Jerry McGuire is one of my favorite films. It has some great one liners that have stood the test of time. One of those was “Show Me The Money”.

I believe this is why Network Marketing has such a high drop out rate, because most people who start don’t have a true understanding of where the money is and how quickly they are going to get into profit.

HOW QUICKLY DO YOU PROFIT FROM YOUR BUSINESS

I believe it is prudent to understand and fully scrutinize the compensation plan of the company you are going to be working with because you need to know how you are going to get paid. That doesn’t mean you need to go into analysis paralysis.

In the first instance you need to know what your break even point is or when you have covered the cost of your required order.

To do this easily, let me introduce you to a concept I call the 20 club which you will be able to apply to any network marketing compensation plan. This simple formula will give you a way of comparing network marketing companies comp plans and evaluating you how quickly you and your team can get into profit.

THE 20 CLUB

The 20 Club is a simple concept. You introduce 4 and then help those 4 to each do the same. 4 each = 16. The total would be 4 + 16 = 20

You
Level 1:  4
Level 2: 16
Total:    20

Now work out the total residual income you would receive each month. I’m not talking about the fast starts or any other up front bonuses. They are just “one time” bonuses.

It’s important to do the calculation so you work out what your residual income is, as this is the money that will keep coming in as long as you place your required order. Now does your 20 club a least pay for your required order? Are you in profit yet? If it does can you see how this would help you?

Let me give you an example to show you the money. This is how I get paid with my network marketing company. My required order to max the compensation plan is 100 business volume or $320 per month.

Me
Level 1: 4 x 100 X 5% =       $ 20
Level 2: 16 X 100 x 40% =   $640
Total: =                              $660
Less: required order =         $320
Profit: =                            $340

What would you do with an extra $340 per month?

Many companies only 5% on each level which would give an income of $100 per month. Wouldn’t you prefer to be earning an extra $540 per month?

Let’s face it most people would know 4 people who would know 4 people who would continue investing in their product if it was being paid for !!

Simon Smith
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