The Downside of Easy Business Startups
The success of MLM and franchise programs is simple - they provide an easy way for new entrepreneurs to jump into business ownership.
For a fee ranging from a few hundred to tens of thousands of dollars, these opportunities give you a product, some marketing tips or training, and a few other startup perks that can make getting started as easy as pie.
Of course, if it seems too good to be true, it often is.
Here are some things to keep in mind if you are considering one of these startup opportunities.
It is always better to be the one at the top That is, if you have a business idea that could become a franchise or a legitimate MLM, you will make far more money starting it yourself than joining an existing one.
Is it harder to be at the top? Not really - no matter where you are in the system, you still have to run your business! They cannot guarantee your success How well you do in any business depends entirely on what you put in to the effort.
Those ads that promise you riches with no work and no capital should be avoided...
they are probably scams.
The reality is that less than 2% of MLM participants actually earn back their initial investment.
Franchisees do better, but the odds are still not on your side.
They don't help you succeed There are no franchises or MLM companies who will teach you everything you need to know to run your own business.
They are not in the business of helping you succeed.
They are in the business of recruiting new players.
Some of the good MLM and franchises do provide excellent marketing materials, but still don't teach you how to use them effectively or how to manage the details of your own company.
If you are not at the top, you will permanently share your profits with the people who are Franchise fees are rarely the end of the costs.
Most franchises require a portion of your profits AND they make corporate decisions that your shop must abide - Burger King is currently requiring all locations to offer the $1 burger, even though it is not profitable to the store owners.
MLM programs severely limit your profit potential.
You are selling their product or "opportunity" at their price, and your share is only a tiny fraction of the total profits.
They provide your products and operations The reason franchises and MLMs seem like such good options is that they are marketed as ready-to-go businesses.
You just pay a fee and are in business for yourself.
On the flipside, you generally cannot make changes to your product line or pricing, and any problems at the corporate level will become your problem.
You are still a business owner Even though the majority of these opportunities do not teach you basic entrepreneurial skills, you still need to master them if you want to succeed.
Even as an MLM member or franchisee, you will need to be your own accountant, attorney, salesman, marketing department, and secretary, and you will need to know enough about each to grow your business.
There are people who find great success in both MLM opportunities and with franchises.
They all have a few things in common - they know the fundamentals of entrepreneurship, they know how to sell, and they are willing to put in the work.
If you choose to try one of these easy startup opportunities, take the time to master basic business principles and give yourself a chance to succeed!
For a fee ranging from a few hundred to tens of thousands of dollars, these opportunities give you a product, some marketing tips or training, and a few other startup perks that can make getting started as easy as pie.
Of course, if it seems too good to be true, it often is.
Here are some things to keep in mind if you are considering one of these startup opportunities.
It is always better to be the one at the top That is, if you have a business idea that could become a franchise or a legitimate MLM, you will make far more money starting it yourself than joining an existing one.
Is it harder to be at the top? Not really - no matter where you are in the system, you still have to run your business! They cannot guarantee your success How well you do in any business depends entirely on what you put in to the effort.
Those ads that promise you riches with no work and no capital should be avoided...
they are probably scams.
The reality is that less than 2% of MLM participants actually earn back their initial investment.
Franchisees do better, but the odds are still not on your side.
They don't help you succeed There are no franchises or MLM companies who will teach you everything you need to know to run your own business.
They are not in the business of helping you succeed.
They are in the business of recruiting new players.
Some of the good MLM and franchises do provide excellent marketing materials, but still don't teach you how to use them effectively or how to manage the details of your own company.
If you are not at the top, you will permanently share your profits with the people who are Franchise fees are rarely the end of the costs.
Most franchises require a portion of your profits AND they make corporate decisions that your shop must abide - Burger King is currently requiring all locations to offer the $1 burger, even though it is not profitable to the store owners.
MLM programs severely limit your profit potential.
You are selling their product or "opportunity" at their price, and your share is only a tiny fraction of the total profits.
They provide your products and operations The reason franchises and MLMs seem like such good options is that they are marketed as ready-to-go businesses.
You just pay a fee and are in business for yourself.
On the flipside, you generally cannot make changes to your product line or pricing, and any problems at the corporate level will become your problem.
You are still a business owner Even though the majority of these opportunities do not teach you basic entrepreneurial skills, you still need to master them if you want to succeed.
Even as an MLM member or franchisee, you will need to be your own accountant, attorney, salesman, marketing department, and secretary, and you will need to know enough about each to grow your business.
There are people who find great success in both MLM opportunities and with franchises.
They all have a few things in common - they know the fundamentals of entrepreneurship, they know how to sell, and they are willing to put in the work.
If you choose to try one of these easy startup opportunities, take the time to master basic business principles and give yourself a chance to succeed!
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