Creating a MLM takes a tremendous amount of effort, talent and drive. Sometimes when a person has a product that they want to sell through a MLM they look for a partner to help with the capital and the decision making. As with any new business sharing ownership can be a hit or miss and it is important to take all aspects of the MLM into consideration before deciding to form a partnership.
Kinds of Partnerships
When you are a partner in a business you usually take one of two paths. Either you are an active partner or a silent partner. This is a simple definition as it is usually much more complex, but basically an active partner is more involved in the day to day planning, while a silent partner is more about providing capital and financial support. Because of the outgoing nature of MLMs there are likely fewer silent partners than what one would find in other businesses. Because MLMs demand a certain level of passion in its owners, it is more likely that all partners will be active.
Business Decisions
The decisions made as a MLM is formed will affect it for most of its life. Issues such as the compensation plan and recruiting methods have to be thoroughly reviewed and selected. The owners must discuss and agree upon all the details and methods. They need to look at division of labor and who will be responsible for each area of the MLM. They have to look at their long range goals and determine if they have the same level of commitment. They must look into the future and plan for changes that can and will happen. The biggest change is when one of the owners decides to leave, what happens to the company? Every possibility must be explored.
Legal Concerns
Once all the details have been worked out the plan must be committed to paper and agreed to by both owners. It is important that this step includes legal counsel. Both owners can either share one lawyer or have their own. If one lawyer is used it must be someone who is fair to both sides and has no bias against either of the owners. The document should be reviewed and each section gone over and agreed to by both sides. Only when this document is signed should they start to launch the MLM.
Problems
If the MLM ownership document is complete then any major problems should be addressed. It is important that owners resolve conflicts quickly because a lingering dispute can halt the progress of the MLM. One legal expert advises that the number of owners should not go above two, as the more owners involved the greater potential for conflict. He especially advised against three owners as in his experience it often turns into a two against one scenario and the power struggle can destroy the MLM. As with any business decision it is important to do extensive research and get legal advice before agreeing to share ownership of a MLM.
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