In the course of our work as MLM consultants, we regularly make recommendations for our clients to implement.  The path to implementation is often the most challenging aspect of any executive’s responsibility.

Over the months and years of working closely with the greatest MLM companies on the planet, we have to apologize that we’ve not been on our best game when it comes to giving our clients the solutions for reaching distributors with training.  We have simply supposed that clients will create their own training systems into which we can insert our recommended solutions.

Like lights switching on, we have had the bright realization that one of the best ways we can serve our clients is to provide the vehicle that makes training work for them.  So, that’s what we are doing.  Online training tools and resources are tricky.  Our clients learn that the hard way, and so have we.

In coming blogs, I’ll share what I’m learning about the use of web training for MLM companies.  As an MLM consultant, I’m only as effective as our clients who reach their staff and distributors with the training we create for them.  Come back often and I’ll share what I’m learning about web training for MLM distributors.  The good news for readers is that we are actually doing it, and we’ll share everything we are learning with you.

As consultants in the fast-paced world of direct selling, we get a feel for the most-asked questions of MLM consulting firms.  The most-asked question we receive is, “Will my mlm business work?”

Other questions include these:

• How can I find investors for my new MLM company?
• What are the steps to launching my MLM startup?
• Can I start my MLM enterprise in 90 days?
• How do I get my first 500 MLM distributors?

The list goes on.  Importantly, as mlm consultants working closely with mlm consulting issues, I think that the most important question should be asked by us to our client:  “What do you have that others need, that is so valuable and worthwhile that direct selling becomes the most efficient and effective way to get the word out?”

The corollary might be, “What are you absolutely passionate about, and what are you best in the world at doing?”  With vision and leadership, you will really go places.  The direct selling business is booming!

Ask any MLM consultant or consulting firm!  They will agree.

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.

When working at Melaleuca, LaunchSmart™ I learned early on that other direct selling companies were not the competition.  For Melaleuca, the competition was Proctor & Gamble, the personal care and home products giant.

There are different types of competitors in direct selling:

1. Traditional (non-direct selling) companies that sell the same or similar products and services
2. Direct selling companies and MLM companies that sell the same or similar products and services
3. Direct selling companies and MLM companies that offer income opportunities that will draw reps to them

As you become aware of the strengths and weaknesses of your MLM competitors, you will grow strong and confident.  If you are keenly focused on your unique differentiators, the primary one being your culture, you will find that the game of growth will be challenging and fun.

As you go through the strategic planning process, don’t skip through the SWOT analysis where you will be guided through the exercise of identifying competitors and creating profiles from which you will learn.

In deciding how to work with an MLM marketing firm, it’s vital that YOU take the first step in making the key decisions required.  Don’t forget: it’s your company.  If you choose not to use a marketing firm, but to go it alone and create your own materials, organizing your thoughts will be even more important.  Contact us for a free no-obligation overview of the questions to ask and the steps for planning your MLM marketing strategy.  Below is an overview of the topics to cover in your MLM market planning:

• Basic Business Concept
• Basic Product Concept
• Branding
• Broad Marketing Description
• Specific and Targeted Market Description
• Competitive Analysis
• Unique Selling Proposition
• General Awareness Marketing
• Lead Generation Marketing
• Distributor-Specific Marketing
• Product-Specific Marketing

Whether you do your own review or engage us to help you with your MLM marketing plan, the results are well worth the rigor.  “No rigor, no results.”

The latest in MLM Startup Consulting is the world-class, all-star team of MLM consultants at LaunchSmart.  Specializing in the most urgent and vital areas for starting and running a successful MLM business, this team of MLM experts includes seven recipients of the coveted DSA Partnership Award.

Areas of expert MLM focus include the following:

• MLM Software and technology solutions
• MLM Best Practices
• Distributor recruiting, training, and sales
• Awards, incentives, and recognition for MLM leaders
• MLM Compensation plan design and analysis
• MLM Legal and regulatory support, filings, and compliance
• MLM operations and distributor service
• Web marketing, web policies, and recruiting
• Design, branding, and image for the startup MLM
• Distributor kits, starter kits, and sales tools for MLM distributors
• Payment options and merchant accounts

Watch this consultants blog for future releases of up-to-date information on topics that are important to MLM startups and early-stage companies, presented by the best MLM consultants and MLM consulting teams in the world.  We are serious about your success, and we look forward to helping you to start and run a successful MLM company.

