Have you heard that from person trying to recruit you to MLM?
“95% (or 80%, or 90%) of traditional businesses fail in (first year, three years, five years)”
Sounds that MLM is better option. But is.. NOT.
Let’s check the facts.
Various businesses have various failure rate in on, three or five years. For example funeral businesses usually do NOT fail in many years, while 60% of restaurants may be gone in 5 years. But this is still far form 95%!
How many businesses fail in first years?
Not as much as MLMer will tell you 🙂
On the other hand – funeral homes usually lasts – just 1% of them fail (source: 1)
What about other business? Failure rate vary among businesses but you can assume, that
just 10-20% percent will fail in first year.
And 50% of businesses continue to exist after 5 years.
So, if you start a business, statistically you have 50% chance that it will last over 5 years. After those 5 years, most of the businesses that still exist, will continue to exist for many years. (sources: 1 2 3)
See this graph by Bureau of Labor Statistics
How does it look after 4 years, by industry:
|Industry||Operating After 4 Years|
|Finance Insurance and Real Estate||58 %|
|Education and Health||56 %|
Best and worst rate of success after 5 years:
|Businesses with Best Rate of Success After Fifth Year|
|2||Apartment Building Operators|
|3||Vegetable Crop Productions|
|Business with Worst Rate of Success After Fifth Year|
|1||Plumbing, Heating, Air Conditioning|
|2||Single-Family Housing Construction|
Now compare that to MLM
How many people will still be in that MLM after 5 years?
How many of them will make money?
Do you have better data? Or other comments? Please share!