I had a great conversation with a successful network marketer and close friend yesterday (Herb). He asked me if I could write a post about “what you should do if your MLM Company closes or shuts down” so I figured I would do him a favor and write a post about it. I figured other people would be interested in this topic as well.
I should start out by telling you that most companies fail, inside and outside of the network marketing industry. Building a successful, long-term company is a challenging task in any industry. Just ask any entrepreneur!
Drive through any town in America and you will see what I am talking about. Not only are there empty office buildings everywhere, but most of the businesses that are around today weren’t there five years ago. And five years from now, most of the businesses around will be different businesses than the ones that are there today.
Even in the network marketing industry, many companies don’t make it to the five year mark, let alone the ten or twenty year mark. That is one of the biggest reasons I am a huge fan of working with established network marketing companies. They’ve already gone through the growing process, worked through the kinks, and prepared themselves for long-term growth.
I’ve heard countless stories through the years of people who spent years building a successful downline in their network marketing company, only to have their company close its doors. I can’t even imagine what that would feel like for someone who has poured their heart and soul into a company. Talk about disappointment, anger, frustration and resentment.
I also have a lot of sympathy for the new or inexperienced distributor who joins a network marketing company only to have it close down a few months later. This can leave a bad taste in their mouth and make them vow to never do network marketing again.
The bottom line is that when a network marketing company shuts down, NO ONE WINS. Distributors lose commission checks. Employees of the company lose their job. And the owners of the company normally lose millions. Our industry even takes a hit when this happens. Talk about a lose-lose proposition.
So, is it possible to avoid working with a company that might shut down one day? My immediate answer is NO. There are so many things out of your control, and even out of the company’s control to say it could never happen.
That being said, I would tell you to pick your company wisely. Do your homework before you join a network marketing company and don’t join a company that is less than five years old (just my thoughts).
Furthermore, what can you do if your MLM Company closes its doors for good? As I see it, you really have three courses of action. That’s what I’m going to talk about in the rest of this post.
# 1 Leave the Industry for Good
Your first course of action is to leave the network marketing industry for good. Many people will choose this route, especially new distributors or people who didn’t earn a lot of money with their company. Because of their inexperience, or lack of belief in the industry, they might think this is the norm in our industry.
After working with a company for any period of time, and it closes its doors, the distributor might have a bad taste for network marketing and vow never to do it again.
Before you choose this course of action, I want you to know something. Most successful entrepreneurs (in any endeavor) failed several times before they became successful. Success is seldom a straight line and very, very few people are successful in their first business venture.
Although you might be disappointed with your network marketing company and with the industry for letting you down, I don’t think this is a very good course of action for most people.
# 2 Spend Three to Six Months to Decompress
Another common reaction might be to do nothing right away. Just take some time and decompress, collect your thoughts and evaluate your experience. Spend some time thinking about why the company failed, and how you could prevent this from happening to you again in the future.
I believe that every experience can be a learning experience, IF you take the time to reflect on the experience and look at it objectively.
Personally, I believe this is the best course of action for most people. Spending 90 to 180 days to reflect on the experience is much better than just jumping ship and joining a new company right away, or leaving the industry for good (as I see it).
# 3 Find a New Company Right Away
The last course of action is simply to find a new company right away. Maybe you were already promoting multiple companies. Maybe you already had your eyes set on another company. In either case, even if you’re thinking about joining a new company right away, I would at least spend a few weeks to analyze several companies, so you have something to compare it to.
Believe it or not, teaming up with a MLM Company is a MAJOR decision, even if you don’t think of it that way. If you were going to buy a franchise or start a traditional business, I know you would do your due diligence and research before you got started. Treat your next MLM Company the same way. Pretend that you’re investing MILLIONS of dollars in it, even if it’s only a few hundred dollars to join.
Research the company. Evaluate their product line. Talk to the corporate team and some successful distributors. Find out the good and bad about the company. After you do these things, then you can make an informed decision.
Whatever you do, don’t make a rash, uneducated decision that will only lead to more disappointment.
What Would I Do If My MLM Company Closed Down?
If my MLM Company shut down today, this is what I would do:
- Take 30 to 90 days to decompress and collect my thoughts
- Research five to ten other network marketing companies that interest me
- Try out the products from each company as a customer first
- Do a thorough analysis of each company
- Talk to the corporate team and successful distributors from each company
- Pick the company that I believed offered the best products and opportunity
- Shop for a good sponsor
- Get started
I should also disclose that I am already SOLD on the industry and want to make a career out of it. Everyone’s situation is different, so don’t think you need to do what I would do.
Here are some additional questions you could ask yourself to help you through your decision making process.
- Do I really want to make a career out of my network marketing?
- What do I like and dislike about the industry?
- What type of product line would I like to represent?
- What type of compensation plan would I like to participate in?
- What did I like and dislike about my previous company?
- Why did my company fail and how can I prevent it from happening in the future?
The Most Important Lesson
Always remember this. Your network is your greatest asset. No, I’m not talking about your downline either. I’m talking about your list of names of people that know you, like you and trust you. It could be people on your auto-responder list or in your address book.
I’ve found that successful network marketers are always focused on growing their network. They’re always expanding their network, not just to build their current business, but to ensure long-term success in this industry. If you have a large network of people who know you, like you and trust you, and your company closes, it’s easy to rebuild. If you don’t have a large network, it will be a big challenge. Never forget that.
I hope you are never in a situation where your MLM Company closes its doors. Although it can be a great learning experience, it can also be very stressful and disappointing. I truly believe that if you follow the advice mentioned in this post, you can make a good decision about what to do if this happens to you.
What are your thoughts? What do you tell people to do if their MLM Company shuts down? Has this ever happened to you? Leave a comment below to share your thoughts. I look forward to hearing from you.