Often Network Marketing is a much missunderstood and maligned concept. This article written for publication in a Students Union Magazine goes a long way to explain the concept to the uninitiated

1. TIME LEVERAGE
A prime factor in Wealth Creation
Most of us spend the first sixteen to twenty years of our lives in some form of education to
exercise and stimulate our brains during these formative years and to provide us with an
understanding of our SELF-SUFFICIENCY needs in adult life. By choice none of us want to be
dependent on others for support throughout our lives. We therefore accept the need to learn the
basic skills required and to soak up as much information and knowledge of our surroundings as
possible. We can then take our rightful place in society when we eventually leave the education
system.
Unfortunately the education establishment provided by our state system is really only concerned
with the business of training our brains to process facts and figures, statistics and analysis. It
often tends to ignore those factors, which actually determine the difference between potential
success or failure, particularly the development of our attitudes and belief system.
How do we judge what is success and what is failure? Maybe a good benchmark would be to look
at our status at retirement age. If at this point in our lives we have sufficient wealth and reserves
of money to ensure that, no matter how long we live, we will not need to depend on the state and
that our personal savings and pensions afford the same level of comfort achieved during our
working lives, then maybe we are a success. Anything less than this in reality means that we
have failed to provide for our own retirement years and maybe should therefore be classed as a
failure!
Now let us ask the question; ‘How many people do you know, or know of, who can honestly say
that they fit our definition of the success category?’ You can probably count them on one hand.
So do we aspire to these achievements, and if so, what do we need to do to ensure our success?
Let’s take a look at just three living examples of our success definition.
Bill Gates, Richard Branson, Charles Dunstone (Carphone Warehouse Co-founder)
We could go on but these few will suffice to demonstrate our example. Let’s examine some
factors that have contributed to their successes.
Bill Gates - Founder of the gigantic Microsoft Empire (but you already new that). He is the
richest man in the USA, three to four times richer than anyone in the UK. Bill wasn’t even born
when the computer software business first started. Not much brighter than you or I, doesn’t work
much harder than you or I and didn’t have lots of money to start with, (he actually set up his
business in his garage). So what made him so successful? Well several factors amongst which
are:
a) Right place, right time
b) Massive action
c) Focus
d) The use of Time leverage
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2. Richard Branson – Britain’s best known and probably most popular entrepreneur with a string
of business successes to his name yet he left school with few ‘O’ levels and no higher
qualifications. A character who has turned the common conception of entrepreneurial image on its
head. Richard has had more business failures than most of us will even consider during our lives.
This hasn’t stopped him becoming one of Britain’s richest men. What can we attribute his
successes to? Amongst other things:
a) Self belief
b) Focus
c) Diversification
d) The use of Time leverage
Charles Dunstone – A man who left public school with few qualifications. Little was expected of
him but he and his colleagues had the ability to visualise the enormous potential of the new
mobile communication revolution. In line with our other examples above he has demonstrated
some common traits of the successful businessman:
a) Vision
b) Self belief
c) Massive Action
d) The use of Time leverage
Obviously these characteristics and techniques are only a few of the factors involved in the
overall success of these people but they demonstrate certain typical attributes needed to become
a success in any chosen career path. We could spend a considerable amount of time discussing
each of these attributes and techniques but that’s not the purpose of this document. Our title is
‘Time Leverage’, the one common ‘tool’ listed for each of these people to help facilitate the extent
of their success. You notice we call this factor a ‘tool’ rather than a personal characteristic or trait.
Time leverage is in fact a method employed by virtually every major business organisation to
maximise their growth and, if used sensibly and to its maximum potential, results in almost
unstoppable success.
Let us break down this phenomenon into a simple easy to understand concept. Within this
example we are going to make some figurative assumptions to simplify the end result. The point
of the exercise is to help you understand time limitations.
Assuming that each of us follows an education programme that ends at around age 20 years, we
then spend up to 5 years deciding the direction of our lives and establishing ourselves in our final
career path. This means that from about age 25 through to 65 we can expect to be earning our
highest levels of income. Let us assume for the sake of the exercise that our average annual
income works out over this period to be £50,000. This means that over our working life span we
can expect to have earned in total £900,000. (What a shame, we haven’t even achieved
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3. Millionaire status!) Never mind, perhaps we can invest the majority of this income in some sort of
high return investment programme so that by retirement we have attained our million.
