Debt Free Network Marketing, Part I

Here’s How To Stay Out of Debt and Get In Profit Fast With Your Network Marketing Business

As a long-time small business owner and small business start-up coach, it worries me that so many people get themselves into debt starting their network marketing businesses.

The whole point of starting a home business is to have low start-up costs, low overhead, and high profit margins. So why is it then that so many new distributors spend so much money (often on credit cards) in order to get their business launched?

Three Reasons Why People Rack Up Debt In Network Marketing, and How To Avoid Them

Reason #1 – Upline Pressure

One of the principles of Maverick Networking is to do things the right way, with integrity, and to always act in the interests of your customers and downline. If your upline is pressuring you to front-load (buying more product than you can sell or personally consume yourself up front to artificially boost your volume), you should find another team. Front-loading is never a good idea, and in fact it’s illegal to pressure your downline to do it in some jurisdictions. Don’t do it.

Additionally, if your upline leaders pressure you into purchasing expensive marketing or education tools, or to make expensive trips to attend regional or national conferences or trainings, you should find another team to work with. You should never spend more than your business is profiting on your business. Period.

I know this flies in the face of what 99% of network marketing coaches and leaders tell people to do, but it is based on solid business principles that have worked for me over nearly two decades of business ownership. Debt does not build businesses; cash flow does.

So, build your cash flow first, then you can spend money on more costly marketing methods, tools, and trips… if and only if you think they will increase your income and grow your business.

Reason #2 – Impatience

I know it’s enticing to think about the prospect of getting rich quick. However, they call them “get rich quick schemes” for a reason. Sure, your sponsor or someone in your company might have built a huge business quickly by spending “X” amount of dollars a month on pay-per-click ads, banner ads, solo ads, display ads, direct mailings, and any of the numerous other costly methods for advertising a network marketing business.

However, what you may not realize is that the person who built a large business using those methods may not have started off that way. In fact, they might have started using cheap and free marketing methods, then reinvested their profits back into their business in the form of paid advertisements. Additionally, they may have a background in marketing, advertising, and promotions that you don’t have, allowing them to maximize their return on investment for using those paid advertising methods.

Moreover, in this day and age you simply do not need to spend any significant amounts of money to advertise your business. There are so many cheap and and free marketing methods and tools available today, it makes spending money to advertise almost an afterthought. Sure, those cheap and free marketing methods might take a little more time to implement, but they certainly won’t cause you to rack up a bunch of debt on credit cards, either. That’s exactly the way I am using to build my home business, and you should consider doing the same.

Reason #3 – Laziness

But, the downside to the cheap and free marketing methods available today is that:

1. As I mentioned above, they require time to implement them effectively…
2. And, they require work to use (there’s that four-letter word network marketers seem to dislike so much).

The truth is, many of the people who are attracted to network marketing end up in the business because they don’t want to work and they want to get rich overnight.

Well, guess what? That ain’t going to happen. I’ve met and studied many a successful business owners in the network marketing industry, and in almost every single case they worked extremely hard for several years to achieve a six-figure or seven-figure income in the business.

What’s The Takeaway?

The bottom line is that you need to approach the network marketing business like a business. Control costs. Increase profits. Work hard. Have a long-term strategy.

By doing so, you will not only ensure that you avoid racking up a ton of debt to start your business, but you will also have created a hedge against your own failure in the business. Simply by taking an honest and realistic approach to your business, you will ensure both your financial stability, as well as your likelihood of success.

(You can read Part II of this article series here.)

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