business plan of a network marketing company

Network Marketing Business Plan Template

Written by Dave Lavinsky

Network Marketing Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their network marketing companies.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a network marketing business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Network Marketing Business Plan?

A business plan provides a snapshot of your network marketing business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Network Marketing Business

If you’re looking to start a network marketing business or grow your existing network marketing company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your network marketing business to improve your chances of success. Your network marketing business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Network Marketing Businesses

With regards to funding, the main sources of funding for a network marketing business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for network marketing companies.

Finish Your Business Plan Today!

How to write a business plan for a network marketing business.

If you want to start a network marketing business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your network marketing business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of network marketing business you are running and the status. For example, are you a startup, do you have a network marketing business that you would like to grow, or are you creating a new multi-level marketing (MLM) business in another geographic region?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the network marketing industry.
• Discuss the type of network marketing business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of network marketing business you are operating.

For example, you might specialize in one of the following types of network marketing businesses:

• Services network marketing : this type of MLM, or multi-level marketing business, is focused on the sales of services. For example, services such as insurance policies, telephone or cable television services, or educational services are offered via direct-selling, independent contractor representatives within the MLM company.
• Product network marketing: The most popular format for MLM (multi-level marketing) companies is found in selling products. Sales of products such as jewelry, health and wellness items, weight loss products, and other popular consumer categories are profitable continuity items that can create a significant income for independent contractor representatives.
• Membership network marketing: An MLM, or multi-level marketing business, can also be successfully built around the sales of memberships, such as travel, timeshare ownerships, and certain sport or hobby clubs.

In addition to explaining the type of network marketing business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of independent representatives you’ve signed up under your MLM business, the number of products you or your downline representatives have sold, or the number of clients your MLM business has acquired.

Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the network marketing industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the network marketing industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your network marketing business plan:

• How big is the network marketing industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your network marketing business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your network marketing business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, students, schools, and hobby or travel organizations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of network marketing business you operate. Clearly, individuals would respond to different marketing promotions and products than schools, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other network marketing businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes retail stores, travel agencies, health supplement manufacturers, or hobby club members. You need to mention direct competition,  as well.

For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of MLM (multi-level marketing) business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide options for upselling your products?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a network marketing business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of network marketing company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will your MLM (multi-level marketing business) sell a product line of natural health and wellness supplements created for athletes, or will your MLM sell jewelry club memberships that auto-ship jewelry to customers once a month ?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your network marketing company. Document where your company is situated and mention how the site will impact your success. For example, is your network marketing business located in a standalone office, or is your MLM (multi-level marketing) business purely online? Discuss how your business structure might be ideal for your customers.

Promotions : The final part of your network marketing marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to friends and family; sign them up as independent representatives
• Distribute flyers
• Engage heavily in email marketing to friends, associates, and others
• Post daily and blog frequently across all social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your network marketing business, including answering calls, planning and providing products, services or memberships, tracking online orders and payments, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when your MLM, multi-level marketing company, expects to sign up your 10,000th independent contractor, or when you hope to reach $X in revenue. It could also be when you expect to expand your network marketing business into new product lines or service industries.

Management Team

To demonstrate your network marketing business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing network marketing businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a network marketing business or successfully sold into DTC (direct-to-consumer) categories.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you sign up 10 new independent representatives in your beauty category downline every day, and/or offer bundled travel rates for your MLM downline representatives as they sell travel club memberships? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your network marketing business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a network marketing business:

• Cost of equipment and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your MLM downline independent representatives and the percentages you collect from their earnings, or a list of your “gold star” independent representatives who make over 100K in yearly revenue.

Writing a business plan for your network marketing business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the network marketing industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful network marketing business.

Network Marketing Business Plan FAQs

What is the easiest way to complete my network marketing business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your network marketing business plan.

How Do You Start a Network Marketing Business?

Starting a Network Marketing business is easy with these 14 steps:

• Choose the Name for Your Network Marketing Business
• Create Your Network Marketing Business Plan
• Choose the Legal Structure for Your Network Marketing Business
• Secure Startup Funding for Your Network Marketing Business (If Needed)
• Secure a Location for Your Business
• Register Your Network Marketing Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Network Marketing Business
• Buy or Lease the Right Network Marketing Business Equipment
• Develop Your Network Marketing Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Network Marketing Business
• Open for Business

Where Can I Download a Free Business Plan Template PDF?

Click here to download the pdf version of our basic business plan template.

Our free business plan template pdf allows you to see the key sections to complete in your plan and the key questions that each must answer. The business plan pdf will definitely get you started in the right direction.

We do offer a premium version of our business plan template. Click here to learn more about it. The premium version includes numerous features allowing you to quickly and easily create a professional business plan. Its most touted feature is its financial projections template which allows you to simply enter your estimated sales and growth rates, and it automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements. Here’s the link to our Ultimate Business Plan Template.

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OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how a Growthink business planning consultant can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Network Marketing Business Plan Template

Written by Dave Lavinsky

Network Marketing Business Plan

You’ve come to the right place to create your Network Marketing business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Network Marketing businesses.

Below is a template to help you create each section of your Network Marketing business plan.

Executive Summary

Business overview.

GlamGirl Cosmetics is a startup network marketing company located in Atlanta, Georgia. The company is founded by Allison Anderson, who has experience in network marketing. Now, with the expertise of knowledge and business acumen, she has determined she can confidently start and effectively grow a successful GlamGirl Cosmetics company. She believes her experience of strategic growth, marketing skills, financial capabilities, and wide and deep knowledge of network marketing practices will provide everything needed for long-term growth and profitability.

GlamGirl Cosmetics will provide a comprehensive array of all-natural cosmetic products for a wide variety of clients. GlamGirl Cosmetics will be the premier cosmetic company, providing services and products to each client while supporting the strategic goals of the company. GlamGirl Cosmetics will be the ultimate choice in cosmetics for clients to ensure that every need of the customer is fully and completely met.

Product Offering

The following are the services that GlamGirl Cosmetics will provide:

• Initial training and on-going empowerment for independent consultants to build their own successful businesses while offering top-notch beauty products to consumers
• Direct-sales model, allowing independent consultants to promote and sell proprietary product lines of GlamGirl beauty and cosmetic products.
• Wide variety of products, including skincare, makeup, and beauty accessories
• Easy-to-succeed plans for consultants to choose their own hours to work and their own schedules for potential client gatherings
• Attractive compensation plans
• Monthly subscription boxes for clients

Customer Focus

GlamGirl Cosmetics will target all interested individuals who would like to independently represent and sell GlamGirl cosmetics via a direct-selling model. GlamGirl Cosmetics will also target universities and colleges to recruit young adults who want to self-start in their own careers. GlamGirl Cosmetics will target customers of GlamGirl Cosmetics who would like to make additional income for their families and those who need to supplement their primary job with additional income.

Management Team

GlamGirl Cosmetics will be owned and operated by Allison Anderson. She recruited her former associate, Shayla Duncan, to be her Consultant Manager. Allison also recruited Tremain Dowd, the financial manager in a former employment, to be the new Financial Director of GlamGirl Cosmetics, overseeing all financial operations and long-term financial strategies.

Allison Anderson graduated from Georgia State College with a degree in marketing. She was formerly an independent consultant and state director in a network marketing company that sold a product line of skin care items. Allison was an independent consultant for three years within the company, building her downline in sales to over $500,000, while assisting in training and leading others to do the same. Allison was then promoted to the state director role, where her percentages of each sale became larger and her income grew to almost double her prior earnings.

Shayla Duncan, formerly an associate and independent consultant with Allison Anderson, will be the consultant manager in the startup company, overseeing the training and development of the independent consultants.

Tremain Dowd, formerly the financial manager in a network marketing company, will be the financial director at GlamGirl, overseeing all financial operations and long-term financial strategies.

Success Factors

GlamGirl Cosmetics will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team of GlamGirl Cosmetics
• GlamGirl Cosmetics offers the best pricing in town. Their pricing structure is the most cost effective compared to the competition.

Financial Highlights

GlamGirl Cosmetics is seeking $200,000 in debt financing to launch its GlamGirl Cosmetics. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for GlamGirl Cosmetics.

Company Overview

Who is glamgirl cosmetics.

GlamGirl Cosmetics is a newly established network marketing company in Atlanta, Georgia. GlamGirl Cosmetics will be the most reliable, cost-effective, and attractive cosmetic choice for young adults, teens and pre-teens in Atlanta and the surrounding communities. GlamGirl Cosmetics will provide a comprehensive menu of all-natural cosmetic products to consumers, in conjunction with an extensive training and ongoing-educational program for their independent consultants. Their full-service, direct-selling approach includes a comprehensive array of all-natural cosmetic and beauty products.

  Allison will be able to manage both the training and on-going teamwork for independent consultants. At the same time, Allison will oversee the production of the GlamGirl product line. The team of professionals at GlamGirl Cosmetics are highly-qualified and experienced in network marketing and the sales of cosmetic products. GlamGirl Cosmetics introduces independent sales to individuals seeking to advance personal monetary goals, while at the same time, it introduces superior and all-natural cosmetics and beauty products to their target audiences. In this construct, it removes all headaches and issues of buying numerous products to “try on” and ensures that customers are consistently satisfied while building long-lasting relationships with the direct-sales independent consultants.

GlamGirl Cosmetics History

GlamGirl Cosmetics is owned and operated by Allison Anderson, who was formerly an independent consultant and state director in a network marketing company that sold a product line of skin care items. Allison was an independent consultant for three years within the company, building her downline in sales to over $500,000, while assisting in training and leading others to do the same. Allison was then promoted to the state director role, where her percentages of each sale became larger and her income grew to almost double her prior earnings. She believes she has gained the trust and commitment of both her own downline independent consultants and that of other state directors that will enable her to start her GlamGirl Cosmetics with their assistance and work to grow the GlamGirl sales in the long-term strategic plan.

Since incorporation, GlamGirl Cosmetics has achieved the following milestones:

• Registered GlamGirl Cosmetics, LLC to transact business in the state of Georgia.
• Has a contract in place for a 10,000 square foot office at one of the midtown buildings
• Reached out to numerous contacts to include GlamGirl Cosmetics in their independent consulting businesses.
• Began recruiting a staff of independent consultants and office personnel to work at GlamGirl Cosmetics

GlamGirl Cosmetics Services

The following will be the services GlamGirl Cosmetics will provide:

Industry Analysis

The network marketing industry is expected to grow over the next five years to over $329 billion.

The growth will be driven by an increase in the population of adults who want to independently work for themselves, determining their own hours in business and their own time in demonstrating product lines. The growth will also be driven by the increasing desire of young adults to travel internationally and experience new adventures, both of which need to be financed. The network marketing industry will also grow as young families require additional income for children.

Costs will likely be reduced as products of all kinds become lower in prices as availability increases. Network marketing brings the ability to drive costs even lower than brick-and-mortar stores, due to the ability of network marketing executives to purchase directly from manufacturers in high-volume quantities. Technology will also drive the prices lower, as increased efficiency will reduce the number of tasks to do on a daily basis and reduce the number of employees to conduct those tasks.

Customer Analysis

Demographic profile of target market, customer segmentation.

GlamGirl Cosmetics will primarily target the following customer profiles:

• Individuals interested in direct-sales and independent consulting
• Individuals starting in first-time jobs or careers
• Universities and colleges with graduating students
• Customers of GlamGirl cosmetics

Competitive Analysis

Direct and indirect competitors.

GlamGirl Cosmetics will face competition from other companies with similar business profiles. A description of each competitor company is below.

Mary Jane Cosmetics

The Mary Jane Cosmetics company has been in existence for over 40 years. It was initially started by Mary Jane Goodwin, who invested her savings in a new cosmetic line and then set up independent consultants to create direct-selling opportunities. Although Mary Jane Goodwin is now retired, her company has grown to over 15M in revenues and is successful around the globe. The popularity of her proprietary cosmetics and the dedicated customers of her product lines have brought long-term gains to the company.

Train & Teach

The owner of Train & Teach is Jerry Swan, a former secondary education teacher who started his network marketing company for independent consultants in 2015. Jerry used his expertise to train five adults in methods and practices of teaching primary students. He then placed the adults in various positions as tutors, where they replicated his model each with five additional people who wanted to teach. In this manner, a network marketing company was established. There are currently over 600 tutors who are independent teachers, working on their own schedule, and creating wealth in the process. Jerry Swan is now considering a global network marketing company, replicating his model within several countries.

Teen Treasures Company

Teen Treasures Company was started in 2010 as a network marketing company, established to reach the teen and pre-teen audience by direct sales methods. The owner of Teen Treasures, Shannon Swanson, was a former direct sales manager within a popular housewares network marketing company, where she earned enough money to start the Teen Treasures Company. To attract teens and pre-teens within her model of direct sales via independent salespeople, she targeted college students who would like to earn cash with each sale and she invited the students to meet in coffee cafes, outdoor restaurants, and other casual environments to present the product lines to the teens and pre-teens. With products including skin care, acne erasers, themed jewelry, Native American turquoise, and silver and gold plated items, the networking marketing company soon created a profit for the key executives.

Competitive Advantage

GlamGirl Cosmetics will be able to offer the following advantages over their competition:

• Friendly, knowledgeable, and highly-qualified team of independent consultants at GlamGirl Cosmetics

Marketing Plan

Brand & value proposition.

GlamGirl Cosmetics will offer the unique value proposition to its clientele:

• Highly-qualified team of skilled independent consultants using direct-selling tactics to present all-natural cosmetics and beauty products to individuals throughout Atlanta

Promotions Strategy

The promotions strategy for GlamGirl Cosmetics is as follows:

Word of Mouth/Referrals

Allison Andreson has built up an extensive list of contacts over the years by providing exceptional service and expertise to independent consultants and their customers. These contacts and clients will follow her to her new company and help spread the word of GlamGirl Cosmetics.

Professional Associations and Networking

Allison Anderson will join both local and national associations to network for additional business opportunities. She will attend the Networking Association of America to scout for highly-proficient executives who may want to join her team at GlamGirl Cosmetics.

Print Advertising

Due to the nature of direct-selling, there will be no public print advertising. However, there will be cosmetic catalogs printed and online, with ordering available either by phone or online.

Website/SEO Marketing

GlamGirl Cosmetics will fully utilize their website. The website will be well organized, informative, and list all the direct-selling opportunities that GlamGirl Cosmetics provides. The website will also list their contact information. The website will engage in SEO marketing tactics so that anytime someone types in the Google or Bing search engine “cosmetic company” or “network marketing near me,” GlamGirl Cosmetics will be listed at the top of the search results.

The pricing of GlamGirl Cosmetics will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for GlamGirl Cosmetics. Operation Functions:

• Allison Anderson will be the owner and President of the company. She will oversee all staff and manage client relations. Allison has spent the past year recruiting the following staff:
• Shayla Duncan will be the consultant manager, overseeing the training and development of the independent consultants.
• Tremain Dowd will be the financial director, overseeing all financial operations and long-term financial strategies.
• Tami Wainwright will be the part-time network marketing manager for GlamGirl Cosmetics and each client it serves.

Milestones:

GlamGirl Cosmetics will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel contracts for the GlamGirl Cosmetics
• 6/1/202X – Finalize contracts for GlamGirl Cosmetics vendors
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into GlamGirl Cosmetics office
• 7/1/202X – GlamGirl Cosmetics opens its doors for business

Financial Plan

Key revenue & costs.

The revenue drivers for GlamGirl Cosmetics are the fees they will charge to the customers of independent consultants for their products.

The cost drivers will be the overhead costs required in order to staff GlamGirl Cosmetics. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

GlamGirl Cosmetics is seeking $200,000 in debt financing to launch its startup network marketing company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Customers Per Month: 300
• Average Revenue per Month: $23,000
• Office Lease per Year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, network marketing business plan faqs, what is a network marketing business plan.

A network marketing business plan is a plan to start and/or grow your network marketing business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections. You can easily complete your Network Marketing business plan using our Network Marketing Business Plan Template here .

What are the Main Types of Network Marketing Businesses?

There are a number of different kinds of network marketing businesses, some examples include: Services network marketing, Product network marketing, and Membership network marketing.

How Do You Get Funding for Your Network Marketing Business Plan?

Network Marketing businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Network Marketing Business?

Starting a network marketing business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster. 1. Develop A Network Marketing Business Plan - The first step in starting a business is to create a detailed network marketing business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your network marketing business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your network marketing business is in compliance with local laws. 3. Register Your Network Marketing Business - Once you have chosen a legal structure, the next step is to register your network marketing business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 4. Identify Financing Options - It’s likely that you’ll need some capital to start your network marketing business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 7. Acquire Necessary Network Marketing Equipment & Supplies - In order to start your network marketing business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your network marketing business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

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Network Marketing Business Plan

The ability to generate residual revenue is one of the key benefits of network marketing. As a result, even if you are not actively involved in the sales process, you can still receive commissions. Thus, are you thinking of starting your network marketing business, if yes, then you will need a plan.

Need help writing a business plan for your network marketing business? You’re at the right place. Our network marketing business plan template will help you get started.

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write a Network Marketing Business Plan?

Writing a network marketing business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your business:

• This section may include the name of your network marketing business, its location when it was founded, etc.

Market opportunity:

Product and services:.

• For instance, your products and services may include health & wellness products, home goods, travel & vacation services, financial services, etc.

Marketing & sales strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business description:

Describe your business in this section by providing all the basic information:

• Single tier networking
• Multi-level marketing
• Affiliate marketing
• Cooperative marketing
• Describe the legal structure of your network marketing company, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission statement:

Business history:.

• Additionally, If you have received any awards or recognition for excellent work, describe them.

Future goal:

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

• People who are interested in starting their own business and need one other income, then they might be your target market.

Market size and growth potential:

Competitive analysis:, market trends:.

• For instance, the need and demand for personalized services is increasing day by day so explain how will you keep up with the trends.

Regulatory environment:

Here are a few tips for writing the market analysis section of your network marketing business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your products:

Mention the products your business will offer. This list may include services like,

• Health & wellness products
• Travel & vacation services
• Financial services, etc.

Product development:

In short, this section of your MLM business plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique selling proposition (USP):

• This could be anything from superior quality or performance to better pricing or packaging.

Pricing strategy:

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your network marketing business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your network marketing business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Operational process:

Training and support:, manufacturing and production:, supply chain management:.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your network marketing business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founder/CEO:

Key managers:.

• It should include, key executives, senior management, and other communication or product managers including their education, professional background, and any relevant experience in the industry.

Organizational structure:

Compensation plan:, advisors/consultants:.

• So, if you have any advisors or consultants, include them with their names and brief information consisting of roles and years of experience.

This section should describe the key personnel for your network marketing business, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

• This exercise will help you understand how much revenue you need to generate to sustain or be profitable.

Financing needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your network marketing business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample network marketing business plan will provide an idea for writing a successful network marketing plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our network marketing business plan pdf .

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Frequently asked questions, why do you need a network marketing business plan.

A business plan is an essential tool for anyone looking to start or run a successful network marketing business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your network marketing company.

How to get funding for your network marketing business?

There are several ways to get funding for your network marketing business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

Small Business Administration (SBA) loan

Crowdfunding, angel investors.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your network marketing business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your network marketing business plan and outline your vision as you have in your mind.

What is the easiest way to write your network marketing business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any network marketing business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Network Marketing in Business: Complete Guide

Network marketing, or multi-level marketing (MLM), is a business model that has gained popularity in recent years. It relies on individuals using their networks to sell products or recruit customers and partners. The concept has a long history dating back to the 1800s, with companies like Nutrilite and Amway pioneering the MLM industry. Today, network marketing companies exist in various sectors, allowing individuals to work from home and earn an income based on their sales and downline sales.

One of the main benefits of network marketing is the flexibility it offers. Unlike traditional employment, network marketing allows individuals to set their schedule and work at their own pace. This can particularly appeal to those who value work-life balance or have other commitments. Additionally, network marketing allows individuals to sell products they are passionate about. Whether health and wellness products, beauty and skincare, or household goods, a wide range of products is available in the industry – this enables individuals to align their business with their interests and values.

Furthermore, network marketing allows one to expand one's network and benefit from mentorship. Building relationships with like-minded individuals who share the same goals and aspirations can be incredibly valuable. These connections can lead to business opportunities and provide a support system. Experienced mentors can offer guidance and support, sharing their knowledge and expertise to help others succeed in marketing. Surrounding oneself with a strong network of mentors and peers can be a game-changer in this industry.

Table of Contents

How Network Marketing Works

Different types of network marketing include MLM, direct marketing, and affiliate marketing . MLM is the most common form, where distributors earn money from their sales as well as the sales of their downline. In direct marketing, individuals focus solely on selling products without recruiting others. On the other hand, affiliate marketing involves promoting products or services through online platforms and earning a commission for each sale made through their referral.

Finding your passion and choosing quality products is essential to succeed. When considering a network marketing opportunity, it's necessary to evaluate the age and integrity of the company. Research the company's track record, financial stability, and reputation in the industry. Additionally, consider the value of the product or service being offered. Is it unique? Does it solve a problem or fulfil a need? These factors help determine if the opportunity aligns with your goals and values.

Building solid relationships is a vital aspect of marketing success. Trust is the foundation of any relationship, and it is essential to establish trust with both customers and potential business partners. Providing value to your network is crucial. This can be done through educational content, sharing personal experiences, or offering exceptional customer service. By consistently delivering value, you build credibility and loyalty within your network.

