Home Based Business MLM – Why Do 90% of People Fail in Home Based Business MLM?

To most people an industry failure rate of 90% is staggering. It’s important to look at that statistic and understand exactly where it comes from though. It’s also important to understand the contributing elements, in order to have a realistic perspective about a person’s chance at success. The truth is that the home based business MLM vehicle has tremendous potential for wealth building, as long as you know how to make it work.Home Based Business MLM – Where do you get a 90% Failure Rate?When we look at this statistic, it’s important first to understand the definition of the term “failure”. In this case, the failure rate has been determined by the number of people who started out and didn’t make it successful. This statistic says little about the amount of time that a person has put in or effort put forward. Also, “failure” can just mean that they gave up, they quit. If you know anything about what it takes to be an entrepreneur, you know that there are plenty of opportunities to quit. And when the barrier to entry is so low (it doesn’t typically cost much to start a home based business MLM) then people find it a lot easier to quit than to do what it takes to be successful. This does NOT necessarily reflect the viability of the home based business MLM model. The truth is that it is very strong, when done correctly.Home Based Business MLM – The Critical Factors For Success or FailureWhen it comes down to it there are only a few simple elements that, if mastered, will pretty much guarantee your success. They are these:Choosing The Right Vehicle For You – There are many options to choose from out there in the world of home based business MLM. If you are smart about it, you will choose a company who you feel not only shares your values and beliefs but embodies them. You will feel as though their principles, their leadership and their character are things that you can stand behind and feel proud of. If not, you’re out of integrity and you will NOT be successful.Working With A Team – If you set out to do this on your own, you will lose. Even if you’re the most dynamic sales person the world has ever seen, and even if you have the most incredible product or service, you will lose. The fact is that this business has a learning curve, and it relies on duplication. So no matter how good you are, if you can’t teach other people to be just as good or better, you’re done. And if you don’t know how to do that, and don’t partner with a team and a community of people who does, you’re done. It’s unfortunate that there are some companies in the home based business MLM industry who promise people all the support in the world, and then once they’ve signed up leave them out on their own.The good news is that there are other companies that operate quite differently. The highest quality companies (the ones that are here to stay, displaying stable and sustainable growth) plug people into a TEAM and a COMMUNITY of people who know how to be successful and can teach you, show you, help you. Then they help your people do the same. This is how you win.Develop An Endless Stream Of Qualified Prospects – The other sad truth is that people fail because they don’t have people to talk to. For whatever reason they just don’t have the connections, or the influence, or the networking skills to bring in the numbers. The good news here is that you can learn how to leverage technology to create a virtually endless stream of qualified people to talk to, who actually WANT what you have to offer. And they will come to YOU. There are only a small percentage of people in the industry who understand how to make this last point a reality. Partner with them.The home based business MLM industry is amazing as a tool for wealth building. Follow these simple principles, and you too will win.

Hiring An Auction Company

Estimating your assets value:

Typically, one of the first questions a business owner will ask me is, “how much will the assets bring at an auction”. After taking the time to review the assets, the auctioneer should give the client a conservative estimate of the sale based upon his experience and the current market trends. It is important that the company give realistic expectations so the seller can make informed decisions based on their best interest.

Compensation and Expenses:

Is the company you are considering working for you or against you? The agreement you decide may determine this.

A business owner should carefully consider how the auction company is compensated. The most common commission structures include: straight commission, outright purchase of assets, guaranteed base with a split above to both auctioneer and seller, guaranteed base with anything above going to auctioneer or a flat fee structure.

In a straight commission structure, the company is paid an agreed upon percentage of the total sale.

In an outright purchase agreement, the auctioneer simply becomes your end buyer. The company purchases your assets and relocates them. While this can be an option in some unique situations, keep in mind that they will want to purchase your assets at a very reduced price to make a profit at a later date.

In a minimum base guarantee, the auction company guarantees the seller that the auction will generate a minimum amount of sales. Anything above that amount either goes to the auction company or split with the seller. While a seller might feel more comfortable doing an auction knowing that he is guaranteed a minimum amount for his sale, keep in mind that it is the best interest of the auction company to secure a minimum base price as low as possible in order reduce their financial liability to the seller and secure higher compensation for the sale.

In a flat fee structure, the auctioneer agrees to show up for the sale and call the auction. There is no incentive for the auctioneer to get the best prices for your assets. The auction company is compensated regardless of the outcome of your sale.

What is the best option for business owners? In my experience, an agreed upon straight commission structure. This puts the responsibility on the auction company to offer the best outcome for everyone involved. There is an incentive for the auction company to work hard for both parties, set up and run a professional sale, get the highest bid and sell every item on the inventory. Successful auctions translate to a higher bottom line for both the seller and the auction company.

Auction Expenses:

In most auction agreements the expenses to conduct an auction are passed to the seller. If the auction company pays for the expenses, it is simply absorbed in higher commission rates.

All expenses should be agreed upon in advance in a written contract. Typical expenses will include the costs of advertising, labor, legal fees, travel, equipment rentals, security, postage and printing. A reputable auction company will be able to estimate all expenses based upon their experience in previous auctions. An agreement should be actual costs charged as expenses, not an estimated amount.

Advertising is typically the highest cost in conducting an auction. The auction company needs to set up an advertising campaign that will promote the sale to its best advantage and not overspend to simply advertise the auction company.

Once the auction is complete, the auction company should provide a complete breakdown of all expenses to the seller, including copies of receipts within the auction summary report.

Buyer’s Premium:

What is a buyer’s premium? If you attend auctions regularly, you are very familiar with this term. The auction company charges a fee to the buyer when they buy an item at auction.

