Introduction

In our digital world, the lines between work and play, and personal and professional life, are blurred. Work follows you home, and play follows you to the office. As a result, multi-level marketing (MLM) and online purchasing have become prominent industries, changing the face of marketing as we know it.

An MLM business gets its name because it involves multiple levels of participants. Typically, you have a few large companies that fund and take on the responsibility of recruiting members, or distributors. Members then receive digital marketing materials and training on how to promote and sell the company’s products. In return, they get a share of the company’s profits. For the purposes of this article, we’ll refer to these businesses as ‘multi-level marketing (MLM) businesses’.

The rise of the MLM business can be attributed to a combination of factors. First, the information and technology available to make digital marketing more effective and efficient means more individuals can participate, even if they aren’t professional marketers. Second, the sharing economy has led to a decline in the traditional, one-dimensional buyer-seller relationship. In the past, buyers and sellers would communicate, negotiate, and maybe even meet in person to close the sale. Now, they might engage with each other purely through electronic means.

Why an MLM Business?

The sharing economy has disrupted almost every industry, including marketing. However, the rise of MLM is particularly significant in light of the above factors.

Thanks to technology, it’s much easier to build and administer a remote team. Furthermore, with the sharing economy, expectations around customer service and loyalty have changed. The digital nomad lifestyle has led to individuals looking for ways to monetise their skills and knowledge while also providing a sense of community and autonomy through their work. In other words, they want to be ‘co-founder’ or ‘co-owner’ of a business rather than just an employee.

In the case of MLM, the appeal is twofold. First, you get to work from home and be your own boss. Second, you get to build a team of loyal customers who can help you promote and sell the company’s products. In exchange for taking on this responsibility, you get to enjoy the benefits of a steady income and potential for residual income.

An MLM business can be a great choice for those seeking to follow a lifestyle reminiscent of the “golden age of television’, as popularly characterised by writer Christian Lefebvre in his book, ‘Television: The Good, the Bad, and the Ugly’.

Television in the ‘50s and ‘60s was considered a luxury that only the wealthy could afford. With the rise of the medium, however, came a wave of creative entrepreneurs who saw the potential for change, as well as financial opportunity.

“I think that the whole idea of luxury goods is changing,” said Barbara Fishwick, an independent historian who has published a book on women and business in Britain during the post-war years. “In today’s world, everyone can afford a good set of earphones or a nice pair of sunglasses, so why pay a lot for a fur or another type of expensive cloth when you can make the same thing yourself? I think that entrepreneurial women have always been there, but I think that the opportunities have increased with the rise of the sharing economy and with technologies that mean people can work remotely.

The Four-Step Process of an MLM Business

The need to simplify and streamline every stage of the business process is at the forefront of every entrepreneur’s mind. This especially pertains to MLM, where you’re looking to grow a remote team in a short period of time.

The four-step process that makes up the MLM business model is as follows:

1. Identify the need

As a marketer, you’ll be looking for a product or a service that you feel will solve a problem for your target audience. You can also use your marketing research to create buyer personas.

You need to consider a couple of factors when doing this. First, what is the current state of your industry? What are the trends and issues that your product solves? Your target audience’s problems and unmet needs. Second, what are your finances and resources (time and money) at your disposal?

Answering these questions will form the basis of your pitch to potential participants in your network.

2. Find the solution

Once you’ve got a clearly-defined need, you can begin to look for a solution. This can be done through detailed market research, or it might involve talking to industry experts, examining competitor offerings, or even just brainstorming with a couple of friends. In terms of marketing, you want to create a shortlist of solutions, and then narrow it down to the few that are most suitable for your target audience. Your choice of marketing method will depend on your particular situation, but you might decide to combine various types of marketing to reach your audience more effectively.

3. Choose a name

Having a name for your business is a crucial step, especially if it’s a brand new venture. The name you choose should be short, easy to pronounce, and memorable. You also want to work with a legal team to ensure your chosen name isn’t already registered by another business. Finally, make sure that your chosen name isn’t the same as, or similar to, any other company or product. You don’t want to run into trouble with trademark issues later on.

4. Register your business

Once you’ve got a short-list of suitable names, you can begin the cumbersome process of registering them with the local government. Depending on your industry, you might have to register with a Professional Regulatory Body as a condition of doing business. Always check the small print before you begin advertising so that you don’t accidentally violate any trademark or copyright laws. You don’t want to discover that your business has been barred from using certain marketing techniques because it violates a company’s intellectual property rights (patents and trademarks).

Creating a Business Plan

You have a business idea, a name, and you’ve started to form a network. Now it’s time to put it all down on paper. Although this might seem obvious, creating a business plan isn’t like writing an academic paper: it’s not a dry, sterile exercise. Instead, you’re writing a living document that will evolve and change as you go along.

You need to start by drawing a line under all the ‘coulds’ and ‘shoulds’ of your plan. Instead, focus on all the ways in which you will succeed. Use as many resources and opportunities as you can to make sure your business idea comes to life. Create a business plan that will satisfy future investors, lenders, and other interested parties. Finally, make sure that you tailor your business plan to the needs of your network. As your network grows, so does your business plan. Take time to rewrite it whenever necessary.

The business plan should include the following sections:

Executive Summary

The summary is a concise description of your business. Include key details around the name, the product, and the address of your business. Include the website if you have one.

Overview of Products and Services

Here, you should include a description of each product or service you’ll provide. Be very specific and include any relevant details (such as production times, material requirements, etc.).

Market Analysis

The market analysis is crucial for any business – it defines your target audience, and forms the basis of your marketing and fundraising efforts. In the case of MLM, your target audience is other members of your network. You’ll begin by identifying existing competitors. You want to choose a niche or category that isn’t already dominated by a few big companies. The analysis should include the current state of the industry, previous industry experience, industry trends, and factors influencing consumer behaviour.

Operations

The operations section should include everything necessary for the business to function. This might include things like a personnel section (with an eye to recruiting the best people for your team), a procurement section (to source materials and equipment), a logistics section (to facilitate the flow of goods and information within your company), and a financial section (to analyse your company’s finances and project future earnings).