Patience is also crucial. Building a successful network takes time and effort. Setting realistic expectations and not getting discouraged if results don't come immediately is essential. Consistency and perseverance are crucial. Treat your network marketing business like any other and invest the time and resources to grow it.

Network Marketing vs Pyramid Scheme

It is crucial to understand the distinction between network marketing and pyramid schemes. Network marketing is a legitimate business model that relies on selling products or services. Distributors earn money from their sales as well as the sales of their downline. Pyramid schemes, on the other hand, focus primarily on recruitment, with little emphasis on product sales. Pyramid schemes are illegal in many countries, as they are unsustainable and often result in financial loss for participants.

In network marketing, sincerity and genuine enthusiasm for the product or service are vital. Believing in what you are selling and being transparent with your customers and potential business partners is essential. You can establish a strong reputation and attract like-minded individuals to your network by being genuine and building trust.

Before getting involved, it's important to research state laws and regulations regarding the industry. Understand the legal requirements and ensure that the company you are considering aligns with these regulations. This will help protect you from legal issues and provide you with a legitimate business opportunity.

Training and Resources for Network Marketing

Mentorship plays a significant role in network marketing. Many marketing companies offer training programs and resources to support their distributors. These resources can include product information, sales techniques, personal development training, and more. Take advantage of these resources and continuously invest in your knowledge and skills. Attend training events, webinars, and conferences to stay updated on industry trends and best practices.

In addition to company-provided resources, many external resources are available to network marketers. Books, podcasts, and online courses can provide valuable insights and strategies to help you succeed in your business. Seek out industry leaders and experts who share their knowledge in these mediums.

Types of Network Marketing

There are different types of marketing structures. Single-tier marketing involves individuals selling products directly to customers. In this model, distributors earn commissions based solely on their sales. Two-tier marketing adds another level: individuals can recruit others to join the network. In this case, distributors earn commissions from their and recruits' sales. Multi-tier marketing, also known as MLM, involves multiple levels of distributors, with distributors earning commissions from their downline sales.

When considering which type of marketing structure to pursue, evaluating your strengths and preferences is essential. Some individuals may thrive in a single-tier model, focusing solely on their sales. Others may enjoy the challenge of building a team and earning commissions from the efforts of their downline. Consider your goals, skills, and personal preferences when selecting the network marketing structure that aligns best with your strengths.

Building Strong Relationships in Network Marketing

Building solid relationships with friends, family, and potential customers is crucial to success in network marketing. These relationships provide a solid foundation for your business and can lead to long-term success. Here are some tips for building solid relationships in network marketing:

• Trust : Trust is the cornerstone of any relationship. Be honest, transparent, and reliable in your interactions with others. When people trust you, they are likelier to do business with you and recommend you to others.
• Value : Share knowledge, insights, and resources to your network. Offer helpful tips, educational content, and exceptional customer service. By consistently delivering value, you build credibility and loyalty within your network.
• Communication : Effective communication is vital to building relationships. Be responsive and attentive to the needs and concerns of your network. Regularly reach out, follow up, and listen actively. Establishing open lines of communication fosters stronger connections.
• Support : Offer support and encouragement to your network. Celebrate their successes, provide guidance when needed, and be a source of motivation. Building a supportive community within your network creates a positive environment for growth and success.

By investing time and effort in building strong relationships , you create a valuable network for your business and a source of personal fulfilment and support.

Can Anyone Make Money with Network Marketing?

While it offers the potential to make money, it is not a guaranteed income for everyone. Success in network marketing requires effort, dedication, and overcoming challenges. Setting realistic expectations and understanding that building a successful business takes time is essential.

To increase your chances of making money, consider the following:

• Treat it as a business : Approach network marketing with a business mindset. Set goals, develop a business plan , and allocate time and resources to grow your business.
• Continuous learning : Network marketing is an ever-evolving industry. Stay informed about the latest trends, strategies, and best practices. Invest in your personal development and continuously improve your skills.
• Work ethic : Network marketing requires consistent effort and hard work. Treat it like a profession and be willing to put in the necessary time and energy to achieve your goals.
• Persistence : Network marketing can be challenging, and rejection is a part of the process. Develop resilience and perseverance to overcome obstacles and keep moving forward.
• Seek mentorship : Surround yourself with experienced mentors who can guide and support you on your network marketing journey. Learn from their experiences and leverage their expertise to accelerate your success.

Anyone can make money in the industry by adopting a proactive approach, continuous learning, and a strong work ethic.

Risks Involved in Network Marketing

As with any business opportunity, there are risks involved. It is essential to be aware of these risks and make informed decisions. Some of the risks include:

• Startup costs : Network marketing often requires an initial investment to join a company and purchase products or starter kits. It's important to carefully evaluate the costs and ensure they align with your budget and financial goals.
• Required purchases : Many network marketing companies have monthly minimum purchase requirements to remain active and eligible for commissions. Evaluate whether these ongoing expenses are sustainable for you.
• Operating expenses : Running a network marketing business may involve additional fees such as marketing materials, training events, and travel. Consider these costs and factor them into your financial planning.
• Sales and recruitment : Success in network marketing relies on both sales and recruitment. It can take time to generate sales and find recruits consistently. Be prepared for rejection and develop strategies to overcome sales and recruitment obstacles.

To mitigate these risks:

• Conduct thorough research before joining a network marketing company.
• Evaluate the company's track record, financial stability, and compensation plan.
• Seek advice from trusted mentors and professionals who can provide guidance and insights.

Network marketing is a business model that allows individuals to leverage their networks to sell products or recruit customers and partners. It provides:

• Flexibility.
• The chance to work with products you are passionate about.
• The potential to expand your network.

Success in network marketing requires building solid relationships, choosing quality products, and continuous effort. While risks are involved, with careful research, determination, and the right mindset, anyone can make money in the network marketing industry. Embrace the journey, invest in your growth, and enjoy the rewards of building a successful network marketing business.

Stuart Crawford

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Network Marketing Business Plan: Key 2024 Strategies

Looking to launch your MLM business using a solid network marketing business plan?

Getting a fast start helps with:

• Immediate income
• Long-term viability

In this blog post, I’ll dive deep into the essential steps and strategies to include in your network marketing business plan , the one I took to hitting $10,000+ per month in direct sales .

I’ll dig into this:

• Setting  goals
• Helping team members
• Leveraging company incentives
• Choosing your best launch date
• Getting in front of prospects
• Scheduling presentations 
• Leading by example

Commit to Your Network Marketing Business Plan

First step?

Ya gotta commit to the process when launching your direct sales business.

This involves:

• Writing down an affirmation commitment on your launch schedule
• Informing your sponsor, business partner, and family about your decision
• Explaining why you’re undertaking this venture

Making a solid commitment sets the foundation for network marketing success . 

You’ll establish a strong mindset to propel you towards achieving your goals.

• Write down an affirmation: Create a powerful statement that reflects your dedication to succeeding in network marketing. Repeat it daily as part of your morning routine or whenever you need motivation.
• Inform key people: Share with those closest to you – such as sponsors or mentors within the company – what steps are being taken towards achieving desired outcomes. Their support can prove invaluable during challenging times encountered throughout the journey.
• Tell family members: Your loved ones may not understand exactly how these businesses work; however, by providing them clear explanations regarding the reasons behind decisions made, they’ll likely become more supportive of the overall efforts put forth into the project.

In addition, consider joining online communities dedicated specifically to discussing topics related to lead generation, closing sales, and building teams.

It helps to find like-minded individuals who share tips and tricks gleaned from personal experiences from building their network marketing business plan.

Learning from others is a quick trick to avoid straying from your launch after you hit the inevitable obstacles faced along the way.

Committing to your network marketing business requires dedication, hard work and perseverance . 

Maintain a determined outlook and use your organized MLM blueprint to achieve your network marketing business objectives.

Set Network Marketing Business Plan Goals for Your Launch

To ensure a successful network marketing launch, set specific goals that align with your desired outcomes. 

By having clear targets in mind, you can better focus your efforts and measure progress throughout the process. 

Two common objectives to consider include:

Enrolling New Members or Customers

Aim to enroll a certain number of new members or customers within a specified timeframe, such as 10 individuals within 30 days. 

This provides you with an attainable goal while also motivating you to take consistent action during the launch period. 

To achieve this target, consider using effective lead generation tactics , reaching out to potential prospects through various channels like social media and email marketing.

Assisting Team Members with Rank Advancement

Another important aspect of your network marketing business plan is supporting your team’s growth by helping them advance in ranks. 

Set a goal for how many teammates you’d like to assist in achieving their next rank level within the launch timeframe – perhaps two people within 60 days. 

You can accomplish this by:

• Providing mentorship
• Sharing valuable resources on network marketing tips
• Conducting regular check-ins with each member

To reach these specific goals effectively, reverse engineer what actions to take on a daily or weekly basis. 

For example, if enrolling ten new clients requires contacting fifty leads per week, break it down into manageable tasks completed consistently throughout the entire project timeline. 

This approach ensures steady progress towards ultimate success while minimizing overwhelm associated with ambitious endeavors.

Establishing clear network marketing business plan objectives is a must for any prosperous and lucrative campaign, serving as the cornerstone of its success. 

Now that you have established these objectives, it’s time to consider when you should launch your MLM business.

Network Marketing Business Plan: Launch Dates

Select appropriate dates for your launch period as one of your network marketing business plan steps. 

Aim for a duration between 30 and 60 days, ideally coinciding with major company events that will provide additional motivation and support during the launch phase.

To choose the best possible dates, consider factors such as personal commitments, holidays, or seasonal trends in your industry. 

Aligning your launch with periods of high demand or interest can help you maximize exposure and results.

• Company Events: If there are any upcoming conferences, trainings, or webinars hosted by your network marketing company, use these opportunities to build momentum around your launch. Attendees will be more likely to join after witnessing firsthand the value provided by these events.
• Holidays & Seasonal Trends: Be aware of potential distractions during holiday seasons when people may be less focused on business opportunities. On the other hand, some industries experience increased sales during specific times of year – like fitness products in January or back-to-school items in August – so plan accordingly if applicable to your niche.
• Personal Commitments: Ensure you have enough time available to dedicate yourself fully to the launch process without neglecting family obligations or work responsibilities outside of network marketing activities.

Create a calendar outlining key milestones throughout the entire project timeline, including initial preparations and promotional efforts leading up to the actual event itself. 

This visual representation helps maintain focus while also providing necessary breaks from the intense concentration required throughout the project timeline.

Leverage Company Incentives Inside Your MLM Business Plan

One of the most effective ways to stay motivated and achieve success during your network marketing launch is by leveraging company incentives. 

Many companies offer rewards and bonuses when you reach certain milestones, such as rank advancements or sales targets. 

These incentives can provide a powerful boost to your efforts and help you maintain momentum throughout the launch process.

Rank Advancement Rewards

A common incentive offered by network marketing companies is rank advancement rewards. 

As you progress through the ranks within your organization, these rewards may include:

• Increased commissions
• Access to exclusive training materials
• Recognition at company events

To maximize this opportunity, research your company’s specific rank advancement structure and set goals that align with these milestones.

Vacation Bonuses

In addition to monetary rewards for achieving higher ranks in the organization, some companies offer vacation bonuses as an added incentive for top performers. 

These trips are often all-expenses-paid getaways designed to reward hard work while providing opportunities for networking with others. 

If your company offers such a program, make sure you understand the qualifications required, so that it becomes another motivating factor during your launch period.

Taking advantage of available incentives not only helps drive personal motivation but also demonstrates commitment towards achieving success. 

Setting clear objectives aligned with existing MLM company offerings gives you a better chance of realizing your desired outcomes.

Ultimately, it leads to greater overall satisfaction as you watch your network marketing business plan mature into sales and team members.

To further incentivize yourself during the journey, consider rewarding yourself with daily celebrations of progress and personal rewards that will keep you motivated along the way.

Rewarding Yourself During the MLM Launch Process

It’s essential to maintain a positive mindset and stay motivated during your network marketing launch. 

Reward yourself for each step forward, even if it doesn’t result in hitting your original objectives.

Celebrate Network Marketing Business Plan Progress

After each day’s work during your launch period, take some time to celebrate your achievements. 

This could be as simple as acknowledging that you’ve made progress or sharing your accomplishments with friends and family. 

You can also find creative ways to reward yourself for completing tasks or hitting milestones throughout the process.

Picking Personal Rewards

To keep motivation high, choose personal rewards that truly excite and inspire you. 

It might mean:

• Indulging in a favorite treat
• Taking a short break from work to enjoy an activity you love
• Setting aside funds for a larger reward once certain objectives are met

Remember that these rewards should remain aligned with your overall goals.

They serve as constant reminders of why you’re working hard towards launching your network marketing business successfully.

Incorporating daily celebrations and personal rewards into your launch strategy not only helps maintain momentum but also provides necessary breaks from the intense focus required throughout the entire project timeline. 

Take advantage of daily celebrations and personal rewards to invigorate yourself and remain motivated while forging ahead with your MLM business launch.

Rewarding yourself during the launch is a way to keep your motivation and concentration high. Now let’s look at how you can build a comprehensive list for your network marketing business plan launch.

Build A Comprehensive Launch List

Create an extensive list aligned with your target objectives.

It ensures maximum reach to potential clients. 

Rebuilding Existing Lists

If you already have a list of contacts from previous marketing efforts, revisit and update this information. 

Remove any outdated or irrelevant entries while adding new prospects that align with your network marketing launch goals. 

This process will help you maintain a fresh and targeted list for optimal results during your launch period. 

Don’t leave any stone unturned!

Not sure what to say to your prospects? No worries! I wrote this post all about what to say and which scripts to use .

Aligning List Size with Goals

Keep the size of your launch list proportional to the specific goals set inside your network marketing business plan. 

If you aim to enroll 10 new members within a certain timeframe, ensure that your contact list contains enough potential leads to attain the goal. 

To learn more about creating high-quality prospect lists for network marketing success, read this Network Marketing Leads Pro guide.

In addition to building an effective launch list, consider using online platforms such as social media networks for reaching out and engaging with prospective customers during the launch timeline.

Building a comprehensive launch list is essential for success in network marketing . 

And scheduling presentations and leading by example will ensure that the launch goes smoothly. 

With proper planning in place, you can gain new team members and keep them motivated to reach their goals with confidence.

Scheduling Presentations & Leading by Example

To achieve optimal results during your network marketing business plan launch, schedule at least three presentations per day. 

Leading by example, your commitment, and hard work will be a source of motivation for team members, enhancing the likelihood of success.

Conducting Daily Presentations

Presentations are a must if you expect to start selling products and build a successful network marketing business. 

You can’t make sales or close people into your team if you’re a “silent builder.”

Daily presentations provide an opportunity for potential customers and team members to learn more about your products.

It gives them a chance to ask questions and address concerns directly with you: the knowledgeable representative. 

To ensure maximum exposure during your launch period, aim to conduct three daily presentations. 

Different methods of conducting presentations exist such as:

• In-person meetings
• Social media live streams 

Use them all to gain maximum exposure for your network marketing business.

Motivating Team Through Personal Actions

• Lead by example: Your actions speak louder than words when it comes to inspiring others on your team. Show them what’s possible through consistent effort and determination.
• Create a supportive environment: Encourage open communication within the team where everyone feels comfortable sharing their successes and challenges without fear of judgment.
• Celebrate achievements: Recognize both individual accomplishments and collective milestones achieved throughout the launch process. This helps build camaraderie among team members while fostering a sense of pride in their contributions towards shared goals.

Taking these steps ensures that you not only meet personal objectives set forth during initial planning stages but also create positive ripple effects throughout your entire organization…

…ultimately leading to greater overall success for all of you.

I Bought This, Then Built a 9-Levels Deep Int’l Organization (click “play” to see details in Review Video below):

Network Marketing Business Plan FAQs

Still have a few questions about building your network marketing business plan and overall team?

How to Introduce Network Marketing

Introduce network marketing by explaining the business model, highlighting its benefits such as flexibility, low startup costs, and potential for residual income. Share your personal experience and success stories of others in the industry. Offer resources like company presentations or webinars to provide further information.

What Did Bill Gates Say About Network Marketing?

Bill Gates once said, “If I would be given a chance to start all over again, I would choose Network Marketing.” This quote demonstrates his belief in the potential of this referral marketing business model for creating wealth and opportunities for entrepreneurs.

Does MLM Have a Future?

Yes, MLM has a future as it continues to evolve with advancements in technology and changes in consumer behavior. The increasing popularity of social media platforms provides new opportunities for MLM reps to start selling and to growing their networks successfully. Use online marketing correctly to reach wider audiences.

Is MLM a Pyramid?

No, MLM is not inherently a pyramid scheme. While both involve recruiting new members into hierarchical structures, legitimate MLM companies focus on referral marketing to sell products or services rather than solely relying on recruitment fees from new members. Pyramid schemes are illegal due to their unsustainable nature (no product involved).

What Is the First Step in Network Marketing?

The first step in network marketing is choosing the right company that aligns with your values and offers quality products or services you believe in. Researching compensation plans can help ensure fair earning potential while also considering support systems provided by each company’s training programs.

Final Network Marketing Business Plan Thoughts

In conclusion, launching a successful network marketing business requires:

• Specific goals
• Strategic planning

By leveraging company incentives, rewarding yourself along the way, and building a comprehensive launch list, you can increase your chances of success. 

Additionally, scheduling immediate presentations and leading by example is key to motivating your team.

Let’s be real for a moment:

Most people you meet, sell products to, and recruit into your downline will not have the same desire to win as you do. 

Keep that in mind. 

Don’t let it disappoint you or lessen your commitment. 

Use it as a driving force to find those few individuals who match your intensity. 

You need to build a network marketing business plan, and go after it with all your might. 

Sift through the seemingly endless stream of people until you find those other business builders. 

You don’t know them yet, but the people who come in, recruit a couple of people, and quit?

Those people?

They know your future business builders who you’ll build your dynasty with. 

Build your network marketing business plan and go forth like God said: Multiply. 

Do you need help learning all this? 

Want support from people with decades of experience in MLM?

I built a 9-levels deep international downline and I’ll show you the #1 educational tool I used to enroll 3-7 new customers and team members here . 

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MLM Inspiration From Garrett Miles On American Idol

Written by Matt ZavadilUpdated February 5, 2023 (2 minute read) Last night my wife and I saw Garrett Miles on American Idol. We both found it inspirational to see his spirit shine through as he played for the panel. As I watched him sing it inspired me to write this post for you, the network…

Lead Generation

Network Marketing 101: Starting From Scratch Effortlessly

Explore essential tips to launch your network marketing journey, from selecting the right company, creating a solid plan, to effective outreach on platforms like LinkedIn. Learn the art of consistency and relationship-building for success.

Mar 3, 2024

Ever wondered how to dive into the world of network marketing? You're not alone. Starting from scratch can seem daunting, but with the right approach, it's an adventure waiting to happen. Imagine building your own business network, being your own boss, and creating a stream of income that's as active or passive as you desire.

Why's everyone buzzing about network marketing, you ask? It's simple: flexibility, growth potential, and the power to leverage your personal connections into professional success. Whether you're looking to supplement your income or launch a full-time business, network marketing offers a unique pathway to achieving your goals.

You're probably pondering where to begin, what strategies to adopt, and how to grow your network effectively. Don't worry, we've got your back. Let's embark on this journey together and turn your network marketing aspirations into reality. Ready to take the plunge?

Define Your Why

Embarking on a network marketing journey requires more than just an entrepreneurial spirit; it's about understanding your motivation . Think of your why as the fuel that will keep your engine running even when the road gets tough.

Imagine you're setting sail on an ocean voyage. Without a compass, you'd drift aimlessly, right? Similarly, when you're lost in the sea of network marketing , your why is that compass steering you back to shore. So, what's driving you? Is it the desire for financial freedom, the dream of working from anywhere, or the passion for the product you're promoting? Hammer down your purpose, because it's your steadfast guide through high tides and storms.

Don't confuse your why with a goal like making a million dollars. Your why runs deeper; it's emotional, personal, and it's the backstory to every success. It's not a destination, but rather the journey itself, filled with lessons and growth.

Beware of mistaking momentary enthusiasm for a true why. While a burst of excitement can kickstart your engine, it won't sustain you. Your why is the resilient current beneath that carries you forward through both triumphs and setbacks.

Let's break it down into steps:

Reflect on your passions : What really lights your fire? Maybe it's empowering others or having the means to support your family like a rock-solid pillar.

Consider your strengths : Often, your why sits snuggly with what you're naturally good at. Are you a networking ninja or a sales superstar?

Look at your struggles : Sometimes your why is born from challenges. Overcoming obstacles can fuel your drive to help others navigate similar hurdles.

Write it down : Putting your why into words cements it in reality. Keep it visible, and let it be a daily reminder of what you're working toward.

Your why is your story, your brand , your battle cry. It's unique to you, and it's what makes you stand out in a sea of marketers. Own it, nurture it, and let it be the constant that defines your journey in the ever-evolving world of network marketing.

Research Different Network Marketing Companies

Before you dive into network marketing, it's crucial to shop around and research various companies. This is like picking a partner; you want to find a good match that resonates with your values and interests. Look into their product lines, compensation plans, and the support they offer their network marketers.

Consider this: not all network marketing companies are created equal. Some may promise the moon but have very little history of success. It's vital you look at their track record. How long have they been in business ? Do they have a strong reputation? What's their Better Business Bureau rating? These are indicators of a company's stability and credibility.

You'll find an array of products being sold via network marketing, from health supplements to beauty products to tech gadgets. Think about what you're passionate about selling. If you believe in the product, you're more likely to be convincing when you talk to potential customers and recruits.

