Traveling around the world, one of the most common retorts I encounter is, “Network Marketing is one of those, Pyramid Schemes right?  When I ask, “What exactly do you mean by that?” Almost always the reply goes something like this, “The one at the top of the pyramid makes all the money.”  Perception is reality and I get that.  However, nothing could be further from the truth when it comes to Network Marketing.  The person at the top does not make the most.  It is just perception but not reality.  Dig in a little deeper and understanding will come your way quickly that it is not the case.  In fact that ability for you to sign into a viable network company gives you the opportunity to be the number one income earner even if the company is 8, 10 or 20 years old.  Many such “realities” are the case.

However, I thought you might like to see that the Corporate Pyramid truly does in fact pay the most to the person at the top.  In this HIGHEST PAID slide show, produced by CNBC and published on their website for all the world to see shows that in the Corporate world, yes in fact the “guy” at the top make the most!  So, does that mean the Corporate world is a Pyramid Scheme?  Hmmmmmmm

Glade

Ryan Anderson interviews Tommy Johnson days after the elite summit in California.  During the interview, Tommy explains how winners win.  Winners win because they “expect to win” and losing is not an option.  Do winners have set backs and challenges?  Of course they do but they do not give up. They stay the course and  expect to win as they continue their course dealing with challenges, adversities, disappointments, and setbacks…. but ultimately win.  Listen in and feel the  passion and conviction that 2011 has in store for those who “expect to win”.

Yesterday I returned from Tokyo Japan from attending the 2011 Kick off event with my sponsor, friend, and mentor Tommy Johnson.  During some of the down time we enjoyed some talks about our dreams, experiences, vision of the future as well as goals and aspirations.  Bob Schmidt was mentioned and we reflected how fortunate Tommy was to be taught by, mentored by and coached by the late Bob Schmidt.  I never had the privilege of working with Bob but soon after I joined Xango in February of 2009, Tommy sent me a library of Bob’s recordings.  Oh how I treasure those CD’s.

On the 8 hour trip back from Japan I listened to a number of Bob’s CD and was so impressed, yet again, at the wisdom and depth of Bob’s understanding as well as his ability to articulate in a direct and straightforward way the concepts, rigors, and disciplines of the MLM business.

With that in mind I have taken an excerpt from one of his CD’s and posted it here on my Blog/Website for you to listen to and glean from his understandings.   Pay particular attention to the “managing expectations” and how doing the correct activities, over time, will pay big dividends.

Here you go;  the incredible Bob Schmidt

My wife Cindy and I are about to hold our first English Speaking XBA (Xango Business Academy) held tomorrow through Saturday in Lehi, Utah.  We have 30 attendees there on their own dime for travel and lodging.  It is a nuts an bolts on how to build a successful network marketing business.  We are holding the event at Corporate so we have had some liaising with corporate staff to arrange this.

Evidently some word got out to the founders about what we are doing and just a few minutes ago, on the eve of us leaving to Utah to host this event, I received the following email from Kent Wood, (far left in the picture above) one of the founders of Xango:

Glade and Cindy,

I am in Australia for our Australia Leadership Retreat this week, so I’ll miss being with your group when you are in the office tomorrow through Saturday.  I did want you and your team to know that I would have loved to be there to get to know them.  I hope you have a wonderful experience and that your team uses this experience as a springboard to higher ranks in the next couple of months.

Thanks for the consistent effort that you put into supporting your team.  You are the best!

Cheering for you,

Kent

Are you kidding me?  Kent is in Australia and he somehow found out about what little ole Glade and Cindy are doing;  he writes it in his diary and then takes the time, half a world away and some 17 different time zones ahead of us,  telling us good luck and wishing he were here to share in the experience!  Are you kidding me?  Where can you find this kind of authentic leadership and genuine interest in people?  In all my years of being in business, nearly 35 of them, ONLY XANGO!  Xango is different and this is just one of a number of examples I can share!

If you are not part of Xango, perhaps you might be compelled to take a look.  Dig a little deeper and see what this company and our opportunity is all about.

Blown Away….AGAIN,

Glade

To Buy a franchise or not to buy? That is the question!

It is no secret that owning your own business is how wealth has been created. Let me share statistics that have long been swirling around. When I was a young entrepreneur in my early 20’s (in the early 70’s) these statistics were ubiquitous for those who were selling franchises or network marketing opportunities. But, amazingly, the numbers are still (almost exactly) the same numbers as 30+ years ago.

