The Truth about Multi Level Marketing

Too good to be true?
My friend wanted a passive income stream, which means making money without actively selling a product or service. A business associate suggested a product line, explained that customers would order online and she would make money. She went to an information session, was sold on the products and signed up without having a lawyer look at the documents.

She sold the products, and then wanted to known when she would be collecting her payments. It was then she was told she would not be paid, but instead received points towards products. It was not a passive income stream she was looking for, but instead a multi level marketing company or MLM.

MLM
Multi level marketing is a system where one business person, the top of the pyramid, receives commissions of their sales and the sales of others they get to sign up under them. It is sometimes referred to a pyramid scheme. This is not to say that they are all illegitimate, they are money makers for some.

What you should look for?
If you want to sell product, you have been approached and are interested, then there are some things you should keep in mind.
• Recognize that you are signing a contract. You may want to have a lawyer review it.
• Is there a penalty if you decide to terminate it?
• Can you easily terminate the contract?
• Next, look at how much money you have to give up front.
• Is the only way for you to make money to find someone else to sell with you so that you gain their commissions?
• Can you just sell the products in your office and do a markup. In this way you are treating the company more as a distributor.

There are opportunities in multi level marketing, but there are also risks. You need to have a good understanding of what it expected for you to make money before signing the contract.

Contact TrueNorth Business Consulting for your legal coaching needs to review your MLM contract.

Welcome to TrueNorth Business Consulting presentation of a Business Makeover. Each month will feature an idea that can help your business. True North focuses on small businesses, but especially helping health and wellness practitioners to maintain and grow their business using the areas of law, marketing, insurance and project management.

I gave a seminar, and when I finished I had a few people come up to me to ask questions. I was surprised that the questions were ones that would require about 5 minutes of internet research to get an answer. It struck me that people don’t do research, and part of managing any project or making a business decision is looking at historical information.

Historical information let’s you see what was done right and what was done wrong. Other people have made similar or the same decisions. You may be able to find some information on the internet, or you may have to ask others.

An example I like to use to illustrate the usefulness of research is designing a website. Once you decide you need, or want to revamp a website, what do you do? Well, first you want to look at other websites-see what they have done successfully and not so successfully. What do you like about that website? Next, you want to think about the elements—do you want a blog? Do you need a shopping cart?

Before you hire someone, you want to look at what is available that you can do yourself. There are online blogging programs, like Wordpress or LiveJournal that you may want to use, which would be less expensive.

If you are using a web designer, then get referrals to many. Ask to see their work, and talk to their clients, if possible. You want to make sure your project comes in on time and within budget. Check out the web designer’s previous experience.

Lastly, you want to make a list of all the things you want on your website, along with a date of when you want them completed by. As time goes on with your project, then you can check off things on your list, and also write comments on what is going well and what you need to change.

In the future, when you need another website, you will have your research, plus your historical information to go back to. You will notice a faster project, and have used your research skills to get you there.

Welcome to TrueNorth Business Consulting’s presentation of a Business Makeover. Each month will feature an idea that can help your business. True North focuses on helping businesses, especially health and wellness practitioners, maintain and grow their business using the areas of business law, marketing, insurance and project management.

Mediation is a form of alternative dispute resolution (ADR) where a third party neutral, or mediator, facilitates so the parties can come to a mutually beneficial resolution. Mediation is not binding, but a contract or an agreement can be the end result, which is legally binding.

One reason small businesses fail is because they cannot afford litigation, fear losing the business relationship with the contracting business, or misunderstanding of contract terms. The small business owners are experts in their own profession, but lack resources in conflict management. In normal business circumstances, conflict arises, and usually there is litigation. Mediation is less expensive and can preserve the business relationship.

Most businesses are not familiar with mediation or mediators. To be a mediator the neutral must complete a course, which is usually a 30 plus hour class. Mediators have all different backgrounds- law, psychology or industry experience. In choosing a mediator you want to be aware of their background so that you can have confidence in their ability. Family disputes would be better with a mediator with a psychology background, while business disputes may need a lawyer mediator.

