For this month’s blog piece, I’d like to talk with you about the journey I took to become an entrepreneur.
The stepping stone that led me to where I am, today.
First, I want to talk with you about something that has a stigma attached to it. Something that’s interesting, yet is often times viewed negatively.
Multi-Level Marketing, aka Network Marketing or MLM. (or the derogatory term, “Pyramid Scheme”).
Before we get into the weeds, let us unpack some things, define what I’m talking about, and set some ground rules.
The stepping stone that led me to where I am today was MLM.
I’m not directly involved in network marketing anymore, and that was a long time ago. Not that there’s anything wrong with what I learned, or how I learned it. I went a different direction with my businesses, focusing on recurring revenue through services, and software-as-a-service. (Saas)
Unless you’ve been involved with network marketing, MLM, etc, don’t throw stones at the concept. Like any business model, it’s certainly has it pitfalls, and positives; however, some of the world’s most legitimate companies started and grew, using this business model.
There is nothing wrong with MLM or network marketing. In reality most affiliate and reseller programs are structured in a similar way as an MLM.
Before BNG Team, before all our other businesses, I learned some lessons from an MLM environment that I never could have learned in college.
Let’s define some concepts
Just to define the term: Multi-Level Marketing “is a sales strategy in which the sales force is compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant’s “downline”, and can provide multiple levels of compensation” (Investopedia).
I was going into nursing when I attended college. The concept of Multi-Level Marketing was completely foreign to me.
I was approached by my now business partner my freshman year of college. He asked me if I was interested in making some extra money while I was going to school. This interested me, so I listened.
What I found was that despite all of the flaws and struggles of Multi-Level Marketing, it was the first thing that introduced me to business concepts. It was the first tool I saw to make money, lots of money, as a young, broke college student with a hectic class schedule.
I learned that I could save my friends and family money on products and services they were already paying for.
I learned that I would earn a percentage from the monthly bills of the services I was saving my friends and family money on.
That’s my experience, defined, and that’s the definition of MLM.
Now that we’ve covered a bit about what MLM is and how it functions, let’s talk about how it works and how it grows.
Simplistic in it’s structure
The idea is simple: go out and recruit customers that will sell services to their network of friends and family, that they’re already paying for. Services like long distance telephone, internet services, cell phone service, vitamins, identity theft protection, etc.
Essentially, services that people buy and use on a monthly basis. Then, go and find multiple other people that think this is a good idea.
People want to get paid off services that other people are already using and paying for. So you’re going to help them get ten customers as well.
Then rinse and repeat.
For me, it was simple: I dropped out of college because I knew I wanted something different out of life. MLM simply opened my eyes to what income possibilities existed.
As an entrepreneur, my ultimate desire is fueled by my passion to give and serve others around me. That’s why I dropped out of college; to help people in my network.
Not to mention, fiscally it made sense.
That being said, I had no idea how much hard work and sacrifice laid ahead of me, as a business-owner.
Sometimes being ignorant is the only reason you start the journey of being an entrepreneur. That’s definitely the case for me. I’m glad how naive I was or I probably would have never started.
I’m sure you can relate.
MLM’s succeed and fail for the same reason businesses do: people
What makes companies grow, and find success in that growth, is having the right people on your team, in the right roles.
I wish I could say that a perfect business model exists, but I cannot. There is no such thing. In order to make a business work you need people who are skilled and motivated.
Just like with MLM, people need to be bought-in and motivated to learn, execute, and win. As a business owner today, I now know the value of the people on my team who help me execute our mission and vision. We’ve had success because of the quality of people on our team. Just like MLM, I chose to seek out good people and bring them on board to avoid letting the wheels come off the bus.
Whether you’re recruiting good people inside an MLM, or hiring employees for your business, they need to be all-in. I cannot stress this enough. Once they’re all-in, and motivated, it’s your job to place these good people in the right roles.
It’s there that you’ll watch success happen. People are important.
Priorities not facts
I have colleagues and friends still today, that make hundreds of thousands of dollars a year in MLM.
It works, but it’s just like any real business. How much are you willing to put into it and how good you are, will be deciding factors of whether you succeed or not.
It’s about priorities, not facts. Where are your priorities?
