Accounts payable is the money your business owes to suppliers or vendors for goods or services received. It’s like an IOU from your business. This is money you need to pay out.

Accounts receivable is the money customers owe you for goods or services you’ve provided. It’s like an IOU from your customers. This is money you expect to receive in the future.

AGI is your total income after certain deductions but before your standard or itemized deductions. It’s used to figure out your taxable income. It’s a key number on your tax return.

Attrition is the rate at which distributors and customers leave the MLM organization. High attrition rates can hinder growth and stability. Understanding the reasons for attrition and addressing them through support and training is essential for long-term success.

An audit is a thorough review of your financial records by someone outside your business. It ensures your books are accurate and comply with laws. Audits help maintain trust and transparency.

Auto-ship is a recurring order program where MLM distributors automatically receive products each month. It ensures consistent personal volume and simplifies inventory management. Auto-ship is often required to qualify for certain commissions and bonuses.

A balance sheet is a snapshot of your business’s financial condition at a specific point in time. It lists your assets, liabilities, and equity. It helps you understand what your business owns and owes.

Bonuses are additional financial incentives given to MLM distributors for achieving specific goals or milestones. These can include recruitment bonuses, performance bonuses, and rank advancement bonuses. Bonuses can significantly boost your overall earnings.

Bookkeeping is the process of recording all the financial transactions of your business. It includes tracking income, expenses, and other financial data. Good bookkeeping is essential for managing your business’s finances.

Branding is the process of creating a unique identity for your MLM business, including your logo, messaging, and overall image. Strong branding helps build recognition and trust with customers and recruits. It differentiates you from competitors and enhances your market presence.

The break-even point is when your business’s income equals its expenses. At this point, you’re not making a profit, but you’re not losing money either. It’s an important milestone for any business.

A business expense is any cost that is necessary for running your MLM business. Examples include supplies, advertising, and travel. You can deduct these expenses on your taxes.

Cash flow is the movement of money in and out of your MLM business. Positive cash flow means more money is coming in than going out. It's important for keeping your business running smoothly.

A capital expense is money spent on something big that will help your business for a long time, like equipment or property. These costs are usually spread out over several years through depreciation. They are different from regular day-to-day expenses.

A carryover is an expense or loss that you couldn’t fully use in one tax year, so you move it to a future year. This can include things like business losses or unused deductions. It helps maximize your tax benefits over time.

Closing is the final step in the sales process where the prospect makes a decision to purchase a product or join the MLM business. Effective closing techniques help secure commitments and finalize deals. It involves clear communication and addressing any remaining concerns.

The cold market consists of individuals who have no prior relationship with the distributor. Cold market prospecting involves reaching out to strangers through methods like cold calling, social media, or advertising. It requires effective communication and follow-up to build trust and interest.

A commission is a percentage of sales revenue paid to distributors based on their sales volume. In MLM, commissions are earned from both personal sales and the sales made by your downline. Commissions are a primary source of income for MLM distributors.

A compensation plan outlines how MLM distributors are paid for their sales and recruitment efforts. It details the various ways to earn income, including commissions, bonuses, and residual income. Understanding the compensation plan is crucial for maximizing earnings and achieving business goals.

The compensation structure outlines the various ways MLM distributors can earn money, including commissions, bonuses, and overrides. It defines the criteria for earning each type of income and is a crucial element of the MLM business

Compliance refers to adhering to the rules and regulations set by the MLM company and relevant authorities. It includes ethical business practices, accurate income claims, and proper documentation. Maintaining compliance is essential to avoid legal issues and maintain the integrity of the business.

The conversion rate is the percentage of prospects who become customers or recruits after initial contact. High conversion rates indicate effective prospecting and follow-up strategies. Monitoring and improving your conversion rate can significantly impact your business growth.

COGS is the total cost of making or buying the products you sell. It includes things like materials and labor. This cost is subtracted from your revenue to find your gross profit.

