How to Start a Networking Business

Tuesday, April 30, 2013

How to Start a Networking Business

A networking, network marketing or MLM (multi-level marketing) business entails recruiting business-minded people into an organization. A newly recruited business associate then purchases product from the networking company and builds his downline, or network of sponsors. You can earn monthly commissions off people in your downline when they start buying your product. Network marketing is a legitimate business opportunity, according to Entrepreneur.com. A company can legally sell through through multi-level sales with a legitimate product.

Step 1

Decide what type of products you want to sell in network marketing, such as vitamins, cell phones or home cleaning supplies. Select a product line with which you are familiar or enjoy working.

Step 2

Look through home business opportunity magazines like Small Business Opportunities or Entrepreneur for network marketing companies. Call some of the distributors, as these are individuals like you who previously joined the business. Ask to speak with the distributor's sponsors or up-line, who have been around longer and have a better knowledge of the company. Ask for information about the company and business model, including the pay plan. Get on a conference call and get your questions answered by company officers.

Step 3

Sign up for the network marketing opportunity with the best pay plan. Join a company, for example, that offers 20 percent to 30 percent on level one instead of 10 percent, so you can start profiting more quickly. Have your products automatically shipped to you each month, which is often a requirement in network marketing.

Step 4

Add a separate business phone line for your network marketing business. Record a short greeting, asking people to leave their names and phone numbers if you are unavailable when they call.

Step 5

Order a website through your network marketing company; most of them will provide you with a website similar to the main company website.

Step 6

Order postcards from your network marketing company or create your own. Have the company include your website address on the postcard.

Step 7

Search for a mailing list supplier via an online search engine. Find a mailing list distributor that sells MLM or Business Opportunity Buyers names and addresses, which are people who are interested in starting a home business. Order 500 or 1,000 mailing list names for an initial test mailing.

Step 8

Affix the mailing labels to your postcards and mail them to people on the list you obtained in step 7. Call people back when they respond to the card. Bring your sponsor onto a three-way call to help you recruit people into the business. Mail postcards out every week. Increase your mailings as your profits increase.

Things Needed

Wholesale supplier
MLM or opportunity buyers mailing list
Website
Postcards
Separate business line
Three-way calling

Tip

The best way to become a successful network marketer is to help others build their down-line. Like your sponsor, be available for people you recruited into the business. People like to hear success stories. Share your experiences with other prospects. Helping others will build the depth of your business; this is how the number of people under you grows exponentially. Most MLM companies pay "infinity" bonuses, entitling you to commissions on all down-line purchases.

Warnings

Do not quit your job to start a network marketing business. Build your network marketing with your current income until you are earning enough to support yourself.
Be sure to check out how long your organization has been around. You chance of success greatly increases if your organization has been around 30 or 40 years -- like some MLM companies.

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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Tuesday, April 30, 2013