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But it was the fear of losing his job and professional reputation that held Richard back from participating in the business with Susan. The fear of something that may never have happened destroyed the possibility of their success.

The lesson here is that whoever knows the warm list prospect best should make the call. Prospecting the other way certainly put Susan into a funk because she didn’t understand what had happened. She just assumed that she wasn’t a self-starter. She, who had been one of the top women earners in corporate America, had failed in her own networking business. She was depressed and Rene had little ability to fix it, change it, or help her understand it. Rene was only two years in the industry at that time and could not pinpoint the problem. But, in hindsight, there is no doubt in Rene’s mind that if she had coached Richard to put himself and his reputation on the line with this business, he and Susan would be two of the top earners in the industry today. They had phenomenal potential. They could have been great working side-by-side. This fear of lost credibility holds the countless new distributors in our industry. As leaders, we must not be afraid. Once we are absolutely convinced of their potential, we need to encourage men and women to take a stand and go for it all the way!

We don’t mean to undermine the very real fear that exists in starting a new venture. It is a legitimate one. Why burn the bridge that currently supports you before you know whether the new bridge you are building will hold up through storms and outer pressures? The solution is in what we call “balanced risk-taking.” If you don’t let prospect know how completely and totally convinced you are about this industry and your company, you will fail. That is for sure. On the other hand, if you flaunt your new business around the office, you could lose your job and your source of income before you have replaced it. Somewhere in between is the answer. Unless you have sizable savings, you may have to postpone sponsoring you boss if he is someone who would be truly threatened by your outside business involvement. You may even have to put off sponsoring everyone in your immediate environment. But there are plenty of other current clients, former clients, and sideline associates who would be interested and/or know other people who might be interested to hear about a business opportunity that creates personal freedom and financial security. With these people, don’t hold back. Prospects need to know that you are a believer. Let them know, in no uncertain terms, the depth and breadth of your conviction about the power of this type of business to transform your life and theirs.

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We can relate countless stories of people who have failed at this business because they were afraid to let their peers know how very serious they were about building a networking organization. One story goes back to 1990, when Rene sponsored a couple, Susan and Richard, from the San Francisco Bay area. She was a corporate executive on maternity leave, highly motivated because she wanted to stay home with her baby and not return to the office. Susan was a competent, organized, self-starter. Richard was a high-level salesman for a food manufacturer who admitted that he was no longer excited by his job, even though he was well established with a Fortune 500 company that was strong in the global marketplace. Richard was concerned about how his reputation among his corporate peers might suffer by joining network marketing. He could not afford to have his boss learn of his involvement, which he felt might result in him losing his job before their network marketing business actually began generating a good income.

Richard played it safe by providing his wife leads from among carefully selected business associates and trusted acquaintances. He had the utmost faith in his wife’s ability to do this business and to professionally handle his best prospects. The problem was that his associates knew him and trusted his judgement and insights about a business opportunity, and they didn’t really know his wife. She spent months calling up his leads and doing presentations for them. He was even present at some of her business meetings. But because of his fear losing his professional credibility, he never openly admitted that he believed in the business hook, line, and sinker. He never let prospects know that at some point in the future, he was planning to give this his full-time effort. He continued to portray the image that this was entirely her business and that he avidly supported her in it.

After a year, she had sponsored a few of her girlfriends, a couple of guys she knew from work, and a few of the wives of her husband’s business associates. But their business never really took off as they had expected. Susan and Richard ultimately slipped from business building into merely product wholesale buying and she eventually went back to work. Both of them were disillusioned about network marketing. Rene was developing a close and personal relationship with both of them and knew that, if any two people could succeed in this industry, they were Susan and Richard. They had the connection, the motivation, the innate ability, and respect of their friends and associates. Susan obviously felt that if she could make her MLM business work, none of her family and friends could either.