Customer acquisition involves the strategies and processes used to attract new customers to your MLM business. This can include marketing, promotions, and referrals. Effective customer acquisition is vital for expanding your customer base and increasing sales.

A deduction is an expense that you can subtract from your total income to lower your taxes. It helps reduce the amount of income that is taxed. Deductions can save you money.

Depreciation is a way to spread out the cost of a big purchase over several years. For example, if you buy a computer for your business, you can deduct part of its cost each year. It helps lower your taxes over time.

The downline consists of the distributors you have personally recruited into your MLM organization and any recruits they bring in. Your downline is crucial to your business success as you earn commissions based on their sales and recruitment activities. Building a strong downline is essential for achieving higher ranks and income.

Downline maintenance involves supporting and managing your downline team to ensure they remain active and productive. It includes providing training, motivation, and resources. Effective downline maintenance leads to higher retention and team performance.

Duplication is the process of replicating successful business practices within your downline. It involves teaching your team to follow proven methods for recruiting, selling, and training. Effective duplication leads to consistent growth and stability in your MLM organization.

Enrollment is the process of officially registering a new distributor or customer into the MLM company. It involves completing necessary paperwork, providing product information, and explaining the compensation plan. Successful enrollment is the first step in building your downline.

Estimated tax is the money you pay to the IRS four times a year if you're self-employed. It's like paying your taxes a little at a time instead of all at once. This helps avoid a big tax bill at the end of the year.

Equity is the value of your business after all liabilities are subtracted from assets. It’s what you own outright. Equity represents the owner’s stake in the business.

Expenses are the costs you have to pay to run your MLM business. This includes things like buying products, marketing, and office supplies. Expenses reduce your total profit.

Filing status is a category that determines the tax rates and deductions you’re eligible for. Examples include single, married filing jointly, and head of household. Choosing the correct filing status is important for accurate tax filing.

A financial statement is a report that shows the financial performance of your business. It includes the balance sheet, income statement, and cash flow statement. These statements help you understand your business’s financial health.

Follow-through involves maintaining contact and support with customers and recruits after the initial sale or enrollment. It ensures customer satisfaction and fosters long-term relationships. Consistent follow-through is key to retention and repeat business.

Follow-up involves contacting leads or prospects after the initial meeting or presentation to answer questions and address concerns. Consistent follow-up is key to building relationships and increasing the chances of enrollment or sales. It demonstrates your commitment and professionalism.

Gross income is the total money you earn before any expenses or taxes are taken out. It includes all your sales and earnings from your MLM business. Think of it as your big paycheck before any deductions.

Gross margin is the percentage of revenue that remains after deducting the cost of goods sold. It shows how well your business is managing its production costs. A higher gross margin means more profit.

Group volume (GV) is the combined sales volume of your entire downline group, including your personal volume. It is used to determine your rank and eligibility for certain bonuses. Strong group volume indicates a healthy and productive team.

A home meeting is an in-person gathering at a distributor’s home where the MLM business and products are presented to prospects. It provides a personal and comfortable setting for discussing the opportunity. Home meetings are effective for building relationships and trust with potential recruits.

A home office deduction allows you to subtract some of your home expenses if you use part of your home for your MLM business. This can include things like rent, utilities, and internet. It helps lower your taxable income.

An income statement shows your business’s income and expenses over a period of time. It helps you see if you made a profit or loss. This statement is important for understanding your business’s financial performance.

An incentive is a reward offered to distributors for achieving specific goals, such as recruiting new members or reaching sales targets. Incentives can include bonuses, trips, or other prizes. They motivate distributors to perform at their best.

Inventory is the stock of products you have on hand to sell. Managing your inventory is important to keep track of what you have and what you need. It affects your cost of goods sold and profits.

An invoice is a bill you send to customers to show what they owe you. It includes details like the amount, date, and services provided. Invoices help you get paid for your work.

