What business can learn from the Avon lady

LAST week I spoke to a convention of Avon sales representatives about being an “accidental” business person. The theme seemed to resonate. Many in the predominantly female audience were achieving business objectives without having ever really considered themselves to be “in business”.

If you want to set yourself up in business with Avon, you can do so for a remarkably low £15; you can be your own boss, and participate in one of the most achievement-oriented firms I’ve ever been exposed to.

Sitting on a train to Blackpool, where I had a speaking engagement, I read an Observer article about Rachida Dati, the chic French former Justice Minister. Now a European MP, she admitted she was once an “Avon Lady” when she was climbing the career ladder.

Smirk if you will, but the empowerment is palpable, and the stories of women changing their lives touching.

The new world of work is based on networks like Avon.

One core principle of work must be that effort leads to reward. Avon harnesses the best of hundreds of thousands of “little guys” around the world into a $10bn organisation. It topped all cosmetic brands in the 2009 league table for financial performance.

But the power is in the business model. Californian Compass Life Coaching, which is run by Skills Village founder Kim Fulcher, leverages the same network marketing model, enabling the business to expand very rapidly while creating viral growth.

This “pyramid structure” business model – where people’s networks are grown by members getting more members for the community – is on the rise. Historically, only technology was able to give network effects to business. Now through this business model, people networks are giving network effects to business-to-business service companies.

Last week, I heard Mark Prisk, the shadow minister for trade and industry speak about the changes that the Conservatives will make if they win the coming general election.

They will give small businesses a one-year break on national insurance contributions for their first ten employees. This should go some way to encouraging start-ups to hire employees again. Many simply keep their staff as consultants to avoid paying tax.

The time will soon come when employment as we currently know it becomes a relic of the past. People will create network-oriented alignments, and win consulting contracts for short-term, interim posts and project work. Less and less people will be hitched to a firm as a long-term employee.

Your local Avon lady might just be ahead of her time.

Julie Meyer is chief executive of Ariadne Capital and a Dragon on the BBC’s Online Dragons’ Den.