Hello Friends. Welcome back.
Hope you have gone through the previous postings
and agree that to give yourself a realistic chance to achieve your life’s goal
you need to be in the right quadrant of Robert Kiyosaki’s Cashflow quadrant we
discussed earlier.
Don’t get me wrong, I am not trying to say
that money is everything but even to give back to the society or aid a charity
or help the under privileged we need money. I promise to deal with this aspect
in more detail in a later discussion to avoid digressing from the current chain
of thought.
To be in the right quadrant we either need to
be a Businessman or Investor. We can safely assume that ‘Investor’ option is ruled out (sorry if
I upset anybody). So the only option is to be a Businessman.
We have a choice of being in Traditional Business or Network Marketing Business.
How easy or how tough it is to be a
businessman and be as successful as say, Richard Branson, Steve Jobs or Michael
Dell?
Let’s look at the Traditional Business first.
You will agree it is not easy for an average
person because it needs:
1.
Capital: A reasonably large Capital upfront for
the office set up, employee salaries, inventory cost etc. The amount
depends upon the nature of the business. You can have a rough idea from the
fact that to set up a small corner shop can set you back by a few thousand
dollars.
2.
Advertising
Cost: To promote and sustain a new start up for long term, you need to invest
in advertising. An advert in the newspaper, a TV ad for few seconds or
banners/hoardings can cost you a fortune.
3.
Fixed
Costs: Ongoing monthly cost like rent, salary etc can’t be avoided
irrespective of business happening or not
4.
Return
on Investment: Average year-on-year return in businesses world over is about 15-18%.
So to just breakeven it would take more than 5 years. From that point on the
ROI depends on the type of business, location, management, competition and a
host of other factors.
5.
Time
and Effort: To build a successful business one need to be virtually 24x7 in the
initial years.
How different is Network Marketing?
1.
Capital: A very low
startup cost. In a physical product based company there would be an ongoing cost
of buying products every month. There are many online businesses where expense
is one time.
2.
Advertising
Cost: This is minimal and would be a very insignificant fraction of the
cost of the traditional business.
3.
Fixed
Costs: Virtually zero fixed costs
4.
Return
on Investment: As the investment is not too big the capital is recovered in a much
shorter period of time. Running cost being virtually zero, all earning from that
point onward is profit.
5.
Time
and effort: 10-15 hours per week should be good enough. Have the benefit of working
from home and also to choose when to work.
I will leave you with this 10mins video of Burke Hedges Pablo and Bruno in the Parable of a Pipeline. I will let the video do the talking. Till
next time.
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