Here are some steps to guide your research:

Check out company reviews – What do current and past network marketers say about their experience?

Examine the earnings disclosure – Be realistic about potential earnings. Look at the average income statistics for network marketers in the company.

Attend company meetings – Firsthand information is golden. Get a feel for the culture and support available.

Understand the compensation structure – Know how you'll earn money. Is it more focused on selling products or recruiting others?

It's also wise to be aware of red flags, such as companies that require a large upfront investment to join. This could be a sign of something akin to a pyramid scheme, where the products are secondary to recruiting. Genuine network marketing focuses on actual sales to customers.

When you settle on a company, make sure you're comfortable with their business model . Some operate on a multi-level marketing structure, while others may be direct sales . You'll want to decide which environment fits your business style and how you envision your growth in the field.

In exploring different companies, don't jump at the first opportunity. Network marketing is about building lasting relationships, and that starts with thoroughly understanding the firm you're partnering with and finding synergy with their products and ethics. This deep dive into your potential partnership will pave the way for a more committed and informed start in your network marketing journey.

Choose the Right Network Marketing Company

Embarking on your journey in network marketing starts with selecting the right company to partner with. Think of this decision like choosing a vehicle for a cross-country trip - you want something reliable, efficient, and comfortable.

Research the Company’s Background Begin by digging into the company's history. Just like you wouldn't buy a car without checking its history report, you don't want to commit to a company with a questionable past. Look for companies that have stood the test of time – longevity can be an indicator of stability in the fast-paced world of network marketing.

Product Line Appeal Next, examine the product line. Your enthusiasm for the products is your fuel in network marketing. If you can't get excited about them, it'll be tough to convince others. Choose products you believe in, ones that you would use yourself, and watch your natural passion sell.

Compensation Plan Clarity Understanding the compensation plan is akin to knowing the mileage of your vehicle; it determines how far each effort you put in will take you. Dive into the nitty-gritty of the commission structure and bonuses. Ensure it's fair and offers you a genuine opportunity to grow your income .

Support Structures A good support system from your chosen company is your GPS and roadside assistance rolled into one. Training resources, marketing tools, and mentorship programs can steer you towards success. Verify that the company provides adequate support to help you navigate and grow within the industry.

By focusing on these key areas, you're not just picking any network marketing company; you're choosing a partner that aligns with your goals and values. Equip yourself with this knowledge and drive forward with confidence—your network marketing journey is just revving up.

Understand the Compensation Plan

When you're diving into network marketing, understanding the compensation plan is like unraveling a road map to your treasure. It's the blueprint that details how you'll earn money and it's critical to figure out if it's a good fit for you.

First things first , think of the compensation plan as a recipe—various ingredients come together to give you the full flavor of your potential earnings. These earnings usually include:

Retail Profits : The difference between the wholesale price you pay and the retail price you sell at.

Commissions : Earned from direct sales or sales made by those in your network.

Bonuses : Additional incentives provided for reaching certain milestones or recruiting new members.

Residual Income : Continuing to earn from recurring customer purchases.

It's vital to grasp the key terms like 'downline,' which refers to the recruits who sign up under you, and 'upline' is who you've signed up under. Your downline is crucial because, in most plans, their sales give you a ticket to commission city.

However, the common pitfall lies in the allure of exaggerated earning potential. Don't get caught up in the sizzle of high figures without considering the actual work required. It's not just about recruiting a team—it's about ongoing sales and team support.

Moreover, compensation plans can be as varied as the fish in the sea. Some popular structures are:

Binary Plan : You build two teams (right and left legs). Your earnings are based on the sales of the lesser performing leg.

Unilevel Plan : You earn from your direct recruits and potentially from their recruits down a specified number of levels.

Matrix Plan : Also known as a forced matrix plan, limits the number of recruits in your first line, promoting spillover, which can lead to teamwork.

To navigate these waters, you'll want to regularly attend company training sessions or webinars to sharpen your understanding and skills. Also, tap into your upline for mentorship—they've been where you are and can provide the compass to guide you through the complexities.

When sizing up a plan, use a critical eye. Ask questions like:

How often will you get paid?

What are the benchmarks for each earning tier?

Is there a cap on earnings or required minimums?

Develop a Marketing Strategy

When diving into network marketing, constructing a solid marketing strategy is akin to building a house; you need a good foundation, sturdy walls, and a plan for every room. To start on the right foot, identify your target market. This is your foundation—the group of people who need or want what you're offering. Picture someone you already know who might benefit from your product or service. Chances are others like them are your ideal market.

Imagine each marketing channel—be it social media, blogging, or email campaigns—as a room in your house. You wouldn't decorate every room the same way, right? The same goes for your marketing channels; tailor your strategy to fit each platform's unique style and audience.

One common mistake is trying to be everywhere at once. You're better off picking a couple of outlets where your target customers are most active and focusing your energy there. Spreading yourself too thin can dilute your message and sap your energy.

As for techniques, personalization is paramount, especially in cold emails or LinkedIn outreach. Think of your message like a handshake; it's much more effective when you look someone in the eye, say their name, and offer something relevant to them specifically. A generic message is like a limp handshake—easily forgotten.

Incorporating best practices into your approach means:

Crafting compelling subject line

Customizing messages to add personal touches

Offering genuine value in your conversations

Following up without being pushy

Test different approaches and track your results. Some methods might work well with one segment of your audience but not another. Keep refining your strategy based on feedback and metrics, such as open rates or engagement levels.

Remember, network marketing is a dynamic and personal business . Your marketing strategy should reflect that, allowing for genuine connections that could lead to fruitful partnerships or sales. Keep learning, adapting, and growing, and your network marketing efforts can thrive from the ground up.

Utilize Social Media Platforms

When starting from scratch in network marketing, social media platforms are your allies. They're like the new-age town square where conversations happen, relationships are forged, and businesses grow. You'll want to be where your audience is —and that's likely scrolling through their feeds on various social platforms.

But before you dive in, here's a crucial point : Don't spread yourself too thin. You might believe you need to have a presence on every platform, but that's a common misconception. In reality, you should focus on one or two platforms where your target demographic is most active.

Facebook and Instagram are the equivalent of mainstream TV channels, appealing to a broad audience. Meanwhile, LinkedIn is like the professional networking event of the social media sphere, excellent for B2B outreach. TikTok ? It's the trendy new club everyone's talking about – great for a younger audience.

Avoiding the trap of generic posts is vital. Personalize your content; think of it as tailoring a suit—it should fit your audience perfectly. Your followers don't want the same old pitches they've seen a hundred times. They're looking for stories, helpful tips, and insights that resonate on a personal level.

Leverage user-generated content and reviews. They act as word-of-mouth endorsements and are social proof that your network marketing is genuine and impactful.

Understand the Algorithm

Each social media platform has its own algorithm , which determines what content gets seen. It's kind of like the secret sauce that can make or break your visibility online. Here's where you'll need to do your homework—understanding these algorithms is key to increasing your reach. Regular posts, engaging with comments, and posting at optimal times can improve your visibility.

Engage with Your Community

It's not just about broadcasting content; it's about sparking conversations. Reply to comments, ask open-ended questions, and run polls. Engagement boosts your activity and gets more eyes on your page. But remember, the engagement must be authentic —no one appreciates spammy comments or insincere interactions.

Build a Strong Network

Establishing a solid network is the backbone of successful network marketing. Imagine networking like planting a garden – you need to sow the seeds, nurture them, and then watch them grow. You're not simply collecting contacts; you're cultivating relationships.

Understanding and identifying your target market is the first step. You wouldn't want to water tomato plants if you're trying to grow cucumbers. Similarly, engage with individuals who genuinely have an interest or a need for your product or service. This relevance is crucial, as it ensures your efforts are concentrated on fertile ground.

One common mistake network marketers make is trying to cast the net too wide from the get-go. It's like trying to be friends with everyone at a party. Realistically, you'll only vibe with a few people, and those are the connections that will be most fruitful. Focus on quality, not quantity. Invest in those relationships by showing genuine interest and offering value before you look to gain anything from them.

Different techniques can be applied depending on where you find your connections. For instance:

LinkedIn outreach requires a professional tone and understanding of business etiquette.

Cold emails need to be concise, personalized, and provide a clear call-to-action without sounding too salesy.

On platforms like Facebook or Instagram , casual and relatable content may resonate better.

Let's talk about incorporating these into your routine. Schedule regular intervals to reach out to new contacts, but also to follow up with your current connections. Remember, networking isn't a one-and-done activity. It's about building and maintaining relationships.

Here are some practical tips to further strengthen your network:

Attend networking events and conferences related to your niche.

Participate actively in online forums and social media groups.

Offer help and provide insights when others seek advice – be a giver, not just a taker.

Each interaction is an opportunity to learn and grow your network. Keep your approach flexible - adapt your strategies as you gain more insight into what works for your particular audience.

Attend Events and Workshops

When you're looking to break new ground in network marketing, attending events and workshops is like finding a treasure map. You'll meet others who are on the same journey, share stories, and learn from those who've already reached the treasure chest of success. Imagine walking into a room filled with potential partners and mentors—it's like stepping onto a gold mine of opportunities.

Events and workshops are more than just meet and greets; they're your fast-track to learning the ins and outs of the industry. You might find yourself at a workshop that teaches you how to craft the perfect pitch or at a seminar that shows you how to leverage social media for your business. You're not just a passive listener; you're an active participant in your growth.

One common mistake? Going in without a game plan. To get the most out of these events, go in with a strategy:

Set clear goals. What do you want to walk away with? Is it 10 new contacts or a new selling technique?

Prepare engaging questions. Asking thought-provoking questions not only helps you learn but also makes you memorable.

Follow up. The magic often happens after the event. Don't let those new connections grow cold.

Remember, each event is unique. The lavish annual conference with keynote speakers might offer big-picture insights, while the local weekly workshop could be a chance to fine-tune practical skills. Select events that align with your business phase—whether you're just starting out or aiming to scale up.

Integrating the knowledge and networks gained from events into your business plan is key. Perhaps you learned a new lead generation technique; test it, refine it, and measure its success. Information without action is like a car without gas—it might look good, but it's not going to get you anywhere.

These gatherings are fertile ground for collaborations and partnerships. Be open to joining forces with others who complement your strengths and weaknesses. That synergy can be the catalyst for exponential growth, launching you ahead in the competitive world of network marketing.

Simply put, attending events is not just about showing up—it's about showing up prepared to learn, connect, and apply new insights to your business blueprint. Each event is a stepping stone, and with the right approach, you're building a path towards your goals.

Provide Value to Your Network

When diving into the world of network marketing, think of yourself as a farmer rather than a hunter. Your network is your crop; nurture it with value and it'll flourish. Imagine throwing seeds (your products or opportunities) on barren land (a network with no value) - they simply won't grow. But plant them in fertile soil (a network that trusts you), and you'll reap the rewards.

First off, let's tackle common mistakes : marketers often pitch their product relentlessly, forgetting that a hard sell can turn people away. It's like going on a first date and asking someone to marry you - it's just too much too soon. Instead, focus on building relationships . Share resources, offer advice, and engage genuinely with your network's needs. By doing so, you're laying the groundwork for trust and loyalty.

Next up, different techniques and variations for providing value. It's not always about your product; sometimes, it's about the knowledge you share or the problems you solve. Here are a few practical tips:

Share industry insights and trends.

Offer free, valuable resources that address common pain points.

Engage in meaningful conversations and truly listen to feedback.

Each of these methods works best when tailored to your audience. For example, if you're addressing budget-conscious entrepreneurs, sharing cost-saving tips might be more valuable than discussing premium tools.

Incorporating these practices involves patience and consistency. It's about finding a balance - you don't want to bombard your network with too much content, but you also don't want to be forgotten. Regular, value-driven interactions are key. Share a pertinent article one week, host a free Q&A session the next. You'll become a go-to resource in your industry, which is a strong foundation for any network marketing business.

Embrace these strategies and watch as your marketing transforms from a series of cold pitches to a sustainable growth system . Remember, value is a currency in itself, and you're the mint.

Stay Consistent and Persistent

Building your network marketing business from scratch is a lot like nurturing a garden – you can't just plant the seeds and come back weeks later expecting a bounty of vegetables. It requires daily effort, a steady hand, and a patient spirit. Consistency is the water and sunlight for your business; without it, nothing grows.

When you're consistent in your efforts, reaching out to potential leads, and regularly sharing valuable content, you're setting a rhythm for your business. Persistence , on the other hand, is the resilience to keep going when results aren't immediate. It can be tough, especially when you don't see the fruits of your labor right away, but that's where the magic happens. Here's what you need to remember:

Establish a Daily Routine : Create a schedule for your outreach efforts. Whether it's sending cold emails or connecting with potential leads on LinkedIn, carving out dedicated time each day ensures you're always moving forward.

Monitor Your Outreach: Keep track of who you've contacted and when. It'll save you from the embarrassment of double messaging and help you follow up effectively.

Practical Tips to Sidestep Common Mistakes

Imagine you're casting a wide net to catch fish, but this particular net happens to have one massive hole. That's exactly what inconsistent follow-ups do to your potential leads. They leak out. So, always double-check your follow-up strategy.

Avoid these common errors:

Not personalizing your messages. A generic approach screams 'bulk email', and leads can sniff those out from a mile away.

Bombarding contacts. There's a fine line between persistence and annoyance. Space out your messages to avoid spamming.

Techniques and Variations for Every Situation

Cold emailing is much like baking – certain ingredients work wonders for some recipes but not for others. For instance, a personalized subject line might be the 'sugar' that sweetens the deal for a cold email but could feel too informal on LinkedIn. Know your platform and adjust your method accordingly:

Cold Email : Keep it short and sweet, talk about the benefits, and explain why you're reaching out.

LinkedIn Outreach : Be professional, highlight mutual connections or interests, and engage with their content first.

Provide value in every interaction. It’s not just about the sale; it’s about building a relationship

You've got the tools and insights to kick-start your journey in network marketing. Remember, it's about nurturing relationships and providing value, not just closing sales. With a daily routine and smart outreach, you're set to grow your network effectively. Avoid the pitfalls of impersonal messages and stay the course—consistency and patience are your best allies. Now, take that first step and watch your network marketing business flourish.

Frequently Asked Questions

What is key to building a successful network marketing business.

Building a successful network marketing business hinges on consistency and persistence. Engaging in daily efforts and maintaining a patient demeanor are fundamental to growth in the network marketing field.

Can you suggest practical tips for maintaining consistency in network marketing?

Practical tips for maintaining consistency include establishing a daily routine and monitoring outreach efforts to ensure a steady flow of communication with your contacts.

What common mistakes should I avoid in network marketing?

Avoid common mistakes such as failing to personalize your messages to each contact and overwhelming your contacts with too many messages, as this can be counterproductive.

How should you use cold emailing and LinkedIn for network marketing?

For cold emailing, focus on personalizing your communication and providing value upfront. LinkedIn outreach should be professional and concentrate on building relationships by engaging with content and offering assistance.

What is the overall focus when interacting in network marketing?

The overall focus in network marketing interactions is to provide value in every exchange and prioritize building relationships over simply trying to make a quick sale.

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Creating a Successful Network Marketing Business Plan: A Step-by-Step Guide

If you’re considering starting a network marketing business, it’s crucial to have a solid business plan in place. A network marketing business plan will help you stay organized, attract potential customers and partners, and set achievable goals for your business.

What is a Network Marketing Business Plan?

A network marketing business plan is a document that outlines the details of your network marketing business. It includes information about your products or services, target market, marketing strategies, financial projections, and goals. It’s essentially a roadmap for how you plan to grow and manage your business.

Why do You Need a Network Marketing Business Plan?

Having a network marketing business plan is essential for several reasons. First and foremost, it helps you clarify your business idea and vision. It forces you to think through the details of your business and consider things like your target market, pricing, and marketing strategies.

A network marketing business plan also serves as a reference point for you and your team. It helps you stay on track and ensure that you’re working towards your goals. Additionally, a business plan can be used to attract potential partners and investors, as it provides them with a clear understanding of your business and its potential for success.

How to Create a Network Marketing Business Plan

Creating a network marketing business plan may seem overwhelming, but it’s actually a straightforward process. Here are the steps to follow:

• Define your business idea and target market: Start by outlining the products or services you’ll be selling and the customers you’ll be targeting. Consider things like demographics, location, and needs.
• Develop your marketing plan: Next, create a plan for how you’ll market and sell your products or services. This could include online and offline marketing techniques, such as social media, content marketing, and networking events.
• Set financial goals and projections: Determine how much money you want to make and how you plan to achieve those financial goals. This could include budgeting for marketing and advertising efforts, as well as forecasting sales and profits.
• Create a budget and timeline: Based on your financial goals, create a budget and timeline for your business. This will help you stay on track and make sure you’re making progress towards your goals.
• Review and revise your plan: As with any business, things may change and you may need to adjust your plan. Be sure to review and revise your plan regularly to ensure that it reflects the current state of your business.

Implementing Your Network Marketing Business Plan

Once you’ve created your network marketing business plan, it’s time to start implementing it. Here are a few tips to help you get started:

• Focus on building relationships: Network marketing is all about building relationships, so make sure you’re spending time cultivating connections with potential customers and partners. This could involve networking events, social media outreach, or even one-on-one conversations.
• Leverage your network: Your network can be a valuable resource as you grow your business. Don’t be afraid to reach out to your friends, family, and colleagues for support and introductions to potential customers or partners.
• Stay organized: It’s important to stay organized as you grow your business. Use tools like project management software or a CRM to keep track of your tasks and progress.
• Stay up to date: As with any business, it’s important to stay current on industry trends and best practices. Keep learning and staying up to date with the latest strategies and technologies to ensure that you’re positioned for success.
• Get support: Building a network marketing business can be challenging, so it’s important to have a supportive community to turn to for guidance and encouragement. Consider joining a training center or online community, such as our free WiFi Entrepreneur training center and online community, to get the knowledge, tools, and access you need to quickly succeed online.

A network marketing business plan is a crucial component of your business, providing a roadmap for growth and success. By defining your business idea, developing a marketing plan, setting financial goals and projections, creating a budget and timeline, and implementing your plan, you can set yourself up for success in the world of network marketing. Don’t forget to seek out support and resources, such as our free WiFi Entrepreneur training center and online community , to help you along the way.

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Network Marketing 101: A Step-by-Step Guide to Starting Your Own Business

• Post category: Start Business
• Post published: June 25, 2023

Network marketing, also known as multi-level marketing (MLM), is a business model that relies on a network of individuals to promote and sell products or services.

It is a unique approach that allows individuals to build their own businesses by leveraging the power of networking and personal relationships.

In this article, we will explore what network marketing is and provide a step-by-step guide on how to start your own network marketing business.

What is Network Marketing with Example

At its core, network marketing involves the distribution of products or services through a network of independent distributors or representatives.

Network marketing companies example Amway India, Herbalife India, Vestige, and RCM,

These distributors earn commissions not only from their own sales but also from the sales made by the distributors they have recruited into their network.

This creates a multi-tiered structure where distributors have the opportunity to earn passive income by building and managing their network.

Starting a Network Marketing Business

Join a dynamic network marketing team today and unlock unlimited earning potential.

Experience financial freedom , personal growth, and a supportive community. Be your own boss and build a business that lasts.

1. Research and Choose a Reputable Company

Before diving into network marketing, it’s crucial to research and selects a reputable company with high-quality products or services.

Look for a company that aligns with your values and offers a product line that you are genuinely passionate about.

Investigate the company’s track record, compensation plan, and support system for its distributors.

2. Understand the Compensation Plan

Network marketing companies typically have different compensation plans, so take the time to understand how you will be compensated for your efforts.

This includes understanding the commission structure, bonuses, and incentives provided by the company.

A transparent and fair compensation plan is essential for long-term success in network marketing.

3. Build Your Network

Network marketing heavily relies on building and nurturing relationships. Start by reaching out to your existing network of friends, family, and colleagues who might be interested in your product or business opportunity .

Attend industry events, conferences, and networking gatherings to expand your network.

Utilize social media platforms to connect with like-minded individuals and showcase the value of your products or business.

4. Master the Art of Selling

To succeed in network marketing, it’s important to become a skilled salesperson. Learn about the products or services you offer and effectively communicate their benefits to potential customers.

Develop your persuasion and negotiation skills, and always prioritize building trust and maintaining authenticity in your interactions.

Continuous personal development and training in sales techniques can greatly enhance your selling abilities.

5. Train and Support Your Team

As you start growing your network marketing business , it becomes vital to provide training and support to the distributors you recruit.

Share your knowledge, experiences, and strategies with them. Help them develop their sales skills , provide guidance on building their own networks, and offer ongoing support to ensure their success.

The stronger and more successful your team becomes, the more your own business will prosper.

6. Stay Consistent and Persistent

Network marketing is not a get-rich-quick scheme. It requires dedication, consistency, and persistence.

Set clear goals for your business and develop a daily action plan to work towards those goals.

Be prepared to face challenges and setbacks along the way, but remain focused on your vision and keep pushing forward.

Consistency and persistence will eventually lead to long-term success.

Types of network marketing

• Single-level marketing: Distributors earn commissions only on their personal sales.
• Multi-level marketing (MLM): Distributors earn commissions on their sales and the sales made by their recruited team members.
• Pyramid schemes: Illegal schemes that focus primarily on recruiting participants rather than selling actual products or services.

How  to  join a network marketing company in India

To join network marketing companies in India, you can research reputable companies, attend presentations or meetings, understand their compensation plans and product offerings, and sign up as a distributor or representative.

