Obtaining Capital for MLM

We carefully watch the requests for information on MLM startup capital, and we see a wide array of requests, that all seem to have a single focus:

  • MLM funding
  • MLM startup capital
  • MLM budget services
  • MLM forecasting
  • MLM budgeting and MLM budget services
  • MLM financial analysis
  • MLM growth analysis
  • Starting capital for MLM
  • How to fund an MLM startup
  • MLM raising capital
  • Other similar requests

There is indeed a high degree of interest and hope centered on the topic of, “where do I obtain the necessary financial backing to start and operate a successful MLM enterprise?”

To these questions, we offer insights and encouragement.  First, the encouragement.

From mid-2008 until today, we have seen the single biggest surge in the history of MLM startups.  We’re believers in the entrepreneurial spirit that drives the brave men and women into the front lines of battle.  People are starting strong MLM companies, and they are succeeding!

One of our clients launched in January of 2010, and within 90 days, they had achieved more than 2,800 enrollments into their monthly autoship program.  If you consider that most attain breakeven at our around 500 to 1,000 active accounts, you can only imagine the great relief and confidence that this company already enjoys.  And, they attribute much of their success to thoughtfully and effectively arranging the necessary MLM startup capital.  This came as a result of rigorous MLM forecasting, MLM growth analysis, and careful attention paid to how to fund an MLM startup.

We can barely keep up with the vision and determination of so many brave and visionary souls who are tireless in their MLM budgeting and MLM forecasting which assure that they have sufficient MLM funding.

Second, allow us to share some of the important insights we have gained in the journey.  In creating your forecast for MLM funding, start by giving very careful thought to the growth model, including the assumptions behind behaviors that drive MLM growth.  Since the sales model is completely dependent on the results achieved by your voluntary sales force, it follows that a close analysis of the behaviors will be the key to forecasting MLM growth and financial demands.

Thus, here are some the key considerations for MLM growth modeling and MLM financial forecasting:

  • What percentage of distributors will join your company simply to be able to obtain a favorable price on the products and services?
  • Of those who join, what percentage will introduce 1, 2, 3, 5, 8, 13, and 21 new customers and other distributors to the company?
  • What attrition percentage will you apply to your MLM growth model?  From all our years of researching retention trends, we offer a basic rule of thumb:  for Home Party Play Companies (such as Pampered Chef), distributor retention is 40% per year.  This means that of 100 distributors who join in January, 40 will still be active in December.  For MLM retention, the norm is 20%, for hosts of reasons we will explain in other articles and seminars.

In my next blog, I will share the “not-so-secret” secrets of how to raise capital for MLM startup.

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