When I was an Amway IBO, many people would talk about "building a business". But many folks who spoke about building a business didn't know what that meant. I believe it is because they were taught that building a business meant listening to cds or tapes, or recruiting people, and attending functions. Or building a business might mean sponsoring others. In my segment of the Amway world, building a business pretty much meant recruiting and showing the plan. Apparently, I was misled, and many others were as well.
Building a business, generally speaking means building a customer base. A business moves products and services for a profit. In groups that focus on buying from yourself or prosumer nonsense, generally will struggle because the revenue they generate in their business is coming from their own pockets. Or their jobs are actually supplying the money for their own bonuses. In this model, the only way to profit is to sponsor many downline so the pyramidal compensation plan can work in your favor.Many IBOs compare themselves to a franchise. Can you imagine a true franchise where your long-term success depended on your ability to open other franchises? What if you as the owner and your family accounted for the majority of the sales? Could this franchise survive? More than likely not. Yet this is exactly what many Amway IBOs do and they mistakenly think they will be successful. The only reason why Amway IBOs are able to play out this model longer than a traditional franchise owner is because they do not have to rent office space, equipment, or hire employees.
If an Amway IBO ran their business like a traditional business, the lack of retail sales to non-IBO customers would be immediately apparent when the first month's electric bill or lease payment arrived.
Building a business entails many things. These things may include advertising, marketing of products, and do not necessarily include any training. In its simplest form, the Amway business is about selling and using products, and getting others to do the same as you do. Why do IBOs think such extensive training (standing order and functions) is needed? I challenge IBOs to write up an actual business plan for their Amway business, including projected sales and expenses and see what you come up with. If you think I am just being negative, write up your Amway presentation and show it to a loan officer at a bank. See what they have to say. Seriously.
If a business opportunity is promoted as being accessible and easy to start compared to alternatives, there should not be much building involved at all. As an example, you could buy a snack, ice cream or soft drink stand in a park and be operating from day one. No weeks, months or years of "building the business" required. Sure it is not quite as enticing because people don't imagine stinking rich people who operate a snack stand.
ReplyDeleteFollowing the "low startup" investments of an Amway distributor business, which they typically define as the sign up fees to signup, is the business operational? Is there as steady flow of income going through it's books? For the snack stand, the answers are yes, and yes. The Amway distributor's business is not operational after the signup fees. Neither are the startup expenses a thing of the past.
True the snack stand isn't that glamorous, people who have tertiary education or some kind of skill or experience may well find formal employment pays better or is less of a burden to keep going. Or alternatively a more complex business that specifically uses one's specific skills and talents. But both the snack stand and having a job is a lot better than Amway. Not only setup costs, but chances of succeeding, if you buy a snack that is being used at a certain location in a park, the business very likely will work.
People who have signed up for Amway should ask about this endless and money pit "building your business" stuff, because that is not what is implied with low startup costs and easy to set up promises. If I hear low startup costs and easy to get going because systems are in place, I expect to have a running business after I've done those things. Not Amway. Don't fall for if when they say it's like that for any business, because as I have demonstrated, that is simply not true.
Another thing about building a business, is that whatever one accumulates in the process of building or improving taking the example of a snack stand: a better fridge, ice cream machine, signage, microwave, the trailer or stand. All these these fruits of having build the business, makes it worth more, and more attractive to a prospective buyer.
An Amway business owner's investments when building the business do not make the business worth more to a prospective buyer. Which brings me to the elephant in the room: A real business can be sold when the owner quits, and a lot of the investments and efforts of having built it, can be recovered.
Spot on excellent comments! Thank you for sharing!
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