As we all know, To start an MLM Company, You need to choose a Plan. The plan is basically used for people who join or run the MLM Company. Let’s talk about how to design a suitable business plan for your MLM company.

There are many types of Business Plans to use in MLM Company. Binary Plan, Uni-Level Plan, Matrix Plan, Generation Plan, Hybrid Plan, and many more are currently running in the Market. All the plans have their own different and unique features, benefits, and limitations. Let’s not get too much into it for now. But the main thing you should know before starting your MLM Company is to choose the correct Plan. There isn’t any magical thing that can grow your business by choosing any kind of plan. These Plans are used to maintain your company structure and make it easier to run it. But the complimentary of Product and Plan can make it possible. It means the chosen Plan should match the nature of your product or we can say the type of your product.

Let’s Understand Different Product As Example

(1) Regular Consumable Product

You have a product, like having “Soap”. The nature of your product’s consumption is regular. So, we can assume that there are 4 people in the family who use soap regularly. Each of them uses 2 soaps in a month. So, by calculating it this family needs to buy 8 soaps every month. If we take this example into consideration. So, we need to choose our Business Plan in which people can be attracted by our Plan and Product.

(2) Digital Product

 You have a digital product like having an “Online Education Courses”. Basically, this kind of product is not regularly purchased. Because once you read or learn all the courses, why would you Re-purchase it right? 

If you have this kind of product, you need to select a Plan that can mainly focus on new sales and joinings.

(3) Now Think, If You Have A Product Like “Clothes”

This is the product that can be Re-purchased or can not be too. It totally depends on the Buyer. Even If the Buyer wants to purchase 2 times more and/or less in a month. So, If you have this kind of product you need to create a plan according to this. 

Which MLM Plan You Should Choose?

If you ask me about choosing the correct Plans. For the Regular consumption Product. Generally, In the current market scenario people use MLM Binary plan, Generation, or MLM Hybrid Plan again it totally depends on the product you have. For the Single time Product, People use Binary, Unilevel, or MLM Matrix Plan. 

Many people have questions about choosing the best Business Plan for their MLM Company.   They ask, If I want to start an MLM Company Which Plan should I choose?? So, The answer is each Plan is good and attractive to choose/use. Whichever Plan You Choose is the Best. Because You are the Director or Owner of your MLM Company. The key management person who can make it execute for people. Because MLM is a Business of Duplication. It comes from the concept of Top to Down working process. So, to run this, firstly you need to be comfortable with the Plan and work. 

We have seen many companies in the market. Which have the same kind of products and plan but still few of them are running successfully and other ones just fail miserably. So, you must think, Why is it so? The fundamental reason is, The one which is running successfully comes up with a properly developed plan and executes it with a good strategy. They know very well the fundamentals, benefits, and limitations of their Business plan, products, and market standing.  And on another side, the one which fails may be started by seeing someone’s plan or product or by assuming some realistic examples. 

Do you think there is any perfect formula for creating any Business Plan? No, The Business Plan totally depends on factors of your company. Like Product, Legality of Plans and incomes, Margins on the sales of products, Logistic management, Previous experiences, Market trends, Target audiences, and many more.

Points To Make Sure Of When You Are Making Your Business Plan:

(1) PROFITABILITY

Profitability is not about how much Profit you’re getting. Generally, 90% of the people who are starting MLM Company have already worked previously in other MLM companies. So, they might have an idea that If it worked for them then maybe It’ll also work for me too. Don’t do that. Because that plan might be designed based on their calculation of margin, On product price, How much quantity they purchased and other details too.

In that way, it may work for them but It doesn’t mean that it’ll definitely work for your MLM Company too. So, you should design the structure of your Business plan according to your profitability. Now, Let’s assume that if you found some good points of any plan from another MLM company, you can grab those points and accommodate them as per your profitability. Like Product, Legality of Plans and incomes, Margins on the sales of products, Logistic management, Previous experiences, Market trends, Target audiences, and many more.

