How to Choose a Home Business by Phil Stone

I’ve been involved in Network Marketing for almost 30 years now. Being very fortunate years ago, my wife Kim and I have had great mentoring and support and have been able to develop the kind of income and lifestyle that many people only wish for. We've raised our four children, put them through college, and set them up for success. Our guard gated waterfront community here in Florida offers us the perfect setting to operate our home business. But Network Marketing gives us the freedom to run our business anywhere there's an internet connection and a phone. Unlike so many people our age, our lives are still filled with possibilities.

Over those years I have read countless guides on choosing a home business opportunity, and guess what. They always favor the company that the author works with. Surprise, surprise!

I am going to do my absolute best to tell you what to look for and why. You may decide that the company I am with doesn’t fit the guidelines I’m offering. That’s okay. What I hope to gain by this is your trust. Who knows, if you truly benefit from what I've written here, maybe we will work together some day. If not, I hope you will remember that Phil Stone gave you truth and value. This is kind of my "Jerry Maguire" paper. (If you don't get it- rent the movie.)

Please do not skip ahead. Reading this entire e-Book should only take you ten minutes or so. I am going to give you the absolute most important thing at the end- but it will have far more impact and relevance if you read everything in between.

One other thing- this is being written solely by my hand. There may be ideas that you have heard before. I hope so. But you are about to get my perspective in my style. Please don’t copy any parts of this without my permission. It’s intellectual property covered by copyright laws. You want to pass this entire thing along? Great.

Okay, so let’s get to figuring out how to pick a great home business opportunity.

Let's Touch on the Unusual Success Stories and Affiliate Marketing

First let’s talk about starting a business like making specialty cookies or some kind of clothing. The woman who created Spanx did that. You hear these stories all the time. There must be a couple people every year who hit a home run with one of these. Ben and Jerry started out of a gas station. I’m not going to get into this style business because the failure rate is absolutely huge. You don't want something that has a one in a million chance- or worse.

To provide a high likelihood of success it is best to start with a proven system. Since you are not going to start a franchise out of your home, we’ll move to the next category: Affiliate Marketing.

Affiliate programs are all over the internet. You set up an account and whenever someone buys anything using your Affiliate link, you get paid. The most difficult part about Affiliate marketing is setting up the systems required to make it all work. You’ll need a great deal of knowledge about online marketing to make good money with an Affiliate program. Keep in mind that you will be in direct competition with some of the most computer savvy online marketers on the planet. The only entity that has a benefit from your success is the company you are affiliated with. And they couldn’t care if you get the sale or if someone else does, as long as they get the order. So, you are on your own.

There is a ton I could tell you about Affiliate marketing. I do some, and I get results. But since you won’t have much more support than what you can find in the tutorials offered by the company you become affiliated with, we are going to skip to what I believe is the best style of home based business- Network Marketing.

Network Marketing

The big difference is you will join a Network Marketing program under someone else. That someone will succeed or fail based on the results of the people in their downline. That means, unless you choose to enroll under a bunch of boneheads or people who are not seriously working the business, you’ll have help. If you join a program and find yourself without help, shame on you. You need to make sure a viable support system is in place long before you sign in. More on this later.

So with network marketing there are a number of things to look for. Since they are all elements to consider, we don’t have to worry about any particular order, so let’s start with timing.

Why is Timing Important?

There are a lot of professional Network Marketers who will tell you that you want to be in a company from the very beginning. You get there early enough and position yourself before all the growth. That’s great advice- if the company makes it on the first try. Like any other business, the failure rate for new Network companies is about 80%. If you do get in early you can score big, but the chances are you will not.

Another thing that happens to start-up companies is that the vision they sell you on in the beginning often changes due to the unforeseen. They may encounter obstacles that make them change course, and you may not like the new direction. This is where acting and thinking like a true leader and influencing the direction whenever prudent can really benefit both you and the company. Just be aware that what you signed up for could radically change.  

On the other end of the spectrum would be the companies who are already well established. With a company with a long track record you’ll have some degree of security, but you will likely be giving up some opportunity. It has often been said that if you want to be able to pick the freshest and best fruit, you have to be willing to climb way out on the limb of the fruit tree.

I like Disney stock. But it sure isn’t going to jump from $30 per share to $300. The explosive growth is already past. The same holds true with any opportunity. You’ll enjoy security aligning yourself with a well established and successful company, but you are not likely to join a program that is close to a billion dollars in annual sales and find them growing by 40 times and taking you with it.