A lead is a potential customer or recruit who has shown interest in your MLM business. Leads are gathered through prospecting efforts and are crucial for expanding your network. Effective follow-up with leads is essential for conversion.

A lead magnet is a valuable resource offered for free to prospects in exchange for their contact information. It can be an eBook, checklist, or webinar. Lead magnets help attract and capture leads for follow-up and conversion.

A liability is something your business owes, like a loan or a bill. It’s a debt that needs to be paid back. Liabilities are listed on your balance sheet.

Marketing involves promoting your MLM business and products to attract and retain customers and recruits. It includes strategies like advertising, social media, and content marketing. Effective marketing is essential for business growth and brand awareness.

A mileage log is a record of the miles you drive for your MLM business. You need to keep track of dates, distances, and purposes of your trips. This log helps you claim a deduction for your vehicle expenses.

Net income is the money you have left after paying all your expenses and taxes. It's your real profit from your MLM business. This is what you get to keep and use.

Net profit margin is the percentage of revenue left after all expenses are deducted. It shows how much profit your business makes for every dollar of sales. It’s a key indicator of your business’s profitability.

A network is a group of people connected through relationships, often used for business growth and support in MLM. Building a strong network involves creating and maintaining connections with customers, recruits, and other distributors. A robust network enhances your business reach and opportunities.

A networking event is a gathering where MLM distributors meet to share ideas, strategies, and support each other. It provides opportunities for learning, collaboration, and building relationships. Networking events are valuable for personal and professional growth in MLM.

A niche is a specialized segment of the market with specific needs or interests. Focusing on a niche allows you to target your efforts more effectively and differentiate yourself from broader competitors. Finding the right niche can lead to more loyal customers and recruits.

Objection handling involves addressing and overcoming the concerns or objections raised by prospects during the sales process. Effective objection handling requires understanding the prospect’s needs and providing relevant solutions. It is crucial for converting prospects into customers or recruits.

One-on-one refers to a personal meeting between a distributor and a prospect to discuss the MLM business opportunity. This approach allows for tailored presentations and addresses specific questions or concerns. One-on-one meetings are often more effective for converting prospects.

Operating expenses are the everyday costs of running your MLM business. These include things like rent, utilities, and supplies. You can deduct these expenses to reduce your taxable income.

An override is a commission earned on the sales made by your downline distributors. It is an incentive for building and supporting a productive team. Overrides encourage teamwork and leadership within an MLM organization.

Personal volume (PV) is the total sales volume generated by your personal purchases and sales to customers. It is often used to qualify for commissions and bonuses. Maintaining a high PV is important for meeting compensation plan requirements.

A presentation is a formal or informal meeting where you introduce prospects to your MLM business opportunity and products. It can be done one-on-one, in small groups, or via webinars. A compelling presentation is crucial for attracting new recruits and customers.

Product knowledge involves understanding the features, benefits, and uses of the MLM products you are selling. It enables you to effectively communicate with customers and address their needs. Comprehensive product knowledge is key to building credibility and trust.

A profit and loss statement shows your business’s income and expenses over a period of time. It helps you see if you made a profit or loss. This statement is important for understanding your business’s financial health.

A prospect is a person who has been identified as a potential customer or recruit for your MLM business. Prospects are evaluated based on their interest, need for the product, and potential to join the business. Effective prospecting and follow-up are vital for converting prospects into customers or team members.

Prospecting involves identifying and reaching out to potential customers or recruits for your MLM business. This can include making lists of contacts, networking, and using social media to find interested individuals. Successful prospecting is key to expanding your customer base and downline.

Receipts are papers or digital records that show you paid for something. They are important for tracking expenses and proving your deductions. Always save your business receipts.

Record keeping involves keeping track of all your business’s financial transactions and documents. This includes receipts, invoices, and bank statements. Good record keeping is essential for accurate tax filing and financial management.

