By Jay Leisner, President, Sylvina Consulting
I began my career in network marketing in 1986 when I went to work for a company that develops and sells network marketing software. My background was software development, so I was hired a programmer/analyst.
Within a few months, I was promoted to project leader. In those days, project leaders did everything for their clients. They wrote specification documents, programmed, and tested their clients’ compensation plans, mapped and converted their data, trained the users, and answered all support questions. To do a good job, it was essential that the project leader learned everything about their clients.
I saw firsthand how companies like Creative Memories, Matol Botanical, NuSkin, NSA, and Tahitian Noni grew from small businesses into multinational corporations. I also saw many companies launch and die, some more quickly than others.
During my 13 years of employment with the software company, I learned from my experience working with over 100 network marketing and home party plan companies.
What did I learn?
I learned that direct selling companies are often launched by people without the experience of having worked inside a direct selling company and that what often injures or kills a company is a lack of knowledge of what to do, and what not to do.
In 1999, I launched Sylvina Consulting, a company focused on helping direct selling companies to launch and grow their businesses successfully.
While creating a direct selling company is a complex endeavor, there are a few do’s and don’ts that everyone should know.
(1) The products or services you sell are critical to your success. Make sure that your products can be sold by your sales reps to non-participants in your income opportunity.
(2) The income opportunity is your second product. It needs to be branded and marketed like any other product.
(3) Your compensation plan is an important ingredient in your success recipe. It must encourage and reward specific behaviors. If your plan is weak, your income opportunity will be less attractive and as a result your business will grow more slowly and eventually wither and die.
(4) Follow the golden rule of direct selling – Create an income opportunity that is as easy, fun, and lucrative as possible for your sales reps.
(5) Direct selling companies need good margins. Without them, this business model will not work.
(6) Recognize that your company has a responsibility to recruit alongside your sales reps until the business has enough momentum where this is no longer necessary.
(7) Watch your cash carefully. Use financial budgets and cash-flow management religiously.
(8) Set targets for growth and monitor your progress. Whether you are ahead of plan or behind it, you will need to adjust your spending in response to where you are.
(9) Take the time to nurture the business. You can’t run a direct selling company successfully as an absentee landlord or part-time while you focus on other businesses.
(10) If you don’t have all the answers, get help.
Jay Leisner is President of Sylvina Consulting, a business and software consulting firm with more than 19 years of experience working with over 200 direct selling, home party plan and multilevel marketing companies.
For a complimentary 30-minute consultation or to request our white papers on launching and growing a direct selling company, visit
www.sylvina.com or contact Sylvina Consulting directly at 503.244.8787.