The buyer’s premium has been around since the 1980′s and is standard auction practice. It was first used by auction houses to help offset costs of running brick and mortar permanent auction facilities. Since then, it has spread to all aspects of the auction industry. It is prominent in online auctions and allows auction companies to cover added expenses incurred from online sales.

It is the responsibility of the auction company to provide clear disclosure of the buyer’s premium to both the buyers and the sellers. Those not familiar with auctions are often taken back by the buyer’s premium. They looked upon it as an under handed way for the auction company to make more money. Reputable auction companies will provide full disclosure within the auction contract, advertisement and bidder registration.

Typically, an auction company will charge online buyers a higher buyer’s premium percentage than those attending an auction in person. Extra fees are incurred with online bidding and are charged accordingly to online buyers. This provides the seller a level playing field for both online buyers and those attending the auction in person. Without the buyer’s premium, there is no way to do this.

Pre-Sales:

We’ve all been there. We’re looking forward to attending an auction only to find that some items were sold prior to the auction date.

As an auctioneer with over thirty-six years of experience, I can honestly state that pre-sales will hurt an auction. When a company decides to liquidate their assets, it is easy to sell off high-end pieces of equipment through online sources, equipment vendors or to other businesses. The seller receives instant cash and avoids paying a commission to an auction company.

Auctioneer’s find themselves appearing to acting in a self-serving capacity when potential clients say they are planning to sell off parts of their inventory prior to an auction. It’s hard not to consider the auctioneer’s commission when they warn you not to pre-sell anything. Yes, the auctioneer wants to earn a commission on those sales but it is more important that the auctioneer protect the sale from potential negative backlash that comes from pre-selling. The buying public knows when an auction has been “cherry picked” prior to the sale and it reflects in their bidding. It becomes a sale of “leftovers” and that impacts prices.

A buyer who purchases prior to the auction usually does not attend the sale. They already bought equipment at a good price with no competition. If they do attend the auction, they tend to let others know of their great pre-sale purchases which again, impacts prices and the overall excitement of the sale.

It is important to understand that auctions work best with a complete inventory. You want competition on your higher end equipment. The easy to sell items make it possible to gain respectable prices for hard to sell items.

When a business owner decides to liquidate their equipment assets, there is only one opportunity to do it right. Hiring a reputable auction company will assist you with a professional, orderly and timely liquidation.

Applying For a Small Business Loan

When you have ideas, plans, and desires in place, the anticipation of moving forward in operation a small business is extremely exciting. Only one thing can hold you back – money. Working with a lender and applying for a small business loan can be easy or difficult, depending on how much preparation you’ve put into the process.The lender will ask for a variety of items when applying for a small business loan1. Business Plan.If you don’t already have one, write one. Virtually no lender will consider you for a small business loan without the organization, detail, and direction you have for your business, and all of this is stated in a business plan. For information on how to write a business plan, visit sample-business-plan.org/sample-business-plan-directory.html – Don’t be afraid to hire a professional writer to write or proofread the plan for you if you’re not confident in doing it yourself.2. Loan Proposal.Nearly all lenders require a loan proposal if you are applying for a small business loan. After you’ve written a detailed business plan, your loan proposal can be written. The information in a loan proposal includes details on who you are, including your experience and business desires; how much money you need and what it will be used to purchase or fund; how you intend to pay back the loan; and what your plans are if you cannot pay the loan back in full.3. Completed Lender’s Application.Most lenders will also require that you complete a business loan application when applying for a small business loan. Your application should be very organized and presented in a professional manner. Don’t omit any details, and be completely honest about your credit history, even if you don’t have an excellent credit rating, when applying for a small business loan. Some lenders base their loans on the character of the person applying for a small business loan, and if you’re “borderline” for qualifying for the loan, your honest application can prove to the lender that you are indeed trustworthy for receiving a small business loan.4. Financial Statements.If your business is already in existence, visit the lender for your interview with two years of tax records, as well as two years of business and personal bank statements when applying for a small business loan. Not all of that information may be required immediately when applying for a small business loan, but it’s better to be prepared with the information on hand, rather than have to tell them that you’ll have to bring that in at a later date. Your tax records will show the profitability of the business, as well as detail its expenditures. Your bank statements will prove that money is coming in, and that the business is already established. If your business is yet to be launched, you still need to go to the meeting prepared with both two years of tax forms and two years of personal bank statements when applying for a small business loan. This will show the lender that you are a responsible, reliable individual, that you pay your bills, and that you file your taxes in an honest, timely, and fair manner.5. ResumeWhile not required for a meeting with a lender, it’s probably a good idea for you to have a current resume with you for the interview with the lender when applying for a small business loan. As mentioned, there will be some judgment of your character made at your loan interview. If this should come into play during the interview, you can easily present your resume to show your work experience when applying for a small business loan. This is especially important if you’ve worked in the field in which your business will be based. It’s also important in the instance that you have experience in a business-related area, such as management, marketing, or accounting, to show that you are capable of succeeding in business due to your experience in working with other businesses.The bottom line is to be prepared when applying for a small business loan:- Visit the lender with all files neatly presented and very organized.- Present information as requested during the application process and interview when applying for a small business loan.- Dress for success. Don’t show up at your meeting in jeans and a sweatshirt when applying for a small business loan.- Don’t worry if you’ve forgotten anything, and don’t get flustered. Offer to drop off or fax the requested information as soon as you leave the meeting. Offer to provide any additional information that could possibly play a role in your loan’s approval.If your business loan is not approved, don’t become frustrated. Many small businesses are declined on small business loans. Look into alternative loan sources, and don’t give up.


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