Has it ever crossed your mind what actually constitutes a lifestyle business? Many people normally dream of a lifestyle but lack the true understanding or have a concrete plan. This is a very important subject because there many people join network marketing businesses with dreams of fancy lifestyles but with absolutely no understanding of what it actually takes in order to succeed in this business.In fact, most people are lured to become members after seeing a slick presentation or being persuaded by friends or family member without the slightest idea of what they are getting into. This is why they get disillusioned when they do not notice tangible results for their efforts.Cash FlowCash flow is one of the most important aspect of any lifestyle business. It is cash flow that pays your bills and determines your lifestyle. If you have huge cash flow your business will definitely thrive. On the other hand, if you lack cash flow, your business will most probably collapse.Digital ProductsTraditional network marketing companies selling physical products only give out 5% to 21% commissions depending upon the achievement level of an affiliate. Digital products companies selling information and entertainment products give out as much as 50% to 100% of their profits to affiliates. They can afford such high commissions simply because after their initial development they do not incur any additional costs e.g. manufacturing, distribution or warehousing costs. Importantly digital products can be delivered instantaneously which is an important criteria in today’s instant gratification world.Digital products can also be sold to clients anywhere across the globe. With digital products the entire world becomes your oyster while in the case of physical products, companies have to seek local government approvals to set up infrastructure e.g. warehouses and distribution channels prior to finally launching their products into the market.In case of a physical product network marketing company, whenever any country opens up for business you are forced to travel and physically launch the product in that country. This process requires a lot of effort, time and is very expensive.Most physical products have safety issues and need to be demonstrated to new clients and affiliates for proper usage. This is a time consuming process as the training new affiliates is real hard work. The above reason explains why not a single product company will encourage affiliates using a blog or website for marketing the business due to fear of product misrepresentation.Traditional network marketing companies only allow you to promote the company’s affiliate website which takes the sting off your e-commerce marketing effort as thousands of other affiliates are also promoting the same website hence significantly reducing your chances of ever standing out from the crowd.Remember, digital products have no safety issues hence most internet based companies understand and encourage e-commerce and help you with global marketing.The basis of a lifestyle business lies in selling digital products that pay higher commissions, have global markets open instantaneously and the business operations can be automated.Retention RatesRetention of affiliates is another important aspect of network marketing. It is pointless to join a company with very poor affiliate retention rate. This is because your hard work will go to waste if large number of affiliates drop out from the business. It is impossible to have a lifestyle business with a low affiliate retention rate.Physical product companies have an average retention rate of approximately 8%. In case you are an outstanding leader with a great training program then chances are your retention rate will increase around 10% to 15%. These are industry standards.Building a network with high attrition rate requires extreme hard work and persistence. If you wish to earning a lifestyle income through network marketing then your retention will have to be closer to 100%. Also ensure that your business is sticky to avoid having affiliates dropping out. This is only possible if affiliates start making money within couple of weeks if not month of joining the business opportunity. It is obvious that no one will drop out of your organization especially when they start seeing cash flow and profits from their business.Profit Sharing ModelInnovative companies are offering profit shares in order to improve retention rate of affiliates. Profit sharing helps new affiliates earn money even if they don’t sponsor anyone. What’s more, once a new affiliate makes money it becomes much easier for that person to refer and sponsor more people into the business.100% CommissionsThis is another business model that works perfectly with lifestyle business model. Believe it or not some innovative companies are offering 100% commissions on sale of their products. By simply making a single sale affiliates are able to recover their initial investments and with their second sale they are in profit.Residual IncomeThe business that you choose to join must guarantee you steady cash flow and also build residual income if you are to create a sustained life style. Remember, smart businesses are those which not only create cash flow but also guarantee quick residual income.LeverageApplying leverage can help reduce your time and effort consequently making a lifestyle business possible. Without leverage you will not be able to enjoy your wealth or have free time to pursue other dreams. To have leverage you’ll need to have technology and business systems. Every successful business has proper systems put in place. Systems give you the leverage to enjoy lifestyle business.SimplicityThe business you join must embrace the principle of simplicity. The business may be complex but it should be easy to operate on a day to day basis. This is actually the reason why McDonald franchises are so successful. It’s because of simplicity. A business should be designed by a genius to be run by ordinary folks.The Right TeamJoining the right network marketing team is the highest leverage you can apply in your business. This is because a professional team gives you support, training and the necessary systems for not only you to succeed but also the prospects you sponsor into your business.