Hang on a minute, what about our friendly Taxman, doesn’t he deserve a slice of our good
fortune? Let’s take off around 40% for PAYE, National Insurance and other taxes at source. That
amounts to £360,000 to be deducted from our gross income, leaving £540,000. Now what if we
buy a home, somewhere for us to live comfortably? The associated mortgage and insurances will
probably cost us around £250,000 over this 40-year period, a reasonable estimate. So how much
of our £900,000 do we have left? We make it £290,000. Hey that sounds like a useful amount for
investment, what do you think? Oh! Hang on, we need to live, clothe ourselves, maybe buy a car
and run it. How much do we need to keep ourselves each week? About £100 perhaps and then
the car will probably cost us around £60 per week making a total of £160 or approximately £8000
per year or £320,000 over our 40 years.
Oh dear! But we only have £290,000 to live on. Obviously we have to start cutting some corners
and making savings so we can scrape a living. Yet we thought we had a pretty good income on
£50,000 a year! Maybe now we can start to see why so many people live their lives in hock to the
financial establishments.
The rather sad picture we have painted is in fact reality for 95% of the population. Only 5%
actually achieve what we call ‘Financial Security’. Why? Because we all accept the ‘status quo’ and
go searching for those ‘safe’ dependable JOBS designed to keep us all on the brink of financial
disaster. So what can we do to lift ourselves out of this mire and join the 5% living in comfort,
stress free and self-sufficient? The actual path we take is really up to us but ideally it should be
one about which we are totally and continuously enthusiastic and incorporates activities we really
enjoy. Those who do a job just to bring in the money needed to live on but do not enjoy, will
forever struggle to motivate themselves at a level that just about keeps them on top of their
chosen pile.
We really need to maximise our earning potential in order to avoid the scenario we have just
explained. We need more income than our day-to-day living will cost us. This will provide a
surplus of money to be invested for future growth and provide the nest egg for our retirement
years. Maybe we need to take our little example to our employer and explain that we need to be
paid around double our current salary! That should do the trick. Somehow we don’t think that
many companies would buy into this philosophy, where would they get all the extra money from
to pay us these vastly inflated wages?
The answer has to be in our own hands, and it is. Let’s go back to one of our successes, Richard
Branson for example. When he started up his Virgin Atlantic Airline business, did he go out and
buy his first aeroplane, get a pilots licence and go fly it himself? Of course not, he employed a
qualified airline pilot to do it for him. When this pilot had flown a few journeys and needed to be
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4. paid for his time, did Richard put his hand in his pocket and count out some notes for his pilot?
Indeed not, he employed the services of a trained accountant to handle such matters for him. We
hardly think he would have stood in the entrance to the airport selling tickets for his flights to the
customers as they came to fly. Specially trained booking staff handled such activities for him.
What are we trying to say here? Basically Mr. Branson earns a very handsome living by
employing others to do all the specialised jobs he can’t do himself. This is a much simplified
example of the principle of ‘Time Leverage’. How many of us have heard the old expression
“Many hands make light work”? It’s an accepted fact that two people can achieve more in one
hour than one person working two hours. Logically, if we put a team of people together then we
should achieve proportionately more success and a greater margin of profit for the hours worked
so that we can be paid more.
Look at it another way, each of us have just 24 hours in every day. We sleep for around 7 of
those hours, eat for about 2 hours, spend perhaps 2 hours travelling and take well-earned
relaxation for a further 5 hours. This leaves just 8 hours for us to earn a living. Depending on
what we do and how effective we are using these 8 hours, we can hopefully earn a certain level of
income proportionate to our skills. Now how can we double this income? The answer to that is
easy, work twice as long! Many people actually try to do this but unfortunately the majority of
these people enjoy a miserable lifestyle, ruin relationships and often die of exhaustion at a
relatively early age. Working longer hours is not necessarily the answer, ‘working smart’ now that
makes more sense. By understanding that we can become much more productive sharing the
workload between a number of people, each skilled in their own field of activity, we can increase
productivity and reap the financial rewards that follow.
