Part 3 of a 4-part series
Four Lethal MLM Mistakes

No. 3: Working “Smart”

by John Counsel

We’ve all heard the adage “you can work hard, or you can work smart”. Working smart usually produces the biggest, fastest results. But there’s a fatal trap lurking for unwary MLMers who fail to understand that working hard and working smart are not opposites.

Working smart normally involves the use of some form of leverage to produce higher results from lower input (note that I said “lower” input, not “no” input). In Multi-Level Marketing, it involves sponsoring others, and teaching them to do the same, all of you selling a relatively small amount of product so that the total volume sold is exponentially higher than if you simply retailed the same amount on your own (which would be working hard).

The danger lies in assuming that working smart is the opposite of working hard. It’s not. But more and more people in MLM are falling for this false assumption – and wondering why they’re making no money! Here's an example of this kind of distorted perception.

On this graph, the vertical axis represents the MONEY you can earn. The horizontal axis is TIME as it progresses. The pale orange area in the lower third of the graph represents the amount of time you have available to work your business.

By working HARD, you can accelerate your growth quickly. This includes lots of retailing (very time intensive) and recruiting lots of consumers into your team — people who buy, but don't sell. (Fact: there is NO leverage in recruiting consumers. Get over it.) There's a limit to the amount of time you can spend selling to customers and recruiting lots of consumers. Your growth is typified by the RED dotted line in the graph. Your income has a ceiling. It will rarely grow beyonf this. If it does, it won't stay there.

People who work SMART invest time and effort (not money!) in learning what they need to know to succeed, and in gradually developing the skills they need, as well as recruiting and training other people who do the same. This process is slower, but your progress is assured through leverage and the synergy it creates as time passes. Not only do you all get better (and faster) at the things you need to do to be successful, but everyone you sponsor is doing the same, and duplicating continuously. Your growth is typified by the GREEN dooted EXPONENTIAL CURVE.

The booby trap that sabotages a lot of people working SMART is shown by the dark orange area between the two growth curves.

People working SMART (green curve) look at the people working HARD (red curve) see how much more money the HARD workers are making compared to them, and conclude that they're failing. It only happens in this area of difference. But it's a powerful trap that sucks a lot of otherwise SMART people into the mistake of abandoning the things that create exponential growth for the short-term, quick-fix tactics that DON'T and CAN'T produce real growth... all they get is the ILLUSION of success and growth.

In reality, the HARD workers will always have to work hard, just to keep people coming in the front door of their businesses to overcome the loss of most people, just as fast, out the back door!

Working smart is NOT the opposite of working hard. Just because you’re not working hard does NOT mean that you’re working smart. It usually means that you’re actually working a third alternative that’s the opposite of both.

The Lethal Third Alternative

If you’re not working either hard or smart, you’re probably working dumb. This means you’re expecting all the benefits of the first two for not working at all! Dumber still, you’re probably sponsoring others on the basis that they can do the same.

Notice that in the title of this article the word “smart” is in quotation marks. It signifies that it’s a counterfeit… a fake. That’s because nobody is ever likely to fall for the suggestion that they work dumb. But they don’t want to work hard either.

The fact is, they don’t want to work at all. And working smart (the real smart, not the fake “smart”) still involves doing some work. So they fall for mistaking the counterfeit for the reality because it’s a “quick fix”… something for nothing.

The problem with “something for nothing” is that there’s no such thing. Our experiences with all forms of gambling should tell us that “something for nothing” always means “something for a few, nothing for everyone else”.

In fact, the only guaranteed winners are the people or organisations promoting the scheme!

Back to Basics

The free enterprise system – of which MLM is the most advanced form – is based on a single, vital premise:

“The rewards are only for results, never for mere activity.”

In other words, it doesn’t matter how busy you are, if you’re not productive, you get nothing.
The mistake too many people in Multi-Level Marketing fall for is believing that sponsoring is a result rather than just an activity.

There is only ONE true result in a free enterprise business system: profit.

There is only ONE way to make profit: Selling something for more than it cost you to buy or make.

You cannot make a profit simply by buying. Until you sell it (for more than it cost you) all you have is more product than you need – and less money than you had before you bought it!

In MLM, the ONLY point at which money changes hands – and profit is made – is when you SELL a product or service for more than it cost you.

Sponsoring is nothing more, nor less, than a form of leveraged activity that enables you to sell more products, to more people, more easily, for more reward.

If you choose to just personally retail products in MLM, without sponsoring, you’re working HARD.

If you choose to sell some products, and sponsor others to sell some products, then teach and encourage them to do the same, you’re working SMART.

But if you simply sponsor people to sponsor more people, and none of you actually sells any products (“You don’t have to sell any products, just sell the System… and buy the products” is a common catchcry), you’re working DUMB. Because all you’re making is a fraction of the income you’d otherwise make. And, because you don’t really have a business, your ability to claim those very attractive business tax deductions is effectively wiped out, as the Tax Office is hell-bent on proving.

Why?

Because you’re doing nothing more than generating income, the same as a wage or salary earner does. And generating income is NOT the same as creating profit. Your MLM company is simply paying you a referral fee for recruiting more customers(on a sliding scale).

Don’t be surprised, either, if this trend to working dumb is the basis for the Government’s next onslaught on the independence of MLM distributors, so they can slug the MLM companies for payroll tax, workers’ compensation insurance, etc., etc., etc. – and YOU for Pay As You Earn tax instalments and Medicare levies on your bonuses!

Time to Face Facts

It’s high time we got back to basics and stopped putting ourselves and our industry in jeopardy. Start making genuine profit from your genuine MLM business by working SMART:

• Retail some product, then
     
• Sponsor some people and
     
• Teach them to do the same (retail and sponsor and teach).

Remember…there are two words in that phrase: “working smart”. Not working at all is neither smart nor hard. It’s just plain dumb.

A Timely Solution!

If fear of rejection is what stops you from selling your products and sponsoring people to do the same (rather than just plain old fear of work!), learn how to master that fear, quickly and easily, by taking advantage of the powerful, productive audiocassette and workbook program “Master Your FEAR!”

Remember… working smart (real smart, not just dumb posing as “smart”) means adding leverage to your business activities to produce exponentially-greater results. This unique solution is specifically designed to add more leverage to your MLM business, no matter how new or how experienced you are. Order yourself a copy today.

© 1996 John Counsel. All rights reserved. No reproduction by any means permitted without prior written consent of the copyright owner. This article appeared originally in Australian Business & Money-Making Opportunities magazine.

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©1998 The Profit Clinic. All rights reserved. This page updated 1 October 2005.