We ask the MLM Consultant “How long does it take to make money in MLM?”
If you are like most, you have heard of the plan to two people who sponsor two, each of whom sponsor two until the genealogy is as numerous as the sands in the sea. On the one hand, this kind of MLM forecasting is just fine, as long as it’s only about numbers. But when reality is factored, hosts of variables make for an entirely different exercise.
While MLM forecasting is not an exact science, any hope of a reasonable estimate turns on the informed application of human behavior in the key equations of recruiting, selling, managing, leading, and retention.
We have studied the trends and forces that drive the important questions of “why people join, why they stay, and why they leave.” How long it takes for them to make money becomes the key metric in determining how long it will take your MLM company to also make money, especially the profits that fuel growth and expansion.
Too often, distributors have expectations that are not met, and often will never be met. Commonly this comes from the realization that they simply do not understand how successful MLM really works.
Making money in MLM, as in any business, depends on how well a distributor applies the fundamental skills of prospecting and selling.
Occasionally, a distributor will enter the game with such experience, such vision, and such consistent commitment of resources that they will shoot to the top and stay there. A closer look at these “overnight success” stories will reveal that the success is a culmination of years, even decades, of learning now to make money in MLM—along with the failures, discoveries, and refinements along the way.
As a rule of thumb, we’ve never missed the mark by etimating that a business will take (on average) from 500 to 1,000 active MLM distributors or home party plan consultants, to set a foundation of break-even revenues. Carefully managed, this base can—and often does—sustain the next round of growth, where the growing margins provide much of the necessary capital for funding inventories and overhead.
Factors that contribute to making money in MLM include these MLM growth principles:
- An effective fast-start program and incentives that fuel early excitement and action
- Immediate and effective training for MLM distributors
- MLM compensation plan elements that reward early, key behaviors
- MLM products that are valuable, exciting, and enduring
- MLM company leaders with vision, stamina, and tenacity
Whether your goal is to break even in MLM as early as possible or to create forecasts that look far into the future, the key to projecting MLM sales and growth is to understand the human factor and apply the known MLM best practices to help you determine how long it may take to make money in MLM.
For help with MLM forecasting, contact us for our newest version of the MLM growth and forecasting software used by LaunchSmart clients.
Do you have a or know of anyone you has a good model for forecasting field growth?