Just because you work hard and make sacrifices does not mean that you will make it, just like in a traditional business. There’s no free lunch and no guarantee. Things don’t always work out perfectly. It often takes a lot more work than you expect.
According to Forbes, 8 out of 10 entrepreneurs who start a business fail within their first 18 months (forbes.com). Not only that, but 96% of businesses fail within 10 years. (I’m happy to say we are just coming to the official 10 year mark at BNG this January)
What often happens in network marketing (MLM) is that people would pay to get started, three or four hundred bucks, and then they don’t do anything. They don’t recruit anyone underneath them, and they don’t recruit anyone to get any customers.
They do nothing, so they lose their money. Just like in a traditional business setting, if you have all the awesome ideas in the world, but can’t execute them, you will lose your money.
It would be like me buying into a Subway franchise, but not selling any subs. Who’s fault is that and who owns that? I do. I have to set my priorities, and make progress from that point.
The reason most businesses fail is because of the people element and lack of priorities. In business it is about priorities. It is about goal setting. It is about working through growing pains, and making progress each day.
That’s the process that I’ve learned.
The most valuable lesson learned
If you can do MLM, or network marketing well, I believe you can be successful at any business.
I learned a tremendous amount from dealing with all of the rejection, the conflict, all of the fighting, and the negativity that comes along with the MLM industry. These values I learned are the only reason I can do my business today. If someone wants to know if they’re cut out to be an entrepreneur, go and join a network marketing company.
Being involved in an MLM is the cheapest education to learn how to run a business. So if you fail at MLM, it’s not as if you’re out thousands of dollars and can never be successful again. As far as education goes, it’s an inexpensive lesson.
I learned so much doing this business, that’s why we got into payment processing, and more importantly, recurring revenue. The concepts, the recurring revenue, the residual income, that all started because of network marketing.
Here are some other things I figured out, along the way.
Knowing why you do this business is more important than how you do this business
You need to be in business for a reason. And it darn-well better be more than just making money or being successful. Those are the outcomes, not good reasons. I’m involved in business because of a higher-calling. I want to generate revenue so I can take care of our 35 employees, their families, and my family. I want to give back to those that have given to me, like mentors, the Fargo-Moorhead community, and my parents. What’s your reason, and what is your ‘why?’
Success is not about being a racehorse; it’s about being a pack horse
There were times early on where I was literally crying myself to sleep at night. I felt like I had no friends, I had dropped out of college, and really smart people I knew were questioning what I was doing with my life. That really hurt me. I knew what I wanted to do, and I knew I had a good reason for it. I just saw it and other people didn’t. All of those challenging times changed who I am.
The hard skills, the toughness, the resiliency, and the hustle helped me understand what it takes to push through to be successful. This is the only reason I can do what we do at BNG.
One of the most important things to figure out in any business venture is knowing what you want out of your business
Knowing this will help you decide what you have to put into your business, in order to make it work. It is probably going to be a different level of commitment and time on your part, and there is no right or wrong answer. You just have to get to work, then the inspiration will come. Just find out what you want and have a realistic expectations of the time/effort it will take to achieve your goal.
Why I chose to pursue payment processing and recurring revenue
Eventually, I was becoming burnt out from constantly seeing people who signed up, only to fall through. I was good at selling, and I was making money, but I was just frustrated with the lack of drive and commitment from other people. I was desperately seeking to build a recurring revenue model, even though I didn’t know it yet. That is where payment processing came in. I found a new way to help people, and consistently receive payments for a service, without needing to convince hundreds or thousands of people to do the same work as me.
If you want to be super successful, whether it’s in network marketing or in any normal business, it takes a lot of work, planning, and persistence. The values of the stuff that it takes to be successful in network marketing directly applies into a real business.
You can work your business full-time or part-time, but not spare-time
The skills and the things that it takes to be successful at network marketing are very consistent with what it takes to be in a real business. Network marketing is not easy. Business isn’t easy, either. You can run a successful business without ever trying. You can even do it part-time, but you can’t do it in your spare time. Spare time meaning 2 days this week, then 1 day next week, then an entire week next month. It doesn’t work that way. Entrepreneurs follow the Nike philosophy. They “just do it.” You have to consider the same.