| There are many factors to consider when choosing a | | | | experience. |
| direct sales or network marketing company. The | | | | 2 - Research the company leadership. Who owns the |
| financial health of the company is an important, often | | | | company? Who runs the day-to-day operations? |
| overlooked factor. Here are some tips that will help | | | | How experienced are they? Have they taken other |
| you evaluate a company's financial health and help | | | | companies to success or failure? |
| reduce the risk of losing your business due to a | | | | 3 - Is the company owned or backed by a bigger, |
| company's poor financial performance. Find out how | | | | more experienced company? |
| to uncover hard-to-find information, how to surmise | | | | 4 - Are the company's products, websites, and |
| financial health from other information, and how to | | | | printed materials professional looking? Are their |
| use the information you find. | | | | consultant agreements, policies, and procedures |
| It's easy to find information on publicly traded | | | | thorough and well written? A professional appearance |
| companies (those that sell stock to the general | | | | can indicate that either the company is experienced |
| public). They are required to disclose specific | | | | or they have the finances to hire experienced people |
| information, including certified financial statements. | | | | to develop the materials. |
| These reports are readily available to the public and | | | | Use the information you gather to evaluate the |
| provide information about the company's assets, | | | | likelihood that the company will be profitable and |
| profits and losses, expenses, investments and other | | | | therefore in business for the long term. |
| information that can help you assess their financial | | | | If the company seems to be in complete chaos and |
| health and likelihood of continued success. | | | | totally unprepared for the financial responsibility of |
| Many direct sales and network marketing companies | | | | running a company, it's probably not worth risking. |
| are privately owned companies, which means they | | | | If you expect decent profit early on in the business, |
| have no legal obligation to disclose any financial | | | | a high risk may be tolerable. And if the opportunity |
| information. It may be much more difficult to get | | | | will provide knowledge and training you can transfer |
| fiscal information about these companies. | | | | to another business, the risk may be worth it. Or if |
| There are private companies that offer at least | | | | you can build your own customer base and downline |
| some financial information to the public, which is a | | | | that will likely follow you to a new venture if |
| good sign. A struggling company isn't likely to reveal | | | | necessary, you might be willing to risk more. |
| that information if they aren't required to. | | | | But if your success and profit will take longer to build |
| When the company doesn't provide fiscal information, | | | | or you aren't prepared to deal with a possible |
| here are some things you can do to try and ferret it | | | | business failure, you need a company that looks like |
| out. | | | | it has staying power. |
| 1 - Call the company leadership and ask pointed | | | | And remember, your financial investment isn't the |
| questions. What is their annual sales revenue? How is | | | | only thing you might lose. You'll be investing |
| the company financed (reinvesting profits, investors, | | | | considerable time and effort and more importantly, |
| loans)? How long can the company survive on just its | | | | risking your reputation. If the business fails you'll |
| current equity? What other assets or investments do | | | | undoubtedly have to deal with disappointed |
| they own? | | | | customers and team members, as well as face your |
| You may not get direct answers to any of those | | | | own emotional response. |
| questions, but sometimes the reaction to the | | | | All business is risky. Evaluate the company's financial |
| questions can give you an indication of the | | | | health and determine how much risk you're willing to |
| leadership's business and money management skill and | | | | take. |