180 days or less to startup?  Can you really start and run a successful MLM company in 180 days or less?  What about all those people saying you need to build a business plan and secure funding first?  What about all those obstacles—the right MLM software / Home Party Software, the right name, the right MLM compensation plan, the right legal entity and registrations, and so forth?

Yes, you can.  You can do this.  And you can do it in 180 days or less.  Here are the two most important reasons why that’s so:

1. The world has changed dramatically in recent years and we all know it.  Today, we can use online tools, information, contacts, and services to do things much faster than was possible just a few years ago.
2. When you look at the core elements of a new MLM business, the actual tasks involved—just the real tasks, not the thinking, training, researching, and long-time deciding—don’t take that much time.  Technically, it takes about an hour to register a name for your business and to become a legal entity.  Setting up a location can take a couple of hours if it’s in your home, and as little as a few days if it’s in an office somewhere near where you live.  Delaying decisions doesn’t make them any better.

It’s true that not all businesses can go straight from the first spark of an idea to the full and complete execution in just 26 weeks.  But many can.  On one hand, you may not get product molds created, initial orders placed, and finished goods delivered from an overseas vendor in this relatively small window, but on the other hand, you just might depending on your experience and shortened learning curves.  Many cannot raise millions of investment dollars in a few months, but then you may not need that much or you might already have the necessary capital.

It’s also true that the essence of a direct selling company is not only its ability to scale and grow, but because it’s typically a cash-up-front business, much of the growth is self-funding.  We put those two facts here because they show that the majority of new direct selling businesses are like the one you want to start, meaning they are manageable, focused, and ready for you to get going.

So, with that in mind, here’s how it works!  The timetables in the LaunchSmart System show how you go from where you are now to operational in just 180 days.  And, our hats are off to our clients who have done it in less time while not cutting corners.  Give us an opportunity to provide you with the Absolute Launch Essentials, an overview of what you really have to do, no matter what, and where you’ll find it in our system.

Starting a new MLM company can drain resources, so when does outsourcing make sense?  Experts estimate outsourcing to be a $400 billion market in the United States and a $500 billion market in North America.  Sadly, not all services called third-party sourcing or “outsourcing” are adding value.  Some outsourced service -providers take on more than they can handle.  Others exceed their capabilities or they do it to generate business for their core business.  The end result is that the concept of outsourcing loses and so do the users of the services.  So, does outsourcing really make sense for MLM companies?

Yes!  Outsourcing makes sense.  Outsourcing with quality third-party providers gives new and growing MLM enterprises access to horsepower otherwise not available to them.  Independent, third-party providers of services continue to gain increasing attention—and service contracts—for a variety of reasons.

Outsourced Services for MLM Companies

It should come as no surprise that the important foundational elements of new and growing MLM businesses are the principal areas for outsourcing.  Typically, an MLM enterprise skimps on crucial business elements in the early years, planning on a change as the company becomes better situated to afford or justify the focus.  Ironically, the absence of foundational elements, whose importance in the success formula is typically underestimated or not known, becomes a chief contributor to the failure of most businesses.

Thus, the principal areas for outsourcing are usually foundational in nature.  Though business is not an exact science, all successful businesses are built upon fundamental principles, practices, and processes that have withstood the tests of time.  Effective outsourcing gives budding enterprises access to big business talent and systems, usually at a fraction of the cost.

Examples of areas to consider outsourcing are listed below:

• Manufacturing

• Fulfillment, Shipping and Distribution

• Back Office (Accounting and Tax Services, Payroll, Human Resources, Sales Order Processing, MIS / IT, Inventory Management, Printing and Publications, Report Processing, Commission Processing, Creative Services, Travel & Event Services, International Expansion)

• Front Office (Order Entry, Customer Service/Help Desk / Technical Support, Enrollment Processing, E-commerce Services)

Principal Benefits

The most obvious benefit of outsourcing is likely to be access to more “horsepower” in a critical competency.  By outsourcing various administrative functions, the client becomes free to focus on sustaining and growing their core MLM business.   Resources are better spent serving the field and expanding the business, adding confidence both internally (executives and staff can be mentored through growth cycles) and externally (the field becomes more confident in the infrastructure and the company’s ability to keep up with growth).

Benefits of outsourcing include the following:

• Access to more “horsepower” (relevant, timely information and seasoned specialists) that is either limited or doesn’t exist internally

• Allow company to focus on its core competencies and strengths

• Develop value-added capabilities to better serve customers and distributors

• Improve operations and customer service

• Flexibility to handle extreme changes in business sales/fulfillment cycles either monthly, quarterly or yearly.

• Improve processes

• Lay foundation for long-term growth

• Build long-term partnerships that spread the burden over multiple resources

Other reasons might include the following:

• Cut costs

• Avoid capital expenditures (Postpone costly commitments, i.e. lease agreements, phone systems, etc., until sales history is established)

• Avoid labor problems

• Avoid additional employee costs such as insurance and benefits

• Avoid costs of regulations

Some third-party service providers will tout cost savings as the number one reason in support of outsourcing.  We prefer to view the potential for cost savings as the result of a successful outsourcing decision; however, cost savings will only occur in a functional area of the MLM business if (1) the costs are known, measured, reported, and studied; and (2) through planning and management, the costs are managed.  This is true whether or not a service is outsourced.

