I receive many calls weekly from people wanting to start up a new MLM company. They come with the typical claims of how they are different from everyone else, and that they will be the greatest and biggest MLM company of all time. While they may be terrific marketers, and have terrific ideas, many of them have one common drastic problem; they are severally undercapitalized.

People need to realize that network marketing, or MLM, is no different than a typical business, in that you need to have sufficient working capital to supply your basic business needs. Usually companies that start on a shoestring, end up tripping on that same shoestring falling flat on their face. Far too many people think that because network marketing is an Independent Sales organization based marketing mechanisms, they can just get started with no money.

In this age of technology, people believe that with a low cost website, with no back up support staff or legal protections, they can start a new company. The basic premise that I hear all too often is, “we will take care of those things after we get some money in from sales.” This is simply not sound business operation and is a recipe for disaster.

Many well-established MLM companies have had regulatory action commenced against them, not for their current operations, but for their unsound business practices at start-up and beyond. The highway is cluttered with failed companies fitting this business pattern.

If you are planning on starting a Network Marketing business, prepare as you would any new business. Prepare a quality business plan, establish your costs and expenses, review the plan with an accountant, review the plan with a qualified attorney, and be prepared for unexpected contingencies. Plan to succeed.