What kind of business?
You can choose from the following;
1.TRADITIONAL CORPORATE BUSINESS
When starting your own business from ground up, there are things you need to consider. First, you need to identify what kind of business you want to start,including the name. You must have also have a business plan.The location of your business, including the building or workplace. You have to get also business license and permits to operate. You have to consider also advertising, accounting, logistics... hiring employees to work for you. And finally you need to have enough funds for setting up and operating your business. Start up cost is very high, starting from a few hundred thousands to millions. The risk is high also especially if you are starting it without any guidance from someone who has already experience in setting up the same kind of business.
2. FRANCHISING.
Franchising is a business structure that allows business owners to buy into an established brand and operate a business rather than develop their own original idea. Franchising is a less risky and less time-consuming way to open a business
The advantage of a Franchising business is that everything is already setup. There's no need to start from scratch because everything is established. You will just need to finance and operate it. Franchising can cost millions of pesos, like for example Mcdonalds around $750,000. or it can be small scale, for example are foodcarts that costs around P10,000 up to P250,000. The return of investment normally reaches to a year before you start profiting from your business.
Franchising also utilizes the Law of Leverage, because of the concept of branching out. The more branches, the more you multiply your time and effort. However, you need to invest more money to do so.
What is the Law of Leverage?
This means you multiply your time, effort and money through others. This is the secret of many successful businessmen.
" I'd rather earn 1% from the effort of 100 people rather than earning 100% from my own effort."
- John Paul Getty
(John Paul Getty, is a successful businessman in the oil industry. He was known as the richest living American in 1957 and in 1966 as the world's richest private citizen by the Guinness Book of Records, with a fortune approximately $8.7 billion in 2013)
For example, Mr. Henry Sy, he owns a chain of SM malls in the Philippines. In one of his SM malls, he has around 1000 employees working 8 hours per day. His time is multiplied by how many hours his employees are working, thus in a day he has around 8000 hours. Thus applies the law of leverage, because he is multiplying his time and effort through his employees working for him. And that is just for one SM Mall. How about the other SM branches? and also his other companies like Banco de Oro which also has branches all over the country. Just imagine, how many working hours he has in a day.
3. NETWORK MARKETING / MULTI-LEVEL MARKETING (MLM)
Network marketing is the distribution of products from the manufacturer directly to the consumer for personal use at wholesale and/ or sell the products to other consumers at retail through referral.
This is also known as word-of-mouth marketing or referral marketing.
You can see below the comparison between Traditional business and Network Marketing.
In a Traditional Business, the product flows from the manufacturer to
wholesalers, then to the Middle Men(these are the international
distributors, regional distributors, local distributors) which provides
the products to the retailers, where the consumers buy the products. Up
to 75% of the final price of the product goes to advertising, salaries,
commissions and benefits of the people in the supply chain.
In Network marketing, the product flows from the manufacturer to a networking company, which are composed of distributors. Wherein, the distributors themselves are also the consumers. And the same time, they can also sell the products to other consumers at retail price. The manufacturer has no traditional distribution overhead costs,like advertising and paying people on the supply chain, leaving it is free to reward its distributors extremely well through compensation and bonuses.
In Network Marketing, a distributor is compensated not only by retailing the products but also earn from the sales of the people they recruited to join in their sales group, known as downlines. This provides multi-levels of compensation. Thus, utilizing the Law of Leverage. You multiply your time and effort by recruiting people to join in your sales group.
Many people mistakenly identify this as scam or illegal pyramid scheme. Because scams use the same structure and system like in network marketing but here instead of focusing on sales, people are required to recruit in order to gain back their investment and earn. Normally, they don't have any products at all. In this way, only the persons on the top are earning. and if the recruiting stops compensations stops also. So one must take caution.
WHY NETWORK MARKETING?
This is the best business for you especially if you don't have the money to invest on big businesses which costs millions. Here are the other of the advantages of network marketing.
- very low startup cost.
- similar to franchising, the system is already setup, the products, marketing plan, the branches, establishments, logistics, accounting... etc. is already established.
- no need for high educational background, or a degree to start in this business.
- you control your time, because you are your own boss.
- it is flexible, portable. you can take it anywhere with you.
- you can start as part time if you have a job.
- It utilizes the Law of Leverage.
- it can provide you passive income. you work hard for a few years, and if you build your network right, your income will keep flowing even you are not working anymore. Thus giving you true financial freedom.
"The Multi-level marketing industry offers a ready made business system to anyone wanting to take control of their financial future."
~Robert Kiyosaki, Author of Best-selling book 'Rich Dad Poor Dad'
The business of the 21st century is Network Marketing by Mr. Robert Kiyosaki.
So, which networking company out there is the best for me?
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