Some of you are no doubt thinking that this may be fine for a business owner but how does it
work for those in employment? Let’s look at any department within a company. There will be a
group of working people each designated to do a job appropriate to their skills and training. When
an individual becomes over laden with work, the company has two options. They can either
persuade the employee to work longer hours and pay them a little more or they can employ an
additional employee with similar skills to share the workload.
Option 1 will eventually result in the employee becoming fatigued, possibly falling ill and a
resultant loss of productivity in this department. Option 2 may initially cost the company a little
more but the resulting improved productivity will more than compensate for the additional cost
over time. Here we have a very simple example of the company using ‘Time Leverage’ principle.
There will usually be a supervisor responsible for the activities within the department. This
individual has taken the first step toward implementing the same ‘Time Leverage’ principle. By
using initiative to stand out in the team, the employer has recognised this employee’s extra value
and has promoted this person to a more senior level. This promotion is usually rewarded with an
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5. increase in the amount of income received. So here we have an individual who has created the
opportunity for increased reward through the principle of ‘Time Leverage’. In effect this person is
actually receiving income from the efforts of those working under him or her. Are we beginning to
see the picture here?
The departmental manager probably has responsibility for all the people in the department and
will be paid considerably more than the supervisors or the employees under them. Taking this to
the top of the employment ladder, we will find the Managing Director or Chief Executive Officer
responsible for everyone and paid even more than the highest paid manager.
Now you may think that we are explaining something pretty obvious here but how many of us
actually sit down and think about this concept. How many of us realise that the only way we are
going to improve our lot is to stretch ourselves and achieve the highest position we possibly can.
We also need to be aware of the fact that in certain lines of work, there comes a point where we
cannot climb any higher up the ladder because of the nature and constraints of the job we do.
Often the only way we can increase our earning potential in this situation is to accept the fact
that we need to leave the ‘hands on’ duties to others and accept an appropriate administrative
role. We can still use our skills and expertise to the advantage of the team but in a more advisory
capacity.
So, even in the field of employment it is possible to apply the principle of ‘Time Leverage’.
Unfortunately, however, it also brings to light a glaring problem! What we have described here is
a Status Pyramid. At ground floor, a throng of workers all paid at the lowest rates in the
organisation. At supervisory level, fewer people being paid proportionately more whilst at
managerial level, even fewer paid significantly higher incomes. At the top of the tree so to speak,
we have our director level with maybe a few individuals on incomes our ground floor workers can
only dream about. Then sitting at the desk of the Gods is our MD or CEO reaping rewards from
the productivity of all he/she surveys.
Why do only 5% of the total population ever achieve incomes comparable with the most
successful company leaders? Quite simply because there can only ever be one leader for each
work force.
Just think of the competition for this position, the envy within the company for this individual’s
potential lifestyle. Why ‘potential lifestyle’ you ask, surely with all that income there’s no problem
in that area? Reality is that many heads of companies hardly ever see their families and have
very little time to enjoy the fruits of their labours. The outward trappings of success may be
evident but behind the scenes, many suffer extreme stress and the instances of failed
relationships are increasing dramatically.
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6. If you are contemplating a career in full time employment and you want to achieve the
benchmark for success we discussed at the beginning of this document, then you must focus your
entire being on becoming one of the true industry or commerce leaders of your time. The
alternative is a lifetime of mediocrity and dependency on your pension provisions in retirement.
Enjoy your battles!
Now let’s look at how those who go it alone can benefit from our friend – ‘Time Leverage’. All of
the three examples we gave earlier are what we describe as entrepreneurs. People with the
ambition to become independent and create their own success, rather than relying on an existing
organisation to provide such a vehicle. These are the true risk takers, the goal setters and the
individuals for whom the words ‘impossible’ or ‘failure’ are not an option. This is not to say that
some of them won’t fail or encounter an unassailable obstacle. The difference is that they are
prepared to meet these challenges head on and accept the consequences of their own actions.
Just by way of a little diversion, let us look at the difference between a risk taker and the average
Joe in the street. This short story exemplifies this difference as well as any we know.
A man who had made millions of dollars speculating in commodities was giving a lecture. In the
middle of the talk a spectator stood up and asked, “Didn’t you realise that all this speculation was
risky, that you could have lost every penny you had – and then some?”
“Why yes I did,” the millionaire replied.
“Then why did you continue to speculate?”
“I don’t know exactly why,” the lecturer answered. “I just know I was willing to take the risk.”
