Maintenance Cost For Network Marketing Business Versus Traditional Business
by Samson Itoje
Every business has a running cost or maintenance cost. The same is true of network marketing business.
Let’s start with the kind of running costs associated with operating a traditional business.
Starting a regular or traditional business requires you to:
1. Rent an office space
2. Furnish the office space
3. Stock the shop / store
4. Pay monthly rent
5. Pay monthly electricity bills and
6. Employ minimum of one staff (a receptionist, office attendant or customer service officer)
Startup Cost For A Small Retail Business
Most people in Lagos Nigeria and other busy commercial cities in Nigeria are engaging in trading, buying and selling of groceries and other sellable materials.
Since that is the case, let’s take a look at the startup cost associated with a trading business.
The minimum cost for a shop on a busy street in Lagos Nigeria is in the range of =N=5,000 to =N=12,000 per month.
Let’s assume the minimum cost in this discussion.
Suppose you rent a shop on a busy street in Lagos Nigeria and the rent per month is =N=5,000. You will be required to pay a minimum of 1 year rent. One year rent will be =N=60,000.
In addition to the one year rent, you will be required to pay agency fee (which in this case will be about =N=20,000 and a legal or agreement fee (which in this case will be about =N=20,000).
Total amount spent so far to acquire a shop will be =N=100,000.
Your next step will be to paint the shop and furnish it to your taste and to reflect the class you want associated with your business. That may consume another =N=50,000 of your startup capital.
Next, you need to stock the shop with products you wish to sell. Depending on what you wish to sell, your stock or inventory cost may be as much as =N=200,000 or more.
In this particular scenario, your startup capital is =N=350,000.
That is just half of the story.
Once you have opened for business, you have to then contend with running costs.
Your running costs would include:
1. Transport cost to your business office or shop (daily expenses)
2. Business registration fee which is paid annually
3. Electricity bill, which is paid monthly
4. Shop attendant salary, which is paid monthly
5. Telephone bills, which may be incurred daily
6. Advertising costs and
7. Insurance premiums
Will you still be in business in another 3 – 5years?
It depends on how well you generate income and manage your business costs.
If your total expenses EQUAL your total costs, you have reached break-even point. And at this point you have neither made loss or profit.
However, if income generated from the business is LESS THAN expenses incurred in the business, your business is in a loss position. And it will eventually close down if it continues to remain in loss position.
Unfortunately, most small businesses do not live to see their 5th year in business because they never turn profit.
Business is tough!
Running Costs For MLM Business
MLM company distributors also incurring running expenses.
The expenses include:
1. Monthly autoship costs (That is, amount spent purchasing company required minimum monthly order)
2. Transport expenses to attend business meetings and visit prospects
3. Telephone bills, which may be incurred daily
4. Cost of purchasing promotional fliers or handbills and
5. Advertising costs (if the mlm company distributor decides to use other advertising media beyond word-of-mouth)
Did you notice that the list of running expenses is shorter for network marketing business compared to traditional businesses?
Of course, it is. And even the startup cost is must smaller.
For example, in the example above, you need about =N=350,000 to start a traditional business in Lagos Nigeria whereas you need just =N=15,000 to start a network marketing business in Nigeria.
That is a huge difference!
With a genuine network marketing business . . .No office (or shop) is required
No employees required
No inventory is required
. . . and you can work from home part-time or full-time.
Will everyone who join a network marketing company turn profit?
No . . . just as everyone who opens a shop or an office does not turn profit.
Business success requires sales and marketing skills as well as creativity and leadership skills. And this applies to both traditional businesses and network marketing businesses.
The beauty of network marketing business is that you have two huge advantages in your favour:
First, it is a business opportunity with low entry cost as well as low maintenance cost. So, even the common man on the street can start this business and succeed with it.
Second, you’re not alone when you become a brand partner or affiliate of a network marketing company.
In an mlm business, you work with a team who is genuinely interested in your success because your success is important to their success.
When you think of starting business, think network marketing.
The training and new people you will meet has the potential to make you a multi-millionaire.
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