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5 Common Mistakes in MLM Startups


You’ve created a product or multiple products unlike anything else out there. Now, you’re excited and determined to start your own successful MLM Company. We’ve provided you with several articles to help you grow and build a successful MLM business: Starting an MLM Company that Will Last and Starting an MLM Company that Will Last Part 2. Now, let’s discuss a few of the common pitfalls and mistakes when it comes to starting your business.

1. Lack of Funds

We’ve all heard the phrase, “Money makes the world go round.” In a business sense, it’s true. You have to have the proper amount of funding to jumpstart your business. Be realistic when it comes to setting budgets. Don’t overestimate, and on the flip side, don’t underestimate. Research all areas that you will need to allocate funding to and be thorough in your assessments. It’s always better to be overly prepared than to come up shorthanded. Creating your product is just the first step, and possibly the easiest part when it comes to starting a full functioning business. Start a spreadsheet and list every possible expense you can think of. Don’t forget to keep receipts to use when you file your taxes. There are many tax credits and deductions for personal business owners, and you’ll want to take advantage of each and every one.

Organic Growth vs Rapid Growth

2. Choosing the Wrong Compensation Plan

Binary, Unilevel, Matrix, Stairstep Breakaway… Do you know the ins and outs of each of these compensation plans? If the answer is no, you have a lot of research to do. Fortunately, we have written many articles that will help you determine which compensation plan is best for your business.

MLM plans: the Three Types

The Perfect Compensation Plan (Part 2)

Can You Support Your Compensation Plan?

The Perfect Compensation Plan

3. Hiring an Inexperienced Team

Half the battle is choosing and creating a team of people that will work with you and not against you. You need a team of highly trained professionals who have experience in the field, will understand the goals of the company, and contribute effectively to your company’s Business Plan.

Launch Your New MLM with Team Building

So, You are Thinking of Starting a Company: What You Need to Know

4. Selecting Inadequate Software to Support Your Growing Business

When you’re in the first couple of phases of growth, you might be able to handle the commissions on your own. However, as your company takes off, you’ll want a professional software system that can handle growth and the changes that come your way. Failure to plan is planning to fail. You don’t want to lose business because you can’t keep up with the rapid growth of a well-planned business. Hire a company that will work side by side with your company.

Finding a Good Software Provider for Your Company

Who Is The Best Software Provider?

Direct Sales Software

5. Providing Poor Customer Support Staff

GREAT Customer Service is vital to sustaining your business and your product. With the ever-increasing popularity of social media, all it takes is a few really dissatisfied customers to broadcast their negative experiences to really hurt your business. Hire and train solid staff to provide a strong customer service department that can handle the influx of calls, demands, requests, and complaints that flood in with product introduction and distribution.

These are just a few of the mistakes that are commonly made with startups. The best thing you can do is to spend a significant amount of time researching and learning from the mistakes and accomplishments of new businesses. Don’t get overwhelmed; tackle each part of your new business step-by-step. Don’t let your enthusiasm eclipse patience, caution, and proper planning. A prepared launch is a successful launch!

Mark Rawlins has written a helpful book for anyone starting his an MLM business. Understanding Multi-Level Commissions: And Their Role in a Successful Company.

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