Why Network Marketing is so much safer, better and smarter than other business systems

By John Counsel

We all want to be happy. This seems to be the most basic desire of all human beings.

Happiness ultimately depends on just two things…

Both our health and our relationships can be undermined, or even destroyed, by a single, common threat… s-t-r-e-s-s.

In today’s world, stress is due mostly to two things…

If we had enough money, we’d have plenty of free time. And if we had enough time, we could earn enough money.

The modern health dilemma

To illustrate how lack of time and money create the kind of stress that destroys our health, we only have to look at what happened in the twentieth century.

In the first half of last century, the major causes of death were diseases like influenza, tuberculosis, diphtheria, diarrhoea, whooping cough and typhoid fever. All contagious, microbial infections.

In the second half of the century, through advancements in medical and scientific knowledge, very few people in developed countries died of these kinds of illnesses.

Instead, the major killers – apart from tobacco, alcohol, automobiles and abuse of drugs, prescribed or otherwise – were cardiovascular diseases (heart attacks, strokes), cancer, diabetes and other lifestyle-related conditions.

All of them avoidable or controllable, and almost all of them related to improper diet and lack of exercise.

In other words, self-inflicted.

It’s absurd!

At a time when we know more about proper nutrition, and how to produce it, than ever, our diets and stress levels are life-threatening. Our immune systems are under constant attack from both our physical and emotional environments, and our health and relationships suffer.

Forty percent of all modern marriages end in divorce, most due to the stress of money worries. Suicide rates are at an all-time high. The health care system is under constant strain.

Television and magazines are full of lifestyle programs and features. But the reality is that, for most of us, we have no real lifestyle and little or no quality of life.

Why? What’s gone wrong?

The simple answer is that we’re trapped in a vicious cycle, trading time for money.

We have no leverage. We’re conditioned by our culture, our education system and by the experiences and concerns of our parents and grandparents, to be obsessed with security – even at the cost of our freedom of choice.

We were taught, from the time we were children, to get a good education so we could get a good, well-paying job, work hard, pay for our homes, then retire on “the pension.”

So we trade our freedom of choice and quality of life for a sense of security in low-leverage jobs, where we exchange a fixed amount of time for a fixed amount of money. If we want to increase the money we earn, we have to increase either the amount of time we work, or the value of that time. The problem is,we don’t control either – our employers do.

The illusion of “security”

Nobody really believes in “job security” in the twenty-first century. Yet we still seek the illusion of security and the instant gratification of reciprocal income, all because we’ve been conditioned to see it as the “safest” path.

If our illusion of security is shattered by “retrenchment,” “down-sizing,” “early retirement” and other euphemisms for unemployment, especially in our 40s and 50s, and we realise that we’re unlikely to find another job, we’re left with no option but to go into business for ourselves.

The problem here, of course, is that 90% of all small business owners fail because, despite being skilled at what they did as employees, when it comes to managing a business, they know next to nothing.

In other words, we’re very good at working IN our businesses, but we’re ignorant when it comes to working ON them.

We’ve been educated and conditioned to think and act like employees, not free-enterprise entrepreneurs.

So, when faced with management and marketing decisions, we revert to thinking like employees and buyers.

Why is this such a lethal mistake?

The Secret of Success

The secret of success in any aspect of life is quite simple:

“Do only the right things, for only the right reasons.”

If you do, you can’t make a mistake. (Think it through carefully. It’s true.)

The problem, of course, is knowing what the right things to do are – and the right reasons for doing them.

Few people ever do. Fewer than 10%, in fact. Those are the harsh statistics.

You either know the right things and the right reasons, or you don’t.

There’s no point guessing. Apart from the fact that you only have a 50% chance of being right at best, your conditioning will push you in the wrong direction when choosing. You’re more than likely to seek the illusion of security – and do what everyone else does.

Yet we know that 90% fail.

Doing what everyone else does is really nothing but a sure-fire recipe for failure.

So ignorance – the No. 1 killer of all small businesses, world-wide – has us doing the right things for the wrong reasons, the wrong things for the right reasons, or the wrong thing for the right reasons. If we do manage to do the right thing for the right reasons, it’s due to good luck, not good management.

The franchise trap

As often as not, we “buy ourselves a job” by exchanging our savings or job payout packages, or putting our homes and other assets at risk, for a franchise.

In reality, we become branch managers who accept all responsibility and risk for the success or failure of our branch of the franchisor’s business. It’s the franchisor who enjoys any real security!

While the survival rate is slightly (and only slightly) higher for franchisees than for other “self-employed” people, surveys of franchisees show consistently that few, if any, are satisfied or happy, and most regret their decision within the first year.

The reality is that we get exactly what we had in a job – the illusion of security in exchange for our freedom of choice.

Except, this time round, we pay a much higher price. We stand to lose everything.

The “self employment” snare

There’s no more deadly mindset than that of being “self-employed.” The term gives itself away, if you think about it.

The only real difference between an employee and a “self-employee” is the degree of certainty enjoyed by the latter. Where the employee only suspects that his or her employer is an incompetent ignoramus when it comes to running the business, the “self-employee” can be absolutely certain!

All jokes aside, the truth of the situation is horribly real… few of us know what we need to know to survive (let alone prosper) in our own businesses. In fact, it’s been estimated that if only 10% of small business failures could be avoided, we could eliminate unemployment and our national debt within three short years!

Is there an answer?

If we’re ever going to free ourselves from the bondage we’re in, and enjoy better health, better relationships, more money, more free time and more happiness, at the same time avoiding stress and the appallingly-high risk and failure rates of going into business for ourselves, we have to find better solutions, and better ways of implementing them – doing only the right things, for only the right reasons.