– 100 People At Age 65 (SOURCE: Social Security Admin)
16 Are Dead
66 Annual Income Under $30,000
13 Income Over $30,000
5 Income Over $60,000
1 Only One is Wealthy

– The Wealthy 1% (SOURCE: The New Interagency: Older Americans 2000)
10% Top Professionals
10% CEO’s – Stock
5% Super Sales Persons
1% Athletes / Entertainers
74% Business Owners

Now I don’t know about you but I certainly don’t want to be dead or dead broke at age 65 nor do I want the Government, family or relatives to be burdened with my expenses as I age. Moreover, I am 5’8” tall, can’t sing and I am not one of the very, very few atop the corporate pyramid with lucrative stock options. So, as an average person with average abilities and average education, what are my options to be wealthy? The best most probable answer is to be a Business Owner.

OK, now that I realize that my best odds, my best chance at creating wealth is to be a business owner, what kind of business do I “own” or start?

If you listen to the experts, starting a small business seems to be right up there with shark-diving and base-jumping as a dangerous activity that’s best avoided. Even so, most business experts conform to a theory of “thirds”: Of all the new business startups, 1/3 eventually turn a profit, 1/3 break even, and 1/3 never leave a negative earnings scenario. According to a study by the U.S. Small Business Association, only 2/3 of all small business startups survive the first two years and less than half make it to four years. With numbers like that, it’s no wonder so many would-be entrepreneurs think twice before taking the plunge. Especially when you are about to sink into your home equity, cash in your 401K, or spend your hard earned savings or alike.

Franchises are considered a sure-shot way to a successful business. They have an established structure and reputation and are recognized for their brand value. Figures for franchises show:

* Total franchise sales in 2000 were over $1 trillion
* Nearly 50% of all retail sales are through franchises
* Franchises are currently doing business in 70 industry verticals
* 8 million people are employed by franchises in the U.S., with 5 to 14 employed per franchise
* Franchised businesses create more than 170,000 new jobs each year
* 1 in 12 business establishments is a franchise
* A new franchise opens every 8 minutes of every business day
* There are approximately 3,300 franchisors and over 500,000 franchise units in the U.S.
* The U.S. Commerce Department says that fewer than 5% of franchises were terminated on an annual basis
* According to a study by Arthur Anderson & Company (a company now out of business) of 366 franchise companies, nearly 97% were still in business after 5 years. In contrast, a study by the U.S. Small Business Administration revealed that 62.2% of all new businesses failed within their first 6 years of business

I ran across this website that I found interesting. It is a “franchise broker’s” website.

At this website you can view a plethora of franchise opportunities. Costs range from a few thousand dollars to “pick a number”.

Network Marketing or MLM
What does Warren Buffet, Robert Kiyosaki, Bill Gates, David Bach, and other financial industry experts know about Network Marketing or MLM that most people don’t know? They love and in fact are pundits for the industry when by and large, the vast percentage of Americans, and actually most parts of the world, POO POO Network Marketing? Now wait…wait a moment, is there any correlation to the vastness of poo pooing and the percentage of those who are dead or dead broke with their current “success strategy?’ Let me see…..whose business acumen do I listen to? Warren Buffett or Aunt Mildred?

So let’s compare Network Marketing with Franchising!

Network Marketing

Franchising

Financial Freedom

There is no Financial Freedom for FREE. The question is do you want to exchange your home equity, 401 K, or hard earned savings for a Franchise that costs a ton and has a 62.2% chance of going out of business in the first 6 years or invest a small amount of money in Network Marketing along with sweat equity into a proven system, with a proven company, and a proven commodity with a proven success team? What would you do if you knew you could not fail?

Network Marketing is the best business decision I have made in 30 + years or being in business. I love the business model which is 100% predicated upon the success of your team. Zig Zigglar said, “If you help enough people get what they want, you will get what you want. That is what we do.

Please touch base with me if you are open to the possibilities.

Glade Poulsen

Dr. David McClelland of Harvard University concluded after 25 years of research that the choice of a negative “reference group” was in itself enough to condemn a person to failure and underachievement in life.

Your associations are some of the most powerful factors in determining who you become and what you accomplish in your life.

The great Jim Rohn said, “You will become the combined average of the five people you hang around the most. You will have their combined attitude, health and income.”

Recognizing this truth, how do we use it to our advantage? It’s simple. If we want to advance our lives personally and professionally, we must associate ourselves with people who will be a positive influence on our lives.  Your support line in the Network Marketing Business is critical to your success.  Do they have a system?  Do they have training and support?  Are their heads in the game?

