produced without a functioning business or because the business owner believes property insurance will cover all losses, but that’s a myth. After all, the property insurance only covers the physical loss or damage to the scene and contents of a business and it does not cover the loss of revenue. So, it would be a wise decision to buy this policy cover and be adequately covered.

Tax Advantages For Home Businesses

I’ll guarantee if more people knew about the tens of thousands of dollars you could save annually from turning yourself into a home business using network marketing. People would flock by the thousands into this industry. In my opinion it’s essential for anyone who’s thinking about investing in a home business, to educate yourself on the home business tax system. This will teach you how to recycle your income annually, even if you don’t make any profit. Setting up a home business as a sole proprietor is the best way to get started, until you can afford to incorporate. I’ll cover in more details the importance of educating yourself on the tax advantages in network marketing, that will allow you to recycle your expenses annually to use instead of your salary, and also why you should understand the limits of a sole proprietor.

Bookkeepers are not going to educate you on the tax systems for your business. Their job is to get you to pay taxes not save you taxes. Find you a good CPA that will educate you on all the tax advantages of a home business. Do your own bookkeeping its your business anyway, you need to know what goes in and out for yourself. You need to keep track of all your business expenses you can write off when you file your 1099 income tax return. Also Learning how to manage an income statement and balance sheet will help you keep all your business expenses in line. You have to educate yourself on all this, because your business expenses could get rejected by the IRS if your commingling funds and or not properly recording your financials correctly.

If you’re earnestly trying to build a home business using the network marketing industry. And you understand the tax system, you can claim all your business expenses even if you didn’t make any profit. It all starts with getting your EIN number for the franchise tax board and filing that number with your local state. This way you can set up business accounts for your business to avoid commingling funds. Keeping all your businesses separate from your other business and personal accounts will help you not get your business expenses rejected by the IRS during an audit.

If you’ve ever wondered how to utilize sole proprietorship in your business, I would encourage you to do your homework. At this stage of the game for you, you won’t need to worry about recording minutes or all those things associated with being incorporated. Once your home business has reached an income level of 5K+ monthly then you may want to look into setting up any corporations. But at least when you do you have some experience on how to effectively manage your corporation. I am not a certified CPA. I’m just a concerned business man, who is simply sharing this information to possibly help someone understand a little better.

This doesn’t cover all the true tax advantages of building a home business in networking, I just wanted to plant the seed as far as feeding your brain with some information you may find useful. In today’s economic struggles people need to arm themselves with as much information on any and all tax advantages. Don’t hesitate for one minute to educate yourself by getting around and talking to people who can inform you, or guide you in the right direction. So you can leverage your income no matter what’s going on economically. Remember not to commingle funds between other businesses or personal accounts. Setting up a sole proprietorship is a very good way to start any networking business. I hope this topic helps you understand the importance of educating yourself especially when it comes to making money. Good luck with this topic!