Is this realistic? Can it be done?

Yes… but!

The short answer is “yes,” but there are some tough realities that need to be confronted before you’ll be able to find and recognise solutions that will actually work successfully for you.

As always, there are plenty of counterfeit “solutions” on offer, and you’ll only avoid becoming yet another victim by knowing what to look for and what to avoid.

Scary stuff, isn’t it?

We’re facing a “fate worse than death” – living too long with too little money.

But enough of the gloom and doom. It’s still not too late to change this depressing outlook. But we need to exercise real care, and learn to recognise the counterfeits that lie in wait for the ignorant and gullible, the greedy, lazy and selfish.

If the underlying cause of most of our stress lies in the exchange of time for money, then the answer is to be found in breaking all connection between our time and our income.

There’s only one solution

There’s only one way to achieve that result – leverage.

And the best kind of leverage is to create residual income.

We have to find or create ways to work less and earn more, because we don’t have enough free time now to be taking on another job or investing more time!

The only way for us to achieve this kind of leverage is by going into the right kind of business, for the right reasons, then doing only the right things for the right reasons to manage that business.

Easier said than done, certainly. But if you know what to look for, and how to go about it, the risks are dramatically lower.

Basic Business Realities

Why most people have no real leverage, so they never enjoy residual income

This chart illustrates the vicious reality of our present career system – the Forty Year Plan that most of us become trapped in – because we don’t know any better.

We spend our first 20 or so years getting an education (which is geared to produce employees), then we begin to climb the corporate ladder. The income curve creates the illusion of financial security because of its steady rise.

Once we reach our 40s and 50s the stress increases alarmingly. Mergers, acquisitions and other changes in the corporate environment increase the risk of “downsizing” (job shedding) and bringing in younger, better educated replacements. Redundancy, retrenchment, early retirement (whatever we call it) means a nose-dive in income if we fall victim, or dramatic increases in our stress levels if we manage to survive.

If we go into business for ourselves, most of us end up working longer and harder – and for less money! – than our employees.

Eventually, though, we retire. Either way, it’s a steep drop to the kind of income level we had when we originally began – in our 20s!

Any way you look at it, it’s hardly what you’d call “lifestyle.”

There’s a better way. And it takes only a fraction of the time, with no sudden drop in income.

How Network Marketing’s Four Stage Plan creates true leverage and lucrative residual income

The whole point of residual income is to sever all connection between our time and our money, so that we can work less and earn more. We build an income stream… and it continues to produce income for us, endlessly.

It’s like growing an orchard…

  1. We prepare our soil to make it fertile for the seedlings we intend to plant. We create a safe environment.
       
  2. We plant the seedlings in the soil we’ve prepared.
       
  3. We nurture and protect the growing trees until they begin to bear fruit.
       
  4. When the trees mature, produce seeds and spawn more trees, we enjoy more fruit than ever, with minimal time and effort required.

In other words, it’s a process whereby we do lots of work for very little reward in the initial stages, then earn lots of income for very little work once we’re established.

After the preparation stage, when we’re learning and improving our skills, we enjoy exponential growth in our income as our referral network expands rapidly.

As our people mature and become independent, we earn residual income in the form of royalties on sales created by their organisations (from the company’s share of the sales, not from our peoples’ share). And because it’s a business, the income continues, even after we’re gone. So our loved ones can continue to benefit from our achievements.

The residual income just keeps coming — and growing. And, because it’s tied to product prices, it’s protected against inflation and other economic forces that usually undermine the value of superannuation and other investment-based income.

Why is Network Marketing so much safer, better and smarter than other business systems?

Network marketing is the ONLY fourth generation system of business. Most others, including franchising, are first generation systems. There are almost no second or third generation systems.

This means that network marketing is based on very different principles to “conventional” business systems.

There’s not enough room here to discuss the real differences in detail, but here’s a brief summary of the major differences to help you recognise some of the reasons why it’s so much safer, better and smarter.

Conventional Business

Network Marketing

Based on competition (Win-Lose*) Based on co-operation (Win-Win)
Relies on dependence Relies on independence and interdependence
Values money and uses people Values people and uses money
Creates frustration, financial and time bondage Creates time and financial freedom


(*A counterfeit – Win-Lose is really Lose-Lose posing as a win to fool you, until the loser wakes up to reality and ends the relationship.)

Network marketing is the most effective, enlightened, ethical, equitable and egalitarian form of free enterprise ever to evolve. But ONLY when it’s operated by people who are effective, enlightened, ethical, equitable and egalitarian.

Sadly, that’s all too rare. Just because a company chooses network marketing as its business model doesn’t mean that the people running that company even know about, let alone understand, the principles that will ultimately determine its success – or failure.

In most cases, they fail to understand the critical differences and try to operate this high-leverage, fourth generation system on first or second generation principles.

That’s about as relevant as trying to launch a space shuttle by sitting in the cockpit and flapping your arms.

It will never get off the ground.

If you examine most network marketing businesses closely, you’ll discover that they TALK about all the features in the right hand column (above)… but their people end up with what's in the LEFT hand column.

For more information about network marketing, click here.

For additional information on fourth generation systems, and why network marketing is the only fourth generation business system, click here.

Or read about it in “The Beginner’s Guide to Making Money in Low-cost, Home-based Businesses… No Risk!” by John Counsel, available from this web site.

© 2001 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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©2001 The Profit Clinic. All rights reserved. This page updated 10 August 2002