However, the mediator does not make the decision for the parties—that is up to those involved. The idea is that when that happens, the parties will stick to the decision. In order for there to be mediation, a clause should be added to a contract which states the parties will use mediation along with naming a local mediation service or mediator. TrueNorth Business Consulting provides business mediation in Massachusetts.

The importance of good conflict resolution skills along with access and recognition of mediation services is critical. Many fiscal opportunities are lost, resulting in impacts to the community at large. Businesses strengthen a community with jobs and contributions when they are successful, businesses closure brings with it an increase crime rate and population decrease. Therefore for conflict resolution you should look into mediation first.

Most small businesses accept the idea of a verbal contract, agreeing to terms that were said. If there is a problem, then they hope each side has perfect recall. More often than not, memories are faulty and the business relationship is broken.

When a verbal contract is not used, there is a written contract and the small business owner finds it overwhelming. Does not understand it, but signs it anyway because it is supposed to provide protection for both parties. Plus, the business owner wants the money the contract promises when he/she performs their service.

In legal coaching my first question is: What do you need to be protected against?

There are all sorts of risk from financial to physical. If you are afraid that if something goes wrong and you could lose everything, then you need to make sure you understand the damages section in the contract.

You need to make a list, in your own terminology from your own experience of what can happen. Can you afford to be paid at the completion of the project which may be a year or two years later? What if you are unable to deliver your product or service? What could happen that will stop you from completing the project?

Next you want to think about the client, since that is who is receiving your service. From their point of view what can happen? To answer this question you can use personal experience, and you may want to do some research. What have been problems that clients have had when using vendors in the same service? Using the internet you can see what the issues have been with that particular client, and then make sure to contract to avoid them from happening again. This is a great opportunity to hone your business.

Then my job is to help you understand how that can be added into a contract, and bring awareness so that you can complete contracts confidently. I can also point out if a contract does not minimize the risk, then there are other ways to protect yourself.
Contracts are a common occurrence in the business world, which you need to manage successfully.

Most businesses, in my experience, are unable to afford a lawyer for every contract they sign; they are basing decisions on their own expertise, which is not the law. Using services provided by TrueNorth Business Consulting can help you learn to make these decisions on an ongoing basis with confidence.

Welcome to TrueNorth Business Consulting’s presentation of a Business Makeover. Each month will feature an idea that can help your business. True North focuses on helping health and wellness practitioners to maintain and grow their business using the areas of business law, marketing, insurance and project management.

There are many factors that go into any negotiation- what style you use (competitive collaborative, accommodating), cultural issues that impact values and habits, and lastly gender. Men and women negotiate differently.

“I want this for this amount,” is a male statement.

“I’d like to know how you came up with that number,” is a female negotiation statement.

Men view negotiations as a one time event. They are better at negotiating for themselves and reaching individual goals. They are usually more competitive.
Women, on the other hand, often let negotiation opportunities go by, set low goals and concede easily. Unlike men, usually women let their emotions show through, but are more about mutual gains than individualistic tendencies.

Neither style is right or wrong. There are suggestions so that men and women can negotiate more effectively, especially when it is a long term relationship whether business or personal.
First there should be a correcting of impressions. Also look to taking turns talking and possibly moving physically closer together than staying farther apart. Take the opportunities to ask questions. Negotiation, in this case, does require preparation. This would not be a one time negotiation to buy a car, for example.

Men and women can have successful negotiations with a little understanding of the differences that each brings. It is not a hindrance, but a chance to learn how to communicate effectively and for women, an opportunity to level the playing field where sometimes they feel at a disadvantage.

A best practice is a process that a business uses to effectively deliver a service or product to the public, consumer, or other business. It is efficient because there is a pattern that will be followed so that a good experience is produced.

It is used in education, insurance and nursing, to name a few industries, but the idea can be applied to any business no matter the size.

For example, my friend went to a yoga class at a local gym. She had attended that particular class for over a year- Intermediate Vinyasa. On this day there were the ten regular people and two newcomers. The instructor changed the class to benefit the two newcomers. However, her other clients were left with a workout they did not want.

