MLM Business Monthly Expenses Versus Monthly Income – Breakeven Point And Beyond
by Samson Itoje
Every business has monthly expenses and monthly income.
The same is true for mlm business.
There are two broad types of expenses associated with starting and running a genuine network marketing business:
1. Startup cost and
2. Monthly expenses or running cost
The startup cost is a one-time expense while the monthly expenses is an ongoing expense.
When your total business expenses equal the monthly revenue (or monthly income) from your business, we say you have reached breakeven point.
Therefore, the breakeven point is the point in your business where you’re neither making profit nor loss. And it is also that point where you’re on the verge of turning profit.
How Long Does It Take To Reach Breakeven Point In A Network Marketing Business?
The breakeven point . . . that critical point where you’re on the verge of turning profit . . . is a very important point in your business. The sooner you reach that point and turn profit, the longer you will stay with that business.
Unfortunately, most network marketers or mlm distributors never reach that point. They are repeatedly making losses month after month. And soon they run out of capital to sustain the business and close shop or switch to a different mlm company.
Therefore it is important to ask, “how long does it take to reach breakeven point and turn profit?”
The truth is . . . there is no fixed time.
How soon you reach breakeven point with your network marketing business depends on two things:
1. Your total monthly expenses and
2. How fast your total earnings from the business grow
In reality, you cannot determine with certainty how much you will earn monthly when you join an mlm business because, quite frankly, most people who join network marketing companies do not achieve their income expectations.
Therefore the smart thing to do is to assume that the income from your network marketing business will grow slowly at the beginning. Since that is likely to be the case, you need to focus on what you can control.
For example, you can safely assume that the first year of business will be a year of expenses. A year where you’re trying to find your footing and when you’re trying a lot of stuff to pin-point what really works for you and to exploit it to your advantage.
So, what can you control?
Yes, you can control your monthly expenses!
Monthly Expenses For Network
The monthly expenses for network marketing business include:Mandatory monthly purchase for distributors called autoship
Amount spent purchasing promotion tools (e.g. flyers, cds etc)
Intra city transport cost (e.g. cost of attending weekly meetings, meeting prospects in locations convenient for them etc)
Inter city travel cost (if you travel to cities outside where you live to promote your business)
Items 1-4 above are mandatory. It is mandatory to purchase your monthly activation pack and it is mandatory you buy promotion tools that will help you grow your business.
However, it is not mandatory to travel across the country to meet prospects.
You can discuss with prospects via phone, send them a video link to watch the opportunity video online, send them your website link and even do a video conference through Skype.
Yes, take advantage of technology to reduce your business expenses!
Now, let’s take a closer look at mandatory autoship for distributors of mlm companies which is a key monthly expense you must come to terms with.
This is discussed in the next chapter. Click HERE to read the article.
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