Tweamster's Blog

What To Look For – Part 2

April 26, 2010

Okay, so we’ve all agreed that we want to develop a reliable, long-term, residual income, right? If you don’t think that’s what you’re after, then perhaps you’re looking at the wrong blog…  But please, come back for the humor, I promise I’ll amuse you and your hits on my blog will make me happy.

Okay in the last blog we looked at the company track record, this next point is related to that and that is financial strength. There have been many companies that have outgrown their ability to finance themselves and so had to close their doors. Maybe their investors pulled out or the institution providing their financing turned off the money spigot, or they put too much of their cash flow into commissions or into product research for new products; the reasons for running out of money can be as many as the number of companies failing.

Lest you think that your company is too good, or has too amazing of a product to possibly fail; it still takes money to make that product and pay those commissions and pay the home office staff and keep the computers running that figure it all out. The company track record and asking some hard questions will tell the tale, you have to use your judgment as to whether you’re comfortable with the answer.

Here’s a quote from John Milton Fogg, “There is no such thing as a great MLM company. Distributors are responsible for their own success… The best the company can do is stay in business.”  Sure, they provide great products and pay commissions and have great conventions, but at the end of the year, are they still going to be there? If things work out, they will do research and development, bring out new products, streamline the commission structure, and generally do everything they can to provide an environment where their distributors can flourish and bring other distributors and consumers to the company.

They can’t do this if they go out of business because they ran out of money.  MLM Insider Founder and Editor-in-Chief, Corey Augenstein was once quoted as saying that 85% of MLM companies go belly-up in the first five years, most of them in the first 18 months. Does your company have the financial backing and money smarts to make it past those first few years? Or has it already made it past the magic number and is financially sound and prepared to grow into the next few decades. That’s what you want, you have to decide what your magic number is, I recommend at least the 5 years quoted above, one of my mentors recommends 7 years.

Here’s one example of how not choosing your company carefully can backfire: Jerry Rubin, former 1960s radical jumped into network marketing in the 1980s when he realized that the skills required for success in network marketing were the same as the skills that had made him so good as an activist. He took the plunge, sinking thousands of dollars and week’s worth of time into the new venture. As he expected, he proved good at it. His network marketing business took off, thousands joined his downline. He had 200 people per night waiting in line to go to opportunity meetings in his office.

Then one day the phone rang and the son of the owner was on the phone and said that the company had filed Chapter 11 bankruptcy that day. Jerry looked around and saw his office, the thousands of people he had brought into the business, and two closets full of powder and food and got angry. He lost $30,000 of his own money (1980s dollars), plus his existing business.

Years later Jerry went on to become a very successful network marketer and became a spokesman and an advocate for the network marketing industry. There was nothing wrong with network marketing, nothing wrong with his skills, he simply chose the wrong company, the company didn’t have the capital to survive the growth. (This story is quoted from Richard Poe’s “Wave 3 – The New Era in Network Marketing.” © 1995)

While it may not be easy to check the financials, it is easier than it was back in the old days when pretty much your only option was to go visit the company and interview the principals. With the internet, you can check for scams and fraud, and you can find distributors for the company and interview them. You can check out mlm watchdog sites, here’s a very good place to start: However, visiting the company and meeting the principals is still a good way to go if you have the wherewithal to do so.

Funny mlm adlines:

“24/7 phone hotline reveals secret to insane profits”  Can I stick with the sane profits, please?

“Can you use $10,000 -$20,000 now?”  Umm, no,  but check  back with me in a few weeks.

“Looking for 24 highly motivated professional networkers edging to make a fortune with the next MLM giant”   And what exactly does edging to make a fortune entail?

For more of what to look for, sign up for the free newsletter at


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What To Look For – Part 1

April 18, 2010

There are many reasons that the statistics are so bad in the network marketing industry in regards to people achieving their goals. According to the most commonly quoted statistic, around 90% of network marketers quit within their first year. Here’s one quote: “The fact (is) that about 90 percent of those who start Networking quit within a year…”  – John Milton Fogg; Network Marketing and the American Dream

Does this mean that you should give up? Or never start? OF COURSE NOT. Network marketing is one of the best sources of work from home jobs.

Leonard Clements in his book “Inside Network Marketing,” puts lack of knowledge as one of his top five reasons why people fail in network marketing.

So I want to give you here one of the first things you should know when you are looking at a business opportunities and thinking about whether to join them or not.

One of the primary reasons for failure is in the selection of a company to work with. From my experience, most people select a network marketing company based on almost anything but what they should be looking at.

Oftentimes, it’s the latest company to walk in their door (carried by someone who put them on their warm list). Or because of the “pizzazz “ factor, whether it’s something unheard of before, or the reinvention of vitamins, or something that’s never been done in network marketing before (not very likely, by the way). Or it’s an overhyped compensation plan that will make you rich in three hours a week.


The latest statistics from the Small Business Administration (SBA) show that “two-thirds of new employer establishments survive two years, and 44 percent survive four years.” Other sources can be found that say anywhere from 55% to 85% fail within the first four years.

This includes all small businesses; auto repair shops, quick marts, insurance agencies, and network marketing companies.

So, if you want to work with a company where you can develop a long term residual income, would you rather choose a brand new company where you only have a 44% chance of the company still being there in four years? Or would it be better to choose a company where they’ve already been around for longer than four years and have the financial strength and infrastructure to support you and your business for the next 10 – 20 years?

There is a reason why people looking for a franchise pay an enormous premium for something like McDonalds or Subway, versus a much cheaper buy-in for some unknown company. They’ve already proven that they have a successful marketing plan and a product that sells.

Lucky for us, the really good network marketing companies don’t charge 5, 10 or 20 times as much as the bad ones, as is common in franchising.


To look at this another way, if you are joining a company because it’s such a great deal to be getting in on the ground floor; what are you going to tell your prospects next year when the ground floor is missing? Is it still going to be a great deal or are you just tossing the dice because the potential payoff is so big?


Lack of knowledge is one of the killers of new reps in this industry, do yourself a favor and learn what you need to know before you attack your warm list.

I recommend a company that has been around for several years and is still growing.

For more great tips, go to, and sign up for the MLM-The Whole Truth newsletter.


I couldn’t decide which of these I liked more. Both are from a home business magazine.  Which one do you like?

1)  “Serious Business Minds Only”  So I don’t need a body?

2)  “Unemployed Dad Discovers The Power Of Cash”  Really, no kidding; go figure.

Hello world!

April 8, 2010

Allright! Here it is. My first blog post. How exciting! Home business utopia.

My purpose with these blogs is to educate, enlighten and hopefully, amuse you occasionally as well. In the years that I’ve worked in and studied the network marketing industry, I have come to realize that most people look at the hoopla and the propaganda of a business opportunity rather than at the cold hard facts.

If you were going to go buy a running business, would you take the owner’s word on it that the business was profitable? Or would you ask to see a financial statement and the last three years of tax returns plus their business plan and marketing strategy?

If you were buying a fast food franchise, would you look at the fact that their top franchisee made $5 million last year? Or would you want to see how long it took them to get to that level and what they did to get there? And what background they had that made them successful in this franchise?

When looking at the network marketing business, the cold hard facts tend to get overlooked because the entry price or start up fees are so low. An attitude of “let’s give this a shot, what have I got to lose” prevails, instead of let’s look at this as a business and what is it going to take for me to succeed.

I want to help you look at the rest of the story and increase your odds of success in what I think is an awesome home based business model, network marketing.

Why did the chicken cross the road?  To find a better comp plan. (Okay, not that great, but they’ll get better I promise.)

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