How To Use The Power of Networking and Leverage Like The Big Businesses Do
This article discusses the concepts: "leverage" and "Networking" as used by big businesses such as MacDonald’s, and shows how individuals can use its power to create wealth.
How do you earn your money? Are you:
1. working for someone
2. a professional or self-employed (exchange your expertise for someone’s money) = small business owner
3. a business owner
4. an investor
Most people opt for employment because they see it as a “safe” option. “Job Security” is what they want. However, as many people will tell you; due to downsizing and industries like the recording industry changing from records to CD’s, where a skill is literally obsolete overnight, there is no such thing as “Job Security.” Think for yourself: What would you do if your boss tells you tomorrow that you have no job? How long will you be able to survive?
The second way is to be self-employed, or to be a professional. Some professionals have jobs, like teachers, nurses and doctors, but most have a practice or are self employed. Others are self employed by offering a service. If you ask someone who is self employed why he is self employed, he will often say: “I prefer working for myself and not for a boss.” That is just about the only advantage I can see. Does the self employed have fixed hours to work? No, they often work overtime. Do they have a fixed salary? No, if there is a bad month, they have to take a cut in earnings. They can’t take holidays, weekends or days off.
The third way is to be a business owner – this is someone who leverages his time by having people work for him, and/or own a big network of businesses, such as MacDonalds.
The fourth way is to be an Investor – someone who uses money as leverage.
You can possibly see from the descriptions above that the last two: Business Owner and/or Investor probably have the most money. Why do they have more money? There are two words above that give you a clue: Network and Leverage.
What is a network?
My Thesaurus describes it as: A system, complex, set-up, set of connections, and set of contacts. Examples of Business Networks or Systems: MacDonalds, Wendy’s, Starbucks and Wal-Mart. These are each a network of businesses that branch out across the country or even globally. They also use a system that works, and just duplicate it.
What is leverage?
My Thesaurus says: influence, power, force, control, pull, weight. Simply put, leverage is to get other people to do work for you so you can get more done. The owner of McDonalds has 1000’s of people doing work for him in stead of him doing it all himself.
Can you see the power of leverage and networking? How can you use the power of networking? You can start your own business. However, starting your own business is quite difficult and very costly, and most people don’t have the money to get started. You will have to come up with a new idea, or an idea that gives you a competitive advantage over an existing business. After putting lots of your own money into research, brand names, copyrighting and start-up costs, you will have to find loans somewhere with your business plan that your accountant wrote for you. Most people who want to start their own business take out a loan on the equity in their property, or take out a second mortgage on their house, to get started. Big business may start as a small business. But take care that you don’t think your small business falls in this category. If you bought your small business, and you are running it, and it needs you to survive, then you just bought yourself a job. But true leverage is when you can walk away from your business and it can carry on without you.
However, most people don’t have the resources to get their own business up and running. Besides, there is another problem for most people: Consider this scene: You have worked for a company for 15 years. You have been promoted a couple of times. Now there is an opening to become manager of your division. You and another guy both want that position. You have both worked hard for it, but only one of you can get it. Perhaps one of you wants the promotion so bad, he is willing to bribe someone for it - Is this fair? Most people can never dream of obtaining the top jobs.
Now we have to wonder: Is there a way that you can use the power of Networking and Leverage as well? Is there a fair structure where you get paid and promoted directly in proportion with your efforts? The good news is that there is. It is called “Network Marketing.” In Network Marketing, not only do you get paid directly in proportion to your efforts, but you have the power of leverage and networking working for you as well. You have exactly the same opportunity as anyone else to get promoted to the top positions. Now this is fair.
But isn’t Network Marketing an illegal Pyramid Scheme? I hear you ask.
Though Network Marketing and pyramid schemes do share some similarities, there’s a very important difference that makes the latter illegal. In pyramid schemes, income is generated solely on the process of recruiting others into the pyramid. Sometimes a product of service of questionable value is involved (that is never retailed to the general public by the way), but generally what you’re buying is the right to recruit others into the scheme. This is illegal. Also, in pyramid schemes, those who get in first and who are at the top win, while everyone else loses. In a legitimate Network Marketing company, on the other hand, distributors are paid only on product movement, not on recruiting, both at wholesale and retail. There’s also compensation based on training and managing of your marketing team. And unlike illegal pyramids, in Network Marketing, no matter where you’re positioned or when you join, you can advance to the very highest income levels and even make more money than those above you in the network.