How much does it cost  to  start  a  network marketing

The cost of starting a network marketing business varies depending on the company. It typically includes purchasing a starter kit or product package, which can range from a few hundred to a few thousand rupees.

Network marketing business opportunity

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Home » Business Cycle » Network marketing?

4 steps to network marketing success

Do you want to become your own boss, work flexible hours and make money? Of course you do. One way to get to this stage in your professional life is via network marketing.

If you’ve heard of Mary Kay, Avon or Tupperware, you’ve heard of network marketing. These household names are all examples of this type of business, which can be a great fit for those with an entrepreneurial mindset. But what is network marketing exactly, and how does it work? It’s time to learn how you can get all the benefits of being a business owner without all the headaches and level of risk.

Ready to make the next big move for your business?

What is network marketing?

Network marketing in business is a model that’s dependent on person-to-person sales of a product or service. It involves developing a team of people who work together to deliver the product’s message to a wide range of potential customers. The leaders of these teams are compensated for the products they sell as well as the products their team members sell.

It’s also known as multilevel marketing, referral marketing and consumer direct marketing. No matter what you call it, these are businesses where the best entrepreneurs can succeed – and even find their true gift.

How does network marketing work?

You’ll start your network marketing business by signing up with a reputable company – some of today’s most popular are Scentsy, Younique Cosmetics and Young Living Essential Oils. You’ll typically receive a “starter kit” with promotional materials, supplies and other items you’ll need to get started. At first you’ll work underneath a sponsor who can show you the ropes, provide education and give you tips about the industry. Once you know everything there is to know about your product, you’re ready to start selling.

Most network marketing in business takes place face-to-face. All you need to do is talk to people! Let your passion shine through and use your communication skills to build rapport and get people interested in your product. Here’s where the “network” part comes in: When you sign someone up, they become part of your team. You earn commission on their sales and on sales of any people that they sign up – and so on. The more passionate people you can find, the better.

Advantages and disadvantages of network marketing

One of the best advantages of network marketing is that you will feel like your own boss – without taking on the responsibility of starting your own company. You’ll typically be able to work out of your home and make your own hours, giving you the flexibility that many entrepreneurs love, with none of the risks. Another advantage is that you’ll gain skills you can use in any future endeavor, like developing instant connections with others, making persuasive presentations, cultivating and leading a team and effective follow-through.

The disadvantages of network marketing are similar to those for any sales business: It will take time to build your business , and a lot of people will tell you “no” before you start hearing “yes.” Competition can be fierce, so you must always be a step ahead. Never forget that you are still an entrepreneur, even though you’re part of a network marketing business. You must strengthen your resilience, build your brand, market yourself and innovate – just as you would if you started a traditional business.

How to succeed in network marketing

Now that you know what network marketing is, it’s time to get started. Running a successful network marketing business doesn’t have to be time-consuming or complicated. You can create a breakthrough with a few simple steps – change your story, change your strategy and the rest will follow.

Step 1. Find your passion

According to Tony, network marketing is about “picking the right company and realizing you’re a value creator. Whatever you enjoy the most, you’ll do the most.” 

Your love and passion for a product or service drives you to properly tell its story , and that’s how you create value. Consider what products have improved your life in the past and what you want to learn more about. Is it supplements? Home décor? Cosmetics? When you choose something you have a deep interest in, that passion will shine through.

There’s another benefit to choosing something you love: more sales. Today’s consumer is bombarded with marketing, branding and advertising. They’re on high alert and know when they are being “sold” to. If you’re just doing this for the money, they will sense it right away – and react accordingly. The best network marketing entrepreneurs figure out how to combine their true passion with their ability to make money. What is network marketing at its most successful? It’s your chance to make a difference in the world – and make money while you’re at it.

Step 2: Choose the right company

Passion is the most essential ingredient to successful network marketing – and choosing the right company that matches your passion is equally vital. You’ll need to research carefully to locate a business whose message, story and products or services capture your image and make you want to join their ranks. The network marketing business you choose must also have the following traits:

At least five years in operation :

Fifty percent of businesses fail within the first year, and 80% fail within five years. Signing up with a business that hasn’t had its doors open for at least that long is an additional risk.

Steady cash flow :

Network marketing companies with nothing to hide disclose their financial statements. Take the time to read the statements and ensure the business is well-capitalized.

Professional development :

Make sure the business provides the coaching, technology and support you need, and will send you to any conferences and meetings required to advance your training.

Established customer base :

Sign on with an established company that already has raving fan customers . An existing customer base allows a network marketing business to shift gears as necessary.

Step 3. Put your resources to work

Succeeding at network marketing is largely dependent on how many resources you can cultivate. Start by discovering how you can leverage things you already have – connections, education and achievements – into business success. You may already have dozens of relationships that you can capitalize on to grow your network. 

As you consider turning to these people, remember that you want to add value to their lives with your product or service. Don’t pitch everyone in your phone book just because you can. Remember that the secret to living is giving . Those who thrive in network marketing understand that it’s not about selling – it’s about using the opportunity to cultivate an abundance mindset and improve the lives of others.

Step 4: Manage your mindset

  In network marketing, the way you think about yourself matters far more than your tactics. You might have plenty of strategies to deploy, but if you’re not in the right mindset, you won’t be able to execute them. However, even if you have no business experience, you can succeed in network marketing if you create the right mindset .

Before you even start network marketing, you need to learn how to cultivate positive emotions and control your reactions to situations. Choose how you feel rather than reacting to a situation. When you do this, life happens for you instead of to you, putting you firmly in the driver’s seat . You will face plenty of challenges as you learn about network marketing, and viewing each setback as something you can overcome and learn from will help you move on from temporary disappointments.

Figuring out how to succeed in network marketing doesn’t have to be time-consuming or complicated. You can create a breakthrough with a few simple steps – change your story, change your strategy and the rest will follow. Tony says, “Most of us get what we tolerate.” It’s time to stop tolerating anything less than being your own boss.

Ready to take your business to unreached levels?

Discover how to create the ultimate business advantage with Tony Robbins’  7 Forces of Business Mastery  free content series.

© 2024 Robbins Research International, Inc. All rights reserved.

Mastering the Network Marketing Business Model: A Guide for Companies and Leaders

Welcome to the arena of network marketing —a business model that promises both high rewards and intricate challenges. As seasoned players or aspiring leaders, it’s crucial to master the mechanisms that drive this unique business model. Let’s break it down.

The Rise of Network Marketing Network marketing has come a long way from its early days, and today it stands as a multi-billion-dollar industry. What contributed to this meteoric rise? Let’s explore key factors like the advent of social media, global reach, and the attractiveness of passive income streams.

Anatomy of a Successful Network Marketing Business A network marketing business isn’t just about recruitment and sales; it’s a complex structure that involves training, compliance, and, most importantly, retention. What are the key elements that constitute a successful network marketing business?

• Technology and Network Marketing: In today’s digital age, ignoring technology isn’t an option. From CRM systems to automated marketing funnels, technology is your best friend in managing a large and diversified network.
• Regulatory Compliance: The importance of regulatory compliance in network marketing cannot be overstated. A single misstep can result in legal complications that could bring your entire business down. How can you ensure that you’re always on the right side of the law?
• Training and Development: Investing in the training and development of your distributors pays off in spades. Well-educated and well-supported distributors are more likely to stay, produce, and recruit, thus growing your business sustainably.
• Evaluating Performance Metrics: Performance evaluation is an ongoing process. The metrics for one may not apply to another. How do you set benchmarks and KPIs that accurately reflect your business objectives?

Whether you’re an established network marketing company or an aspiring leader, mastering the network marketing business model can set you apart from the competition. Subscribe to our newsletter or get in touch for comprehensive consulting services. Your next level awaits.

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Home » Sample Business Plans » Wholesale & Retail

How to Write a MLM Business Plan [Sample Template]

Are you about starting a starting a network marketing business? If YES, here’s a complete sample network marketing business plan template & feasibility report you can use for FREE to raise money . Marketing is one of the best tools that can attract loads of people. This is one of the very reasons why network marketing agencies have come to be.

If you have a natural penchant for marketing and meeting people, you may want to consider starting a network marketing agency business. This is a great way to start a trade anytime and anyway.

A Sample Multi Level Marketing Business Plan Template

1. industry overview.

Network marketing business is generally referred to as a business opportunity that is very popular with people looking for part-time and perhaps flexible means of earning additional income. Some of the leading network marketing companies in the united states are Forever Living Products, Fuel Freedom International, Avon Products, Mary Kay Cosmetics and Tupperware et al.

Network marketing which can also be referred to as Multi-level Marketing (MLM) or Pyramid selling or affiliate marketing et al is a controversial marketing strategy in which the sales force is compensated not only for the sales they able to generate, but also for the sales of the other salespeople (down – line / team members) that they recruit.

In the United States of America and of course in most countries of the world, companies that leverage of network marketing approach for compensation have been a frequent subject of criticism and lawsuits.

Generally, criticism has been focused on their similarity to illegal pyramid schemes, price fixing of their products, high initial costs for registering (the amount needed to purchase marketing kit and first products), emphasis on their recruitment strategies and loads of other technique that seems not to be plain and easy.

Research carried out by The Direct Selling Association (DSA) of which network marketing us under, shows that in 1990, 25 percent of members used network marketing, growing to 77.3 percent in 1999. By 2009, 94.2 percent of The Direct Selling Association (DSA) members were using network marketing, accounting for 99.6 percent of sellers, and 97.1 percent of sales.

The research also shows that companies such as Avon, Electrolux, Tupperware, and Kirby all initially used single level marketing to sell their products and later introduced network marketing compensation plans. The Direct Selling Association (DSA) in the United States has approximately 200 registered members, while it is estimated there are approximately 1,000 firms using network marketing in the United States alone.

It is important to state that network marketing companies operate in all the 50 states in U.S. Over and above, network marketing has become one of the best options for stay at home mothers or anyone who intend making money without registering their own personal business or directly working for an organization.

So if you have the intention of starting your own network marketing company, then you should ensure that you select a product that is easily sellable and of course a good reward system for network marketers under your scheme. You should also ensure that you conduct a thorough feasibility studies and market survey before launching your network marketing company.

2. Executive Summary

Good Life® Network Marketing, Inc. is a U.S based and world class network marketing company. We have been able to secure a standard and well – positioned office facility in a central business district in Carson City – Nevada.

We are a network marketing company that is set to compete in the highly competitive network marketing industry not only in the United States market, but also in the global market because our clientele base will not be restricted to just individuals in the United States.

Good Life® Network Marketing, Inc. will manufacture and retail cosmetic products in the United States and in other parts of the world via network marketing. Our business goal is to become one of the leading network marketing companies in the United States of America with a robust network of individual clients scattered all around the United States and the world.

Our back office staff members are going to be selected from a pool of talented and highly creative experts in and around Carson City – Nevada and also from any part of the world as the business grows.

We will make sure that we take all the members of our workforce through the required trainings that will position them to meet the expectation of the company and to compete with leading network marketing companies in the United States and throughout the globe.

At Good Life® Network Marketing, Inc., our network marketers and client’s best interest will always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our clients. Good Life® Network Marketing, Inc. is founded by Rooney Wilberforce and his friend and business partner for many years Festus Holloway.

They both graduated from University of California – Beckley with BSc in Business Administration and Marketing respectively and they have a combine experience that revolves around market researching, sales, network marketing and advertising and business management et al.

3. Our Products and Services

Good Life® Network Marketing, Inc. was established with the aim of maximizing profits in the Network Marketing industry. We want to compete favorably with the leading network marketing companies in the United States of America and the world which is why we have but in place a competent team that will ensure that we meet and even surpass our network marketers and customers’ expectations.

We will work hard to ensure that Good Life® Network Marketing, Inc. do not just recruit network marketers and sell her products to clients in the United States of America, but also for clients in other parts of the world. Our products and services are listed below;

• Sell of cosmetic products via network marketing model (reward network marketers under our scheme)

4. Our Mission and Vision Statement

• Our vision is to establish a standard and world class network marketing company whose products and brand will not only be accepted in the United States of America, but also in other parts of the world.
• Our mission is to become amongst the top 20 network marketing companies in the world; a company that will be known for sincerity and one of the best reward system for network marketers.
• We want to build a network marketing company that can favorably compete with other leading brands in the network marketing agencies industry.

Our Business Structure

Good Life® Network Marketing, Inc., is a network marketing company that intend starting small in Carson City – Nevada, but hope to grow big in order to compete favorably with leading network marketing agencies in the industry both in the United States and on a global stage.

We are aware of the importance of building a solid business structure that can support the picture of the kind of world class business we want to own. This is why we are committed to only hire the best hands within our area of operations.

At Good Life® Network Marketing, Inc., we will ensure that we hire people that are qualified, hardworking, and creative, result driven, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, network marketers and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer
• Creative Director

Network Marketing Specialist

Human Resources and Admin Manager

• Sales and Marketing Executive

Network Marketers / Freelance Marketers

• Client Service Executive / Call Center Agents

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Creative Director:

• Serves as project manager of the organization; works directly with the product manufacturing team and the network marketing team
• Responsible for designing concepts and winning business proposals for the organization
• Develops strategic plan by studying technological and financial opportunities; presenting assumptions; recommending objectives.
• Accomplishes subsidiary objectives by establishing plans, budgets, and results measurements; allocating resources; reviewing progress; making mid-course corrections.
• Coordinates efforts by establishing procurement, production, marketing, field, and technical services policies and practices; coordinating actions with corporate staff.
• Builds company image by collaborating with customers, government, community organizations, and employees; enforcing ethical business practices.
• Maintains quality service by establishing and enforcing organization standards.
• Maintains professional and technical knowledge by attending educational workshops; reviewing professional publications; establishing personal networks; benchmarking state-of-the-art practices; participating in professional societies.
• Makes certain that operations and marketing department perform efficiently, coordinate employee efforts, and facilitate communications between management and employees
• Part of the team responsible for training network marketers / freelance marketers
• Ensures that the organization work in line with international best practices.
• Responsible for handling core network marketing services such as reward system, monitoring team progress, expanding the scope of the network and penalizing erring members under our network.
• Serves as compliance and quality assurance manager for the organization
• Handle other related network marketing advisory and consulting services
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Designs job descriptions with KPI to drive performance management for clients
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carrying out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Oversees the smooth running of the daily back office activities.

Sales and Marketing Manager

• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Writes winning proposal documents, negotiate fees and rates in line with organizations’ policy
• Responsible for handling business research, market surveys and feasibility studies for clients
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding increase sales
• Creates new markets cum businesses for the organization
• Empower and motivates the sales team to meet and surpass agreed targets

Accountant / Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for Good Life® Network Marketing, Inc.
• Serves as internal auditor for Good Life® Network Marketing, Inc.
• Responsible for selling the company’s products (cosmetics products) via network marketing models and getting reward / commission
• Responsible for creating content / buzz words that will help attract more networks marketers
• Responsible for managing team members under his or her network
• Responsible for engaging internet users and people around his or her community to get help statistics and leads
• Liaising and working effectively With other our back office staff and network members to generate sales for the business

Client Service Executive

• Welcomes clients and potential clients by greeting them in person, online or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the creative director in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries.

6. SWOT Analysis

Good Life® Network Marketing, Inc. engaged the services of a core professional in the area of business consulting and structuring to assist our organization in building a well – structured network marketing business that can favorably compete in the highly competitive network marketing agencies industry in the United States and the world at large.

Part of what the team of business consultant did was to work with the management of our organization in conducting a SWOT analysis for Good Life® Network Marketing, Inc. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Good Life® Network Marketing, Inc.;

Our core strength lies in the power of our team; our workforce. We have a team of creative, result driven and highly proficient network marketing expert, a team with excellent qualifications and experience various niche areas in the network marketing agencies industry and other related industry.

Aside from the synergy that exist in our carefully selected back office staff members and network marketing experts, our products are easily marketable and our reward system is one of the easiest amongst network marketing companies and will be guided by best practices in the industry.

As a new network marketing company in Carson City – Nevada, it might take some time for our organization to break into the market and gain acceptance especially from top experienced network marketers in the already saturated and highly competitive network marketing industry; that is perhaps our major weakness. Another weakness is that we may not have the required cash to pump into promoting our business the way we would want to.

• Opportunities:

No doubt, the opportunities available in the network marketing industry is massive especially when you are ready to play by the books and also considering the number of individuals who would not only want to make use of our cosmetic products, but would also want to make money by selling the products as independent marketers, recruiting down – lines, building a robust network and earning good commission from doing same.

As a standard and world class network marketing company, we are ready to take advantage of any opportunity that is available in the industry.

Aside from unfavorable government policies, just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing / spending power.

Another threat that may likely confront us is the arrival of a network marketing company or even a company retailing same cosmetic products like us in same location where our target market exist and who may want to adopt same Business model like us.

7. MARKET ANALYSIS

• Market Trends

If you are conversant with network marketing business, you will agree that it is quite challenging for them to survive that tough and unfriendly terrain that they are expected to operate in. As a matter of fact, most people still see network marketing companies as fraudulent, with a very difficult reward system.

In view of that, most network marketing companies are trying as much as they can to make people believe that they are genuine and are out there not just to make profits, but also to help people – those under their network marketing scheme make additional income without becoming a full – time employee of the organization.

Another notable trend in the network marketing industry is that most network marketing companies go beyond just giving commissions to network markets under their company when they sell their products or recruit down – lines under their network, but also encourage them by rewarding them with mouthwatering gifts when they hit a milestone.

Such gifts go beyond electronics, and cars et al. Some of them win all expense paid trips to notable tourist destinations as a result of their work.

This is one of the reasons why no network marketing company survives without constantly throwing out promos that will encourage and motivate the team to continue to perform thereby creating a win – win situation for the company and of course for the network marketers.

8. Our Target Market

Before starting our network marketing company, we are certain that there are loads of people out there; employed and unemployed who would want to make money and get their life going or make addition income from a business that is flexible.

In view of that, we have created strategies that will enable us reach out to stay at home moms, unemployed, employed and student et al who would want to make cool cash from using our products, and also referring or selling our products.

We have conducted our market research and survey and we will ensure that we meet and surpass the expectations of our clients Below is a list of the people and organizations that we have specifically market our product and network marketing services to;

• Unemployed people
• Employed people
• Corporate executives
• Business men and Business women
• Entrepreneurs and Start – Ups

Our Competitive Advantage

Surviving as a network marketing company goes beyond having the right products, but also having a full grasp of the network marketing industry, playing by the books, and having a good and easy reward system that will encourage people to join your network with little or no stress

We are quite aware that to be highly competitive in the network marketing industry means that you are not only expected to be able to retail good and reliable products and excellent customer services, but you must be result driven and able to create a network marketing system that everyone out there would not only find it easier to understand, but would want to freely join and recommend people to join.

No one would want to continue to remain as member of your network marketing company if don’t always meet up with the target date of paying out commissions or earnings as the case may be.

Our competitive advantage lies in the power of our team; our workforce. We have a team of creative, result driven and highly proficient network marketing experts, a team with excellent qualifications and experience various niche areas in the network marketing industry and other related industry.

Lastly, all our employees (back office staff members) and network marketers will be well taken care of, and their welfare package will be among the best within our category (startups network marketing companies in the United States) in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Good Life® Network Marketing, Inc. is established with the aim of maximizing profits in the network marketing industry and we are going to go all the way to ensure that we do all it takes to meet and surpass the expectations of all our network marketers that will enroll in our company.

Basically, Good Life® Network Marketing, Inc. will generate income by offering the following network marketing services and other related services;

10. Sales Forecast

One thing is certain, there would always be loads of people out there; employed and unemployed, students, business men and business women et al, who would want to make money and get their lives going or make addition income from a business that is as flexible as network marketing company.

We are well positioned to take on the available market in network marketing industry and we are quite optimistic that we will meet our set target of building a robust network marketers and generating enough income / profits from the first six month of operations and grow our network marketing company to favorably compete with the likes of Forever Living Products, Fuel Freedom International, Avon Products, Mary Kay Cosmetics and Tupperware et al.

We have been able to critically examine the network marketing space and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection are based on information gathered on the field, our products (cosmetics products) and some assumptions that are peculiar to similar startups in Carson City – Nevada.

Below are the sales projection for Good Life® Network Marketing, Inc., it is based on the location of our business and of course the kind of products we want to retail and target market;

• First Fiscal Year-: $250,000
• Second Fiscal Year-: $700,000
• Third Fiscal Year-: $1.5 million

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products ( cosmetics products ) and network marketing model as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

We are mindful of the fact that there is stiffer competition in the network marketing industry; hence we have been able to hire some of the best marketing experts to handle our sales and marketing concerns.

Our sales and marketing team will be recruited based on their vast experience of the network marketing industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall business goal of Good Life® Network Marketing, Inc.

Our corporate goal is to grow Good Life® Network Marketing, Inc. to become one of the leading network marketing brands in the United States of America and the world at large which is why we have mapped out strategy that will help us take advantage of the available market and grow to become a major force to reckon with not only in the United States of America but also in other parts of the world.

Good Life® Network Marketing, Inc. is set to make use of the following marketing and sales strategies to attract network marketer

• Introduce our network marketing company by sending introductory letters alongside our brochure to individuals, unemployed, business men and business women, students, religious organizations and key stake holders.
• Advertise our business in relevant business magazines, newspapers, and other media platforms.
• List our business on yellow pages ads (local directories)
• Attend relevant international and local expos, seminars, and business fairs et al
• Create different packages for different category of clients in order to work with their budgets and still accommodate them in our network
• Leverage on the internet to promote our business
• Engage in direct marketing approach
• Encourage word of mouth marketing from loyal and satisfied network marketers

11. Publicity and Advertising Strategy

We have been able to work with our in house brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to become the number one choice for people who reside in the whole of the United States and beyond which is why we have made provisions for effective publicity and advertisement of our network marketing company.

