Middle Market Deals and how to buy, sell and raise capital from $5 to $500 million

Today I attended the annual convention for USANA Health Sciences, Inc. (Nasdaq: USNA), one of our clients. (I also own a few shares of the stock.)

It occurs to me that there are some principles that we can learn from the direct selling, network marketing or multi-level marketing industry. Most folks don't know much about the network marketing industry beyond what they have learned from someone who may have provided an unwelcome pitch. There are, however, some tools they use to build their organizations that have application outside the network marketing industry.

Here are my observations:

Passion: the network marketing industry is good at developing passion among its employees and distributors by constantly reaffirming convictions about having the best, highest quality products and services (generally there is a foundation for the claims).

Motivation: the industry is also focused on motivating the sales force, recognizing that, in point of fact, most people are not self-motivated, by holding regular and frequent sales meetings from small group sessions to huge sessions that all include motivational themes.

High Margins: the industry is also known for its high gross margins, which create opportunity for generous commission plans while still allowing for solid operating margins.

These are a few key principles that can be applied in many other businesses to improve the performance of the business.