Sourcing MLM Startup Funding: The Business Plan

Feb 6, 2023Sheffield Blog

This article comes from respected MLM Attorney, Jeff Babener.

What are the steps to getting a funding source to launch your startup direct selling company?

First, before any investor will consider funding your startup, you must have a business plan, an organized presentation of your ideas, projections and abilities. The business plan is your bridge to funding and the next step to sourcing capital. You can go at it alone, but it’s much more effective if you hire a professional MLM consultant who has experience in writing business plans specifically for startup multi-level marketing companies.

Once you decide whether yourself or a professional MLM consultant will help you write your business plan, what should you include? The following topics are important to present when creating a business plan that will be shown to potential investors:

Executive Summary – This section should provide the investor with a short overview of the key elements of the business plan.

Company History – Investors want to know about a company’s past performance before they assess its future potential. 

The Product – This section describes in detail the company’s products or services, including a summary explanation of the engineering and technology involved, and a statement about performance and present status, as well as any patentable technologies.

The Market – This section should contain a comprehensive description of the market the company plans to serve. If the product is generically new, independent market research may be needed to define both the initial and future markets.

The Competition – Identify your competitors, discuss their relative strengths and weaknesses, and indicate the market share held by each. 

Manufacturing – This section should describe your manufacturing facilities and discuss production capacity in relation to projected sales over the first five years. 

Management – As a general rule, venture capitalists would prefer to invest in a mediocre product produced by first-rate management than a top-notch product produced by mediocre management. This priority should be reflected in your business plan.

Financial Data – This section is the bottom line of your business plan. Begin by summarizing previous financial performance. If your company is new, be sure that all financial projections are realistic and justifiable.

The development of a well crafted business plan is a considerable undertaking. It forces you to focus your ideas, ferret out weak spots in your organization, and turn abstract concepts into concrete plans. The best approach is to hire a professional MLM consultant who can provide invaluable assistance in putting together a sound and attractive business plan.