Below are the platforms we intend to leverage on to promote and advertise Good Life® Network Marketing, Inc.;

• Place adverts on both print (newspapers and magazines) and electronic media platforms
• Sponsor relevant community based events / programs
• Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, YouTube, Google + et al to promote our products and network marketing brand
• Install our Bill Boards on strategic locations all around Carson City – Nevada
• Engage in road show from time to time in targeted neighborhoods
• Distribute our fliers and handbills in target areas
• Contact households, schools and religious organizations by calling them up and informing them of Good Life® Network Marketing, Inc. and the products and services we offer
• List our network marketing company in local directories / yellow pages
• Advertise our network marketing company in our official website and employ strategies that will help us pull traffic to the site.
• Ensure that all our staff members and network marketers wear our branded shirts and all our vehicles are well branded with our company logo et al.

12. Our Pricing Strategy

At Good Life® Network Marketing, Inc. we will keep the prices of our products and starter packs / kits below the average market rate for all of our network marketers / customers by keeping our overhead low and by collecting payment in advance from network marketers who would sign into our network marketing scheme.

• Payment Options

At Good Life® Network Marketing, Inc., our payment policy will be all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that we will make available to our clients;

• Payment by via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via bank draft
• Payment via mobile money
• Payment with cash

In view of the above, we have chosen banking platforms that will help us achieve our plans with little or no itches. Our bank account numbers will be made available on our website and promotional materials to network marketers / clients who may want to deposit cash or make online transfer for the purchase of our starter pack / kit.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The materials and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.

As for the detailed cost analysis for starting a network marketing company; it might differ in other countries due to the value of their money. However, this is what it would cost us to setup Good Life® Network Marketing, Inc. in the United of America;

• Business incorporating fees in the United States of America will cost – $750.
• The budget for Liability insurance, permits and license will cost – $3,500
• Acquiring an office space or warehouse that will accommodate the number of employees and our products (cosmetic products / starter pack) for at least 6 months (Re – Construction of the facility inclusive) will cost – $150,000.
• Equipping the office (computers, printers, projectors, markers, servers / internet facility, furniture, telephones, filing cabinets, and electronics) will cost – $30,000
• Amount required to purchase the needed software applications – $3,500
• Launching an official Website will cost – $500
• The cost for purchase of the required software applications (CRM software, Accounting and Bookkeeping software and Payroll software et al) – $10,500
• Amount need to pay bills and staff members for at least 2 to 3 months – $70,000
• Additional Expenditure such as Business cards, Signage, Adverts and Promotions will cost – $5,000
• Miscellaneous – $5000

Going by the report from the market research and feasibility studies conducted, we will need about two hundred and fifty thousand ( 250,000 ) U.S. dollars to successfully set – up a medium scale but standard network marketing company in the United States of America.

Generating Funding / Startup Capital for Good Life® Network Marketing, Inc.

Good Life® Network Marketing, Inc. is a business that will be owned, financed and managed by Rooney Wilberforce and his friend and business partner for many years Festus Holloway. They are the sole financial of the business which is why they decided to restrict the sourcing of the start – up capital for the business to just three major sources.

These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings and sale of his stocks
• Generate part of the start – up capital from friends and other extended family members
• Generate a larger chunk of the startup capital from the bank (loan facility).

N.B: We have been able to generate about $100,000 (Personal savings $85,000 and soft loan from family members $15,000 ) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Good Life® Network Marketing, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning network marketers and potential marketers over is to our network marketing services is to ensure that we create a reward system that is easy and fair to all, and also to make our starter pack / kit highly affordable.

We will also ensure that at regular intervals we come up with mouthwatering promos that people who are not interested in network marketing will find it difficult to resist.

Good Life® Network Marketing, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare is well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner of our business strategy.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more as determined by the board of the organization. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

• Business Name Availability Check:>Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts various banks in the United States: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Securing a standard office facility and warehouse facility in a good location: Completed
• Application for business license and permit: Completed
• Purchase of All form of Insurance for the Business: Completed
• Conducting Feasibility Studies: Completed
• Generating part of the start – up capital from the founders: Completed
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of Logo for the business: Completed
• Secure trademark for our products: In Progress
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the Needed furniture, office equipment, software applications, electronic appliances and facility facelift: In Progress
• Creating Official Website for the business: In Progress
• Creating Awareness for the business: In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with vendors and key players in various industries: In Progress

More on Wholesale & Retail

How To Start Network Marketing

Network marketing is a great way to begin your business career. It allows you to start small, with only your network of friends, family, and acquaintances. But the internet has made it possible for people to expand their networks much further than they ever could have before.

With so many opportunities out there, it can be hard to know which one will work best for you. The best place to start is by doing some research into different types of network marketing companies and then signing up with one that fits your needs and interests.

On this page, we’ll go over some of the advantages and disadvantages of network marketing so that you can decide if this kind of business opportunity is right for you.

We will discuss how to start network marketing. We will also cover what makes a good MLM company and how to identify scams before they get too big.

Once you have found a company that is legitimate and trustworthy, we will discuss how to sign up and get started with your new business!

Key Takeaways

Choose the right network marketing company : When starting a network marketing business, it’s important to choose a company that aligns with your values and goals. Look for a company that has a good reputation, offers products or services that you believe in, and has a compensation plan that works for you. It’s also a good idea to research the company’s leadership and track record to ensure that it is stable and reliable. Taking the time to choose the right network marketing company can set you up for success in the long term.

Identify your target market : Before you start your network marketing business, it’s important to identify the specific group of people you want to target. This could be based on factors such as age, gender, location, or interests. By understanding your target market, you can tailor your marketing efforts to better meet their needs and preferences.

Create a marketing plan : A marketing plan is a roadmap that outlines the specific actions you’ll take to reach your target market and achieve your business goals. Your plan should include details about your target market, the products or services you’ll be offering, and the marketing channels you’ll use to reach potential customers.

Build a network : Network marketing is all about building relationships with potential customers and partners. To succeed in this business, you’ll need to be proactive about networking and building your network of contacts. This can involve reaching out to potential partners, attending industry events, and staying active on social media. By building a strong network, you can create more opportunities for yourself and your business.

If you are looking to start a business and make money, network marketing can be a good way to do it. Network marketing is also known as Multi-level marketing or MLM. It has now become very popular around the world and millions of people have made their fortune from it.

Network marketing opportunity can be a great way to earn extra income, meet new people, and make a difference in the world. It is a legitimate way to earn money and should not be confused with illegal pyramid schemes .

So let’s analyze the fundamentals to get a successful network marketing business.

NOTE – On the other hand, if you are interested in building and starting a network marketing company, you can find our dedicated guide here .

Section 1 – Business Model

To start a successful career in network marketing, first it is essential to understand the underlying business model. The first section of this guide deals with defining it in its most important aspects.

Network marketing is a business model often related to the creation of a multi-level marketing system. The MLM model allows for individuals to work as independent contractors, selling products or services to other individuals and businesses.

Network marketing differs from traditional sales models in that it does not rely on a single point of contact or sale, but rather relies on multiple points of contact and sale.

The basic idea behind this model is that you will be able to build a team of people who are focused on helping each other succeed. They will help you by buying products or services from you and they will help promote those products or services to others in their network as well.

This strategy has been shown to be very effective at increasing sales and profits while also building relationships between members of the group.

Benefits of network marketing

• You can start with no money.
• It’s flexible: you can work from home or anywhere you want.
• You don’t need any special skills or education to pursue this opportunity.
• You get paid a commission for selling products.
• You can earn residual income.
• You can grow a team of people who work with you and support you while they make money as well.
• You’ve got the power to make your own hours and set your own rules.
• You can help others and earn rewards for it!
• There’s a lot of opportunity for growth within this industry.
• It’s a great way to get out of debt, save money, and start investing in your future.

Disadvantages of network marketing

• Network marketing can look complicated in the beginning.
• It could take more time and effort than you can imagine.
• You continuously have to find people who want to buy your products or services.
• You have to keep selling your products or services after you’ve got a customer.
• You have to make sure that your customers are satisfied with their purchases.
• Many people try to sell things to friends and family, which can be awkward.
• You might have to put up with a lot of people who don’t want to buy your products, but only want to hear about them.
• You might have to put up with people who want you to join their network marketing company instead of yours.

Section 2 – Profitability of MLM / Network Marketing Today

Is it too late to start a business in network marketing today, or is there still room for action? Let’s find out in this section, delving into some valuable indicators .

Is it worth starting network marketing?

Short answer: YES.

However, keep in mind:

➤ You’ll probably make mistakes along the way. If you’re not prepared for this, it can be really discouraging when people don’t respond well to your products or how you’re marketing them. But if you stay focused on your goals and keep trying new things until you find what works, eventually you’ll start seeing results!

➤ It can be hard to stay motivated sometimes. If you’re working from home and not having other people around to keep you accountable for showing up every day, it can be easy to let yourself get distracted by other things that seem more fun than working on building your business. The key is finding ways that keep YOU excited about what you’re doing—and there are plenty of ways to do this!

Why now is a good time to get into this model of business

There are a number of reasons why it’s a good time to get into network marketing.

First , there has never been a better time to be an entrepreneur. We’re living in the age of the empowered employee and the empowered customer. People want to feel like they have more control over their lives, which is why we’re seeing more people starting up businesses and taking on freelance gigs than ever before.

Second , there are so many opportunities out there for people who want to start a business that it can be hard to know where to start. Network marketing offers a clear path: you join an established company and do what they tell you, while they help you grow your own business through the power of recruitment and referrals .

Third , networking is all about relationships—and relationships are key when it comes to building a successful business. When you’re working with other people in your network marketing company, you’ll be able to build those relationships much faster than if you were doing it alone!

How to get into network marketing in a profitable way

To start a profitable network marketing business, you need to understand the foundations of how it works.

Network marketing is a great way to make money without having to work for someone else. You work with people who are in the same position as you, so you can help each other grow.

Here are some of the basics:

• You don’t have to own the product or service you sell.
• You don’t have to pay for any inventory upfront.
• You don’t have to hire anyone else or pay them commissions on what they sell.
• There’s no limit on how much money you can make!

Also, don’t forget to be ‘digital’ since your first steps into the network marketing industry.

The internet has been one of the biggest game-changers in modern business. It has created new opportunities for companies and individuals alike to connect with customers, reach out to them, and build relationships with them. Network marketing is no different.

In fact, it’s even more important to make use of the internet in network marketing than in other industries.

Because there are so many people out there who are looking for ways to make money on their own terms. They don’t want to have to work at a job they hate, they don’t want to be tied down by office hours or even a physical location—they just want to be able to set their own schedule and work whenever they want!

DO YOU KNOW THAT… –   One of the best ways to get started with network marketing has always been considered to tell people about it. This is called mouth marketing , which means you’re telling people about your business through word-of-mouth advertising.

Section 3 – Choosing the product / company

The crucial first steps are choosing the products to sell and the company to become a distributor. This section looks at the criteria to follow and the indicators to refer to.

Search for a network marketing company

The direct sales industry is populated by a lot of multi-level marketing companies with various legal entity, commission structure, and different average success rates for their distributors.

But when it comes to making money from home, the internet can be tricky because there are so many scams and shady companies out there. It’s important that you do your research before investing any money in a business opportunity or buying products from an MLM company.

One way to find out if an opportunity is legit is by looking at its website or social media pages. If the company has been around for a while and has plenty of positive reviews online, then it’s probably worth investigating further by talking with current members or reading testimonials on their website or Facebook page.

Signs it is an MLM Scam

When evaluating a network marketing company, there are some signs that it might be a scam.

First , look for unreasonably low prices for products and services. If the price of the product or service is too good to be true, it probably is.

Second , look for overly aggressive marketing tactics. If you get an email from someone who has no connection to you or your business offering to help you make money or get more customers, this is a red flag.

Third , look at how many members are in the company and how much they earn on average. If there are only a handful of members and they are all making great money, it’s likely that the company is running on hype rather than substance.

Fourth , look at what type of products or services they sell and whether they seem legitimate as well as how they market them. If they seem like they’re trying to sell anything that will make money instead of focusing on one specific product line or service area—and if their marketing materials aren’t very clear about what exactly that product line or area is—watch out!

Network marketing ‘scam checklist’

You should also be wary if you see any of these signs:

• The company doesn’t provide any information about its products or services, only showing testimonials or using vague language like “the best” or “the most revolutionary.”
• The company requires you to sign up with a distributor before you can view pricing information. This is typically done to hide how much things cost so that you’ll buy into the sales pitch before realizing it’s too expensive for your budget.
• The company cannot provide any evidence of independent research proving that its products are effective or safe for use.

How do identify opportunities?

When you’re evaluating whether a network marketing company is a real opportunity , here are some of the most important things to consider:

• The product or service : Is it something you’d use? Do you understand how it works? Is it something that people will be willing to pay for?
• The compensation plan : How much money do you stand to make? Does your income depend on recruiting others into the company? Is there any kind of residual income or royalty-based income from your efforts?
• The company culture : What’s the vibe like at this company? Are people friendly and helpful, or do they seem standoffish or competitive? Do they value their customers as highly as their employees? How does the overall environment make you feel when you interact with them?

If these three things check out, then chances are you can treat this company as a valuable opportunity.

Section 4 – Guides, Tips, and Tutorials

This section of the How to start network marketing guide provides an overview of the skills to focus on as you begin your journey and the best free online resources for getting started as an expert.

Understanding network marketing business

When starting a network marketing business, there are a few key steps to keep in mind above anything else.

First, you should understand the business model and know your brand and products . Understanding your company’s products will help you be able to explain them to others and can help you identify opportunities for new ones.

TIP – Start by reading and studying the best network marketing books, written by the world’s top MLM experts .

Second, aim to begin as a ‘pro’ in your sector . This means that you should focus on building relationships with other professionals in the field and learning from them as much as possible.

MLM network marketing success tips

Darin Kidd is an entrepreneur who has achieved success in various areas. His leadership skills helped him build large teams in network marketing and other ventures.

Right now he’s a big player among networkers. In this video, he shares his advice on how to start your own business by sharing the basics of building a business that will help you get started today.

It’s hard to believe that no matter how much you aspire to be something, or how hard you work, there are some things that just will not happen overnight.

At the beginning of your network marketing career, it can be tempting to think that if you don’t see results right away, then the business opportunity is not for you. But remember that this is a process!

No matter how hard you work on yourself and plug into the system, nothing will happen overnight. Network marketing is not a get-rich-quick scheme, but rather a proven way to build wealth over time—and it’s up to you to make sure that happens.

So what should you do? Treat this like any other job: set goals and work towards them every day. If you treat it like a job, then eventually it will become one for you.

Darin Kidd, in short, identifies these 7 crucial network marketing tips:

• Remember it is a process
• Work on yourself
• Treat it like a job
• Learn to manage your emotions
• Plug into the system
• Associations are everything
• Do not compare yourself to other people

Mistakes new network marketers make

Network Marketing is not a get-rich-quick scheme. It’s a business and it takes time, effort, and dedication to be successful.

You might come into this with the best intentions, but if you don’t have concrete plans or aren’t willing to put in the work, it’s unlikely that you’ll see results. Here are some typical mistakes new network marketers make:

• Not being clear about your purpose in network marketing
• Not having a clear plan for your business
• Trying to do everything yourself and not delegating tasks
• Focusing on yourself too much and not enough on your team
• Being uncomfortable with asking for help

Best free guides to starting a successful MLM business

We’ve selected some useful resources (in different formats) that can help you in solving the question How to start network marketing?

Network marketing courses

There are plenty of online training courses on network marketing. Some are independent, others are directly created by companies in the industry.

To get your business started, you won’t need to sign up for premium courses – often very expensive – right away.

You can start with free training like the ones on the Getpenny site .

The main points that are covered are:

• Daily business routine in direct sales
• Customer care
• Sales funnels and marketing plan
• Prospecting

Funnels guide

If you’re looking to start a network marketing business, many software programs can help. Read this guide about how to build product sales funnels with Clickfunnels . 

Here are their top 3 tips for getting started:

1. It all starts with your funnel

This is the most important piece of advice we have for anyone starting a network marketing business: it all starts with your funnel! You need to be able to attract people into your funnel, and then make sure they stay there in order to make any money. Make sure that your landing page, website, and sales letter are all pulling people into the right place at the right time.

2. Make sure you’re using the right tools

You’ll want all kinds of different tools as you grow your business, but it’s important not to get carried away with too many things at once—or else you’ll end up spending more time managing than actually doing anything productive! Keep things simple by only using the tools that will help you succeed and then add more as needed (and when the budget allows).

3. Don’t forget about customer service!

It’s easy for people who have never done network marketing before to forget about customer service because it doesn’t seem like a big deal at first glance—but if you don’t take care of your customers your chance to succeed in the long run is tiny.

Products distribution guide

The first step to network marketing is choosing a product that will sell well in your target market. You need to know who your target audience is, what they want, and how much they are willing to pay for it. Then, you can choose a good product that meets those criteria.

A useful resource on this topic is this article on Softwaresuggest

You will learn that starting a network marketing business can be a great way to make money and meet people, but it’s not easy. Here are some tips that will help you get started on the right foot and help you grow your business.

1. Start by deciding what kind of company you want to work for. Do you want to sell products, recruit people as distributors, or both?

2. Find out if there is a local distributor who can help you get started and answer questions about the company’s products or services.

3. Research any potential competitors in your area and compare them to what you’ve found online about the company that interests you most.

4. Make sure you have enough capital available to purchase inventory at wholesale prices so that you can resell it at retail prices (and earn profits).

Learn from the masters

In any business sector, following successful industry figures , top earners, and coaches with proven experience is always a good idea.

Eric Worre is one of the most influential network marketing leaders in the industry. He has created a community with thousands of people that are committed to helping each other succeed.

Follow Eric Worre’s YouTube channel

One of the first things you will notice about Eric Worre is his ability to communicate with others in an easy-to-understand way. He uses analogies and stories to help people understand how they can improve their lives through network marketing.

Worre is a regular speaker at conferences, events, and retreats all over the world—he’s been featured on CNN and CNBC, as well as in Forbes magazine. He’s also been named one of the Top 10 Most Influential Networkers by Networking Times magazine.

How to succeed in network marketing

There is no one way to succeed in Network Marketing. 

The goal of this guide (aimed at beginners or those who have not yet succeeded in achieving their goals), is to put the best foundation on which to build.

In addition to what we have said so far, there are three non-negotiable concepts to familiarize yourself with right away:

A- Stand out from other distributors

If you want to succeed in network marketing, you should stand out from other distributors.

Because if you try to sell the same products as everyone else, people won’t see any reason to buy from you instead of them. You have to be different—and better!

That means that when people visit your website, for instance, they should see something special about it and about YOU. They should feel that there is a reason for them to choose you over anyone else. They should know what makes you different from the other distributors out there, and why they should choose you over them!

Be positive and optimistic about your company, be approachable and easy to talk to, don’t be afraid of rejection. And do all that with a personal, unique touch!

B- Develop a framework for following up

Network marketing is a great business model, but if you want to succeed, you need to develop a system for following up.

It’s easy to get distracted when you’re running your own business. But if you want to succeed in network marketing and build a team of people who are committed to your success, it’s vital that you establish and maintain a consistent follow-up system.

Here are some tips for creating an effective follow-up system:

• Set specific goals for each prospect. This will help keep everything on track and ensure that you’re reaching out to prospects in the most effective way possible.
• Create a schedule for following up with prospects . This will ensure that you’re staying organized and hitting deadlines as well as getting through all your leads in a timely manner so that no one slips through the cracks!
• Make sure everyone on your team knows exactly what they need to do at every step of the process so that there’s no question about how things should proceed from one day or week to another (and so that everyone feels like they’re contributing equally).
• Set regular reminders for yourself about what needs doing next—especially if there are multiple tasks involved.

C – Leverage the power of referral marketing

Referral marketing is a powerful way to grow every business. When you have customers who love your products and services, they can become your best salesperson by sharing them with their friends and family.

When you ask for referrals, you’re asking for an important favor: to recommend your product or service to someone else. That’s why it’s important to make it as easy as possible for them to do so.

Remember: communication skills are key.

Section 5 – Network Marketing and Internet

Network marketing has a long history behind it. The model it is based on is still highly effective, but the world is changing. This section focuses on the importance of ‘digital’ in a growth strategy as a networker. 

Use of the Internet 

In the past, it was common to meet with people face-to-face and sell them the latest product or service. This method is still used in some industries, but these days, there’s a better way: online networking marketing .

When you start networking online, you can reach more people than if you were using traditional offline methods.

Plus, it’s easier to track your actual sales and make sure you’re getting the most out of every lead . You can’t always tell how well a face-to-face meeting is going until after it’s over—but when you run an online campaign, everything happens right in front of your eyes.

The best part?

No need for expensive equipment or lots of training: just follow the right coaches and the internet courses more appropriate to your needs and attitudes.

NOTE – Typically connected with the use of digital marketing channels is affiliate marketing. It has something in common with network marketing, but there is no networking with the people involved. Affiliate marketing is simply when you refer someone to a product or service and they purchase from this company. You get paid for referring them to the company.

