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A Franchise Or Network Marketing? Nigel Mayne Discusses

Guest post by: Nigel Mayne

Article Overview: Small business entrepreneurs look for an investment opportunity to make it in their own business venture for a number of reasons. Most likely have to borrow to finance not only start up and initial fees costs, but also to cover working capital requirements for some time. Those new to self employment know they need a proven business model. How to steer clear of the unethical practises, moral traps, get rich quick scams and other fraud practised by a few bad apples in any business?

A Franchise Or Network Marketing? Nigel Mayne Discusses

For any number of reasons, small business entrepreneurs look for an investment opportunity to make it in their own business venture as opposed to having one or more income streams from salaried positions in the workforce. Most likely have to borrow to finance not only start up and initial fees costs, but also to cover working capital requirements for some time. Those new to self employment know they need a proven business model. Friends may have suggested network marketing options, and yet the very public front of a successful franchise system is more attractive. How does the investor you best steer clear of the unethical practises, moral traps, get rich quick scams and other fraud practised by a few bad apples in any business?

Multi-level marketing (MLM) is a system of retailing by independent distributors, often in consumer homes, and compensation is a percentage of the sales made by the business owner`s sales force. There is often comparatively less money required for the start up investment, but the investor/owner has to manage a large network of wholesalers that he or she must build from scratch and develop their own growth and management strategy going forward.

MLM carries the taint of being a front for pyramid schemes, illegal scams, and other fraudulent activities. MLM is a legitimate business in the US; there are a few illegitimate, fraudulent schemes and variations that collapse and leave all suffering. Ponzi schemes are an example of this - remember Bernie Madoff? Beware if first meetings focus more on requirements to purchase high cost inventories and on recruiting other investors than on the product or service to be sold.

What should the new investor know before taking the decision to look for a franchise that is the best fit?

• Be very comfortable that the model suits their skills and knowledge.



• Successful franchises are run rigorously. The small business owner runs the local business with the support of the franchisor. The franchisor wants success. They have the map, the tried and true plan, the “how to” manuals, the expert trainers, the savvy and focussed marketing teams. The franchisee concentrates on well mapped operations. The business focus is clear, so well defined.



• On the other hand the MLM company will encourage the new owner to find, manage and motivate and pay their own sales force.



• With a franchise model the franchisee abides by the contract with the franchisor business partner.



• The network marketing model allows the business owner to be more entrepreneurial, more creative which isn’t always a good thing – especially if a proven business plan is the better alternative.

All would be investors are advised that either of these options aren`t get rich quick schemes, and there is likely up to 5 years real commitment of capital, energy, time and focus before the entrepreneur can pause and say they have successfully built a business.

Whichever path is chosen, the new business owner should focus, focus, focus on the product or service they are marketing. The success in business will depend on how much product or service is sold, and how efficiently. The best advice offered at the outset is that they decide on the business option that best suits them and avoid wasting time on offers that carry even the faintest taint of con schemes and fraud.

Franchise consultants know the red flags of fraud in the investment field. It takes the very few promoters that practice business fraud to taint the dream of the franchisee and their family.

That`s where seeking the independent advice of an expert franchising consultant is prudent and invaluable.

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Article Tags: franchise, franchisee, investment opportunity, Nigel Mayne, small business franchise



Related Forum Posts
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
Why do people hate Network Marketing / MLM? - I've been looking at a number of different opportunities and end up meeting a lot of Network Marketing / Multi-Level Marketing people. Some of the offers look interesting but everyone I talk to about it says to avoid these guys like the plague - what's the deal? Why do people hate network marketers and MLM people so much? Is it not legit?
Re: MLM Marketing, youtube, and buzzirk mobile. - I have experience with MLM too. My initial reaction to the business was "snake-oil salesman" but once I got to understand the "overall business model" I am now an advocate to it. MLM (Multi-Level Marketing) is also known as Network Marketing. I realized an MLM business is no different than any other business. One needs to focus on both words "Network" and "Marketing" and give both equal respect. Some people focus heavily on the Networking part but forget "Marketing". I've started to use Building on a Budget and Magnetic Sponsoring concepts in my NM business and have found that people don't get involved so much because of the product but more because of what you bring to the table as far as marketing systems and support. I have both products listed in my signature. you don't have to buy it as the link to the free videos itself provides you a good understanding of what is required to position yourself as my above paragraph. If you do plan on purchasing it I can tell you that the measly $40 will open your eyes BUT your upline will not be too happy (atleast in the short term) beacuse the system is not duplicateable. I wrote this post as a polar post to Bulmer's reply as I have exhausted the friends and family networking and realized i never really focused on marketing. My leads now are more qualified and open to hearing about my opportunity than the other way around. my 2 cents if you plan on growing an MLM or Networking Marketing business.
Network Marketing Business - Hello all, Recently, I had join a Network Marketing Business on a part-time basis. Does anyone here who has some knowledge on this type of business? I want to learn as fast as I can from all the gurus here
10 best franchises to get involved - My advice is: 1) Go to the library and start reading business books (accounting, finance, etc.) 2) Go to your local community college and enroll in night classes 3) Join the local Chamber of Commerce 4) Network / Network / Network -- through the above sources. Once you have spent two years doing the above, then look for a 55 - 60 year old business person that is looking to reduce their time in the business. Then you can work on a sweetheart financing option.


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