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As more professionals enter the network distribution industry, it is natural that they will want to postpone acknowledging their participation until the time is right. For example, some will pretend that it’s their wives’ business. The problem is that if you’re a professional and people sense your doubts or uncertainty about the industry, they will also be suspicious. Some will choose not to join and other will join but build through someone else, such as their spouse. But the reality is that once someone of stature has joined our industry, the floodgates start opening for everyone. And more often than not, it’s the ordinary, everyday people who make it to the pinnacle, not the “big hitters” of traditional business, law, or medicine, though they certainly can earn enormous wealth while pushing their sponsors into the stratosphere.

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Just address this issue in general terms during training, Bob will not approach those men. Here’s what we suggest you say because there will always be someone similar to Bob in your group:

“Folks, the biggest challenge you’re going to face just as soon as you succeed in this business will be the anger of people to whom you never even showed this opportunity. You may have a group of friends, even physicians and attorneys, whom you’re afraid to approach. But they won’t be your friends any more when they find out that you got involved with a business that’s now paying you $30,000 a month, while they’re still going into an office sixty hours every week. Why would they be upset? Because you didn’t think enough of them to show them this business. If they do resist even attending your presentation, tell them right upfront that it’s their choice whether they get involved or not. But you wanted to make absolutely sure that they won’t turn on you in a year because you didn’t give them a chance to see this opportunity as soon as you knew about it.

Notice the strategy here. We keep it a soft approach and refer to professions like law or medicine. Most everyone who isn’t lawyer or doctor looks up to those professionals. And in our business it’s really uncommon for a student or maid to sponsor an accountant or CEO of a corporation. On a scale of 1 to 10, if you think of yourself as a 5, once you sponsor a 10 into this business, you become a 10. Move past your comfort zone and offer everyone on your list this opportunity. The truth is this: We are all 10s in potential, we just need to seriously buckle down and recruit as many frontline distributors as we can. Don’t let this Warm List Warhead hold you back.

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1. Identify a specific objective and indicate how a coordination of effort toward the chosen objective depends on the performance of all other management functions.
2. Show how the following are related to attempts to achieve a coordination of resources:

• Quality control
• Production scheduling
• Personnel selection
• Employee training
• Financial audits
• Market research

3.  How is it possible to have cooperation without coordination? Can one also find coordination without cooperation?

4.  Cite examples of preventive control measures within your present organization. Are there other areas where you would             agree that you are totally dependent on remedial control?

5.  How would you attempt to determine whether or not a particular control was self-defeating? Is a self-defeating control still             better  than no control at all?

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Recognizing that not all discrepancies can be prevented, the manager should nevertheless seek to apply preventive measures where possible. At the same time, however, managers must improve their abilities to deal with those inevitable occurrences where remedial action must be taken.

Finally, managers must realize that the establishment of control devices is but a starting point for a coordination of resources and effort. Without a framework of guidelines provided by control systems, chaos would certainly result. Yet, just as there can be too little direction of employee behavior, the other extreme is also possible. When operating guidelines are too inflexible and confining, stagnation can result as individuals cast aside their initiative in favor of the security that seems to be associated with a rigid adherence to those guidelines. Understandably, such controls are not in the best interest of the organization since the means for achieving coordination have become ends in themselves.

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In seeking to accomplish objectives through the utilization of human and material resources, all managers strive for a coordination of effort. While the performance of all management functions has a bearing on coordination, control is especially important. Without question, the standards of performance established through plans are not self-fulfilling. Similarly, organization is meaningless without an application of the control process. In this sense, control encompass the activities which have as their aim the prevention of discrepancies between planned and actual performance.

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To know where they stand and what they are expected to do. Some, more than others derive a great sense of security from the controls which prescribe the limits of their actions. But it is also human nature to resist, in varying degrees, guidelines which act as constraints on behavior. Perhaps these points are most noticeable when one observes the behavior of children.

In the family environment, children seek the guidance and direction provided by certain ground rules. In fact, the most frustrated children are often those who have no clearly defined boundaries within which they are expected to act. At the same time, however, children are constantly testing their boundaries as they seek to develop degrees of individuality. Therefore it is not surprising that this testing continues as children mature and take their places in the adult world of work.

