Should I concentrate on one opportunity or choose many?
Tuesday, October 16th, 2007Plain and simple, your program you are in probably tells you that you can only focus on them if you want to be successful. Not even close to true. Why limit yourself to one stream of income, when one can pave the way for more?
Ever notice that most of these companies are owned by parent companies that own multiple companies and websites? Why should you follow their advise to focus on one thing and do it well, when they them selves don’t? These companies know that there is a set of basic rules to success.
Rules:
1. Own the product.
2. Build the sales force, (You).
3. Keep the sales force, Done by paying you enough to stay with them, but never enough to retire, or go into business for yourself. They tell you that you must be committed to building their business and not pay attention to other offers because they want 100% of any success you achieve to put dollars in their pockets. They want you to stay in their program, and not leave for more money, they want a sales force with built in blinders never seeing life outside the company.
4. Diversify. Don’t have too much money tied up in one product or strategy, create and maintain multiple stream income. They do it, but tell you no.
5. Have an exit strategy. When a publicly held company enters a new business venture they have to send a proposal to the members of the board of directors. Directors are primary shareholders holding majority interest, either by themselves or combined that make a ruling on the companies direction. In this report they have to provide a full business plan, WHO’S in charge, WHERE that target audience, offices, and operations will be, WHAT the product or service is and why it is in high demand, WHEN they will enter the market and how that timing relates to good sound business practices, WHY that timing is right, and projections to show the value of the offer. The final section must contain a FTC required exit strategy.
Exit Strategy: Large companies start planning on going out of business before they go into business.
The look at the cost to enter the market, the average life of companies in the market, the time to needed recoup cost, the amount of targeted profits required by investors, and how and when the program will end and they can pull out with those profits in hand.
I know you have seen this in action, if you read the business section of your local paper. You see companies sell strong subsidiary companies that are in the black but seeing a decline. The stock is still high, and they reap huge profits from the sales during their ownership. The companies that buy these venture buy them for one of 2 reasons.
1. They are a management group, looking to restructure, the existing focus of the company or capitalize on the pre-built brand name to introduce a new product or service.
2. They are a salvage firm, that looks at value in each component, all real estate, and licensing from a stand point of if I break it into 5 pieces and sell each, will I make more than the value of the whole. You will see a great deal of ventures that have been purchased by a firm with this mindset self off several high value aspects of the company. In the mean time they establish the company as a independent entity transferring debts and loosing ventures to it’s holdings, and will either use it as a tax write off, selling or operating it as a loss, or they will file for bankruptcy and claim the loss while ridding themselves of debts.
I know I strayed a little off course, but I wanted to share some economics 101 with you so you can see what will happen to your business venture once it becomes less profitable, or begins to even lose money for the owners.
The exit strategy includes how they will strip mine the remaining value and integrate it into ether the existing company or use it to start a new Venture. A good example would be one that Gerald English and I discussed on the phone a while back. A major water filter company who pioneered that market in MLM had seen major declines in sales and profits, they have been bought and sold at least 3 times since I left my MLM position with them in 1996. Gerald was telling me they have restructured and now sell a multi vitamin as well as maintaining the most profitable products from the filter business. Chances are that if I had stayed with them, I would have been slowly introduced into the new product line, and eventually weened off of selling filters, I would now be earning 100% of my pay from vitamins, and still depend on them for income.
So when your company says the only way to earn is stay focused on one program, have only the one income, don’t dilute the waters. They mean you, not them.
Another quick example is Wal-Mart. Wal-mart started as a small 5&10 store, as they grew from concepts of great service and low prices, they saw benefits in owning their own warehouses and distribution centers, and set on a clear path to save money and pass that savings on to you.
Besides that the Wal-Mart trucks you see on the road are only part of the fleet, as they own large portions of trucking companies such a Werner and Fleetline. They found many of the businesses they chose to do business with struggling and even failing, many of their suppliers are now owned or partially owned by them. From Ol’ Roy dog food to GV Brands products, Wal-Mart gains income from both the supply and demand ends of retail and even wholesale trades. They are both importer and exporter, and have fluent multi stream income in the billions. Others have failed along the way because they were only retailers, they only manufactured one product, only provided one service.
Big business is diverse, and multi streamed and yours should be too.
Andy Zeus Anderson
http://www.andyzeusanderson.com
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