Take advantage of the world wide web and digital marketing

In the past, it was common to meet with people face-to-face and sell them the latest product or service. This method is still used in some industries, but these days, there’s a better way: online network marketing.

When you start networking marketing online, you can reach more people than if you were using traditional offline methods.

Plus, it’s easier to track your sales and make sure you’re getting the most out of every lead. You can’t always tell how well a face-to-face meeting is going until after it’s over—but when you run an online campaign, everything happens right in front of your eyes.

The present and the future: Online Network Marketing

The internet has played an increasingly large role in network marketing over the last few years, and as a result, many network marketers have moved away from traditional offline methods of networking and used the internet instead .

There are many advantages to using the internet in network marketing:

• You can use social media platforms like Facebook and Twitter to connect with other people interested in your product or service. This is a great way to reach out to people who may not have heard about your company otherwise.
• You can also use these platforms for advertising purposes—you’re not limited by what billboards or newspaper ads can offer!
• You can also get information about your customers without having to leave home: all you need is an internet connection!

The internet is a powerful tool for network marketers. It allows you to reach out to more people and build a bigger, more loyal customer base. It also lets you use social media to connect with people who have similar interests and needs, which is great for networking.

Section 6 – FAQ About How To Start Network Marketing

To conclude, some of the most recurring questions that those starting their venture in the network marketing and MLM industry ask themselves. If you don’t find the one you are asking yourself right now, use the comments at the end of the guide or tweet us !

How to join network marketing?

The first step to joining network marketing is to find a company you’re interested in. Once you find a company, you should do some research on them. The next step is to set up an account and get all the promotional and informational material. You should also look into whether or not there are any training opportunities available through your chosen network marketing company.

How to build a network marketing business quickly?

You can’t build a network marketing business quickly. It takes time and effort to develop your team, products, and brand. However, there are some things you can do now to accelerate the process and get started faster:

• Do your research on the company or product so you know what it’s all about and why it’s different from other options on the market.
• Ask questions! If you don’t understand something, ask someone in your upline or mentor. They are there to help you succeed.
• Get involved! Join groups on social media or attend events where you can learn more about the industry and meet potential customers or recruits.

Where and how can I learn network marketing as a beginner?

The best place to start learning network marketing is on the internet. Check out YouTube and Google for a ton of resources. You can also find a lot of great information in Facebook groups and other online communities. Start by searching for “how to start [network marketing company name]” on Google or YouTube. This will pull up all kinds of information from articles and videos to podcasts and live streams.

What should I look out for when starting a network marketing business?

 When you’re getting started with network marketing, it’s important to be aware of the following:

• What are the company’s values and mission?
• What are the products or services that they offer?
• How much does it cost to start up?
• Is there a training program that I can take advantage of to learn how to run a successful business?

What is the easiest way to become successful in network marketing?

The easiest way to become successful in network marketing is by building a strong foundation of knowledge. If you can learn what it takes to be successful, and then consistently apply that knowledge, you’ll be able to build a business that will last for years. You should start by reading books or following courses about the industry and the business model so that you understand how it works. Also, don’t forget to surround yourself with like-minded people who will support your efforts and help push you forward.

What is a pyramid scheme?

A pyramid scheme is a business model that recruits members through the promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. The earnings of people in a pyramid scheme are not dependent on the sales, but on the number of new members recruited.

The MLM industry is a growing one, and it’s not hard to see why. It’s a great way to make money from home without having to deal with the hassle of an office job or a traditional 9-5 career.

So what happens now?

Let’s say: you’re ready to start a network marketing business, you’ve heard about all the amazing things that can happen when you build your own team, and you’re ready to get involved.

You know it takes a lot of work, but you’re excited because you know that if you can just get started and keep going through one day at a time, eventually you’ll have all the success you ever dreamed of.

But here’s the thing: most people who start with no experience end up quitting after a few months because they don’t know what they’re doing .

And even if they do stick with it for longer than that, they usually end up in debt and feeling like they wasted time and money on something that didn’t work out. The truth is that those people aren’t failures—they just didn’t have the right information before starting out.

On this page, we tried to walk you through all the steps you’ll need to take in order to start your own profitable network marketing business from scratch.  

Whether you’re brand new or an experienced marketer with years under your belt, these general concepts will stay true all along your path.

If you have doubts and concerns about how to get started in network marketing, leave a comment below, follow us on Twitter , or contact us directly from this page .

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The Network Marketing Business Model: Is It Right for You?

That depends on the type of network marketing.

What Is Network Marketing?

Multi-level marketing, does network marketing pay well.

• Multi-Level Marketing vs. Network Marketing

Frequently Asked Questions (FAQs)

The Balance

Network marketing is a business model that relies on a network of distributors to grow a business. There are many types of network marketing, but one of the most well-known types is called multi-level marketing.

Key Takeaways

• Network marketing is a business model that relies on a network of independent distributors to sell a product.
• Multi-level marketing is a type of network marketing where the salespeople also earn money by recruiting more salespeople.
• To earn money with network marketing, you must commit time, money, and effort—possibly more than you'd expect.

Network marketing relies on individual distributors who market and sell a product to their network of friends, relatives, and people they know or meet. The distributors make money through commissions on the products they sell. Often, they're not employees of the company, but rather independent contractors.

Distributors in network marketing businesses typically use three strategies to succeed: lead generation, recruiting, and building and management.

Lead generation is the process of locating new customers and clients who may be interested in the product. Recruiting is the process of adding customers and business partners to your network. And building and management are the way you train, motivate, and manage your recruits.

In some businesses, the distributors are also paid a commission for recruiting more distributors to sell the product. The more people they recruit, the more money they can make.

The result is multiple tiers, or levels, of salespeople: the top, original tier (called "the upline"), and then one or more tiers below them ("the downline"). Each new recruit might then also recruit additional distributors, which would form that level's downline. This type of network marketing is called multi-level marketing (MLM).

Some MLM programs allow you to make money five or more tiers deep. The top-level tiers make the most money, because they receive commissions from all the tiers below them. It is difficult for the newest recruits to make money.

Examples of MLM businesses include LuLaRoe, Magnetic Sponsoring, and Amway.

Network marketing does not pay equally well for everyone. The amount you earn depends on the volume of sales you can generate on your own and, in the case of MLM companies, the success of your downline as well.

A study published by the Consumer Awareness Institute noted that most of the commissions paid by MLM companies go to a tiny portion of distributors, with 99% of recruits actually losing money on their efforts.

There are several reasons why it can be tough to make money with multi-level marketing.

First, the company may require you to buy its products, pay for training, or keep a certain amount of inventory on hand. These costs often come before you can make your first sale, so you start out behind.

Then, the exciting bonuses or prizes the company offers are often only available to sellers who "pay to play," by making incentivized purchases of a certain dollar amount. This inventory then has to be sold as well if the salesperson is to make a profit. Sometimes these purchases are required if the seller wishes to advance, and reselling is tough because the seller needs to mark the product above retail to recoup their costs.

Finally, there are often operating expenses, such as computers, phones, internet access, and "training tools" required by the company. These costs further erode the possibility of profit, requiring the seller to meet such rigorous sales or recruiting goals that it's nearly impossible to get ahead.

Not everyone who wants to sell something will be good at it. However, sincerity and genuine enthusiasm about a company or product is a form of marketing in and of itself. If the only incentive to the sales team is money, they may cut corners or mislead others in an attempt to earn more for themselves. For network marketing to be successful, the salespeople must be sincerely enthusiastic about the product as well.

Take the time to research your state's laws regarding network marketing. Deceptive marketing practices and pyramid schemes can land you in legal trouble if you are not careful.

Multi-Level Marketing vs. Network Marketing 

Multi-level marketing is a form of network marketing with several levels of distributors. A large part of a multi-level marketer's success will come from recruiting.

But there are two other, simpler modes of network marketing as well: single-tier network marketing and two-tier network marketing.

Single-Tier Network Marketing

With single-tier network marketing, you sign up for a company's affiliate program to sell their products or services. You do not need to recruit other distributors, and all your pay comes from direct sales. Avon, the popular beauty company, uses single-tier network marketing.

In some online affiliate programs, you get paid for the traffic you drive to the affiliate's website. Pay-per-click (PPC) and pay-per-lead (PPL) affiliate programs are other examples of single-tier networking.

Two-Tier Network Marketing

Unlike single-tier network marketing, two-tier network marketing does involve some recruiting, but your pay isn't solely dependent on it. You get paid for direct sales (or traffic you drive to a website) and for direct sales or referred traffic made by affiliates or distributors you recruit to work under you. An example of a two-tier program is Ken Envoy's Site Sell.

Can you make money with network marketing?

Yes, it's possible to make money with network marketing. However, it's not easy. To be successful typically requires a serious application of effort, time, and money. Casual salespeople will quickly find themselves losing money.

Is network marketing risky?

Yes, there are risks that go with network marketing. You risk the money it takes for startup costs, inventory purchases, and training materials. You'll also spend time and money filling out paperwork, filling and shipping orders, and recruiting new salespeople. To make your money back, you'll need to sell a lot of product. And to continue to make a profit, you'll need to continue selling more (and sometimes recruiting new salespeople for your downline). Consider whether your network truly has enough buyers to support your business's needs, and research the network marketing company thoroughly before you get involved.

Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!

Federal Trade Commission. " The Case (for and) Against Multi-Level Marketing ," Chapter 7, Pages 7-1, 7-32.

Federal Trade Commission. " The Case (for and) Against Multi-level Marketing ," Page Intro-4.

Federal Trade Commission. " The Case (for and) Against Multi-Level Marketing ," Chapter 7, Pages 7-5, 7-7.

Federal Trade Commission. " Multi-Level Marketing Businesses and Pyramid Schemes ."

Avon. " Make Beauty Your Business ."

SiteSell. " Solo Build It! (SBI!) - Proof of Success ."

How to Start a Network Marketing Company

By: Author Tony Martins Ajaero

Home » Business ideas » Wholesale and Retail Industry » Multi Level Marketing

Do you want to start a network marketing company? If YES, here is a complete guide to starting a network marketing business with NO money and NO experience plus a sample network marketing business plan template.

If you live in the united states of America, you will agree that loads of entrepreneurs and freelance marketers are making good money from selling the products of a company or their own product via network marketing or multi – level marketing as it is popularly called.

Starting a network marketing business can be demanding and risky at the same time, but if you have done your due diligence before venturing into the business, you are likely not going to run at a loss. First and foremost, you are expected to have experience in the network marketing agency industry. It will pay you to study marketing if indeed you want to venture into this line of business.

It is very needful that you analyze the existing network marketing business in and outside of your area. Know how many there are. Also, you would be required to check the existing competition, as well as know their strengths and weaknesses.

Knowing the weaknesses of the existing network marketing businesses around you means that you would be able to learn from their mistakes and in turn come up with a better and more preferred network marketing company devoid of the mistakes and weaknesses of others.

So, if you have done the required feasibility studies and market research, then you might want to venture into this business. If you have been tinkering with how to start your own network marketing business but do not know how to go about it, then you should consider going through this article; it will sure give you the needed guide and direction.

Steps to Starting a Network Marketing Company

1. understand the industry.

Network marketing business is generally referred to as a business opportunity that is very popular with people looking for part-time and perhaps flexible means of earning additional income. Some of the leading network marketing companies in the United States are Forever Living Products, Fuel Freedom International, Avon Products, Mary Kay Cosmetics, GNLD and Tupperware et al.

Network marketing which can also be referred to as Multi-level Marketing (MLM) or Pyramid selling or affiliate marketing et al is a controversial marketing strategy in which the sales force is compensated not only for the sales they are able to generate, but also for the sales of other salespeople (downlines/team members) that they recruit.

In the United States of America and of course in most countries of the world, companies that leverage on the network marketing approach for compensation have been a frequent subject of criticism and lawsuits.

Generally, criticism has been focused on their similarity to illegal pyramid schemes, price fixing of their products, high initial costs for registering (the amount needed to purchase marketing kits and first products), emphasis on their recruitment strategies and loads of other techniques that seem not to be plain and easy.

Interesting Statistics About the Industry

Research carried out by The Direct Selling Association (DSA) of which network marketing is under, shows that in 1990, 25 percent of their members used network marketing, growing to 77.3 percent in 1999. By 2009, 94.2 percent of The Direct Selling Association (DSA) members were using network marketing, accounting for 99.6 percent of sellers, and 97.1 percent of sales.

The research also shows that companies such as Avon, Electrolux, Tupperware and Kirby all initially used single level marketing to sell their products and later introduced network marketing compensation plans.

The Direct Selling Association (DSA) in the United States has approximately 200 registered members, while it is estimated there are approximately 1,000 firms using network marketing in the United States alone.  It is important to state that network marketing companies operate in all the 50 states in U.S.

So, if you have the intention of starting your own network marketing company, then you should ensure that you select a product or service that is easily sellable and of course, formulate a good reward system for network marketers under your scheme.

You should also ensure that you conduct thorough feasibility studies and market survey before launching your network marketing company.

Some of the factors that encourage entrepreneurs to start their own network marketing companies are that the business is easy to set up and the start-up capital is indeed affordable especially if you are selling the product or services of an existing company; you can actually start your own network marketing business as a freelance from the comfort of your house.

All you need to do is to create an office or storeroom somewhere in your house and then start marketing your products and services to your friends and invite them to join the network. Over and above, network marketing has become one of the best options for stay at home mothers or anyone who intends making money without registering their own personal business or directly working for an organization.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

The demographic and psychographic composition of those who enroll with a network marketing company as freelance marketers and those who need the services or products of a network marking company are all encompassing.

To a large extent, it depends on the product or services the network marketing company is involved with. For example, a network marketing company that retails makeup and related cosmetics can only appeal to female folks and a network marketing company that retails aftershave and related products can only appeal to male folks.

So, if you are looking towards defining the demographics for your network marketing company, then you should make it all encompassing. It should include everybody with or without purchasing power within your target area.

3. Decide Which Niche to Concentrate On

Most network marketing companies tend to operate a general network marketing business that involves every business activity or services that a standard network marketing company is expected to offer. That is why it seems that there are no niche areas in the industry.

These are some of the areas of specialization a start-up network marketing company can specialize in within the advertising agencies industry;

• Selling Products
• Offering Services

The Level of Competition in the Industry

Surviving in the business world as a network marketing company requires more than your expertise and knowing how to conduct your business, but also how to network with key people that matters, people with influence to help you recruit network marketers with the capacity to take your products or services to every nooks and crannies of the city your operating in.

The level of competition in the network marketing industry to some extent depends largely the location of the business and of course the products you are selling or services you are offering. If you can successfully create a unique product or services, you are likely going to experience little or no competition.

For instance, if you are the only network marketing company that sells children toys or children related stuffs in your location, you are likely going to face minimal competition. The major competition you will face won’t be from fellow network marketing companies but from toy stores around you. But if the prices of your toys are competitive and your reward system for network marketers is enticing, then you will enjoy a fair share of the available market in you location.

When it comes to network marketing, distance is never a barrier when competing for customers and network marketers. Your network marketing company can be in the United States and but you may have some of the largest network of marketers in Lagos – Nigeria.

But over and above, there are several network marketing companies scattered all around the United States and in the cyber space. So, if you choose to start your own network marketing company in the United States, you will definitely meet stiffer competitions not only amongst network marketing companies in the United States, but also all over the globe.

Besides, there are larger network marketing companies like Forever Living Products, Fuel Freedom International, Avon Products, Mary Kay Cosmetics and Tupperware that determine the trends in the industry and you should be ready to compete with them for network marketers and for customers.

4. Know Your Major Competitors in the Industry

In every industry, there are always brands who perform better or are better regarded by the customers and general public than the others. Some of these brands are those that have been in the industry for a long while and so are known for that, while others are best known for how they treat their customers.

These are some of the leading network marketing companies/brands in the United States of America and also in the globe;

• Forever Living Products
• Fuel Freedom International
• Avon Products
• Mary Kay Cosmetics
• Tupperware Brands Corp.
• Primerica Financial Services Inc
• Nu Skin Enterprises, Inc.
• Oriflame Cosmetics SA
• Viewer & Co. KG
• Natura Cosmeticos SA
• Herbalife Ltd.
• Ignite Inc.
• Yanbal International
• Telecom Plus
• Ambit Energy, L.P
• USANA Health Sciences Inc.
• New Era Health Industry Group, Co., Ltd. (Zhong Jian)
• The Pampered Chef Ltd.
• Thirty-One Gifts LLC
• Nature’s Sunshine Products, Inc.

Economic Analysis

If you are looking for a business that requires relatively less stress and perhaps minimal start-up capital to start, you can consider starting a network marketing business. The cost of running a network marketing company especially as a freelance network marketer selling the products and services of a company when compared to the turnover you get can be poles apart (this is applicable when you have been able to build a robust network of vibrant and result oriented marketers).

People that venture into network marketing business can as a matter of fact start the business from their home and still make headway in the business. This is why there are loads of stay-at-home moms who are active network marketers all across the United States and in the globe.

As a matter of fact, the cost of running the business process from start to finish could be restricted to the cost of making phone calls, transportation, internet subscriptions, PR and in some cases materials such as fliers, posters and digital billboards et al. With that, it is easier to place a projection on the profits you are likely going to make if you are able to successfully sell your products or services via the number of network marketers you have within your network.

5. Decide Whether to Buy a Franchise or Start from Scratch

In the real sense of it, the business concept of network marketing makes it possible for anyone to become a network marketer for a network marketing company without purchasing the franchise of the company hence it will be right to say franchising does not really work with network marketing companies.

So, if you are interested in the network marketing industry, you have the option of either becoming an active network marketer with an established network marketing company or you start your own network marketing company from the scratch.

Please note that most of the big and successful network marketing companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success and of course you can build your own network marketing company brand to become a successful brand in your area of specialization and even go ahead to sell your products or services and recruit network marketers both at the national level and global stage.

6. Know the Possible Threats and Challenges You Will Face

If you decide to start your own network marketing business today, one of the major challenges you are likely to face is the presence of well established network marketing companies and also retailers or businesses who are selling same products or offering same services that you intend selling or offering. The only way to avoid this challenge is to create your own market; concentrate on a location that you can easily penetrate.

Asides from unfavorable government policies, just like any other business, one of the major threats that you are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. Another threat that may likely confront you is the arrival of a network marketing company or even a company retailing same products like you in same location where your target market exists and who may want to adopt same Business model like you.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

When considering starting a network marketing company, the legal entity you choose will go a long way to determine how big the business can grow. Some network marketing companies design their products and services for regional/community market, some for national market, while others for international market via online platform.

Generally, you have the option of either choosing a general partnership or limited liability company which is commonly called an LLC for a business such as a network marketing company. Ordinarily, general partnership should have been the ideal business structure for a small scale network marketing company especially if you are just starting out with a moderate start-up capital and you want to concentrate on a region. But people prefer limited liability Company for obvious reasons.

As a matter of fact, if your intention is to grow the business and have network marketers from all across the United States of America and other countries of the world, then choosing general partnership is not an option for you. Limited Liability Company, LLC will cut it for you.

For example, Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need board of directors, shareholders meetings and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your network marketing company; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.

If you take your time to critically study the various legal entities to use for your network marketing company, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.

Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your network marketing company so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures.

8. Choose a Catchy Business Name

When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.

If you are considering starting your own network marketing company, here are some catchy names that you can choose from;

• Extra Income Network Marketing, LLC
• Jeff Finn Global Network Marketing, Inc.
• Horn of Gold Group, Inc.
• Belarus Brothers Network Marketing Company, LLC
• The Green Products, Inc.
• Avenues 2 Prosperity Network Marketing, LLC
• Cee Plus Network Marketing Co.
• Brighton Gab Network Marketing, Inc.
• Flora Maples Network Marketing, Inc.
• Global Moms Network Marketing Company
• Mary Jay Cosmetics Ltd.

9. Discuss with an Agent to Know the Best Insurance Policies for You

In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your network marketing business.

Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own network marketing business in the United States of America;

• General insurance
• Health insurance
• Liability insurance
• Workers Compensation
• Overhead expense disability insurance
• Business owner’s policy group insurance
• Payment protection insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are considering starting your own network marketing company, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successful run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subject to the review of attorneys as required by USPTO.

11. Get the Necessary Professional Certification

Asides from the results you produce, professional certification is one of the main reasons why most network marketing companies stand out; network marketers will consider it easier to work with you if they know you have the major certifications in your area of business.

You are strongly encouraged to pursue professional certifications as they will go a long way to show your commitment towards the business. These are some of the certifications you can work towards achieving if you want to run your own network marketing business;

• Certified Network Marketer
• Certified Training for Direct Sales/Network Marketing
• Certified Marketing Management Professional – CMMP®
• AMA Certified Professional Marketer
• MBA in Network Marketing

Please note that the higher your qualifications and experience (expertise), the easier it is for you to make impact as the owner of a network marketing company.

12. Get the Necessary Legal Documents You Need to Operate

The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized especially a business like network marketing company. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long arm of the law catches up with you.

These are some of the basic legal documents that you are expected to have in place if you want to legally run your own network marketing company in the United States of America;

• Certificate of Incorporation
• Business License
• Business Plan
• Non – disclosure Agreement
• Employment Agreement (offer letter)
• Operating Agreement for LLCs
• Insurance Policy
• Consulting contract documents
• Online Terms of Use
• Online Privacy Policy Document
• Apostille (for those who intend operating beyond the United States of America

13. Raise the Needed Startup Capital

Starting a network marketing business can be cost effective especially if you choose to sell the products or services of a company and you also choose to run the business from your home, share office space with a friend or make use of virtual office.

