Over the past 17 years, I’ve worked for and with numerous MLM companies; some have been small startups while others were multi-million dollar global giants. During my time as a consultant and Project Manager at Xennsoft, I’ve worked with dozens of additional direct sales companies in this industry, all of which have varying degrees of success. As an industry insider from the corporate viewpoint, I’d like to share some of the things that you, as a potential networker and independent business owner, should look for when choosing a company.

Choosing a company with the right balance of products and opportunity can be a daunting challenge. Even if you just want a “hobby” income, embarking on your own part-time business adventure with the right company deserves some special consideration. The old adage to “look before you leap” is certainly applicable when it comes to picking the right opportunity for you. Whether you’re looking for a part-time income or a full-time income, your time and dedication to a particular “business partner” (aka the company you’ll be selling products for) should deserve your due diligence up front. After all, we’ve all experienced those “friends” that come to us every six months with a new opportunity to check out.  Nobody really wants to be part of the NFL (No Friends Left) club, right?!

So here are what I consider to be the top 3 critical things to look for in a company. These are from powerful lessons learned from observing successful (and some not so successful) companies as well as distributors over the years.

1. Stability – Your number one consideration should be the stability of the company. There is one possible exception to this, which I will explain shortly. How old is the company? How many distributors does it have? How is the company doing financially and how is it being funded? Now this doesn’t at all mean that you should rule out startup companies. I’ve known several startup companies that have gone through the roof and those that got in early were glad they did. I’m just saying that it’s important to do your homework and ask the tough questions. If it looks like it’s all smoke and mirrors, it probably is. Another thing to consider is not just how they’re doing today, but what is the  long-term stability of the company? Some “old-school” companies might be rolling in the dough in today’s climate, but where will they be in 5-10 years, especially given the recent Herbalife FTC rulings? If the company is skirting the gray areas and looks to be having some ethical or legal challenges because of their policies, it may not be the best company to partner up with if you want to keep building your business long-term.

2. Product – For most situations and for most people, product considerations generally come second after stability. However, if you discover a company with a dynamite product or service that truly works wonders for you, this could be your ace in the hole, and stability may take a backseat to the product. The reason I say this is two-fold. One, if the product really works for you, you’ll be passionate about sharing and it’s a proven fact that it’s much easier to sell something that you believe in. This especially becomes significant if the product is ground-breaking in the sense that there aren’t a lot of competing products out there. Two, if the product changes your life in a positive way (i.e. lose weight, look 20 years younger, save money, etc.), you’ll at least have the positive life-changing experience of the product, even if the company is unstable and goes out of business two years down the road. Generally though, if the product is solid, the word-of-mouth model works like it’s supposed to and those are the types of companies that experience steady growth over time, despite any other factors.

3. Compensation Plan – Let’s face it; most people join a direct sales company to earn an income. So we can’t leave the pay plan out of the equation. However, those that put the focus on the money first, before the stability and the product, generally end up disappointed. Having managed various compensation plans for 15 years for all types of companies, I can tell you that most sustainable plans pay out between 38-50% of sales volume, regardless of what they say in their marketing documents. This article isn’t about what types of plans are better than others but the key thing to look at is the fairness of money distribution between the new members and old members. How are those pennies being allocated? Plans geared heavily toward the “leaders” (old members) leave nothing to the “little guy” (new members) coming in. Plans geared heavily to the “little guy” coming in will never attract the big hitters wanting to make six and seven figure incomes. The plan should contain a balance between the two as well as focus on customers. In addition, with all the new regulations coming down the pike, it makes sense more than ever to find a company that has a safe and fair plan that will “outlast” the Fed’s (FTC) crackdown on “unfair and deceptive acts” with regards to MLM compensation.

While it’s difficult to predict the future success or longevity of any company, I believe that by looking for certain traits up front, you’ll have a long-term advantage as you build your business. I’ve outlined the top 3 things to consider when looking for a company, but watch for parts 2 and 3 of future blogs, where I’ll be discussing 6 more things to look for when picking the right company. Stay tuned!