As network marketers, especially beginning ones, it’s easy to get caught up in the “I’m going to make thousands of dollars per month while sitting on the beach in Hawaii” mentality. While passive income of this magnitude is certainly possible, let’s not get too carried away just yet. First things first, your business needs to break even and create positive cash flow.
Break Even?
Yes. Every business has expenses, which will vary depending on your particular situation, but often include: office supplies, membership fees, sign up fees, product costs, inventory costs, marketing and more.
Our first priority is to create enough income to offset those costs. Realistically, this can take several months – so don’t get discouraged if you’re not at this point yet. (On a side note, a “traditional” business model usually accounts for a three to four-years before breaking even. A couple of months doesn’t seem so bad anymore, does it?).
How do you know if you’re breaking even? It’s simple: add up all of your costs (going all the way back to the time you signed up), then subtract that number from the sum of all your commission checks so far. If it’s negative number, or “in the red,” you haven’t quite broken into positive cash flow.
If it’s positive, or “in the black,” your network marketing business is turning a profit.
Why is this so important?
Successful network marketers are in their businesses for the long haul. And while it’s important to dream about money hand-over-fist, setting achievable mini goals like this is your road map.
Besides, it’s an enormous psychological boost to know your business is actually making you money, not the other way around.
If that wasn’t enough, turning a real profit is actually one of the toughest mini goals you’ll ever accomplish. Once you learn how to make your business profitable, you can apply those same principles in masse and start bringing in serious cash flow. Most people’s incomes grow exponentially, meaning they double over a certain period of time (i.e. 1, 2, 4, 8, 16, 32…), and reaching that break even point is the first step.
Conclusions.
Is your MLM business breaking even yet? If not, make it your number one priority. As many successful network marketers will probably tell you, it’s Goal No. 1 for True Financial Freedom.