Producing your products and securing a standard office/production facility is part of what will consume a large chunk of your start-up capital, but if you choose to start the business on a small scale by retailing the product and services of an existing company, you may not have the need to go source for fund to finance the business.

No doubt when it comes to financing a business, one of the first things and perhaps the major factors that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.

Here are some of the options you can explore when sourcing for start-up capital for your network marketing company;

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell of shares to interested investors
• Applying for loan from your bank/banks
• Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
• Source for soft loans from your family members and your friends.

14. Choose a Suitable Location for your Business

Network marketing business and most product based businesses require that you see physically with your clients hence it must be located in a good location; a location that is prone to both human and vehicular traffic if indeed you want to attend to loads of clients and maximize profits from the business.

The fact that you can operate your network marketing business from your home does not mean that location has little influence on the success of a network marketing company. If you have taken your time to study the network marketing industry, you will realize that network marketing companies are willing to pay expensive rents in order to stay in a busy business district; a place where business activities are at its peak.

Your clients should be able to drive down and locate your office with little or no difficulty. Vendors also should be able to easily locate your office when they have to come submit their bid/proposals, documents or for background checks et al.

15. Hire Employees for your Technical and Manpower Needs

On the average, there are no special technology or equipment needed to run this type of business except for customized network marketing, accounting and social media management software applications. In a bid to work out sales and marketing monitoring solutions for your clients, you might be required to design a customized software application. So also, you will definitely need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves).

When it comes to choosing between renting and leasing of an office space; the size of the network marketing company you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a standard network marketing company, then you should consider the option of leasing a facility for your office; when you lease, you will be able to work with long term planning, structuring and expansion.

As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Software Apps Developer/Programmer/IT Specialist, Network Marketers/Freelance Marketers), Business Development Executive/marketing Executive, Customer Service Officer or Front Desk Officer, and Accountant.

Over and above, you would need a minimum of 8 key staff members to effectively run a medium scale but standard network marketing company.

The Service Delivery Process of the Business

On the average, the way network marketing companies work varies from one company to another company, but ideally, a standard network marketing company is expected to first and foremost develop a product or services and then build a network marketing software app. that will enable them monitor the progress of network marketers and their downlines.

Once network marketers are recruited into the network, they are expected to pay registration fees and start-up fees (for the purchase of the first set of goods to be sold). The network marketers are required to recruit network marketers under them and they are encouraged to also recruit more network marketers as their downlines.

The truth is that if the product that a network marketing company is selling is affordable and of good quality, it will be easier for network marketers under their network to sell the products. The more products that are sold, the more money that the network marketer will make and of course the more money the network marketing company will make.

It is important to state that a network marketing company may decide to improvise or adopt any business process and structure that will guarantee them good return on investment (ROI) efficiency and flexibility. It should be noted that the above stated business cum services process is not cast on stone.

16. Write a Marketing Plan Packed with ideas & Strategies

Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a network marketing business, then you must go all out to employ strategies that will help you attract customers and network marketers – freelance marketers or else you will likely struggle with the business because there are well known brands determining the market direction for network marketing.

These are some of the marketing ideas and strategies that you can adopt for your network marketing company;

• Introduce your products or services by sending introductory letters alongside your brochure to network marketers, stay at home moms, and residents in your chosen location.
• Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs can know where to go when they need to purchase your products.
• Create a basic website for your business, so as to give your business an online presence.
• Directly market your products and your business concept.
• Engage in roadshows in targeted communities from time to time to sell your products and to recruit network marketers.
• Join local chambers of commerce and industry for industry trends and tips.
• Provide discount days for your customers.
• Advertise our business in community based newspapers, local TV and radio stations.
• List your business on yellow pages ads (local directories).
• Encourage the use of Word of mouth marketing (referrals).

17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.

If your intention of starting a network marketing company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on the promotion and advertisement of your brand.

No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Your corporate identity has a lot to do when it comes to building a business that is profitable and can last long.

Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your network marketing company;

• Place adverts on both print (newspapers and magazines) and electronic media platforms
• Sponsor relevant community based events/programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your business
• Install your Bill Boards on strategic locations all around your city or state
• Engage in roadshows from time to time in targeted neighborhoods to retail your products and to recruit network marketers
• Distribute your fliers and handbills in target areas
• Contact network marketers, stay at home moms, and residents in your chosen location informing them about your products and your network marketing concept
• List your network marketing company in local directories/yellow pages
• Advertise your network marketing company in your official website and employ strategies that will help you pull traffic to the site.
• Ensure that all your staff members and network marketers/freelance sales agents wear your branded shirts and all your vehicles and distribution trucks/vans are well branded with your company logo et al.

Related Posts:

• 6 Reasons Why I Failed to Build a Network Marketing Business
• 6 Lessons from My Failure in the Network Marketing Industry
• How to Choose the Right Network Marketing Company to Join
• How to Join a Network Marketing Company and Reach the Top
• How to Find Prospects for Network Marketing

The Comprehensive Guide to Building a Successful MLM Company

Whether you’re starting a multi-level marketing (MLM) company from scratch or mapping out strategic growth plans for an already established MLM, there are seven essential focus areas that drive to be successful. From business plans and compensation structure through MLM software platforms and marketing strategies, here’s a comprehensive look at what you need to consider, prioritize, and accomplish along your road to success. 

How do you define MLM success?

Worldwide, MLM companies are a $180 billion industry, with nearly 120 million people working as independent sales representatives. Today’s MLMs sell a wide range of products and services, everything from cosmetics, home goods, and clothing through wellness products, financial services, and utilities. And while every MLM company is different, there are some common key performance indicators (KPIs) that will help you gauge if your company’s direct selling is successful. 

The first metric is related to the company’s structure and ensures that sales practices meet regulatory compliance requirements. In the U.S., FTC regulations require MLM companies to pay compensation to sales representatives based primarily on retail sales, not wholesale purchases or downline recruiting. MLMs that adopt a multi-level business structure but rely on sales to newly recruited representatives rather than retail sales to end customers are known as pyramid schemes and fail to meet FTC guidelines. 

The second KPI MLM companies share is, not surprisingly, a financial one related to revenues and profits. The basic revenue calculation – the sales price of a company’s product or service multiplied by the amount sold – combined with expense management will determine profit margins. Monitoring revenue totals, with expenses (including taxes) subtracted out, tells you the amount of profit that is hitting the company’s bottom line. 

Related:  Everything You Want to Know About MLMs and How They Make Money

People metrics are the third important success measure for MLM companies. MLMs succeed when their sales representatives succeed – and MLM organizations grow when they are able to expand their sales networks. As an industry, direct selling companies see high turnover rates among sales representatives.  Half of MLM representatives drop out within the first year. This makes rep recruiting and retention important KPIs when gauging success. In fact, when an MLM company can improve representative retention by just 10 percent, the company’s  revenue grows an estimated 49 percent  over ten years. 

With these MLM success metrics in mind, it’s time to dive into the seven essential focus areas for building a successful MLM company. 

1. Develop (or refine) your products or services.

For most MLM founders, the company starts with a passion for a product or service and a desire to share it with the world. But believing in a product isn’t enough. Invest time and resources to research and quantify the market opportunity whenever it’s time to develop a new product or service.

For MLM companies, determining the potential market opportunity for a new product or service is two-fold. The product must appeal to customers, and it must also be something that inspires representatives to advocate for and sell. Start by identifying products and services that can be differentiated from other similar offerings. Potential product differentiators can include quality, performance, design, or features. (Of course, being first to market with a unique product is a differentiator! But expect competition to follow and think about how your product offering will stand out for the long-term.)

Never assume that the product you love will automatically translate into market appeal. It’s important to research customer needs, interest levels, and willingness to purchase. This type of market research can be accomplished through a mix of formal research methods, such as surveys, focus groups, and product testing, and informal outreach like customer or sales representative interviews. Remember, you’re not only gauging interest levels, but you also need to determine how much your customers are willing to pay.

Typically, in order to cover the costs of marketing and the multi-level compensation plan model, an MLM should aim to offer products and services priced at a five times margin over the cost of goods. It’s critical to understand the value your potential target customers place on your product or solution and then to accurately estimate the number of potential customers. This is where you’ll want to dive deep into defining and understanding your target customer segments (see focus area 5 below). When you have an idea of how many potential customers there are, estimate the market penetration percentage you can realistically expect to achieve in years one, two, and three. Then, continue to assess the market opportunity as it evolves through changing buyer needs, market forces, competitor actions, and your own organization’s performance.

2. Make (or refresh) your business plan.

Most of the time, success doesn’t just happen. It results from careful strategic planning and execution. Successful MLM companies need to have a detailed three- to five-year business plan that is constantly referenced and updated. A good business plan serves as a roadmap whether you’re launching a new MLM business or growing an existing one. 

Your written business plan should outline your vision for the company’s future, its purpose, and goals. Then, it should lay out the objectives and actions you need to take to get there. An MLM business plan is a living document, always detailing a plan for at least the next three years and always evolving based on results and changing market conditions. 

Much like the steps outlined for product development, your business plan involves research and number-crunching to determine the resources you’ll need to achieve the sales and revenue goals you set. When creating or refreshing your company’s business plan, include target revenue, customer, and sales objectives for at least the next three years. These objectives should be challenging without being unrealistic. For example, you’ll need to know how many sales representatives you need to recruit – and how long it takes to onboard them – in order to achieve the sales objectives. Over time, as you have more results, you will be able to refine your projections and make them more precise. 

No matter what, sales forecasting is always a mix of art and science. Whenever you can, base your projections on past results and a data-based analysis of the future. Don’t stop at high-level totals. Break your sales objectives down by sales teams and representatives, factoring in levels of experience, local market conditions, and competitive forces. You should also incorporate insights about average transaction values for both new and repeat customers. By taking a detailed approach, you’ll be able to see where the team is outperforming or under-performing and help to take the guesswork out of making process, product, or pricing decisions down the road.

Related:  The Road to Better Sales Forecasting

As part of your business plan, always have a plan for rapid scaling in the case of higher than anticipated customer demand. You never want to miss an opportunity for exponential growth. Think through supplier, manufacturing, and logistical needs to determine what it would take to scale at 10, 100, or even 1,000 times the pace outlined in your initial plan. Knowing what you would need to do enables you to act decisively and quickly capitalize on opportunities – and provides peace of mind that you have a map to follow. 

3. Determine (or revisit) your compensation plan structure.

An MLM company’s compensation plan is a critical component in reaching both short- and long-term goals. While it’s not something you want to change frequently, it is important to monitor and manage the plan over time to ensure it continues to effectively deliver on its three primary purposes: to recognize, reward, and incent desired sales representative actions and behaviors. 

MLM compensation plans must balance the company’s pricing structure for its products and services along with the behaviors the company needs from its sales representatives. In fact, determining the right compensation plan to fit your company’s unique needs is one of the most important decisions MLM company leaders make. Effective compensation plans incentivize and reward the sales representatives your company will depend on to grow. But, if your compensation plan pays too little or is difficult to explain, it will have a direct impact on recruiting, retention, sales volume, and your overall bottom line. 

The compensation plan defines how your organization’s sales representatives will earn income through a combination of commissions on their direct sales, overrides on a percentage of their downline’s sales, or bonuses as they achieve levels and ranks. MLM compensation plans are based on the company’s multi-level structure, which is called the genealogy. As representatives join your company, they connect into the organization based on the representative who sponsored them. The new representative’s sponsoring rep is called an “upline” because the relationship appears above them in the organizational hierarchy. Then, as the new representative builds her business, she will also recruit representatives, creating a new “downline.” The inter-connected structure resembles a family’s genealogical record and provides the map for determining how and when representatives are eligible for compensation for particular sales based on where they sit within an upline or downline.

Related:  MLM Genealogy Trees – and How They Grow

Based on the underlying genealogy, the company’s compensation plan defines who will be compensated and how much they will earn. There are five basic types of MLM genealogy behind the majority of MLM compensation plans. The basic difference between these payout structures is how they define the number of representatives included in the genealogy’s “width” and “depth.”

• Binary:  A binary structure is focused on two downlines, which means the plan has a fixed width of two representatives, while its depth is unlimited. In other words, a representative enrolls two people, known as a two-leg downline. Each representative then enrolls two people, with the structure continuing in two-person tiers. The compensation is based on the sales volume generated in each of the legs, with representatives typically earning the majority of their compensation based on the lower-earning leg of their downline, which is called the “pay leg.” A binary structure is intended to encourage teamwork between the downline legs in order for representatives to optimize their earning opportunities.
• Matrix:  Matrix plans have fixed widths and fixed depths, which provide MLM companies with more control over compensation payout volumes. For example, if a company adopts a 3×9 matrix plan, each level is made up of three representatives, up to a maximum depth of nine levels. By limiting the number of people in a downline, matrix plans are designed to encourage representatives to strategize on the placement of the reps they sponsor as a way to maximize both payout amounts and downline growth.  The company determines the structure based on its strategic goals and the market opportunity for the products and services it sells. A matrix structure can be any width and depth, such as “4 x 7” or “3 x 9.” In a 3 x 9 matrix, the sponsoring representative’s first level – also known as their frontline – is three representatives wide. From there, each level below multiplies out in threes, up to a maximum depth of nine levels.
• Unilevel:  Unilevel structures are simple. The width is unlimited, meaning representatives can sponsor as many people as they want. When determining payouts, unilevel plans limit the downline’s depth. For example, a unilevel plan may pay a 5 percent commission per level to a depth of five levels. Unilevel compensation plans typically reward sales representatives based on how many levels they have beneath their frontline, with representatives achieving ranks within the organization based on recruiting and sales volume. As a result, unilevel structures are an appealing option for MLM companies with large numbers of part-time sales representatives.
• Stairstep breakaway:  Used by early MLM companies, breakaway plans enable representatives who achieve defined personal and group volumes to “break away” and start their own lines. Along with being more difficult to explain to new representatives, the breakaway structure can cause representatives to be primarily self-focused as they work toward the breakaway goal. After that, it may be hard for them to shift gears to focus on their downline’s success as the way to continue to achieve higher ranks and rewards within the organization.
• Hybrid:  Today, most MLM compensation plans take a hybrid approach, paying compensation based on both a placement genealogy and a sponsorship genealogy to better align with their strategies and growth goals. For example, a company may opt for a hybrid combination of binary and unilevel plans, with payouts for initial sales volumes based on a binary structure and payouts for ongoing sales volume based on a unilevel structure.

In addition to basic commission structures, MLM compensation plans also include additional earnings opportunities for bonuses and rank promotions. These types of programs provide MLM companies with additional options to incent and reward specific sales behaviors, such as recruiting representatives, selling certain products, or increasing retail sales. Ranks or bonuses can also be designed to reward representatives who actively support their downlines while remaining active in their own business. 

Of course, compliance is a critical consideration when building or refreshing MLM compensation plans. According to FTC regulations, MLM compensation must focus on retail sales to customers who are not part of the company’s genealogy structure. Both compensation and bonus plans must reward reps for retail sales, with bonuses and ranks designed to build a healthy retail customer base. Consulting with an attorney who specializes in the MLM industry is a best practice to ensure your company’s compensation plans don’t raise any regulatory red flags. An MLM attorney can also provide valuable guidance on product regulations, product label requirements, and international expansion. 

Related:  MLM Compensation: How to Build the Best Plan for Your Business

4. Choose (or evaluate) your MLM software. 

The next crucial area of focus is your company’s MLM software, which should function as the backbone of your technology platform. Not only does the right choice of software enable your company to grow and scale through vital business-building tools and capabilities for your sales team, but it also streamlines your back-office functions, increases the accuracy of commission and incentive payouts through automation, and helps you address compliance requirements. 

In other words, your MLM software impacts every part of your business – back-office, representative experience, and customer experience. Choosing – or evaluating your current software – is critical to ensure that field sales representatives have access to vital sales tools like replicated websites, e-commerce sales capabilities, live and social selling options, customer profile management, and a mobile app. Via a representative portal, your MLM software also streamlines business management for the sales team with online ordering, sales, customer and genealogy reports, and commission statements. 

For the corporate back office, focus on MLM software functionality that automates and integrates your business, including field and customer management, lead management, inventory management, shipping fulfillment, payment processing, and commission calculations and payouts. You’ll also want it to have robust reporting capabilities, so you’re able to easily access and analyze the data you need to make strategy decisions. 

Look for an MLM software provider that has extensive direct selling software expertise and industry experience. Your goal is to establish a partnership with an MLM software provider that meets your company’s current needs and is able to adapt and expand functionality as you need it. Regular software enhancements are a must to ensure you can keep up with market expectations and optimize what technology can do for your business. Choose an MLM software provider with a proven track record of innovation and a regular cadence for enhancements provided at no additional cost. 

Ongoing, accessible user support is another important consideration. The best MLM software providers will offer access to dedicated, live support specialists who understand the MLM industry and your company. Be wary of providers who offer an executive or sales rep as your support contact. That’s a red flag that often results in slow and incorrect responses. You and your team should be able to reach out to talk with dedicated support specialists whenever you need to, via phone or live online chat. 

Related:  What Type of MLM Software Support Should You Expect?

Like any major business investment, cost is always an important consideration. When it comes to determining what you should pay for MLM software, look for pricing that’s based on the features you need right now, with a significant amount of functionality that can be “turned on” down the road as your company needs it. This way, you’re not paying for capabilities you’re not using, but you can be confident that the provider will be able to deliver advanced features as your company grows.

Expect to pay money upfront. If an MLM software provider offers to “take a risk” and cover the upfront costs, you should think twice. They will likely need to make up the cost somewhere else, such as fewer upgrades, hidden extra costs, or reduced user support. For high-quality MLM software that fits your business, expect to pay between $20,000 and $35,000 in upfront costs.

You should also seek to pay flat rate hosting fees, without additional hosting fees per order or per sales representative. This type of fixed monthly hosting fee means you’re able to establish a budget without running into surprise software expenses. Flat-rate monthly hosting fees should usually fall in the $3,000 to $4,000 range – and include ongoing support, service, and regular upgrades. 

Related:  How to Find the Right MLM Software at the Right Price

5. Map out your marketing. 

Marketing is essential to MLM success – and it starts with a deep understanding of your target markets. With your business plan as a starting point, create detailed profiles of your ideal customers and representatives – the more details, the better. Tap into external research, like focus groups and rep and customer interviews, as well as data available through your MLM software platform. You’re looking to create profiles that include both demographic and psychographic attributes. 

• Demographics, such as age, gender, ethnicity, marital status, education levels, and income, define who your target audiences are.
• Psychographics, like attitudes, interests, values, hobbies, and spending habits, complement the demographics to help explain why your target becomes a customer or representative. 

With your target audiences in mind, define – or refine — your brand. A strong MLM brand can be an extremely valuable asset for your company, helping to propel awareness, sales, and customer loyalty while establishing credibility among potential sales representatives. 

An MLM brand is more than a logo. Think of your brand as your company’s personality as your target audiences perceive it. Every experience and interaction impact their perceptions and add – or detract – from your brand’s value. That means consistency in messaging, tone, and visuals is key. From in-person events and online interactions, through website, product, and service experiences, it all adds up. The cumulative impact of positive experiences will build increased recognition, purchase preferences, and long-term loyalty. When companies consistently present their brand, they  achieve 33 percent higher revenues , on average.

Related:  6 Essential Steps to Building a Strong MLM Brand

Today, web experience is one of the most important elements of an MLM company’s marketing and brand strategy. Your website is often the first experience that customers and sales representatives have with your brand. That makes the design, capabilities, and user experience essential focus areas.

Your MLM software will be at the center of your web strategy, enabling you to create and deliver online experiences that support your brand and are tailored for the audience. The first step is building or refreshing your corporate website, considering branding, look and feel, content, and functionality. Once you have your corporate site, your MLM software platform should make it easy to create replicated websites for each MLM sales representative. 

A replicated site is built around the brand guidelines you set but provides a unique URL and the flexibility for representatives to customize what’s featured on their site. This way, each representative is able to have their own personalized website to help them build their business, but it’s also connected to your back end MLM software capabilities like payment processing, shipping fulfillment, inventory management, and reporting. In addition, replicated websites ensure brand consistency by providing formatting, product descriptions, and images for the sales representatives to use. 

Pay special attention to the e-commerce capabilities available through your MLM software platform. Today,  70 percent of Americans  are shopping online, and they have high expectations. Make sure your MLM software is keeping you ahead of the curve with capabilities like shop-by-category functionality, personalized product recommendations, the ability to carry your branding through to the customer’s shopping cart, and the option to tag products to highlight best sellers, new items, discounts, and pre-orders as customers shop.

In addition, along with customer-facing replicated websites, your MLM software should also provide robust rep portal capabilities, including business-building tools for sales representatives. For example, through your representative portal, sales reps should be able to access customer profile data and genealogy views, manage their inventory, view commission statements, and run reports in real-time. 

6. Be strategic about recruiting.

The secret to MLM success isn’t just about selling your products and services. Recruiting and retaining successful MLM sales representatives is equally important. As you build and refresh your company’s strategies, recruiting and retention should be considerations in nearly every decision you make.

Your sales representatives and potential sales representatives are key customer segments. Do your homework to understand both the demographics and the psychographics – or what makes them tick – so you’re able to create a profile of the ideal representative for your company. Then, turn that knowledge into powerful recruiting and retention strategies. 

Build in tools and support to help representatives tell your organization’s story and articulate the opportunity of becoming a sales representative. For example, feature click-able access to the details about who you’re looking for, what the role is, and the potential for success on your corporate and replicated representative websites. Make it easy for interested customers to take action by enrolling online, including promoting the opportunity as people shop by offering promotional incentives when they enroll.