This is where having a published Best Practices would be beneficial. Perhaps something like:

1. Classes will start on time.
2. If the instructor is not present, and the class cannot continue then the students will receive a certificate for a free class.
3. Classes are marked at certain levels; please choose the level that is right for you. Modifications will be announced, but the classes will continue at the published level.
4. Our location will always be clean and safe.

The benefits of having Best Practices can be used in marketing to show consistency in your product, plus you will gain word of mouth clients because of your standards. You are also setting a legal benchmark for your business, because of this you want to make sure that you can meet your best practices.

If you have a business to business model, then Best Practices can still be used. Your focus may be on:

• We believe in alternative dispute resolution and will use mediation if a conflict arises. We want long term relationships
• We always use Delaware law in our contracts.
• We will answer your request within 24 hours
• We work with the following charitable organizations and hope you will help.

It is a gain for employees too. They will gain an understanding of what is expected of them, and what level of service they need to provide.

Taking some time to create a Best Practices will allow you to put your best foot forward.

Welcome to TrueNorth Business Consulting presentation of a Business Makeover. Each month will feature an idea that can help your business. True North focuses on helping health and wellness practitioners to maintain and grow their business using the areas of law, marketing, insurance and project management.
Health insurance is a hot topic, as the President tries to press forward on Universal Health Care. Universal health care is healthcare coverage for all eligible residents of a country, which covers medical, dental and mental health. In most countries is it paid for by the public in the form of taxes. The United States does not have this type of system for all its citizens. Medicare gives health insurance benefits, under age 65 with certain disabilities and to those with End-Stage Renal Disease. To understand the topic, there needs to be a discussion of the basics of health insurance.

At least 15% of people in the United States are uninsured. Those that are insured, who are not Medicare participants have one of the three basic types of health plans:

• Health Maintenance Organizations: HMO Plans pay for your coverage in advance, rather than paying for each health-related service separately. For the price of a monthly premium, your HMO will offer you a range of benefits from preventative care to dental or vision coverage. You choose a primary care physician and will need referrals to specialists. You pay a co-payment for each visit.
• Preferred Provider Organizations: PPO Plans negotiate lower overall fee arrangements with an assortment of doctors, hospitals, clinics, and other health providers. Your cost-sharing rate will be lower in-network than out, but you still have the freedom to step out of the network for treatment if you prefer.
• Fee-for-Service Plans (Indemnity): This plan reimburses medical providers for each service received on a case-by-case basis. A Fee-for-Service plan requires payment of an annual deductible before it begins to reimburse the insured for covered services. It also gives family members the freedom choose doctors, hospitals, and clinics.
The problem with these plans is the cost and coverage. The deductibles that need to be met prior to the insurance becoming effective can be high as a cost cutting technique. It is not unheard of for a deductible to $4,000 to $6,000. In an average year most individuals and families will not meet that threshold, therefore paying their medical expenses out of pocket.
The other issue is that most employers do not cover health insurance fully. A percentage is taken out of each paycheck. This lessens the take home pay.
Then there is the 15% that do not have insurance. Prior to Massachusetts making health insurance a requirement, it like New Jersey required the hospitals to take in charity cases. Currently in Massachusetts with some exceptions, individuals who cannot show proof of health insurance coverage that meets the standard of minimum creditable coverage by Dec. 31, 2007, will lose their personal income tax exemption when filing their 2007 income taxes. Failure to meet the individual mandate in 2008 will result in a fine for each month the individual does not have coverage. The fine will equal 50 percent of the least costly available insurance premium that meets the standard for minimum creditable coverage. Other states do not have any system, leaving the uninsured to navigate.

The uninsured can be further broken down by those who are employed, but their employers are not required by state law to provide any health insurance as a benefit; the unemployed; and those that have pre-existing conditions which make them uninsurable.

Universal health care may or may not be the answer. There are multi-level issues, which need a multi-level approach. When looking at this complicated issue, discussions should focus on how to lower healthcare cost, retain quality, lower deductibles and decrease the cost of health insurance.

