Monthly operating requirements for your MLM will be determined by various factors.  Our MLM growth and financial projection models consider following variables, which you should consider so that you can fully participate in setting the plan as well as adjust course once you are in business.

• How many active MLM representatives do you expect to have in your very first month of business?
• What percentage of those reps will recruit others, and of those who recruit, how many will they recruit?
• What will be the rep and customer attrition rate?
• Will your MLM company be engaged in recruiting?
• How much product will customers purchase?
• What will be the consumption patterns and volumes of reps and customers?
• What will you charge for shipping and fulfillment?
• What will your MLM commission payout percentages be?
• What is your product margin multiplier?
• How much will you spend each month to support and grow your business?

The financial model for ongoing operations is available through the LaunchSmart Workshop, helping you to determine profitability and cash flow needs.  The revenue forecasts that you create, along with capital budget and monthly expense worksheets will complete the financial model specifically for your MLM business.

The financial model will prepare you for determining when you will need the money so that you can create the disbursement plan to present to lenders and MLM investors.

As you begin to explore how much it will cost to launch your MLM, here are some important questions to ponder:

• Are you selling services, products, or a mix of these?  What is the status of your services or products?  Do they need to be researched and developed or is the service all set for duplication and delivery or are products in the warehouse ready to go?
• Are you planning to build or lease MLM software to support your enterprise, including genealogies and compensation plan calculations?
• If you plan to retain an MLM consultant, an MLM law firm, an MLM compensation plan design team, or an interim head of sales, how much will you be budgeting for these services?
• Will you operate from an existing business location or do you need to secure and prepare office space?
• Will you be fulfilling orders, and if so, do you require warehouse and fulfillment systems (regardless of how small or grand)?
• Will initial workers be unpaid family and friends or will you be paying them money?  If you compensate them, how much will you budget for labor costs until the business is cash flowing?
• Will you create forms, brochures, and other documents?  If so, do you have a budget for creating the templates, writing the copy, and printing them?
• Will you have a starter kit, catalog, or other marketing collateral?  What is the plan and budget for creating these?
• Will you create a web marketing strategy that incorporates search engine and social media strategies for presenting your company to the world?
• Do you have equipment that can be used in the business, and if so, what is its value?  What equipment will you need to acquire to supplement what you already have?
• Will you have a budget for the launch event, travel, and costs associated with the early recruiting efforts?
• What other unique expenses and capital expenditures do you expect to have for your company?

Many of your early worries will be eliminated by completing a launch and operating budget worksheet.  If you don’t have one, contact us and we’ll get into our toolbox for you.  As you work through this important area of planning, don’t focus on timing as much as the actual planning of expenditures to start selling products and recruiting and supporting MLM distributors.

Your business should be much more than an MLM Money Machine.  Some view business in purely financial terms: business is nothing more than a way to create money.  Everything else is superfluous.  This approach can work, but it’s a very limiting way of doing business.  It squeezes the joy out of being a business owner or member of the team that creates the success of the business, especially in MLM which is a relationship business.

Some are intimidated by the financial side of business and, therefore, avoid financial management.  “As long as the bills get paid, I don’t worry about finances,” is a common, casual disclaimer.  This approach might work temporarily, but it is also limiting because it ignores the great potential that lies within the business.

Each view by itself is shortsighted.  Both approaches leave something of value out of the business equation.  And both diminish the chances of achieving the company’s true potential.

Your MLM business, like any business, should be about making your life better, not merely paying the bills.  The financial view of your business—as long as it’s not the only view—is an essential element of your management arsenal.  The pursuit of money, when balanced with the other aspects of your life on the way to achieving your personal purpose and passion, is appropriate and should be one of your most important business objectives.  In other words, always keep in mind that a successful MLM business is one that fuels the path toward your purpose and passion.  And the financial strength of your MLM business is a key component to its success.