Don’t Cut Corners

For several weeks, we have been one of two finalists for a key MLM consultant role in an established business making a transition to home party plan.  Without clearly defined strategies yet in place, the company has asked for proposals.

Our competitor bears a good reputation although we’ve never had the opportunity of meeting, let alone working together.  The client called to tell me that they are leaning toward our competitor because their proposal is half as much as ours.  Although the final decision has not been made, a word of caution is in order.  Consider these danger signs when selecting an MLM consultant team with the following players:

• MLM Compensation Plan Consultant and Home Party Plan Hostess Program and Pay Plan
• Consulting Team that Specializes in MLM Best Practices
• MLM Software Consultant and Analyst
• MLM Operations and Fulfillment Specialist
• Customer Service Manager for MLM Companies

We were surprised to learn that the competitor’s proposal was favored over ours, mainly because it was a “tight” package with everything already spelled out and a fixed dollar amount proposed.  Just one problem: the company’s strategies are not defined, so it’s impossible to accurately propose a scope of work unless one or the other party is willing to risk huge disappointment, cost overruns, or other unforeseen calamities.

Our advice is to take a step back and first focus on defining the key strategies: what kind of selling plan is best for your MLM or Home Party Plan company?  What is your strategy for training brand new recruits?  Will you build or buy your MLM Software?  How well will your product margins support the necessary margins?  And host of questions related to customer service, test markets, training and sales tools, finding the first 500 MLM distributors or home party plan consultants, and so on.

First things first: get your strategic plan in place.  If nothing else, start with a basic business plan and build out from there.  Give special consideration to the strategic plan and all of the related considerations.  For a template, or even a free consultation on MLM strategic planning, call or email our team of MLM consultants.

Question: Will you explain the difference between MLM and Party Plan?  I think that MLM is the same as Network Marketing, but are these different from direct selling?  And how do I know which is best for our startup?

Answer: “Direct selling” is the generally accepted term the selling system that moves products and services directly from a company to its users and consumers.  The selling is performed by the independent representatives of the company.  Worldwide, companies sell an estimated $118 billion in goods and services through this massive distribution system of person-to-person marketing and sales, with as much as $28 billion of that in the United States.  (Sources: Direct Selling Association, www.dsa.org, and the World Federation of Direct Selling Associations, www.wfdsa.org)

Some MLM Consultants teach that there are three methods of person-to-person selling:

1. Direct Selling
2. Party-Plan Selling
3. MLM or Multi-level Marketing

The LaunchSmart MLM consulting team suggests a subtle distinction, which is that direct selling is the umbrella under which two methods of selling reside: MLM and Party Plan.  Direct selling is a generic reference to the movement of goods and services directly from company to consumer, where sales commissions are associated with the sales efforts of the company’s independent sales force.  Party-plan sales commissions are generated through group selling, often with retail commissions plus incentives for gathering a group together.  Party-plan compensation leverages a one-to-many sales presentation.

MLM compensation plans pay commissions for personal sales, accumulating commissions and bonuses on sales that are related through sponsoring lines.  Both MLM and Party Plan methods link individual sponsors and business builders, often paying compensation through, and/or as a result of, these connected lines.  These methods are sound and very legal since compensation is tied only to the sale of products and services, and not to the act of sponsoring someone.

Advantages that are common to MLM compensation plans and Home Party Plan compensation include the following:

• Sales representatives need not stock products other than those used for demonstration or samples
• The company ships directly to the distributor or customer who makes the purchase
• MLM presentations and Home Party Plan demonstrations are ideal for presenting products that require explanation
• MLM compensation plans, like Party Plan compensation plans, pay for sales personally produced, with commissions and overrides paid to those who train and manage individuals and groups in their sales organizations
• Distribution channels, once established, are the marketing channels through which information, goods, and services are moved
• Part-time to full-time selling, with incentives for immediate action, are characteristic of successful MLM compensation plans and Home Party Plan compensation systems

Through MLM (multi-level marketing, network marketing, viral marketing, referral marketing, etc.) the direct-selling process is duplicated by independent sales reps who sponsor and train others.  Through this basic system of selling, on which virtually all sales systems are based (from insurance to real estate, and from automobiles to men’s clothing) multiple levels of commissions are earned, paid directly from the company to the sellers, managers, and leaders.  This basic concept applies in both the MLM and Home Party Plan selling models.

For a Free MLM Consultation or Free Party Plan Consultation, contact the MLM Consultants at LaunchSmart.  We want you to succeed, since your success is our success.