“Well I’m not,” the spectator retorted.
The rich man considered this response for a moment then a smile crept across his face and he
said, “That might be why I’m giving this lecture and you’re paying for it.”
This example also illustrates another very powerful principle of success but we will leave that until
another time.
Getting back to our main theme, you can probably see how those such as Richard Branson and
Bill Gates have employed this principle to its ultimate. Both have massive business empires
producing untold wealth for their owners and all off the back of literally thousands of workers
being paid a small percentage of their true personal worth.
Anyone who works for an employer can only ever expect to be paid a relatively small proportion
of his or her true worth within that organisation. As an employee you are nothing more than a
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7. tool to be used by the company to produce profit. You sell your time to that company who then
includes it as part of the production cost of the final saleable product or service. Of course they
have to make a profit from your contribution. They also have to include any other overheads
involved in your employment, (National Insurance contributions, contributions to company
pension schemes, company car, protective clothing, office space, tools, etc.) Then they must add
on the necessary profit margins required to make the company viable. At the end of the day you
will be lucky to be paid about 25% of your true worth to that company.
Large successful companies are the ultimate demonstration of how an individual can achieve
untold wealth through the efforts of others. ‘Time Leverage’ is one of the most powerful tools you
can use should you decide to become your own boss. The only way you can expand a business
venture (with very few exceptions) is by employing the time of others to increase output and, as
a consequence, your profit.
The idea of employing lots of workers often frightens people away from business expansion.
We’ve all heard or read some real horror stories involving the problems surrounding control and
utilisation of work forces. There are ways to eliminate some of these problems in certain fields of
operation. We refer to the use of Self-Employed labour or Contract Workers. The movement
toward self-employment is the next PRIMARY TREND in the business world and is evident in many
operations.
For your business there are various ways in which you can take advantage of the tidal wave of
new self-employed workers. These areas cover Manual Labourers, Commission only Sales Agents,
Consultants, the use of Sub-contractors, Franchising your ideas and business methods and
Networking to your marketplace (a form of low cost franchising).
None of these methods involve employing people so your overheads are reduced but you have to
offset against this the increased cost of the labour. The major benefit is that you pay on results.
If your hired workforce does not perform to the agreed level then your payment to them is
proportionately lower and so your profit margins remain fairly stable albeit on a lower turnover.
When things are going well, and turnover increases then your profitability soars and you get to
keep a larger portion of the cake (so to speak).
For many companies this concept is becoming a more and more attractive option. Large
organisations are continuously downsizing and are filling the gaps in their work force with
contract labour in order to maintain output levels. For the entrepreneurs amongst you there is a
tremendous opportunity to be taken provided you give serious thought to your ‘modus operandi’.
Maximising your bottom line profit is the name of the game and elimination of some of the high
costs and problems associated with employing people is a step in the right direction.
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8. Probably the most outstanding examples of the use of this principle in its purest form are the
massively successful Network Marketing companies that are emerging around the world. These
outstanding examples of commercial success rely totally on the use of freelance self motivated
individuals who promote their products and services and are paid handsomely for their efforts.
Not only this, but they also earn from the efforts of others that they introduce to the companies
network of agents through many levels.
The philosophy here is that without the individual efforts of these agents introducing and teaching
new agents, the market penetration of the company would not expand. The ability of each agent
to introduce and teach the necessary skills to new agents is therefore highly prized and richly
rewarded in line with the company’s increased turnover and greater profitability. The massive
savings through not having to advertise, along with very low overheads, makes it possible for
such companies to pay their agents higher rewards based on the time leverage potential of their
team building capability.
Hopefully we have given you an insight into one of the most important principles of success. So
far as we are aware, this kind of information does not feature in a business studies curriculum.
It’s the kind of knowledge usually left to the individual to perhaps stumble across some years
down the line or through a practical learning curve. Many business people have realised the truth
only after their experiences have caused them financial pain, sometimes too late to do anything
about it. We hope that this information will help you understand the power of the networking
system and that we have perhaps, in some small way, contributed to a better understanding of
this important concept.
“I’d rather earn 1% of 100 people’s efforts than 100% of my own”.
Billionaire John Paul Getty
A final thought – Self-employed workers are often far more motivated and focused than employed
workers. They live by their results and have nowhere to hide.
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