(2) MARKET TRENDS

Market trends are about products that are highly in demand. Generally, people who are desiring their Business plan while starting a new MLM Company, Compare with famous MLM companies’ Business plan which is already successful in recent times. Basically, It’s a two-way process, each and every plan will make success and failure. 

So, never make a mark on your mind that this plan in the market is working well and this plan is not. But yes, you can grab some good and working points from any Business Plan. 

Market trends change at some particular time. So, you have to study the market trends but it doesn’t make any sense that this plan will definitely work. The attractiveness of the product is important for researching any market trends. And the stability of your Business Plan is important.

 Always remember one thing, Even if you distribute more, There will always be another company that will distribute more than it. Let’s assume that you are distributing 80% from your company. There will be another company that will distribute 85%. It means the attractiveness and stability of your plan are always on the same balance. 

(3) LEGALITY

Here, Whenever we talk about the Legality of any Business Plan, It is always with a  reference to the direct selling guidelines 2016 and state guidelines. Now, when you read the guidelines, Nowhere is it written that any Business Plan is legal or illegal. If anyone tells you that any particular Business plan is illegal or legal, You must always ask, “ Why? ” 

 There are many companies running in the market which are working on legal Business Plans and many are working on illegal Business Plans. So, you might have 2 questions. The first one is What is actually written in guidelines. and the second one is How to determine whether our Business Plan is legal or not. So, Let’s address each question one by one. 

There are 3 definitions provided in the guidelines.

• What is legal direct selling?
• What is a pyramid scheme?
• What is a money circulation scheme?

And to answer the second question, Any Business Plan falls under the definition

The Pyramid Scheme and Money circulation scheme is illegal and any Business Plan falls under the definition of direct selling which is following the framework of guidelines is legal. 

When we create a legal plan, we work in 3 phases.

• The base of the plan
• Ways of Providing/Executing Income
• Language of the plan

Many times people think that if they change the names of incomes it’ll become a legal plan. That doesn’t work every time. Even if you change the name of income, The execution process is the same, it’s illegal.

Now, When you decide which of the Business plan is current for your Company. You need to Calculate some mathematical modules of your Business Plan.

The calculation of the plan is the most important and significant aspect of the business plan. There are 2 types of calculation in any plan:

1. Fix (Definitive) Calculation: When any new sale occurs in a company, A fixed amount of money that is going to be distributed in different kinds of incomes will be calculated in Definitive calculation.
2. Speculative Calculation: The amount of money distributed in different incomes based on the distributor’s network structure will be calculated in the Speculative calculation. In the speculative calculation, one needs to determine the tolerance of a business plan and how much speculation a business plan can withstand.

Now you’ll need to determine whether a Definitive and/or Speculative calculation will be needed in your plan. Once it’s determined you have to apply appropriate mathematical modeling to complete the needful calculation. There are big chances for companies to make heavy losses if you don’t calculate properly.

After calculation, You need to map those calculations based on practical data of MLM software. So, that you can verify whether your business plan is working as it was supposed to be.

The legal advantage of calculation is you can prove that in order to complete today’s liability, you don’t need to be dependent on the sales of tomorrow. If you’ve to depend on tomorrow’s sales, It’ll be Money circulation. So, by calculating the plan, you can prove that your plan is not Money circulation. 

QUESTION: Do We Make A Plan By Ourselves Or Should We Consult Experts For This?

ANSWER: Neither you make this plan by yourself nor by consulting experts. You should make a Business Plan by communicating with each other (you and the expert) as a team. We need experts because they have a more theoretical understanding, the overall look out of the plan, market feedback, and the idea of necessary mathematics. While you also need a plan you’re comfortable to promote and execute in the market.

This is how you design a suitable Business Plan for your MLM Company. We discussed many of the topics from start to end. It covered Examples for better understanding, How to choose a plan, How it works, How to decide whether it is legal or illegal, Aspects to consider while designing a plan, Important aspects of calculations. 

Hope this article helps you to understand more about How to design a suitable Business Plan. If you have any queries, feel free to ask or contact us.