Starting a Business
Pros
When starting a business, you have complete control over your brand, marketing, products, and pricing. You can work on your business at your own pace and on your own terms.You can also set your own schedule and work from anywhere, depending on your type of business. This can give your business more flexibility, and a successful business can lead to unlimited earning potential. Starting and growing your own business can be incredibly satisfying and fulfilling.
Cons
Starting a business can be a high-risk endeavor, and there is no guarantee of success. Now, depending on the type of business, it can require significant upfront costs, such as product development, marketing, and other expenses.Starting a business can require a lot of time and effort, and it may take months or years before you see any profits. As a startup, you may not have a built-in support system, and you may have to learn everything on your own, like billing and management.
Joining an MLM
First, let's go over what exactly a multi-level marketing business, or MLM, is. An MLM is a business that either sells a product or a service through a pyramidal organizational structure. These salespeople are commonly referred to as “distributors”, “contractors”, or “representatives”, depending on which organization they belong to. Some notable MLM companies are:Participants in the MLM are encouraged to recruit more salespeople. Those you recruit are called your “downline” and you typically earn a commission from every sale from the recruit. Conversely, all the recruiters are called the “upline” and get certain perks.
Pros
Joining an MLM tends to have lower start-up costs, making it an attractive option for people with limited financial resources. MLMs often have a built-in support system, including training and marketing materials, as well as a community of like-minded individuals.Like starting a business, joining an MLM can offer flexibility in terms of working hours and location. Many MLM companies offer opportunities for growth, including incentives and rewards for reaching sales goals, more so for the upline individuals I mentioned before.
Cons
When joining an MLM, you are often restricted in terms of the products you can sell, pricing, and marketing materials. While some MLMs offer the potential for high earnings, many participants report that they make very little money or even lose money. MLMs often rely on personal networks to make sales, which can limit the potential market.Many MLMs have rules against how you can market your services, like advertising or digital marketing, although many are embracing online selling as the only means of reaching a wider audience. MLMs tend to have an unsavory reputation for being pyramid schemes, which can make it difficult to attract customers and build a brand image. If you are looking for funding to start up, SBA has regulations that deem MLMs ineligible businesses to qualify for SBA loans.
Conclusion
Starting a business and joining an MLM both have their own advantages and disadvantages. It's important to consider your own goals, resources, and personal preferences when deciding which path to take. If you are looking to start a new small business, give your local SBDC a call and get 1-on-1 help to get your business idea off the ground.
Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.
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