But don’t stop there. Take a strategic approach to your representative onboarding experience, which lays the groundwork for sales success. Research shows that organizations that deliver standardized onboarding programs achieve  62 percent greater productivity  and 50 percent higher retention rates. Integrated, ongoing training pays off, too. When companies offer comprehensive training, reps earn more, the company achieves higher profit margins, and retention rates increase. Seven in ten people who work for organizations that provide training to enhance sales and marketing skills say it influences their decision to stay. Notably, this number jumps to nine in ten for those in the Millennial generation.

7. Get growing. 

Growth is a focus of MLM companies, no matter how long they’ve been in business. In today’s fast-paced, quickly changing marketplace, companies have to be prepared to adapt and pivot in order to achieve growth goals. As a result, the ability to access and analyze data is imperative. Your MLM software should bring all of your data – customer, sales, representative, inventory, and more – together. Set up automated reports to keep your finger on the pulse of your business. 

At some point, you will likely want to evaluate opportunities to expand your business into international markets as a way to grow. On the surface, with the MLM sales model providing a cost-efficient way for introducing a company and its products into a new market, expanding internationally may seem like a no-brainer. However, each market is unique, and the cultural, language, and currency differences must be carefully assessed. You’ll also want to understand the different regulatory requirements and the available technology infrastructure. To help you evaluate international opportunities, tap into the expertise of your MLM software provider, and seek the advice of an experienced MLM attorney.

Related:  Should MLM Companies Do Business Internationally?

One of the most powerful growth strategies for any MLM is the ability to drive repeat purchases. The MLM sales model creates strong, personalized relationships between sales representatives and their community of customers. Make sure you’re making the most of these relationships by creating memorable customer experiences that strengthen loyalty. There’s a tangible benefit for your bottom line. Loyal customers are  five times more likely  to make repeat purchases and nine times more willing to try new products. And when you’re able to increase customer retention by just 5 percent, your company can expect to  boost revenues by 25 to 95 percent .  

The road to MLM success almost always comes with unexpected turns and obstacles. ByDesign can help you along your company’s journey. With 20 years of experience in the MLM industry and lessons learned while serving more than 1,000 clients over the years, our MLM software solutions can help you optimize your operations and focus on growth. Learn more at  ByDesign.com  or  contact us  to schedule a mlm software consultation today. 

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Additional Articles about Achieving MLM Success:

• 10 Steps for Starting an MLM Company
• The 5 Best Practices to Follow for MLM Success
• Do You Have the Right MLM Software for Your Reps? A Technology Assessment Tool

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Network Marketing Business Plan

Network marketing is one of the marketing methods that has made waves the past few years. Unfortunately, network marketing has also been on the wrong end of business scams and frauds. Nonetheless, network marketing continues to be a very effective tool to increase the visibility of business organizations not only to their customers but also to potential clients. You may also see importance of business plan .

• 9+ Marketing Strategy Business Plan Examples
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Network Marketing Plan Template

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A network marketing business plan will help you increase the effectiveness of your network marketing business as well as identify internal and external issues that prevent you from reaching the full potential of your networking business.

Marketing Business Plan Template Services Example

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Sample for Network Marketing Business Plan Example

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What Is Network Marketing?

Network marketing, also called as multilevel marketing or pyramid selling, is a business model that follows the massive recruitment of individuals in which the the said individuals cannot earn or be compensated if they are not able to recruit other people. The pyramid starts with person A recruiting person B and C. You may also see how to make a business plan .

The pyramid is formed (or goes lower) when person B recruits person B1 and person C recruits person C1. The cycle then continues until there is no one else to recruit anymore, that is when the organization will go bankrupt.

For clarification purposes, legitimate network marketing businesses rely on products and not on people. Legitimate networking companies use a combination of products and human resources to sell their brand, but products still take a front seat over anything else. Human resources are more utilized to recruit, sell products, and create strategies on how to sell them. The more they sell and the more they recruit, the more commission they receive. You may also like company plan examples .

Network marketing is just not about recruiting the next person you see on the street, but passing on the benefits of the products you are selling to them. The more the recruits see the benefits of your products, the easier it is for them to sell the products as well as recruit other people to join your network organization. You may also check out  business plan outline with examples .

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Simple Network Marketing Business Plan Example

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Tips in Creating a Network Marketing Business Plan

Creating a network marketing business plan , similar to other marketing business plans, is not difficult. You just need to incorporate the correct and detailed information and avoid the pitfalls of adding unnecessary data that provide nothing to your simple business plan . Here are some tips in creating a network marketing business plan:

1. Provide specific company information

Your network marketing business plan should always begin with your company information. Among the information you will be incorporating must include the company name, company address, company website and other online portfolio ( social media pages), and the nature of your network business.

Some companies indicate all of these information in the cover page or heading of the business plan. These information are very basic, that is why they should be the ones seen first by the reader.

Don’t forget to include your company logo in the business plan as it adds a bit of visual aesthetics to the business plan.

2. Clarify organizational structure

Organizational structures in network marketing businesses can be quite confusing. You have the person on the highest peak of the pyramid (most of the time the CEO, business owner, managing director, etc.), then what comes after is a sea of individuals having no clear roles or position in the organization. You may also see how to create a business plan ?

To help solve this dilemma, don’t place all your employees in one pyramid, forming an endless row of people that have no specific position in the company.

Rather, set a limit on the number of people that can be recruited in a pyramid. The process should focus on having a specific number of recruits in one pyramid, then the next set or number of recruits should be placed in the next pyramid. To keep employees motivated and productive in the lower levels of a pyramid, a manager or supervisor should be assigned. This should apply in all of the organization’s pyramid. You may also like implementation plan examples .

3. Focus on payment terms

The payment terms will determine how the employees will get paid. In a networking business, most of the employees are working in a part-time basis. Depending on the size of the organization, networking companies usually only pay for the salaries of full-time admin and accounting personnel. Every person working in the pyramid will only get paid once he sells a product or recruits another person. You may also check out  annual plan examples .

Payment terms in a networking business is important as most employees only get compensated once a sale or recruitment has been made.

Make sure the payment terms are flexible and will not only focus more on the individuals on the higher levels of the pyramid but on the lower levels as well.

4. Also focus on marketing

Marketing is key for network marketing businesses to survive. Employees can only do so much in marketing, that is why a marketing strategy should also be developed to make sure the networking business reaches a number of market segments.

Demographics is very important in marketing especially for network marketing companies. Numerous market segments can be targeted in a network market business, and if you manage to find a strategy that does not only grab the attention of different of target markets but also convert them into potential customers, then you can maximize the revenue earning potential of your organization. You might be interested in evaluation plan examples .

5. Discuss investment opportunities

Similar to other businesses, network marketing companies need investment as well. Networking businesses need investment for two things: expansion and recruitment. No business, whether a small enterprise nor large corporation, will want to get stuck in a market position that has no chance in improving. Progress is always a requirement and one method to achieve that professional goal is to get an investment.

Expanding a network marketing business will require a new office (most possibly a new office building) and new staff. Investment is needed to fund these projects. Additionally, network marketing businesses need investment to fund for recruitment. These days, recruitment is no longer limited to giving out flyers to random strangers in the streets and inviting them to join your company or organization. You may also see transition plan examples .

Business Plan for Networking Example

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Biggest Investment/Networking Scams in US History

As previously mentioned, not all networking companies have a reputation of being ethical companies. Some of the biggest scams in US history have involved networking or investment companies. You may also see how to do market analysis of a business plan .

Here is a list:

The fall of one of the country’s biggest energy companies resulted in the passage of the Sarbanes-Oxley Act of 2002. The fraud also resulted in a loss of $78 billion in stock market value for the company.

2. Lehman Brothers

Charges have yet to be filed for investment bank Lehman Brothers, which shut down in 2008. But with the bank having $600 billion in assets suddenly filing for bankruptcy, it is highly plausible that top executives are involved in the fraud. You may also like management plan examples .

3. MF Global

The brokerage firm, led by former Goldman Sachs Chairman and politician Jon Corzine, had $41 billion in assets before failing in October 2011. But a year later, over $1 billion in customer assets were still missing and no charges have been filed. You may also check out business plan examples .

4. WorldCom

WorldCom once had $6 billion in assets before it filed for bankruptcy in 2002. A lawsuit was then filed that resulted to former CEO Bernard Edders now serving 25 years in a federal prison.

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Create a study plan for final exams in high school

Develop a project timeline for a middle school science fair.

Network Marketing Business Plan Template & Guidebook

Have you ever looked for the perfect Network Marketing Business Plan Template & Guidebook? Now, you can finally stop searching as the #1 Network Marketing Business Plan Template & Guidebook is here! With this proven template and guidebook, you can get an edge over other aspiring network marketers and create a business plan that stands out. Get the insights you need to make sure your plan is successful - it's time to show the world you mean business.

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• How to Start a Profitable Network Marketing Business [11 Steps]
• 10+ Best & Profitable Network Marketing Business Ideas [2023]

How to Write a Network Marketing Business Plan in 7 Steps:

1. describe the purpose of your network marketing business..

The first step to writing your business plan is to describe the purpose of your network marketing business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a network marketing business:

Our mission is to provide business owners and entrepreneurs with the best-in-class network marketing solutions, products, and tools that help them achieve their personal and business goals. We strive to be the industry leader in providing modern, scalable, and innovative network marketing solutions. Through these efforts, we can ensure our clients have the resources they need to succeed and create a sustainable future.

2. Products & Services Offered by Your Network Marketing Business.

The next step is to outline your products and services for your network marketing business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your network marketing business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your network marketing business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your network marketing business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a network marketing business?

• Computer with internet access
• Organizational software such as a CRM system
• Marketing materials such as business cards and brochures
• Accounting software
• Any applicable business licenses and permits

5. Management & Organization of Your Network Marketing Business.

The second part of your network marketing business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your network marketing business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Network Marketing Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a network marketing business varies based on many different variables, but below are a few different types of startup costs for a network marketing business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your network marketing business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your network marketing business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your network marketing business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Network Marketing Business Plans:

Why do you need a business plan for a network marketing business.

A business plan is a critical tool for any network marketing business. It provides a roadmap to your business’s success and can be used to help secure funding, prioritize resources and establish the direction of the business. It will also give investors an idea of how you plan to reach profitability and keep them up-to-date on your progress. A business plan can also be used as a tool to evaluate the potential success of a network marketing business by evaluating the various channels, products and competitors involved. The business plan can also set company objectives, identify customer trends and forecast future growth.

Who should you ask for help with your network marketing business plan?

You should consult an experienced network marketing mentor or an experienced small business consultant for help with your network marketing business plan. They will be able to provide you with practical advice and guidance on how to create a successful business plan that can help you reach your goals.

Can you write a network marketing business plan yourself?

Yes, you can write a network marketing business plan yourself. To do so, you will need to start by researching the industry, analyzing the competition, determining your target market and outlining your marketing approach. You'll also need to set out your financial expectations and outline a strategy for reaching and maintaining long-term success. Finally, you will want to create an executive summary that outlines the key points of your business plan.

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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

From assessing market viability and formulating business plans to selecting the right technology and navigating the financial landscape, I am dedicated to helping fellow entrepreneurs overcome challenges and unlock their full potential. As a steadfast advocate for small business success, my mission is to pave the way for a new generation of innovative and driven entrepreneurs who are ready to make their mark on the world.

America's facing a retirement disaster. There's a better way.

• Australia's superannuation system mandates employer-funded retirement contributions.
• US retirement plans, by contrast, depend on employee contributions to accounts like 401(k)s. 
• If the US adopted Australia's retirement model, it could impact wage levels.

For many around the world, retirement can be a mixed bag .

Australian retirees rate their retirement happiness at 70 out of 100, according to a survey of 1,000 Australians over 60 in February by the independent researcher YouGov and investment management company Challenger Limited. Money was ranked behind good physical health as the key to a happy retirement.

Meanwhile, the US retirement system has become anxiety-inducing for many, as older adults struggle to make ends meet . More than half of Americans over the age of 65 are earning under $30,000 a year, according to a report from Sen. Bernie Sanders published in March and based on National Retirement Risk Index data.

What's more, Pew Research Center data shows that Americans over 75 are the fastest-growing age group in the workforce, a demographic that could double in the next decade. That's because many can't afford to stop working.

In the US, retirement accounts are a company benefit that employees can choose to contribute some of their paychecks to throughout their careers. Companies are not federally required to offer any kind of retirement savings account for employees or provide any monetary support for retirees. And many Americans living paycheck to paycheck aren't able to save enough to stop working.

Australia , however, requires that employers make regular contributions to a retirement fund for each employee — a system called superannuation.

Catherine Reilly, a fellow at the financial research firm TIAA Institute and a non-resident scholar at Georgetown University's Center for Retirement Initiatives, said Australia's system makes sure all adults have a retirement fund.

"Everybody is put into a plan," she said. "Whereas in the US, you only get put into a plan if you'd work for an employer that offers it."

Seventy-one percent of nonretired Americans said they are at least moderately worried about being able to fund their retirement , according to a Gallup poll of 1,013 US adults in April 2023.

Reilly said there are structural differences in how America and Australia handle savings for older adults. And while it may be tough to implement Australia's system halfway around the world — but the US could get close, she said.

Australian retirement system puts saving responsibility on employers, not employees

America's current retirement infrastructure includes two major categories: defined contribution plans and Social Security .

Defined contribution plans , which include 401(k) and IRA accounts allow employees to save and invest money that they make throughout their career, usually by depositing a percentage of their regular paycheck directly into the accounts.

Companies might also contribute to an employee's 401(k), but they are under no federal requirement to do so. The retirement accounts an employee has access to and what benefits they retain after they stop work all depend on what retirement package an individual company offers.

In a 2024 letter to investors , BlackRock CEO Larry Fink said the US retirement system puts undue pressure on employees to decide how much money to save and invest. With the rising cost of living in many US cities, it can be difficult for Americans to predict how much money they are going to need, an issue Fink called an "impossible math problem."

Fink encouraged American policymakers to study Australian superannuation , saying the "benefits could be enormous for individual retirees." 

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Social Security also comes into play when Americans retire, providing monthly government income benefits based on an individual's reported earnings. The federal insurance program is funded by taxes and provides income to retirees and workers with disabilities. Many retirees collect Social Security checks in addition to living off their 401(k) savings.

However, the Social Security trust is expected to be depleted by the mid-2030s unless there's an invention.

Traditional fixed-income pensions are no longer a common company benefit in the US, but are still offered by select government and public service jobs .

In Australia, however, companies are legally required to contribute 11% of an employee's monthly paycheck into their retirement account. This money can go into stocks, property, cash, or bonds — the employee has a choice. Employees can also contribute money, but much of the savings responsibility falls on their employer.

The employer contribution amount is set to increase to 12% next year.

Once they reach retirement age, which is between 55 and 60, depending on birth year, Australians can access the fund with their savings and investment earnings.

"It does level the playing field because everybody is put into a plan," Reilly said, adding that Australians have more choice in where and how their retirement money is saved.

As Reilly explained, superannuation also allows retirees to access their money all in one place.

This differs from the American system, where retirees' money is often held between a 401(k), other accounts, and outside investments. If an American employee works at multiple different companies during their career, Reilly said it can also complicate their retirement funds.

Additionally, Australian government age pensions aren't the same as Social Security. Retirees must meet a low enough asset criteria to access the age pension. Reilly said the more limited pension might be a disadvantage of the Australian system because many people's retirement is almost entirely dependent on their superannuation funds.

If the US adopted superannuation, it could impact employee salaries

Although the Australian government sets the terms for superannuation, it is managed by the private sector. Employers manage the retirement funds for their employees without much political oversight.

If America adopted superannuation, Reilly expects the system would work similarly — the federal government could establish what percentage of an employee's income employers need to contribute, but then companies could organize the retirement funds on their own.

She pointed to pooled-employer plans , a retirement fund strategy that is already being tried in the US, allowing multiple companies to contribute to a single retirement fund for an employee if that person chooses to work at different companies throughout their career. Some individual states, such as California and Colorado, also require that employees are automatically enrolled in some kind of retirement plan.

"In the US, the infrastructure for having the private sector manage these funds — that all exists already," Reilly said. "And I think that would be a sensible way to do things."

Still, Reilly cautioned that applying Australia's retirement system to the US could negatively affect employee wages . Because, for companies, it would be "very unpopular," she said.

When a company hires someone new, she said they consider the total cost of employing that person. This includes salary, bonuses, and benefits . If US employers become legally required to contribute to retirement funds, Reilly said companies may lower their employees' salaries to offset this new cost.

Still, a system like superannuation could help ensure a retirement fund for the 56 million private sector employees who don't have retirement benefits through their employer, The Pew Charitable Trust reported in January.

Did you retire and later choose to return to work? Do you feel like you can't retire because of your financial situation? Reach out to this reporter at [email protected] .

Watch: Nearly 50,000 tech workers have been laid off — but there's a hack to avoid layoffs

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Thames Water has six weeks to agree survival plan with Ofwat

While the company believes it has cash to last 15 months, it will have to move fast to stave off insolvency

• Analysis: Thames Water is everyone’s problem and time is running out to fix it

Thames Water has just six weeks to convince its regulator that it has a viable survival plan for its business, the Guardian can reveal.

While the company believes it has enough cash to survive for about 15 months, insiders and investors fear that it must move quickly to strike a deal with its watchdog to stave off insolvency.

The UK’s largest water monopoly must present a new turnaround strategy and business plan before 23 May – Ofwat’s final board meeting before it issues a verdict on how much water companies will be allowed to charge consumers.

Thames, which has 16 million customers across London and the Thames valley, has been thrown into crisis after its shareholders last month pulled the plug on a plan to inject £500m into the business , amid a deepening battle with the watchdog.

This has forced Thames’s holding company, Kemble Water Finance, to admit it will not be able to repay a £190m loan due by the end of April.

Thames holds cash reserves which should fund its operations for 15 months without a substantial increase in bills, but investors, including bondholders in the operating company, are understood to believe it may struggle to meet debt obligations if a deal is not struck by May.

Ofwat is understood to be sceptical that Thames’s current business plan for the next two years or its longer turnaround plan – aimed at revamping its management and infrastructure – are viable or fair on consumers.

Sources have claimed that Ofwat is concerned about bills rising without there being a clear strategy to overhaul how the business is managed, since this would risk the burden of poor business decisions being pushed on to customers.

Thames’s operating company, which is ringfenced by the regulator so it can continue even if Kemble collapses, is labouring under debts of almost £15bn, making it Britain’s most indebted water company. It was privatised in 1989 with no debt .

Investors in Thames backed out of providing £500m of emergency funding in March, after the regulator refused the company’s demands for a 40% increase in bills.

Investors, which include UK university pension scheme USS, Canadian investor Omers and China’s sovereign wealth fund, said Ofwat’s current position – to limit bill increases, levy fines and restrict payment of dividends – rendered the company “uninvestible” .

Ofwat reviews water companies’ business plans and holds a price review in order to set the amount the utility firms can raise their bills over the next five-year period.

Despite its rejection of Thames’s plan, it is understood that bills are still expected to rise by as much as 35%, on average, over the next five years .

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Thames’s owners are running out of time because the regulator must issue its so-called draft determination on bill increases for each regional monopoly company in June. Those plans will govern how much water investors can earn and how much they must invest over the next five years.

If Thames and Ofwat cannot agree on a new financial plan and a fresh strategy for how to run the company by then, it will ramp up the likelihood of nationalisation.

Bondholders in the operating company have said they may be forced to write down their investment. A likely knock-on effect would be to increase borrowing costs for Thames, and bring forward possible nationalisation of the company via a so-called special administration.

Lenders to Thames argue that forcing them to incur losses on their debts would also drive up the cost of borrowing for all UK water companies, and potentially other utilities such as gas and electricity.

An Ofwat spokesperson said: “We do not comment on speculation. Ofwat is continuing to work on draft determinations that will be published in June.

“We will continue to monitor Thames Water as it seeks to turn around its performance for customers and the environment.”

Thames Water declined to comment on the record. Its board in March agreed a turnaround plan that it believes is “well under way” .

• Thames Water
• Water industry
• Water bills

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Thames Water nationalisation plan could move bulk of £15bn debt to state

Thames Water to add to debt mountain in bid for survival

Thames Water break-up is a promising idea

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Australia’s Macquarie among lenders to Thames Water’s parent company

Thames Water is everyone’s problem and time is running out to fix it

Thames Water funding crisis: the key players in the row over its future

Gold hits fresh record high; Fitch downgrades Thames Water parent company – as it happened

Thames Water parent tells creditors it has defaulted on debt

Thames Water owner bond slumps to record lows amid uncertainty over firm

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An agenda-setting and market-moving journalist, Foo Yun Chee is a 20-year veteran at Reuters. Her stories on high profile mergers have pushed up the European telecoms index, lifted companies' shares and helped investors decide on their move. Her knowledge and experience of European antitrust laws and developments helped her broke stories on Microsoft, Google, Amazon, numerous market-moving mergers and antitrust investigations. She has previously reported on Greek politics and companies, when Greece's entry into the eurozone meant it punched above its weight on the international stage, as well as Dutch corporate giants and the quirks of Dutch society and culture that never fail to charm readers.

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Shipping industry urges UN to protect vessels after Iran seizure

Merchant ships and seafarers are increasingly in peril at sea as attacks escalate in the Middle East and the United Nations must do more to protect supply chains, the industry said in a letter released on Friday.

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