That brings us to a middle ground. If you can find a company that is established yet hasn’t become a household name, but looks like it is a sure thing, that’s your best shot for wealth creation. For those companies who have made it to around the billion dollar level, and that’s only about a dozen or so out the many thousands who have tried, there is still opportunity potential ahead, but probably not the explosive growth you feel when you join a company that is in the 40-100 million dollar range and then over 24-36 months multiplies by 10 or more times.

If you are looking at a company that is well established but seems to have never accomplished the explosive growth that all Network Marketing companies strive for, there had better be a plausible reason why. And there needs to be something that will change, or is about to change, and that change needs to have the potential of major impact on the future growth. If a company is not growing, chances are your check from that company will not be growing. If the opportunity isn’t really exciting, chances are your check won’t be exciting either. These things are all related and go hand in hand. If your timing hearing about the company is less than perfect, not to worry. It's not the most important thing.

What about Products?

Next let’s talk about the company products. First, measure the product’s viability on the marketplace. Ask yourself, “Would this product be a hit and would a large segment of the market buy the product based on what it does and how it’s priced if the product had nothing to do with any compensation plan?”

The compensation plan cannot be more important than the product, or it’s just a sort of Ponzi scheme. If you can honestly say that if the product was properly promoted and displayed at the Wal-Mart's of the world or in TV infomercials it would sell like crazy, you’ve got the kind of product it will take to help drive the company to that elusive explosive growth people always dream about.

Some companies offer products that are transfer spending oriented. In other words, they are things people buy already, but in the future they can pay the same basic price and get the product through their Network Marketing Company instead. They 'transfer' their spending from their current source to their new source. The beauty of offering transfer spending products is that people can join the new Network Marketing Company and continue to consume the products month after month without changing the cash outlay of the family. That gives the new marketer time to move to a positive cash flow position. If you buy bottled water now and your network marketing company offers better water for maybe just a little more, get your water from them. That’s transfer spending. It has great appeal and makes sense to people.

If it’s not transfer spending; if people are going to have to dig deeper into their pockets to afford the Network Marketing Company’s products, it had better be sensational. It needs to promise huge results, and deliver at least the true hope of reaching those results. If you heard a believable presentation with scientific evidence and testimonial after testimonial about a product that looked like it would extend your life, or reduce your chances of getting cancer, or anything that dramatic, what would it be worth to you? Would you get that same reaction from most people? And would they dig deeper to have it? Remember, if it’s not transfer spending it must be just short of magical.

That brings me to another point about the product- mass appeal. You hear so much about target marketing. The reason for target marketing is when you enter a marketplace that is already dominated by specific suppliers, you either dethrone them or target a specific niche to give yourself a chance at success. If there is no one dominating, you don’t have to limit your target audience. If you are looking at a company that sells water, they are going to have to compete with everybody already in that arena. They’ll need to shoot for a niche. If they discover and are able to get exclusive rights to a breakthrough like a pill to prevent baldness, they can target everyone who is concerned about hair loss. Nobody now has anything like that so no need to limit the target market to a smaller, more concentrated group. That’s what you think through when you are measuring the potential mass appeal of the product.

And as long as you have a good product, you are okay- as long as you also have the most important thing.

The Compensation Plan

Everybody joins a Network Marketing Company to make money. So the compensation plan is very important. There are four basic types: Unilevel, Stairstep Breakaway, Binary, and Matrix. I have worked with them all at one time or another. Neither is truly better than the other, although you will hear preferences from every possible perspective regarding the comp plan issue. I have my own favorites too. The two you will find most these days are Binaries and Unilevels. And there are countless variations of each of these.

Making money in a Network Marketing Program is directly related to the ease of recruiting and the ease of finding people who are willing to purchase what the company offers, period. Some opportunities will tell you how their comp plan is best because they have a high 60% payout. That’s great if getting to the level where you earn that 60% is realistic. If it’s pie in the sky, what good is it? Others might say that you are in the power leg of the Binary so you will only have to build one leg. That could be great but not if it’s almost impossible to get anyone who will join you. It’s the ability to recruit and develop product purchases combined with the overall compensation plan that must be considered. A comp plan where you only make a small percentage but people flock to join and buy the products would be better than a huge payout where recruiting is as difficult as brain surgery.