When we associate with others who have a greater skill set or have achieved more, we are challenged. It brings out the best in us and inspires us to do better. Observing and modeling someone’s positive example will help us reach new heights. This applies to everything we do.  The mentoring of your support line will help you have better communication skills, better time management skills, better money management skills, better follow up skills, better vision and direction.

Surrounding ourselves with optimistic and uplifting people has a direct cause and effect on our demeanor, confidence level and performance. It’s should be all positive!

The legendary Zig Ziglar said it best, “If you want to fly with the eagles you can’t continue to scratch with the turkeys.”

Bob Schmidt says, “Standing in a garage does not make you a car”

“Show me your friends and I will tell you who you are.” – Author Unknown

“Success comes from a series of good decisions made over time while failure comes from a series of bad decisions made over time.” –Jim Rohn

OAll the great teachers of success from Napoleon Hill to Anthony Robbins have talked about the benefits of using a mastermind team to make better decisions.  Stephen R Covey in his best selling book, “7 Habits of Highly Effective people” goes into great detail of the power of a mastermind group.  One of your avenues for success in the Network Marketing Business should be your support line. Your upline leaders should have already achieved what you want to achieve.  Been where you want to go and thereby giving your clear and concise directions, instructions so as not to waste your time, your money, your energy and most importantly your relationships.  Use this valuable resource and the beauty of the MLM business is that there is a financial incentive for your support line to help you, guide you  and direct you along this path.

Benefits of a Mastermind Team

Napoleon Hill said, “No two minds ever come together without a third invisible force, which may be likened to a ‘third mind.’ When a group of individual minds are coordinated and function in harmony, the increased energy created through that alliance becomes available to every individual in the group.”

Choose your support team or your mastermind group wisely.  It will have a profound effect on your success in the Network Marketing business.  In my blog Network Marketing Revealed, I mentioned there are 5 key elements required for success in the Network Marketing Business.  This is Key element number 5.   All five of these key elements are required for success.  One is not more important than the other.  Just as all four tires are required for operating a vehicle safely down the road at 70 MPH, so are all 5 of these key elements very critical to your success.

Here again are the five blogs outlining my views and experiences and professional opinions on each of the five elements:

1.  Company

2.  Products

3.  Timing/Trends

4.  Compensation Plan

5.  Training and Support

I hope you have enjoyed the overviews on these 5 key elements.  A lot of thought, effort and especially experience have gone into these blogs.  I would greatly appreciate your comments and opinions.

Take the time to carefully evaluate your business decision.  Done properly with the right company, right products, right timing and trends in place, with the right compensation plan plus the proper training and support you will have one incredible journey and achieve the lifestyle, time freedom and personal growth of your dreams.

All the best,

Glade

Nonetheless, during my 13 years of full time work with just one company in this Network Business we were subjected to a number of compensation plans: 1. Breakaway 2. Unilevel 3. Hybrid’s and then back to Breakaway. Plus, in practically every country there were iterations of our own compensation plan adding to the confusion of, or the implementation of, these different compensation plans. This gave me a lot of experience in not only earning a living by them but also teaching others how to earn and build using different compensation plans and variations thereof.

This much I do know, because I have personally spoken with compensation plan software developers and founders of MLM companies, and they all say the exact same thing; “compensation plans are engineered to “forecast” or predict an actual payout or expense line item to and for a company’s profit and loss statement.” In other words they will design a compensation plan and hope that the actual expense or cost to the company will not exceed a certain amount. One of the first questions software engineers will ask company CEO’s or founders is, “How much do you want to pay out?” and then the software engineers will begin working their actuary magic to compose restrictions or qualifications for the distributors and “predict” what the masses will do, the rain makers will do; based on behavior and thus come up with a “theoretical pay out”. And this is where the fun begins in deciphering which compensation plan pays out the most or which compensation plan in the network marketing business is the most lucrative. Herein lies the great debate! Herein lies the great mystery! Herein lies the TRUTH and most people have no clue what questions to ask or what the compensation plans really pay!

Let’s take some time to reverse engineer or expose some of the mysteries of compensation plans, according to book of Glade Poulsen.

