Should You Join a Multi Level Marketing Startup?

multi level marketingIf you’re looking for a multi level marketing (MLM) opportunity, should you consider signing on with a brand new startup company that’s in pre-launch?

By startup company I mean an opportunity that is newer than, say, six months. These are what are also typically called “ground floor” multi level marketing opportunities. If you look around, you’ll find that many established MLM pros recommend going with a company and opportunity that has stood a test of time. At least 3-5 years of successful operation is pretty much a minimum in this view.

Avoiding startup opportunities makes sense for many, simply because the risk is very high. It’s pretty common knowledge that most new MLM businesses will fold and go away within a couple of years or so. The same thing is true of other new businesses, though. In our entrepreneurial system, many new ventures come out of the starting blocks every month, and many are destined to fail.

Reason for failure vary, but often it’s a matter of poor planning, bad management, or even fast growth that outstrips the company’s ability to adapt. In other cases, poor market research predicted success for a product or service that simply didn’t create the anticipated demand.

So, if you’re considering a multi level marketing ground floor opportunity, just be away of the increased risk vs anticipated reward ratio.

Without doubt, getting in at the beginning with a strong MLM business that makes the cut and goes on to become a lasting and stable opportunity carries the potential of great reward, if you are good at getting the word out and sponsoring people. There is something about “getting in on the ground floor” that is attractive to people seeking opportunity. A brand new company with a promising product or service is exciting, nobody has heard of it, and thus there is seemingly unlimited chance for fast growth.

On the other end of the multi level marketing opportunity spectrum, you can go with a company that’s been around a few years, and perhaps has even become a fairly common and recognized name. Going with an opportunity that’s over five years old does carry some advantages.

  • if the company name is known, you won’t encounter as much skepticism as you might with a brand new startup that nobody has heard of
  • there is much less risk in hooking up with an opportunity that has stood this test of time
  • your growth, while perhaps not as explosive as with a startup, will probably be more steady and stable over time

It all boils down to how much risk you’re willing to take on. Going with a new multi level marketing company can become quite a successful ride, and you can make lots of money. However, your odds of also losing lots of money is greater. If the company doesn’t make it, it doesn’t matter how many people you sponsored, the money is gone and you have to start again. I believe that for most people, teaming up with a company that has a history of stability and growth is much less risky and probably the best option. What do you think?

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Eldon Beard, Home Business Success Coach

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Comments

  1. Great question, Eldon, and one we should all ask ourselves before signing up with any business opportunity.

    I suppose if you have the time and money to spend on a new company, you might be willing to take the risk. I’m just glad there are plenty of established companies out there to choose from. I would rather not go with a company that’s been around for decades either, because too often they are “old and set in their ways.” At least, that is true of several older companies I was in, a few years ago.

    The important thing is to research a company thoroughly before joining… making certain you are very familiar with the compensation plan and the policies and procedures.

    Willena Flewelling

  2. Oftentimes, the real reasons why People don’t want dream big is because of the fear of the sacrifices it entails – the unwillingness to shed blood, sweat, and tears… the unwillingness to give up sleep or gimmicks.. the countless pains of inevitable “failure” along the way – the ingredients needed to fulfill the BIG DREAM.

    —-Dream Big! – Start Small
    —- Expert Business Formula

  3. I agree with Willena, start ups are risky business. We’ve seen a couple of them dissolve recently. For my money, time and energy I’d recommend going with a company that has a 3 to 5 year track record and even then it’s no guarantee. If you have the make up to be a network marketer then go with the one most likely to be with you for the long run.
    RICK

  4. I personally would never join a start up company. I do know that is where you can make the most money, but the rick to me is too high. If I ever thought about trying it, I would have to really believe in the product and know that there was a need for it. I did like the point that you said “fast growth that outstrips the company’s ability to adapt”. That happens a lot companies try to grow too fast and burn themselves out. Then everything you put into it burns up with it.

  5. Eldon Beard says:

    You wouldn’t think fast growth is a bad thing, but it has to be managed correctly and many companies have started and burned out over the years because they grew too big too fast.

  6. I am for making sure the company is stable. I have seen many friends lose their business because the company went under. I am thankful I chose a good stable company. It was about 5 years old when I signed up. I have been with them for 14 years. That ground floor thing a lot of people are mesmerized with is usually a mirage.

    • Eldon Beard says:

      Ground floor can be very lucrative if you are a good recruiter, the opportunity is stable and well managed, and you are willing to take the risk. That’s three BIG “ifs”. I believe that for most people, the risk is far greater than potential reward. While a more stable company might not seem as exciting, it’s usually the best bet.

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