Take a look too at how commissions are paid out. Many companies have what looks to be a lucrative payout with high percentages, but they don’t pay those percentages on the actual dollar spent. They assign a “cv” or “commissionable volume” number to each product that is some percentage off of the dollars you are paying. For example, if a company pays a total of 50% through all its levels of payout and they base that on a dollar for dollar price on a $100 item, you and your team will find 50% of the purchase price or $50 in your collective checks. But if they take a product that costs $100 and work their comp plan so you get paid 50% based on that product being worth 80cv, there will only be $40 in those checks. They give the impression that they pay out 50%, but they really don’t.

Realizing that people who want to recruit you might be embellishing, ask how others who have recently joined are doing. Talk to those people. What challenges do they face? How fast are they advancing to the higher payouts that are always toward the top of the comp plan? A company should have substantial numbers of sign-ups company wide every month or that’s a sign that recruiting is difficult.

Then take a close look at the monthly requirements they may have. There is nothing wrong with an autoship program as long as it is realistic. Products autoshipped to marketers and customers bring commissionable sales and help you to establish some consistency. Remember, in almost every case, people have to pay for something before you get commissions.

You should never have an autoship where you consistently wind up stockpiling products because you can’t use them as fast as you receive them, unless you are planning to use those products as samples and have a proven system where handing out samples leads directly to new customers or marketers. If your autoship products are an effective part of your marketing strategy, that’s okay. Don’t get into a program where you buy things and give them away getting nothing in return just to get rid of them.

Take a look at shipping and handling. The company you are considering will have a cost there, but many use that as a profit center by adding to your shipping bill and marking up their handling costs too. These little extras add up, especially as a new marketer is just getting started.

And watch out for extra costs like back office systems or lead capture pages and autoresponder email programs. Many companies currently offer these systems at no cost figuring that the more they provide for the marketers, the more those marketers will produce. The average cost a company incurs providing these services and tracking analytics with downline management software is between $4-6 per month per marketer. Many companies absorb that cost rather than using back office tools as another profit center.

When a company operates with too many little add on charges there is always a percentage of new marketers who feel misled, and lose some of their enthusiasm for the program. Passion and enthusiasm are the fuels that drive the Network Marketing engines. Nobody likes negative surprises, and people can get down right mad if they feel they are being nickel and dimed to death.  

Then ask yourself what it will take for you to get a full return on your investment. You will be far better off investing $1,000 and making that back and more in 30 days than joining a free program and working for 6 months before you see a dime. It is both time and money you are investing.

Take the time you must put in and the money you will invest and then weigh that against the likely return- not the potential return, and see if it makes sense. Remember that you are starting a business and the beginning is always the toughest, where you make less money than your time is worth. It’s like that in any business but especially Network Marketing. If you choose wisely there will come a time when you’re enjoying getting paid far more than the time and effort you put in could ever hope to justify. The leverage provided in a solid Network Marketing Program has created more millionaires than you would ever believe.

The compensation plan makes a big difference when you are judging the value of the program, but it is not the most important thing.

Who Runs the Show?

Management is another very important component to scrutinize. You need to look for industry experience. I’ve been involved with Network Marketing for close to 30 years and I also have run brick and mortar businesses over those years with great success. I think I could do a good job in a management position with a Network Marketing company. But I am not tested. I have never run a successful Network Marketing operation. Maybe my experiences would be all the foundation I need to lead the company to the Promised Land, and maybe not. Do you want to take that chance?

If you are joining a start-up, look for a Management team that has successfully launched Network Companies before and lived through that uncertain start-up period. If you are joining a company near a billion dollars already, look for management who have run billion dollar Network Marketing Companies before. And if you are joining a small company in hopes of riding the wave as it goes from small to huge, look for management who have successfully taken that ride before. If you need open heart surgery you want to choose a doctor who has recently performed that exact same surgery with the most modern techniques available numerous times with stellar results. You should insist on a doctor who is current and sharp. Look for the same attributes in the management of your prospective Network Marketing Company.

You don't have to love the folks that run your show. You don't even have to like them. Respect? That is important! But it's not the most important thing.

Training, Support, and Systems

Training used to be easy in the 'old days'. I'd tell a new marketer, "Hop on your phone and call everybody you know." I'd warn them about the dangers of dialing a rotary phone with their index finger, and that was it. Back when I started there were no touch tone phones. Oh… no internet either- let that sink in for a minute- no internet! And no cell phones, LCD projectors, Laptops, email, PowerPoint Presentations, fax machines, cassette tapes, and the list goes on. Training these days has to take into account all the incredible advances in technology. There’s a lot more to it now.