“UP TO”. Our compensation plan pays UP TO 67% (or whatever % ….they all vary but they usually have a pretty high number) What a joke. NO company will EVER pay the UP TO portion of the compensation plan purported.  They would go broke. There simply is not enough money to pay that high of a percentage. PURE AND SIMPLE! There are a number of public listed companies where the financial data is available. We get “the truth” or reality from these numbers. Amway, the granddaddy of all Network Marketing companies, Nu Skin, Herbalife USANA and others are public listed companies where the financial data is available. (Amway was publicly traded for a short period of time in Asia and that is when their financial data was available for public purview) In MOST cases of the publicly traded companies the UP TO is in reality 28-44% and not the High 60% or the 70% that is talked about! Breakaway, Binaries and most every compensation plans BANK on, hope for, have planned on and will in fact change the requirements of the compensation plan if they exceed the (on average) 34-40 % actual payout. This personally happened to me a number of times in my 13 years with the one company I was with. Every time the company ended up paying higher than what the software engineers had “planned on” or engineered and the founders were paying in excess of that “hoped for number” they changed the compensation plan. This we deadly to the distributor force. They lost confidence and trust in the company every time they changed the compensation plan.

Here is a true statement and one that brings the IRE of company executives and you can quote me on this; “I have never seen a major compensation plan change that benefits the distributor! It is always to improve the bottom line of the company taking money away from the distributors and adding to the profitability of the company.”

“Breakage” The difference between the theoretical payout or the UP TO and the ACTUAL payout is known in the Network Marketing Business as breakage. As stated, companies plan on, bank on, hope for and in fact watch to insure breakage keeps their margins in tact.

CV (or commission-able volume) versus Actual dollar value of products. Let me explain. Let’s say you are buying a product for $100.00 (actual dollar paid for the product) but the CV or the point value or commission-able volume is 80. You paid $100.00 but you are only paid on the 80! Let’s say that the actual payout was 40% of a company (which is one of the highest in the industry of public traded or public listed companies) 40% of the 80 is $32.00 In reality that is only 32% of the $100.00 you paid. Here again is another way companies “play with the numbers” and in reality only pay out 32% of the actually $100.00 paid. What if your company is a Binary and only paid 32%. Example. 32% of 80 is $25.60 or in reality $100 paid out and $25.60 paid to the distributors or 25.6% ACTUAL payout for $100.00 paid!!!!! Highly profitable for the company. (see number one below)

In my Blog How to Choose a Network Marketing Company I stated there are 5 Key elements required for success in the MLM or Network Marketing business.  The number 4 key element is Compensation Plan. That is what I am talking about today. In his blog, John Godzich explains in detail about Binary compensation plans. I totally agree with John Godzich and Doug Wead on their View of Binary compensation plans. In fact Binary compensation plans are illegal in many countries around the world. They are deemed impossible or improbable for most people to build and therefore just a few distributors, key distributors, make a lot of money and the company ACTUALLY pays out less than 35%. Binaries become very profitable for a few key distributors and highly profitable for the company but very unfair for nearly all distributors. The appeal is that it seems so easy to build a Binary. “1/2 of the work is already done!”  “All you have to do is build one leg!”

According to the book of Glade Poulsen,  I believe there are some key elements that make a compensation plan FAIR and attainable to whatever level of income you choose to pursue:

1. A true ACTUAL pay out that the company and distributors know! No breakage, No High Actual price paid and lower commission volume (CV)

2. Fair to the part time distributor. In actuality, 85% of distributors for a Network Marketing company are part time participants. However, most compensation plans are written, designed for and pay according to a full time, rain maker activity level. This kind of compensation plan makes it very difficult for the part time participant to “get to the money”.

3. Rewarding to the rain-maker. Whilst most compensation plans are written for the full time person it is tricky to have a compensation plan that rewards the part-timer and also rewards the hard working, rain-maker distributor who works so hard and pays a price that most are not willing to pay. There have to be function or reward to the Rain-Maker.

4. Fair to the late comer. Shame on us if it is only good for us getting in right now. What about those who join us 20 years from now? In my opinion, there must be something that rewards or is fair to those who join us later on. It may be more difficult but if they get there, they share in the overall growth and development of those who went earlier and paved the way. (Global Bonus Pools)

In my humble opinion, Xango addresses all of these key elements.
1. A true 50% pay out. No up to! 100% of the 50% is paid out through dynamic compression
2. No Breakage again via dynamic compression
3. Nearly every product is 100% CV 1$ for 1 CV
4. Dynamic Compression, Fast Start Bonus, 50% payout and Global Bonus pools make it fair for part-timer, rain-maker and late-comer.

There you have it; My 17 years experience in the Network Marketing or MLM business experience around the world and literally hundreds and hundreds of conversations with people from an plethora of companies. I hope this help you in deciding or in your due diligence in determining what opportunity you would like to align with. You would never go get a job working for a company and not know what your pay is? How you get paid? What are the qualifications of getting paid and alike?

Nor should you in the network marketing industry.