Fire Your Boss

Saturday, October 07, 2006

The Power of Reinvesting Profits in Advertising

The key to success in building a large organisation and huge residual income in network marketing is the understanding of the power of reinvesting profits in advertising. But it does not only work in advertising. Try it in everything you do, like in saving which is known as the power of compounding and see it work miracles.

Have you heard the story of doubling 1 dollar a day for thirty days. It goes like this next day you will have 2 dollars, the third day 4 dollars, the fourth day 8 dollars, the fifth day 16, the sixth day 32, Seventh day .... and so on to 10,737,418.24 dollars on the 30th day.

If you apply the above example into advertising and you reinvest your profits every month you can build huge organisation and residual income. Take for example if you are making a profit of $100 a month with your current advertising budget and you reinvest $100 the following month you have increased your budget. Let say your profit doubles the next month to $200 and you reinvest the whole amount again in advertising. The budget then doubles for the 3rd month to $400 and 4th month is $800. If you do this for 12 months in the 12th month your profit will be $409,600.

The same principle will apply to building your organisation. If with your current budget you are able to bring 10 persons into your organisation in a month, by doubling your budget next month you will bring 20 persons and in the third month 40 persons and so on. In the 12th month your organisation will have built to 40,960 persons.

The key to building a huge organisation and residual income is reinvesting your profits for advertising purposes. You will determine what percentage of the profits you want to apply for advertising every month. The higher percentage you allocate the bigger the profits earned.

The above examples will only work if your advertisement are pulling the best results. It is important therefore to test your advertisement so that you use the best one only. The key is also to know which advertisements work for you otherwise you will be wasting advertisement money on useless marketing.
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