Today, I want to talk to you about the four stages of your MLM Business.
I think this is an important concept to teach people, because most people in our industry don’t understand the different stages of building a business.
Most people joining our industry have never owned a business before, so they have an employee mindset and struggle with this idea. As a result, many people who join our industry have unrealistic expectations and don’t have any rational idea about how long it takes to build a successful business of any kind. I hope to change that.
I personally believe that knowing this information upfront can keep you in the game longer and give you a better idea about what you really need to do to build a successful network marketing business.
Keep in mind these four stages apply to most types of businesses, not just network marketing. My eBay business has gone through similar stages. So have my blogs and websites.
The Four Stages of Your MLM Business
I’ll start with stage one and work my way up to stage four.
Stage One: The Excitement Stage
Stage one with your network marketing business is when you first get started with your MLM Company. I like to call this stage the excitement stage.
You’re excited. You can’t sleep at night. You think about your business all of the time. You’re passionate about the products, services and/or business opportunity. You’re ignorance on fire. You don’t know much about the business, and you have a lot to learn, but you have over the top enthusiasm and hope.
This is the stage where people are the most excited about the possibilities of what their business has to offer them. Keywords to describe this stage include lust, enthusiasm, excitement, hope, and passion.
During this stage you typically earn very little money in your business (less than $300 per month in most cases). You’re building your business foundation. You’re sponsoring lots of new people. You’re looking for your leaders.
You’re developing your leadership skills and learning while you are in the trenches. In many cases, you’re the only one on your team that’s working hard.
This stage typically lasts anywhere from 30 to 180-days. It varies from person to person.
Most people who join our industry do not survive this stage. From my own experience, I’d bet that 50% to 80% of the people who join our industry never make it past this stage.
Once their excitement fades, they quit the business and move on to chase the next shiny object or return to their comfort zone (their job or career). Most people in this stage earn between $0 and $300 per month, although some do earn much more.
During this phase you are a shepherd without a flock. You have a team of followers. During this stage your team typically has 0 to 100 people.
Stage Two: The Middle Mile
This stage begins once your initial excitement fades OR you’re earning at least $1,000 per month, whichever comes first. Either one of those two things will initiate stage two.
Most people have had their business for 6 to 18-months before this stage begins.
I like to call this stage the MIDDLE MILE. Keywords to describe this phase include burn out, disappointment, despair, and frustration.
During this phase you’re typically making some money, but you’re working really, really hard and not seeing much of a return on your time investment.
You question your sanity. So does your spouse!
You’re sponsoring people, but you have very little duplication on your team. No one is doing anything. You are the one doing most of the work.
If you’re lucky you might have one other serious person on your team, or a couple of potential leaders, but in most cases you have very few people on your team sponsoring new people each month and taking responsibility of their own business.
This is the phase where a lot of people throw in the towel (if they didn’t already do it in their first 90-days).
This stage can last anywhere from two to four years, and sometimes even longer than that. For a few people, it won’t last that long, but for most people it’s going to be a long, dark journey during the middle mile!
During this phase people often ask themselves “why am I doing what I am doing?” or “how come I’m the only one doing all the work?” or “why can’t I find other people who are willing to work as hard as I am?” or “how come I’m only making $1,000 per month, but I’m working 20+ hours per week on my business?”
Most people in this stage earn between $1,000 and $2,500 per month. During this phase you’ve found a flock and you are a shepherd of sheep. During this phase your team typically has 100 to 1,000 people.
Stage Three: Momentum
Very few people in our industry stick around long enough (or do the work) to make it to this third stage. But the ones that do are glad that they did!
This stage begins when you have 10-20 good leaders in place in your team OR you have at least 100-200 new people being added to your group every month.
Normally, you will have 1,000 to 2,000 people on your team before you begin this stage.
Most people who make it to this stage have had their business for two years, minimum, before this phase begins.
I like to call this stage MOMENTUM. Keywords to describe this phase include critical mass, duplication, explosion, and rapid growth.
During this phase your business (and bonus check) grow significantly each month. You have lots of leaders and people in your group and your team takes on a life of its own.
You’re still personally sponsoring 2-4 people per month (minimum), but most of your time is spent mentoring others and working in depth.
You’re training people, leading calls, hosting events, and coaching people. You’re assisting your leaders and developing other leaders in depth.
This is the stage where the business becomes fun and very profitable. This phase can last for three to five years, and in rare cases, even longer.
During this stage you are still very busy in the business, but your major focus is building depth and developing leaders.
This phase provides significant income, normally a low to mid six figure annual income. Most people in this stage make $10,000 to $30,000 or more per month.
Stage Four: Maturity
The fourth phase beings once you have 20k to 100k people on your team. Your business matures and your income is large and stable. It grows by 5-10% or more per month, with or without you.
Your key leaders are in place. You have 2 to 5 rock solid legs with many leaders in each leg.
During the maturity phase you are a shepherd of shepherds, a leader of leaders.
You spend most of your time working with your best 10-20 key leaders on the team, and then they go out and lead their own armies.
You might be still personally recruiting people, but in most cases you have transitioned to the mentorship role.
For example, my friend has been with his company since 1996. As of 2019, his team adds approximately 35,000 new people to his team every single month. And he is inactive/retired in the business. Chew on that! He doesn’t do anything to grow his business. He just cashes the check and enjoys life. That is what a mature network marketing business looks like.
Most leaders who hit this phase worked in the trenches really hard for 5 to 10-years to get to this point. This is when you really have walk-away income.
Some of these distributors retire from the business and just cash the checks. Others continue to work full-time because they love it. Others work less and enjoy the money, time, and lifestyle the business provides.
Of the few people who make it to this phase, they might earn anywhere from $50k to $100k or more per month!
Video Overview
Final Thoughts
In conclusion, these are the four stages of your MLM Business, as I see it. If I was to look at all of the different businesses I’ve ever owned in the past (not just MLM) I could tell you that all of my businesses went through similar stages.
Building a successful business of any kind takes a lot of time and a lot of hard work. It’s not for the feint at heart.
The key from moving from one stage to the next is to have a vision, a game-plan, take massive action, and to be persistent and consistent.
Work on your business every single day, focus on the money producing activities and never lose sight of your goal!
What are your thoughts about the four stages of your MLM Business? What stage are you in with your network marketing business right now? Leave a comment below to let me know what you think. I look forward to hearing from you. Have a great day!
Suggested Reading
- Top MLM Companies in the Philippines
- 10 Reasons to Join LiveGood
- How to Automate Your MLM Business
- 34 Ways to Get Leads
- Top MLM Cleaning Products
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Sincerely,
Chuck Holmes
Network Marketing Professional (21+ years)
Top Recruiter & Top Rep
mrchuckholmes@gmail.com
I have been so inspired by your posts
That was very simply put and I believe that a key factor is not letting that first stage get you too far ahead of yourself. I think it is the excitement stage that is the primary culprit in people quitting. They often receive expectations far beyond what they truly can do or be. Network Marketing is not a lottery; we must work hard to achieve success. I also believe that in the momentum stage, a person should never slack on sponsoring people. Yes, we need to mentor the ones that are involved, but we should always be getting more.
Very good post Charles.
I have to agree with you Greg. In discussions I have had with people who left other network marketing opportunities, the common thread seemed to be overly idealistic expectations that did not match the reality. Sometimes this can be the result of fraudulent people who mislead just to get people to join their team. Sometimes people just formulate these grandiose ideas on their own. That is why it is vital we are as honest as we can be about the next steps and the process so that when the excitement phase ends people know what to expect and can work hard to get to where they want to be.