How To Create Business Wealth: Traditional Business Vs Passive Income Business

How To Create Wealth: Traditional Business Vs Passive Income Business
By Chris Kostopoulos

If you read the first two parts of this series you've probably come to the realization that not all businesses are passive income businesses. That's right, they are not, so let's dissect the two business models and see what the benefits are of a passive income business compared to a traditional business model.

How To Create Wealth: Traditional Business Drawbacks

The traditional business model has some benefits, but it also has some severe drawbacks that can ultimately limit the total wealth potential and passive income that the business owner can generate. The main benefit that owning a business provides is that of leverage.

Leverage is the ability to use other peoples' time, knowledge and skills to generate results that you otherwise would not or could not alone. For example, I if I chose to work 24 hours a day for 5 days I could only work a total of 120 hours. However, if I employed 200 workers and only asked them to work one hour a day for 5 days, they would have accomplished 1,000 total hours worth of work. That is the power of leverage.

There are many drawbacks to consider as well. Aside from overhead expenses from rent, insurance, legal work the main problem is actually derived from the hiring of employees. Yes, these employees provide you the leverage to accomplish more than you could alone, but that might not be good enough. Non-performance based employees have no real incentive to assist the owners in growing the business.

Excluding a sales or trading position where the performance can be tracked and they can be paid a percentage of their performance, it become very difficult to pay other employees based on performance. This leads to an issue where the employees generally only work as much as needed to not lose their jobs and the employer pays them just as much as needed to make sure they don't leave. It stumps the full potential of growth for the employees and the company overall.

"The Way to get things done is to stimulate competition. I do not mean in a sordid money-getting way, but in the desire to excel." - Charles Schwab

How To Create Wealth: Network Marketing Benefits

Network Marketing is an optimal passive or residual income business, which is just now being realized for its full potential. There's a lot of misconception about the industry; however, it is a great business model that allowed the top 7 publicly traded Network Marketing companies to average a 268% increase in stock price from March 2009 to May 2011. That was a period of time that many other industries were doing much worse.

It's such a beautiful industry in that by helping other people become successful, you can attain your own success. It's an industry where the average person can choose to learn and work hard to create an above average income and lifestyle. There are many benefits to a Network Marketing Business, which has probably led to the massive growth over the last few years, while other industries are struggling.

Network Marketing Benefits

• Unlimited Earnings Potential
• Leverage Multiplied
• Tax Advantages (Home Based Business)
• Work From Home (or Remotely)
• No Overhead Expenses (Rent, Insurance, etc.)
• Legal Work is handled for you
• Accounting is handled for you
• Production and distribution of products/services is handled for you

The Network Marketing model allows the individual to focus solely on product or service distribution and growing the distribution or network with other like-minded people. The industry is completely performance based, therefore it is in everyone's best interest to work as best they can, because if they don't they are directly hurting their own potential for success.

Leverage multiplied comes from the concept that not only are you able to leverage the efforts of other distributors you introduce into the network, but you will support them to the best of your ability to succeed. At the end of the day your success is based upon their success and vice versa. They will work to the best of their abilities for you and the company, because their earning potential is performance based. You will do your best to support and guide them to success, as they will provide you success, since they are within your network. You are both leveraging each other, but within that the whole network is leveraging each other, so you have a massive support structure in place that all benefits by helping others.

It really is a beautiful industry that is just a bit misunderstood, but considering the Wall Street Journal just published a big piece on the industry back in June 2011; I'm sure more and more people will see the huge benefit.

Network Marketing isn't the only way to create wealth, but it's one method that currently lots of other already wealthy and intelligent business people are getting involved with. Now that's How To Create Wealth!

Additional information or help with How To Create Wealth is available with Chris Kostopoulos.

Success in any business is created by knowing the methods used by successful marketers - Learn to build your successful business by Marketing Smarter online.

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