In all business and government structures, the pyramid is the foundation. It contains the hierarchy of, and indeed shapes the role of, all who participate in the organization. Whether it is the president of the United States and his vice president, Congress, and all the way down to the local government employees, or Microsoft, where one guy sits on the top, followed by his vice presidents, all the way down to the mail clerks, the pyramid structure is ubiquitous. The first thing we should agree on is that there is no inherent problem with the structure of a pyramid.
In government and in business there are several features of the pyramid that are found consistently:
1. The further away from the pinnacle, the less power an individual has, and the less money he or she makes.
2. There is usually one person on the top and that position is typically unattainable to others in the organization. If someone lower down in the structure does assume that top position, it is still reserved for one person at a time.
3. Normally those at the top like to stay at the top. Those toward the top may have incentives to move up higher in their organization, but there is typically no incentive for those higher up to help advance those who are lower down to surpass them. The order of the hierarchy is somewhat sacred.
4. At each level in the organization job titles go along with salaries. Normally a person cannot assume more money or more power without the “permission” of someone above granting those advancements. Normally, people have little control over advancing. One cannot typically “self-advance.”
Going back to pyramid schemes versus legitimate network marketing, the contrasts and similarities need to be examined. One of the bad images of pyramid schemes stems from the fact that if there is no viable product, or just money is being moved around, the people at the bottom really do get a raw deal. If only money is being passed around, by the time an individual rises to the top, the money may simply have run out. This is bogus, illegal and frowned upon by the Direct Sellers Association, and the Federal Trade Commission. (Both the DSA and the FTC oversee and ordain legitimate network marketing companies.) Contrast this with MLM compensation plans in which income is only paid out to those who qualify with enough volume during that pay period.
In a pyramid scheme, the payout runs out because no such limits are set.
In a good Network Marketing company the product is so good it can stand on its own. So this is the way the money is made: From the product, not from recruiting. These are the features of a good Network Marketing Company:
1. Each distributor can surpass the level of anybody who came into the organization before him or her, if the new distributor’s performance is greater than the one already in the business.
2. Each new distributor is encouraged to become a CEO, or the top of his pyramid, by the encouragement, leadership, and training of those in his support team. Those above the new distributor in the organization are motivated to elevate the level of everyone who is newer in the business.
3. There is no glass ceiling, no job title with a fixed and limited salary attached to it. The system does represent financial freedom because the model for business growth and the ability to generate income are inherently limitless. The rewards, incentives, acknowledgements, etc. at every level above the new distributor, all the way to corporate, are authentic, on-going, effective, and inspiring.
4. There are no barriers such as race, education, gender, previous experience, etc. Anyone who does the work gets to the top. (Robert Kiyosaki, author of Rich Dad, Poor Dad, and of The Business School for People Who like Helping People has been a strong advocate of network marketing. He tells a story of having been the top salesman at Xerox; he was not promoted because he lacked a college degree.)
5. There is no single top position. There is unlimited room for these so-called top positions.
6. People can “self-advance.” We give ourselves a raise based on performance, not on politics, nepotism, returning favours, or anything else.
7. No one’s earnings are limited to his or her own efforts. Through the process of leveraging ourselves, the bulk of our commissions come from other people like you and me, who want a better life. It is a business of teaching other people to teach other people, to teach other people, etc. It is an ethical, high-spirited, method of distribution, product consumption, and compensation.
Network marketing represents what we all crave: financial freedom, and time freedom. The opportunities for leadership and self-development are as great as the chance to make a lot of money. Whether or not you decide that this is for you, it is hard to beat this model for building an asset that will pay you over and over. Network marketing makes sense; it is the only viable model for creating financial freedom for the average person. And it is fair.
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ABOUT THE AUTHOR
Hannah du Plessis is experienced in Internet Marketing and has her own Traffic Exchange and Article Directory