Cash Flow in Your Network Marketing Business

I was listening to a recent webinar, when I heard a statistic that the average person stays in their network marketing business for 63 days.   The number one reason for this figure, was a lack of cash flow in their mlm business.   Today I want to talk about the importance of cash flow if you are going to truly build a long term network marketing business.

Let me help you quickly see why cash flow is so important by using this hypothetical illustration.  Joe and Sally join XYZ network marketing company, after attending an opportunity seminar at a local hotel.   Joe and Sally have been given a blueprint to follow by their upline recruiter that includes the following steps:

1. Set up an autoship order
2. Attend the weekly team meetings
3. Attend the quarterly business conferences led by XYZ
4. Conduct at least one home meeting each week for prospective customers
5. Purchase training materials and motivational resources

Seems simple enough doesn’t it?   Now let’s consider the cost of those things.

1. Set up an autoship order  – $150 per month
2. Attend the weekly team meetings – $30 per month for gas
3. Attend the quarterly business conferences led by XYZ – $300 for lodging, meals and fuel
4. Conduct at least one home meeting each week for prospective customers – $160 per month for snacks, handouts, etc…
5. Purchase training materials and motivational resources – $100 per month

Now this is an overly simplified illustration that doesn’t take into account things like printer ink, business cards, web hosting, advertising expenses, etc…  In our illustration, the monthly expense of operating this business is $540 per month.   The funding of this expense must come from Joe and Sally’s cash flow and if there is no cash flow it must come from their pockets.

Many of those who enter into network marketing are entering the business, because they are trying to lessen some of the financial pressure that is already upon them.  If they do not have cash flow from their mlm business, then that money is coming out of their pockets, or even worse requiring them to accumulate debt.  It is imperative that anyone involved in an mlm business opportunity learn to create cash flow if they are to successfully build a long term business.

In my next post of this series I will give you the number one strategy for creating the cash flow necessary to build your network marketing business for the long term.