This is such an important aspect of running our business, but for some reason we often times skip this and wonder why our business is in the red...
What it means to know the numbers is to know what it's going to take to make your business profitable. In business this is call a "Breakeven Analysis" but simply put... it's how many units of X do you need to sell, to start making money.
Let's make sense of this for us Network Marketers. Often times there's bonuses for signing on a new business partner, but for the sake of simplicity lets just talk about our business in terms of breaking even on residual income ...
So what you need to do, is map out how many customers and distributors you need to have in your organization to make your business profitable.
It's actually pretty easy to do:
First- layout all of your expenses, the things that cost you money to run your business (on a monthly basis)
Second - Figure out exactly how many customers and distributors you need to make that same amount. Here you can run different senarios with a different mix of customers and distributors. If you're focused on building with distributors... then use that.
Why is this important?
Well, this is going to help you know exactly what you need to do to make your business "Pay for itself". Once you hit this mark - the products you purcahse on a monthly basis will be free... forever!
Also, you will know how to set your advertising budget. If you know how much a new recruit brings into your business, you will know how much you can spend on advertising to get a new recruit.
That will be your magic number... if you can break even or make money on the front end of your marketing efforts. as little or big of a profit it might might - keep the marketing going! It takes time to build the big residual income... but if you're profiting up front... it's all good.
This is just one piece of the puzzle. Make sure you fully understand the different options available to you to grow and expand your business. A good place to start is by picking up the 7 Fatal Mistakes of a Network Marketer... lots more valuable info in there that will help you avoid the fatal mistakes I've made while building my business.
Cheers to Development and Success,
"The Personal Trainer For Network Marketers"