Start Your Own MLM Company: Should You Do It?

Do you want to start your own MLM Company?

It sounds like a sexy idea. You don’t need to sales reps or pay for advertising. Just offer a few products, set up a website, create a compensation plan, and distributors will magically find your opportunity, get involved, and make you rich.

Yeah right! One of the reasons so many new MLM Companies pop up each year is because naïve owners think it is an easy way to riches. It’s not!

MLM is a beast. It’s a complex industry. Most MLM Companies DO NOT survive to the one-year mark, just like traditional businesses.

However, if you are still considering the MLM Arena, this article is for YOU!How to Start Your Own MLM Company

Considerations Before Starting a MLM Company

There are key factors each entrepreneur must consider before starting a MLM Company.

# 1: Do you have passion? Are you doing this just for the money, or are you wanting to impact people’s lives and make a better world?

# 2: Do you have a unique product or service? While you may have a similar item as other companies, does your product or service have something different that makes it stand out?

# 3: Is what you are offering safe? Is there any chance of lawsuits because someone was hurt or fell ill using your product?

# 4: Do you own proprietary rights to your product? If someone can make an item that is a “knock-off” and sell it much cheaper, what will happen to your company?

# 5: Do you have partners or people in place to help you? It is important to know that no one has started a successful MLM Company as the lone ranger. You will need systems and employees.

# 6: Do you understand multilevel marketing? Have you been involved in the business format? Do you understand the rules and regulations that apply to the industry?

# 7: Do you understand all the aspects of good leadership? As the leader, you will delegate. Do you have a plan in place of how you will lead your team of corporate employees?

# 8: Do you have a good funding source? It costs a lot of money to get a MLM up and running. Do you have the funds or the means to get the funds?

# 9: Do you have a “brand” plan? You need a name and a logo. These are valuable intellectual property.

# 10: Are you cut out or qualified to be an entrepreneur? Being an entrepreneur is not for everyone. Only you know your qualifications, skillset, mindset, and experience. Are you strong enough to handle the stress and financial challenges that come with starting a business?

These are just a few of the important considerations. If you answered yes to most of these questions, you may be the next successful MLM Company founder.

How to Start Your Own MLM Company

In the paragraphs below, I am going to go through the steps of how to start your own MLM Company.

Please keep in mind that I am not an attorney. Also, I cannot guarantee your success. Many businesses fail even by following protocol. Individual results will vary.

The information you see in this article comes from a variety of sources (see reference section below). The best information is coming from MLM attorneys. One of the best is Kevin Thompson. He has a plethora of information on his website. I suggest you visit his website if you want to start your own MLM company. You can see his website here.

starting your own mlm companyStep # 1: Soul Searching, Talk with Mentors & Family

Before you start your own MLM Company, you need to do some soul searching. Are you really cut out to be an entrepreneur? Are you qualified? Do you have the mindset and skillset? Is your spouse supportive?

What do your trusted business advisors think about the idea? Is this something you can commit to for five or more years, even if you don’t make a penny of profit?

Step # 2: Pick a Product Line

Put a lot of thought into this topic. Brainstorm a bunch of different ideas. Whittle your list of potential product lines down to your top three to five choices and then do intensive research on each type of product or service.

Look at the competition, potential sourcing, trademarks, etc. You want something unique, in mass market demand, and at a price that will sell and give you good profit margins. You also want to make sure that your product will not fall into FDA violations or have any potential issues that could result in lawsuits.

Step # 3: Find a MLM Attorney

A good MLM Attorney can help lead you down a straight path. Plus, they usually have contacts that can help you create a successful business. Your attorney can explain the business licensing procedures for your MLM Company. They can also explain the tax information you need to know about. Plus, this attorney can assist with explaining about possible legal issues that I mentioned in step #2.

Step # 4: Register Your Business & Get Licenses

Your MLM Attorney should also be able to help you with this step. Depending on your location there are different formats. If you know a business owner, it may be wise to “pick their brain” about this subject.

Step # 5: Find a Manufacturer or Wholesaler

In many cases, you can have your logo and brand labeled onto a product. This is known as private labeling. Several great places to research potential wholesalers for the product you desire are:

  • National Association of Wholesalers (
  • and the Thomas Register of American Manufacturers (you should be able to find it at your local library).

Call wholesalers and ask if they offer drop-shipping. This can help your keep inventory low.

Step # 6: Set Your Prices

In doing so, you will want to keep in mind the commission structure you will use. You will also want to research the competition and see where their prices are. You do not have to put a lower price, but you must be competitive.

Step # 7: Develop a Commission Structure

There are many types of compensation plans. You want a compensation plan that offers front-end and back-end money. It should be fair and balanced for the part-timer and professional. It should also offer decent profits for RETAILING the products. Finally, make sure the compensation plan is simple and easy to understand.

Step # 8: Install Network Marketing Software

I suggest you look for a tried and true software program that will cover your needs completely. In researching network marketing software, I found several that you may want to research:

  • Affordable Mobile MLM Software
  • Pro MLM Software
  • Multisoft
  • Plexum

These are just a few. There are many more MLM Software Companies, so do your research and find the software that will work best for your needs.

Step # 9: Launch Your Company

The next thing you want to do is find a master distributor so you can launch your new company. Try to find 1 to 12 experienced network marketers with proven success for this position. Also, you want to invest some time and money to do the launch properly. This is one area you can’t afford to mess up. How you “launch” will play a big role in whether your company survives.

Tips for Raising Capital

There are many costs involved in starting a MLM Company. I have heard estimates of $200,000-$300,000 to get it rolling with $1 million or more being normal. If you do not have adequate cash reserves yourself, you must have a plan on how you are going to raise that capital.

You can use your own money, take out loans, or seek investors. It’s your choice.

Just realize that when you borrow money or seek investors, you are giving up some control in your business. If you’re okay with that, great.

so many new mlm companies each yearExpand Your Product Line

While you may start with just a few products, eventually you want a nice variety of products to offer your distributors and customer base. 

Make it a goal to add at least 3-4 new products per year. Launch a new product every quarter. This will keep the reps in the field excited.

More importantly, ensure the products are top quality, unique, and priced fairly so they are easy to SELL.

Your company doesn’t need to have hundreds of products, but most top companies I’ve studied have minimum 50 to 100 products.

Grow Your Sales Force & Company

Once you make it past the first year in business, you want to focus on growing your sales force and company by focusing on the following things:

  1. International expansion
  2. Systems for employees
  3. Annual Convention and regional training events
  4. Form a Board of Advisors consisting of your top reps to seek input from the field
Final Thoughts

In conclusion, multilevel marketing is an excellent business model. With the correct approach, you can build a phenomenally successful dynasty. But with the wrong approach, you could find yourself facing legal challenges and bankruptcy. This is why it’s vital to consult with a qualified MLM Attorney.

There are many educational materials you can read and study on starting a MLM Business; just search for them in Amazon. I also suggest you study other MLM Founders. Interview them, read their bios, and learn everything you can about their experience. In many cases, you can contact them, and they will mentor you.

Let’s reiterate:

  • A dream
  • An attorney
  • Products
  • Key people
  • Pricing
  • Commission structure
  • MLM software
  • Training
  • Advertise
  • Enjoy life

If you want to start your own MLM Company, please leave a comment below to let us know about it. Remember, we are not attorneys and this information is for educational purposes only. Individual results will varyThank you for visiting. All the best in your new endeavor.


  1. MLM Attorney
  2. Network Marketing Company
chuck holmes


Chuck Holmes
Network Marketing Professional (since 2002)
Author, Blogger, & Entrepreneur

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