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Post Tax Day Analysis

April 16, 2010

With the start of the new tax year, it’s critical to start planning for the next 365 days. I have a few questions for my readers:

For those who posted a profit with their MLM business

First off, congratulations! You’re one of the few who are profiting from an MLM business (compared with the majority of people who get involved).

  • How many years have you posted a profit?
  • What’s the ratio between your profits versus expenses?
  • Based on the amount of time that you worked the business this past year, what’s your average hourly rate?
  • Is your business projected to go up or down this year?
  • How are the businesses of your downline? Are they as successful as you are?

For those who posted a loss which their MLM business

  • How many years have you been posting losses?
  • What is the ratio between expenses and profits?
  • Based on the amount of time that you worked the business this past year, how much money are you paying out per hour to be involved with this MLM?
  • Could you have used your time more effectively were you not doing this business?
  • Is your business projected to go down further or up this year? Spare me the optimism and look at the realities of your business today when answering this question.
  • How are the businesses of your downline? Are they in the same situation as you?

As you can see, the questions are very similar for people who made and lost money. That’s because building an MLM business is just like any other business. One has to watch the bottom line, minimize expenses and maximize profits. No amount of motivation can be substituted for the work necessary to build any successful business, be it traditional or MLM.

I would argue, however, that building an MLM business is much more difficult than a traditional one, whose parameters for success are more clearly defined. Success in an MLM business often requires not only large, ongoing product sales, but intense amounts of working providing motivation. Like Dallin Larsen said at a Regional regarding MonaVie’s difficulty in reining in distributors who make false claims about its juice concentrate, “It’s like herding cats.” At the end of the day, that’s really what your upline leaders are doing, herding cats.

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