And that translates into an even greater need for the new marketer to have the support of their upline and other company leaders. Each person joins with different skill sets and one person is always more needy than another. If you or the people who will eventually join your team need to get answers or maybe another voice on a three way call to help nudge the indecisive prospect, available upline support is critical. I touched on this earlier. The fact is that Kim and I would probably not still be in the industry if we hadn’t found great upline support and leadership. Knowing and enjoying the value we had available to us has made us more demanding of ourselves. We view it as a duty, and we work to give superlative support to those who are in our company and on our team.

Network Marketing has always been and will always be a relationship based business. In the days past those relationships were friends, family, co-workers, and anyone you could find in your local community who would listen. Some people employed traditional advertising like direct mail, newspapers, radio, and TV, but that was rare. No matter what the lead source, a relationship had to be built based on trust and mutual respect to be able to build long term success. That has not changed, and never will. Now add everything that is possible with a command of the internet and there is a lot to teach.

With so much to learn it’s understandable that most folks would rather have a system that just does it for them- something automated that they really don’t have to learn how to work. Then there are others who will devour any information available on internet marketing. If the company you are considering doesn’t offer comprehensive training in all these areas, expect some of the people in your eventual downline to start looking elsewhere for this style of training. And when they start looking, don’t be shocked if they get sidetracked into some other money making program or system, and stop taking your calls.

Most people realize that their new business is going to require some kind of advertising and marketing budget. Having a lead source can be critical for folks who don’t have much of a warm market list to introduce to their new company. Since this need arises more these days than not, some companies provide a lead source. You might have to reach certain levels or do specific things to qualify, but if you do, there is a bonus of extra people who may be interested in joining you. If the company organizes a successful co-op advertising program, that's a real plus. You may not need it because of having a huge warm market list or powerful internet marketing skills, but there will be people in your downline who will. Measure things based on not only you, but also consider the type of people who will be joining your team.

Don’t forget to consider the benefit of everything the company does to build company name recognition. There is a huge potential value to everything they do that takes the pressure off of you when you are introducing your opportunity to people. A funny name that your prospect has never heard of starts you off at a disadvantage compared to something they feel sounds credible, or better yet, something they know is credible based on the name and how it has been promoted. That includes everything from product packaging to company brochures and marketing materials to institutional advertising- everything they do to build the credibility of the brand gives you an edge. Place a high value on that.  

You may also be offered the opportunity to participate in a co-op advertising of lead generation program. Some companies will charge you what the leads cost them plus what they have to pay to manage the program; others use this as yet another profit center with the same plusses and minuses that their other non recruiting and product selling profit centers create. The way the company you are considering deals with these programs will give you insight into how your long term experience with them is likely to feel.

There are people out there looking for something. They may not know exactly what. But when they find whatever it is they will go through walls to reach their goals. If they don't have the tools they need, they will find them. They will get the training they need. Support, training, and systems are very important, but they are not the most important things.

Don’t Wait for Perfection

You will never find the perfect program. Never. Don’t waste your life looking. Those of us who have been in the industry long enough have seen too many people who are victims of what we call “analysis paralysis”. There is a leap of faith required at some point. You can’t know it all before you first start. Do your homework, but don’t become a lifetime student analyzing one company after another never to get into the race. Decision making is a painful process. Don’t just sit there in purgatory. You won’t make a dime until you enroll and start talking with people, telling them about the products and opportunity. There will always be trade offs. Something will be missing or imperfect with every company and program, but the sum of all their attributes creates a great environment for success. If you see good things and deep in your heart it feels right, jump in- aggressively.

Network Marketing is a low risk, high reward industry. That’s why it has such appeal. Take what I have written here and use it to weigh the pros and cons of the program you are considering, and then dive in.

I’ve spent half of my life involved in Network Marketing. There is a lot to it. I believe it truly is the Best Home Business Opportunity. Pick wisely using all the tips I've offered here, but never forget the most important thing!

The Most Important Thing

The absolute most important part of the equation is...YOU. If you have a fire inside, if you have passion that's contagious, if you almost explode with enthusiasm, you can join a mediocre program and create wealth beyond imagination. It's about people, not timing and comp plans and systems- people. If you find a group of people who join together and lock arms in a crusade to take whatever company you partner with right to the top and you never look back, you never slow down, you will all win. If one of the team starts to fade, the others must pick them up. Mutual support while keeping a blaze of enthusiasm burning, that's the key. If you all sing out of the same hymn book- in unison, together the sound your voices create can travel around the world.

With passion, you can build an army. If that army has passion and you all lock arms in your quest, you can conquer the world!

Click here to return to the Trump Network Leaders Home Page or just close this page.

 Hosted by Independent marketers of Trump Network