How to Minimize your Risk in the Network Marketing Business

It is extremely important to understand the risks in network marketing business before you join an opportunity.

Most prospects focus on rewards when joining a network marketing opportunity because of the marketing hype. Video Presentation is prepared by copy writers who are masters at triggering our impulsive buying emotion. Risks of the business proposition are never discussed.

To take cognizance of risk is important because every business opportunity carries with it an element of risk. If you are to succeed in your business venture, you have to learn how to manage risks that are part and parcel of any business enterprise.

Generally speaking more the rewards higher will be the risks involved. This should not dissuade you from joining a high reward company if your aim is to create wealth quickly. What you have to put in place is Risk Management Strategies to mitigate the risks.

Analyze the Company

The first step is to dispassionately analyze the company you are joining. It is important to check the track record of the company, people behind the business & their track records.

You must also analyze the business concept and how they earn their profits. The company can share revenues with you only if they make money.

The company you choose must also be strong on compliance or they will be shut down by the authorities. You minimize your risk by joining the right business opportunity.

Life cycle of Products

Rapid advances in technology have shortened the life cycle of products. New break trough’s can make the products of the company you are marketing redundant.

Remember Kodak. This company was a market leader in photo films at the turn of the century.  Today the company has gone into liquidation because digital cameras have made photo films redundant.

The reality is that every product has a life cycle. The trick is to find innovative companies that adjust to the market conditions and add new product lines to their mix.

Recoup your Initial Investment

A good strategy is to recoup your initial investment within the shortest possible time frame. You should be in profit within months if not in days. The pace of technology has compressed product life cycles. It also generates much higher profits within those limited time frame.

Higher profits enable us to be in profit within a very short period of time. You have to work with companies that give you cash flow to recover your initial investment within a very short time frame.

Big Bang Theory

Most affiliates have the tendency to start slowly, test the waters and then increase the size of their investment and commitment to a program. The problem with this approach is that your risk period extends with each incremental investment and upgrade you make.

A better strategy is to first analyze the business opportunity, and if you decide to join then start with the highest level of investment that your budget will allow. By doing so, you keep your risk period down to the minimum.

Spread your Risk

Another strategy is to spread your risk. You have to Create Multiple Streams of Residual Income to survive in today’s world. The rich people do not depend on only one source of income, but grow orchards of “money trees.” If one source of income disappears your lifestyle does not get affected as you have other sources of residual income to support you.

You have to do risk risk management and analyze each and every business opportunity you join not only for the rewards it offers but also the risks. Don’t get carried away by the hype but realistically assess the business opportunity.

If you wish to position yourself as a leader in the network marketing niche, then you have the responsibility to guide your team towards wealth creation by helping to join the right business opportunities.