Has it ever happened to you? A friend calls and wants to share an opportunity with a company that has great products and an excellent compensation plan. The company has “momentum” the time is now. But what’s momentum and when is the best time to join a MLM company? How do you know you are joining a company that will experience massive growth, and provide the long term opportunity you are searching for?
Contrary to conventional wisdom, timing is not necessarily critical. This is especially true if the company in question has an excellent model, is well funded and has an excellent product that truly solves problems or meets needs. Even so, joining a company during in rapid growth is never a bad thing, but you should understand all business and markets have phases and this is no less true for network marketing. And another maxim applies to network marketing as well – if you work smart and hard and follow sound business practices, you will succeed. The road to success has its hills and its dips and it is important to understand that you will experience them. The key is to enjoy the journey.
It is a generally accepted notion that MLM companies go through four growth stages:
- The Formulation Phase
- The Concentration Phase
- The Momentum Phase
- The Stability Phase.
While most every company started will go through three of the stages (assuming of course the company survives start up), many companies never experience the excitement and mass success of Momentum. That is to say, some companies just skip right by and go right into stability. Here is some key factors to consider when you evaluate any opportunity, as well as some advantages and disadvantages of the stages of development:
The Formulation Phase
When an MLM is in startup mode, it is conisdered in formulation. Formulation is considered the riskiest time to become involved in a network marketing business. However, many consider the benefit of being on the ground floor to outweigh the risk. Oftentimes in the early stages of formulation, referred to as “pre-launch”, a new company will attract droves of people looking for the next big thing. More often than not, few of these people have the stamina or the makings to make it out of the first phase because there is a price to be paid for coming in early.
New companies often have a many challenges within this period related to product fulfillment, access to capital and infrastructure. Issues such as these often lead to rapid changes in the compensation plan as unanticipated expenses present themselves and must be absorbed. Many people, including some here at MLM Times would never consider joining a company in formulation. That being said, if a company has the right team in place and they can make adjustments quickly, the long term benefits of being involved in the early stages far exceed the risks.
The Concentration Phase
When a company has solid foundation that provides its IBO’s (Independent Business Owners) predictable fulfillment of products and compensation, it is considered to have entered the Concentration Phase. Usually, this takes about 3 years, but some companies who have an excellent team executing a well conceived business plan can enter this phase within the first year of operation. During the concentration phase IBO numbers begin to experience rapid growth. It is during the concentration when it is considered the best time to join an MLM company, because it is now considered to possess relative stability. The amount of time a company spends in concentration depends on many factors, not the least of which is corporate leadership and their ability to attract endorsement and / or participation from MLM leaders in other sectors.
The Momentum Phase
The momentum phase is the most sought after phase of any company using a network marketing model to achieve growth. Usually, it takes two to three years to achieve momentum, but it can be shorter or longer as alluded to in the previous section. It is a general rule of thumb that a company enters a momentum stage between year five and year seven when a large, core group of IBO’s have reached a point where the revenue derived from the MLM compensation plan is their primary source of income. At this point, the company experiences geometric growth and this can last for several years depending on the introduction of new products and opportunities and sales support.
There have been many millionaires born during the momentum phase of an MLM launch. But even a part time distributor can enjoy substantial revenues during a momentum phase with residuals that last several years. What one must remain cognizant of is that momentum is a phase and that it will end at some point. That being said, many companies experience consistent revenues of hundreds of millions of dollars YOY (Year Over Year) reaching the final phase of an MLM company – The Stability Phase.
The Stability Phase
The Stability Phase is achieved when the company has achieved a proven track record and has a strong, well trained sales force (read IBO here). Reaching stabiliy does not mean the company no longer experiences growth. On the contrary, the company should be growing at a good pace, usually considered to be 9% to 15% annually. Notice this growth rate begins to look more like that of a traditional business organization? That is for good reason. It means the company is now a real business.
A company in stability is still an excellent opportunity for you. The fact they will be around while you grow your business and they have credibility and a recognized brand can only help you. Sure, it may take longer to build your business so you may achieve the outcome you want, but that can be a good thing. J Paul Getty once said the most difficult thing for a business to do is learn to say no to growth. So if you grow slowly with a great foundation, you are in good company.
Its true that timing in an opportunity is important. However, it is not the most important. That most important aspect of an opportunity is if it is right for you. People are more keen on why you are in business than what business you are in. Here at MLM Times & Reviews, we try to help you find the right opportunity with the right company because truth be told – anone with a solid work ethic can be successful in any business using the MLM model. If you can find the right opportunity for you while it is in concentration or momentum, all the better. But the most important thing to consider is whether it is right for you. It’s a journey. Find the right vehicle and then enjoy the ride.