That said, charges for outsourcing various services can represent as little as 50 percent of the cost of equivalent in-house functions.  Consider 25 different MLM companies; there will be 25 different enterprise and accounting systems, 25 separate computer systems, 25 sets of processes and procedures operated by hosts of individuals  atindividuals at 25 various office locations, locations, 25 separate telephone systems, scores of PCs, and a considerable investment in management.  By passing many of these functions to third-party providers, the client can focus its precious resources on its core MLM business.

Ultimately, as the base of sales and enrollments grows, so does the company’s ability to keep pace.  This, of course, assumes that competent third-party suppliers and service providers have been carefully selected.

How Does Outsourcing Work?

To make outsourcing work for your MLM business, remember that outsourcing is an option for designing and managing an important function within your enterprise.  The focus should always be on functions, processes, and systems.

We recommend a three-stage approach to making outsourcing work.  That approach is outlined below:

1. Understand, stabilize, and control
2. Design and implement the processes and systems
3. Outsource the management and maintenance of the processes and systems

It is often wise to invest in understanding, stabilizing, designing, and implementing processes and systems.  The best MLM business consultants are skilled in guiding a client through the initial phases.  Ideally, the best time to decide whether a function should be outsourced is once a process or system has been designed.  Typically, a cost / benefit analysis will be the most meaningful after the processes which support a function have been designed and the implementation and maintenance / management of the function can be quantified.

As in all effective management strategies, outsourcing should be justified on the basis of business factors, which are presented in the next section.

Self-Assessment

Given the vast differences in service providers and the differences in why MLM companies outsource, the decision-maker must look closely at the alternatives, both with regard to providers as well as to reasons for outsourcing.  The following self-assessment outlines the tough questions, which will help in the decision process:

•    What am I looking to outsource?
•    Am I considering outsourcing an entire function or a portion of it?
•    Why am I considering outsourcing as an alternative?
•    How do I describe the function or operation I am considering for outsourcing?
•    What are the costs of the operation to be outsourced?  Fixed costs?  Variable costs?
•    What are its capabilities?  What are its current strengths?  Limitations?
•    How well do I service my existing customers and MLM distributors?
•    If there are service problems, what are they and what causes them?
•    Are there proven outsourcing solutions available for this purpose?
•    What do I expect from the third party?  How will we know if it is meeting my expectations?
•    What about the management responsibility of the third party?  How will it be done and by whom?
•    How do I effectively transition from my own operation to an outsourced provider?  How long will it take to transition?  Are there problems during transition?  If so, what are they and how do we avoid them?
•    What if outsourcing doesn’t work for me?  What are the downsides?  How serious are the potential downsides to the MLM business?
•    If/when will it make sense to bring the operation in-house?

When you begin the selection process, these questions will help to evaluate candidates:

•    What does the candidate bring to the table?  What is its experience with the industry, with other MLM clients, with my MLM distributors?
•    What problems have they encountered in setting up third-party operations?  How did they navigate the challenges?
•    What are all the costs?
•    How will the system operate?
•    How long will it take to set up and to stabilize operations of the function?
•    How will we interface?  What reports will I receive?
•    What is required of my MLM company?  Is this requirement for start-up or is it also ongoing?
•    Why does the third-party want your MLM business?
•    Why should you select the third-party over another candidate?

If you consider outsourcing, and we recommend that you give careful and serious consideration to the benefits as well as risks, you must thoroughly understand what you are doing and what you want to do.  We know of no shortcuts, but there are real problems in doing it wrong.

The future of outsourcing is significant.  We are in the early stages of the new outsourcing paradigm.  How it all comes together is still formative, and there will no doubt appear segmentation in the market as providers continue to discover needs and to define roles.

It’s an exciting time to own or start an MLM business.  And when you find yourself in moments of decision, we wholeheartedly embrace the wisdom of Theodore Roosevelt, 26th president of the United States, who said, “The best executive is the one who has sense enough to pick good men [and women] to do what he wants done, and self-restraint enough to keep from meddling with them while they do it.”  To this we add, the good picks cannot only be found internally, but also externally.  Outsourcing in MLM business makes sense.

Some of the most urgent questions about starting and running an MLM business are probably the same ones you have.

•    What does it take to start an MLM company?
•    Do I need a business plan, and how do I write an MLM business plan?
•    What type of compensation plan should our new MLM company use?
•    When it comes to recruiting MLM distributors, how do I start?
•    Are there secrets to buying the right MLM software?
•    How much does it cost for MLM legal services, and do I really need to hire an MLM attorney?
•    How long will it take and how much will it cost?
•    Are there distributor training tools that I can use or do I create my own?
•    What should I be asking that I haven’t already asked?
•    Has anybody figured this out, or do I need to learn the hard way?
•    Are there any MLM consultants who are working with big companies that can guide me how to do it correctly from the very start?

Perhaps the best advice we can offer is to encourage you to write down all of your questions; keep a project notebook.  Then give us a call and we’ll go through them with you.  That’s the best way we know how to help you get started.