It's a Pyramid!

When it comes to home businesses, sometimes you'll have people tell you that it's a pyramid. Typically those who say or think that, really don't understand what business is all about.

With any business, there has to be a product or service and of course there has to be customers or there is no legitimate business. The other thing to understand is that every business operates in some sort of "pyramid" concept. Think of it this way, who's at the top of the "Microsoft" pyramid. Well Bill Gates of course. Does anyone in Microsoft make more than Bill? No.

How about a business like a restaurant. Who's at the top of that pyramid? Well, the owner right. Under him/her are the managers. Under them are the employees. Under them the customers. Every one of them earns a little each time the customer spends money at that restaurant.

Some home businesses do operate in a way where the guy or gal at the "top" or "gets in first' will make the most. Steer clear of those. However, some home businesses have a compensation plan (pay plan) that rewards business builders based on their efforts. In other words, if the business rewards based on effort and business growth, rather than when you joined or who you're under, that would be the most viable business to be a part of.


Donna

From Dream to Action!

Love this PodCast! 
From Dream to Action
by Robin Sharma
http://www.robinsharma.com/podcasts/Podcast_FromDreamToAction.mp3
Make it a great day! High Five!
Donna

Affiliate and Training Programs?? Here's my thoughts....

Have you ever come across programs that tout things like:

*Our training program will make you a Pro in your home business

*Our system is easy, anyone can do it

*Get 1000 of leads for your home business with our program

*Have dozens joining your home business by following our proven system

*Promote our program and earn extra income to pay for expenses in your home business

*Use our system and you'll get other networkers to join your home business

*Enjoy Multiple streams of Income with Affiliate Programs

Although you may learn a few things or earn a little with some of these affiliate and training programs,  why pay someone for something you can get for free? And if you were to buy it, why wouldn't you just train your business partners on the things that you have learned instead of luring them in to spending money on something that you could simply teach them and in many cases get for free?

Here's an example to think about. If you're promoting another program to leaders in different businesses, (and the program is to get these leaders to eventually join your business), if they bought in to that program, they would be doing exactly what you're doing and will never join your business. Actually, they would eventually be trying to get you to join theirs. It's a dog chasing the tail kind of thing. It just doesn't make sense.

The internet is a huge maze to try to go through. I'm all about keeping it simple. Trying to do multiple programs, affiliates, businesses in my opinion, and from experience, will ultimately create frustration and failure. Remember the partners in your home business will duplicate what you do. Sure you may earn a little from this and that, but ultimately my advice is to have laser focus.

Focus on your home business. Chase multiple rabbits and you're sure to catch none.

Donna

P.S. I'll be writing an article shortly on developing leaders in your home business and leveraging your time..:) Team Work really does make the Dream Work.

Basics of Compensation Plans

Basics of Compensation Plans

When evaluating a Home Business, be sure to research the Compensation Plan. In other words, you need to question how you get paid, what activities are required by you to earn your income and is this a business plan where can you build a real, long term residual income where everyone can win.

First, a good company will be debt free and financially transparent. It should be able to provide you with a breakdown of the compensation plan, their annual sales each year since opening, and the average incomes of it's business builders. Be cautious of any company that is not willing to provide this information.

Another important consideration is future research and development. Why is this important? Well you want to be partnered with a company that is cutting edge and continually evolving with the marketplace. You don’t want to be left promoting a product that is no longer in demand or a product that was some sort of "one product wonder".

When reviewing any home business company the most important thing is the product/service line. It doesn’t matter how good the compensation plan is, if you’re not passionate about the products or services they have to offer. You must find value in the product/service yourself or there is no business.

There are 4 Basic Compensation Plans. Stair-Step Breakaway, Unilevel, Binary and Matrix.

Stair-Step Breakaway - In a stairstep breakaway pay plan, a business builder moves up the volume rebate scale (bonus scale) in steps, or “stairsteps”. The stairstep breakaway plan has the tendency for inventory loading and the potential to lose members in your business if they achieve a higher rank or status than you as they would then "breakaway" from you.

Unilevel - The only way to increase your income is to sponsor more people. There's really no incentive to develop leaders in your organization. It causes sponsors to be thin in support, which is not conducive to retention. Retention is so critical to long term success. The other disadvantage of the unilevel compensation plan is every new person you sponsor goes on your 1st generation in your business, which means every member you sponsor is in competition with each other. It discourages people to work together as a team. And teamwork is where all the leverage is.

Binary - A binary plan allows business builders to have only two front-line business building partners. If a builder sponsors more than two other builders, the excess are placed at levels below the sponsoring builders 1st generation. This "spillover" is one of the most attractive features since they need only sponsor two members to participate in the compensation plan. The primary limitation is that business builders must "balance" their two legs to receive all of their commissions from both legs. If they do not, they will not receive all commissions from their business. 

Matrix - It is a limited width plan. The width generally ranges from 2 to 5 people on the business builder’s first generation. As more people are enrolled, they go under those first level people. This allows for “spillover.” Spillover occurs when someone places a new member in another member's matrix. The biggest drawback to a matrix is that it can attract the lazy type of person who doesn’t want to work and expects others to place members in their matrix. However, for those who are willing to work, it has lucrative pay, promotes team work and is very attractive to people who can just work their business on a part-time basis as well as the full timer.

Despite the fact that every Home Business company’s compensation plan is different, most plans are based around one of those 4 basic structures. All vary in commissions paid, requirements and in additional bonuses.


Although some claim to have a better compensation plan, I strongly encourage you not to join any one purely based on what their compensation plan has to offer. Instead, focus on the complete package which includes the products, service, the practicality of the business opportunity and the fairness of the compensation plan to all of its members.


Hope this was helpful!


Donna