This all points to the need for a careful development of control systems. While individuals need some direction in their work, they will also resist those controls which seem to disrupt the security which they perceive in their jobs. Consequently, the benefits of employee participation should be considered in the development of control systems. When employees desire such involvement in making decisions that affect them, a greater sense of commitment to control devices often accrues as individuals identify more closely with the guidelines which influence their behavior. In addition, communication plays a major role in minimizing resistance to controls. Most people do not like that which is sudden and unexpected. Therefore, the distribution of full and complete information concerning the nature and need for given controls should always precede their installation.

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Your obligations as franchisee might include any or all of the following:

(a) Construction according to plans and specifications provided

(b) Maintaining construction and operating schedules

(c) Abiding by lease commitments

(d) Taking out required insurance

(e) Undergoing required training

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There is no such thing as a standard franchise contract. Each contract differs in some way(s) from the others. However, most contracts contain clauses or sections covering the restrictions and obligations of both the franchisor and you, the franchisee. The obligations of the franchisor may include any or all of the following:

(a) Financial assistance

(b) Site selection and layout

(c) Plans and specifications for buildings and other site improvements

(d) Specifications for any necessary equipment and furniture

(e) Promotional and advertising material

(f) Employee hiring assistance

(g) Franchisee and staff training

(h) Business opening assistance

(i) Business operations manuals

(j) A bookkeeping/accounting system

(k) Product supply assurance

(l) Ongoing support in things such as consultation, visits to the premises, and staff retraining.

When you have had a chance to review the franchisor’s obligations as stated in the contract, try to find out if he or she usually performs the things agreed to in a contract. The best way to do this is to talk to other franchisees. If the franchisor does have a reputation for poor performance, it is better to know this now.

An important consideration in franchisor performance is the closeness of the franchisor’s head office, or area supervisor’s office, to your location. How far do supervisory personnel have to travel, how many units are they responsible for, and how frequent are visits?

If there are other franchisees in your general area, this can be beneficial to you since it is economically advantageous for the franchisor to service them well. This closeness may provide competition, but it may also have benefits to you in sharing regional advertising campaigns (thus providing all franchisees a higher profile) and reducing purchase and shipping costs.

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Don’t be afraid to negotiate more favorable terms in the contract if you can. Most ethical franchisors understand that sometimes special conditions are necessary for a particular franchisee, and these may be agreed to as long as the franchisor still gets a return on the investment and maintains integrity in terms of quality control.

However, an ethical franchisor will not negotiate away essential major points that will violate the franchise system. To do so would mean there is no reason to have them in the contract in the first place. If any franchisor is willing to concede such major points, such as erosion of quality standards in order to obtain your fees, this should warn you to turn to other franchisors.

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Most franchisors want fairly tight control over your day-to-day operations. This is usually achieved by providing you with a copyrighted operations manual that spells out, procedure by procedure, the ways in which you are expected to run the business. It will include the franchisor’s policies and procedures, and cover such details as the hours you must remain open, record keeping methods, procedures for hiring employees, and, in a restaurant operation, such matters as recipes, portion sizes, food storage and handling procedures, and menu mix and selling prices.

You should inspect the manual if possible prior to signing the franchise agreement to be sure that its requirements are practical as far as you are concerned.

The franchisor’s operating policies and procedures are an area that can cause considerable franchise dissatisfaction once a new business has been successfully established, particularly if they force you to follow inefficient or unprofitable methods, or preclude you from taking advantage of local suppliers’ discounted product prices that are lower than the franchisor’s. To combat such dissatisfaction, you should carefully read the contract to find out how you must, so to speak, toe the line.

Where you are required to purchase products and/or supplies from the franchisor or approved suppliers (this is referred to as “tied” selling), you should consider the locale of the suppliers since this will dictate shipping costs and distances as well as timing of deliveries, which may be important in the case of perishable supplies. The contract should ensure that you can select the supplier if circumstances permit.

Does the contract call for a minimum purchase quota (a form of hidden cost)? If the contract requires you to purchase only from the franchisor, how are the prices of the products or supplies established? What assurance do you have that the prices will be reasonable or competitive?

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