Welcome to TrueNorth Business Consulting presentation of a Business Makeover. Each month will feature an idea that can help your business. True North focuses on helping health and wellness practitioners to maintain and grow their business using the areas of law, marketing, insurance and project management.

According to the U.S. Department of Labor, the average U.S. worker changes careers 3-5 times during their lifetime. In today’s economy I do not see it feasible. Changing careers requires, more often than not, a large investment and sometimes an uncomfortable amount of risk.

I believe that already existing skills can be changed and repurposed with a limited investment.

I am looking forward to taking a mediation course in March, which will certify me as a Massachusetts mediator. This alone can not be the focus of my business. Yet, it works well within my business service parameters and it was a course at a limited cost. I can offer another service to my clients.

Offering another service
Think about the service you are currently providing. Is there something you can add that will work in conjunction to your business plan? Is there something from your past you can tap into? For example, you may now be a weight loss coach, but previously you were a fitness instructor. How about offering small, at home, group classes? These are many people that feel uncomfortable in a gym atmosphere.

Don’t let your old skills go, revive them and reuse them. Be green and recycle.

Products
Every service provider uses some sort of product consistently in their business enterprise. Or there are products that work well with your business. I receive mail catalogs that contain many different products, products that people are not aware of, which could be stocked in your office. Are you an acupuncturist who helps neck and back injuries? Then why not sell not just herbs, but other products that can help your patients? It requires some effort to find a product you can support, which fit into your business, but there can be great monetary rewards, especially if you deal directly with the manufacturer.
Think of the convenience you are bringing to your clients. With you they can get many services. You have so much expertise, and it can work well together. Take a look at the True North Business Consulting Blog to see the Remarkable Women post for some great examples of how you evolve your business beyond your dreams. You can also look at what Jenifer Gebhard is doing to help her business take off.

Insuring Your Risk
by Cynthia Pasciuto

Welcome to TrueNorth Business Consulting’s presentation of a Business Makeover. Each month will feature an idea that can help your business as featured on Diva Toolbox Radio. True North focuses on helping health and wellness practitioners to maintain and grow their business using the areas of business law, marketing, insurance and project management.

What is insurance?

Insurance provides risk management where the person purchasing the insurance or paying premiums transfers the cost of a potential loss to an insurance company. One might think in a business such as health and wellness practice that there are limited risks or only the rare occasion of malpractice. However, risk from the point of view of clients is very different and very much a reality.

What are the risks I need to protect from?

I have a quick analysis for you. Identify everything that can possibly happen from the instant your clients enter the front door of your office or space until some time well after they leave. For example:

• Trips and falls
• Injuries or ailments from what you did

Then you want to do the same, but from your perspective. What could you possibly lose?

• Fire loss
• Stolen items
• Disability
• Sickness

Insurance provides you will strategies to deal with all foreseeable scenarios.

What types of insurance should I get?

First, sometimes you are able to contract your risk away with another party taking the risk for you. They would be willing to pay out, but if that is not the case then insurance is an essential and cost-effective way to protect yourself and your business.

Looking back on the foreseeable scenarios—ones we can guess could happen. This is where you want to ignore all the crazy stories you have heard about from other people in your same line of work. This will focus on the common types of losses.

• Trips and falls in addition to fire loss and stolen items are covered under a Business Owners Policy, which covers your liability and property. This is in regards to your premises only.
• Injuries or ailments from what you did are covered under a malpractice or errors and omissions policy. This covers you in regards to your profession.
• There are disability policies and also health insurance to provide coverage for yourself.

Exclusions

I have heard countless stories from clients that they had insurance, but didn’t realize their loss was not covered because it was excluded on the policy. An exclusion is a person or incident that is not covered under your insurance policy, meaning the insurance company will not pay.

The exclusions need to be reviewed with the utmost case. This section varies from one insurance company to the next and could be the determining factor when choosing an insurer (an insurance company). You want to make sure you are not violating the insurance company’s guidelines.

Insurance can help you and your business. It may just seem like an expense that you will never use. I hope so! In the meantime though you will have peace of mind and don’t forget you can advertise that you are insured to make you stand out from other businesses that are not.