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New MLM Company Launch: 5 Investor Guidelines for Pre-Launch Opportunities

Have you heard of any new MLM company launch parties? Maybe you have a chance to make a killing on pre-launch network marketing opportunities, right? Hold on! Get a better idea of what you can expect before you commit that hard earned money.

Remember, you make your own decisions. The items below are just for information, to get you thinking. You are responsible for your own investments.

1. Pocket Change

Let’s get this one out of the way up front. Don’t play with borrowed money or money you can’t stand to lose. Investing in a new MLM company launch carries significant risk, much more than an IPO for stock.

Note that a loss during pre-launch may not be criminal or even unethical, just a normal loss in the course of business. The money may have been spent on development that didn’t pan out. It happens all the time to large companies. Look at New Coke. Or look at movies.

Did you see Jackie Chan in Around the World in 80 Days? That movie lost over $85 million dollars in the box office. Maybe they’ll make in up in DVD’s, but I doubt it. How about the Majestic, The Love Guru, Mars Attacks!, Mighty Joe Young, or Poseidon?

Pretty good movies, but all big losers at the box office. Losses do happen in business, so avoid pre-launch if you can’t afford to lose that $10,000 or whatever they want you to put in.

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2. What’s the Plan?

No surprise here. I’d want to see a business plan. What products do they expect to sell? What price points? Let’s see some growth projections, cash flow charts, and marketing plans to get the show on the road and start bringing in sales.

And, of course, a schedule that tells me when I might see the company open its doors and then my first returns. Consider a business plan critical to a successful new MLM company launch.

I have to point out that any business plan only tells a projected story. In other words, whoever wrote the plan made a guess. Guesses about sales, about profit margins, about distributor recruiting. All a guess. A good business plan author will make educated guesses based on the actual performance of similar companies. But he or she still made a guess and wrote it down.

If your company performance differs from the plan, sorry, but so what? Performance always differs from actual returns. The best you can hope for is returns that are higher than your plan’s guess.

3. Legalese

I mentioned initial public offerings (IPO’s) above. Investing in pre-launch network marketing opportunities will require some of the same types of paperwork.

In other words, you need a contract if you invest. No contract, no deal. You need this to define what happens to your money. Do you get any back if the concept doesn’t work? If it does fly, when will you get a dividend or similar payment? And, if the company goes public (an actual IPO), how much do you own?

Note that a contract does not do what a business plan does, and a business plan doesn’t do what a contract does. You need both. Get a competent attorney to look over the contract before you sign up.

4. The Who’s Who of the Company

Find out who runs the company, who leads the charge. To run a company, you need a full team – CEO, CFO, CMO, a few VP’s, legal counsel, and so on.

Take the names and look them up on Google at the very least. Why?

Look at it like this. Let’s say the guy who ran Enron (lost billions in an illegal scheme) has a great idea for a company. So he recruits an out of work VIP from Arthur Anderson (bankrupt), and couple of banking execs who just lost their jobs in the credit crunch.

Wouldn’t you like to know who will spend your investment on building this new MLM company launch? Shouldn’t you keep tabs on what kind of team the company assembles?

I’m not going to say everyone will be squeaky clean. But you should be able to hope for and find trustworthy executives with a track record of success in the network marketing business. Failure and mistakes in life are normal. Illegal charges and deception aren’t.

Some people call this betting on the jockey (the management team) not the horse (the company).

It’s a small thing, but it helps to know you have a good team.

5. The Rest

I’m going to throw a bunch of things together here. If you can afford to lose your investment and still have a home and buy gifts for the kids at Christmas, and you like the plan, and you have a good contract, and the team looks good, then look at the rest.

Things like the product. Do you like it? Is it a diet bar that will sell for $17 per ounce? That’s bad. Or is it a do-hickey that will give me 200 miles per gallon in my Suburban? Sounds too good to be true. Better see some results from independent testing companies.

So you like the product, but the company is based in Hamandcheesistan, or somewhere else you can’t check on them. Maybe you should skip this new MLM company launch. Wait for it to prove itself for a year or two.

Or perhaps you like the product, it has a real market, it isn’t crazy or overpriced or pie-in-the-sky, and the company seems to be legitimate. But every meeting comes with high volume music, no real meat, no real announcements of progress. Perhaps, you think, this company is all hype.

Then skip it.

Do Your Homework

Not every new MLM company launch will make big money. Some will lose lots of money, like the movies above. Do your due diligence and make an educated decision.

One more thing. If you just plan to sign up in a new MLM company launch to take advantage of being on the ground floor, fine. No big investment, just a sign up and some normal MLM work like in any other company. That ground floor opportunity only makes sense if you have a ton of exposure. Don't spend yourself broke on advertising, and good luck.

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