Dr Robin Rushlo, The driving force in Network Marketing  

New businesses, for the most part, are susceptible to failure, particularly in their first five years of business.  According to the U.S. Small Business Administration, over 50% of small businesses fail in the first year and 95% will close within the first five years (although not always because of failure) http://www.sba.gov/advo/stats/bh_sbe03.pdf.  Although it is difficult to come up with hard numbers, you can be sure that the same is true of multi-level marketing companies.

So how do you balance the risk with the opportunities available?  If you get a chance to get in on the ground level of a new MLM company, should you do it?  How do you know if a company is having trouble (in other words, when to go)? 

You can use a couple of strategies when it comes to your participation in the MLM business.  First, you can look at joining MLM companies much like a stock portfolio by diversifying.  If you want to join that new company (with the corresponding high risk), be sure you have a steady stream of income from a more stable source.

You can join the new company, but be conservative about how involved you get.  Be careful about how much you are investing, particularly if you are buying multiple positions.  Don’t stockpile a lot of sales materials or products.

What are some of the warning signs of a MLM that may be having difficulty?  Probably the number one sign is when the company announces changes in the compensation plans that don’t benefit the distributor.  Have they changed how they pay out or how often?  Do you now have to do more to get the same compensation? 

Another sign is if the top distributors go, either voluntarily or by being dropped.  Yes, even though you are an independent business owner, a multi-level marketing company can terminate you.  Usually this only happens to top distributors for two reasons.  One is that they really did something bad or they are now making too much and the company can no longer afford them.  If there multiple big names going, you should be looking into what’s going on.

Multi-level companies that start adding products that are a mismatch with what they have previously carried is also a sign that something might be going on.  If your local tire company suddenly starting selling vitamins, you would probably wonder what was going on.  The same is true in multi-level marketing companies.  Sometimes the company may stay afloat, but ultimately split (since selling tires and selling vitamins are two different things). 

If you are new to multi-level marketing, or just don’t like taking risks, then stick with a company that has been around.  They probably know what they’re doing and you will have a good chance at being successful without wondering if they will be around tomorrow.

Send me an email and I can help show you a stable company and program.

Dr Robin Rushlo   drblindguy@gmail.com

“If you can't fly, run. If you can't run, walk. If you can't walk, crawl. But by all means, keep moving.” Martin Luther King, Jr.