Recruiting is the process of finding and enrolling new distributors into your MLM organization. Effective recruiting involves identifying potential candidates, presenting the business opportunity, and supporting new recruits as they start their own MLM journey. Recruiting is essential for growing your team and increasing your earning potential.

A residual bonus is an ongoing payment earned from the sales generated by your downline. It provides a continuous income stream as long as your downline remains active. Residual bonuses reward long-term team building and productivity.

Residual income is ongoing income earned from the efforts of your downline after the initial sale. It continues to come in as long as your downline remains active and generates sales. Residual income provides long-term financial stability in MLM.

Retention refers to the ability to keep distributors and customers active and engaged over time. High retention rates indicate satisfaction and loyalty within your MLM organization. Effective training, support, and recognition programs are key to improving retention.

Retirement plan contributions are money you save in special accounts like IRAs or 401(k)s. These savings can reduce your taxable income. They help you prepare for the future while saving on taxes now.

Revenue is the total amount of money your MLM business brings in from sales. It's like the big pot of money before any expenses are paid. Revenue shows how much your business is earning.

A sales funnel represents the stages prospects go through from initial contact to becoming a customer or recruit. It includes steps like awareness, interest, decision, and action. Understanding and optimizing your sales funnel helps improve conversion rates and sales.

A sales pitch is a persuasive presentation or conversation aimed at convincing a prospect to buy a product or join the MLM business. It highlights the benefits and addresses potential objections. A compelling sales pitch is essential for successful selling.

Self-employment tax is a special tax that people who work for themselves have to pay. It covers Social Security and Medicare. It's important because it helps fund your future benefits.

Schedule C is a form you fill out to report your income and expenses from your MLM business. It helps calculate your profit or loss. This form is part of your tax return.

Social media marketing uses platforms like Facebook, Instagram, and Twitter to promote your MLM business and engage with prospects. It involves creating and sharing content, running ads, and building a community. Social media marketing is a powerful tool for reaching a wide audience.

A sponsor is the person who directly recruits you into the MLM company. They are responsible for introducing you to the business, helping you get started, and offering ongoing support. A good sponsor provides training and mentorship to help you succeed.

The target market is the specific group of people most likely to be interested in your MLM products and business opportunity. Identifying and understanding your target market helps tailor your marketing efforts and improve conversion rates.

A tax bracket is a range of incomes taxed at a certain rate. As your income increases, you may move into a higher tax bracket. It helps determine how much tax you owe.

A tax credit is an amount of money you can subtract directly from the taxes you owe. It’s like a coupon for your taxes. Credits can reduce your tax bill more than deductions.

A tax deduction is an expense you can subtract from your income to lower your taxes. It helps reduce the amount of income that is taxed. Deductions can save you money.

A tax exemption is a part of your income that is not subject to tax. It reduces your taxable income. Examples include exemptions for dependents or certain types of income.

The tax year is the 12-month period for which you report your income and expenses. For most people, it’s the same as the calendar year. It’s important for filing your taxes correctly.

Taxable income is the amount of money that you have to pay taxes on. It's your total income minus any deductions or exemptions. This is the number the IRS uses to figure out your tax bill.

Team building involves recruiting and developing a group of distributors who work together to achieve common goals. It includes training, motivation, and leadership. Effective team building leads to a strong, cohesive, and successful MLM organization.

Team volume (TV) refers to the total sales volume generated by your downline team within a specific period. It includes the sales made by all the distributors in your organization. High team volume is crucial for achieving higher ranks and bonuses.

Training involves educating and mentoring new recruits to ensure they understand the products, compensation plan, and business strategies. Ongoing training helps distributors stay motivated and improve their skills. Effective training programs are essential for team success and retention.

The upline refers to the person or people above you in your MLM organization who recruited you or those who recruited them. They are often responsible for providing training, support, and guidance. Your upline benefits from your sales and recruitment efforts through commissions or bonuses.

The warm market includes individuals who have an existing relationship with the distributor, such as friends, family, and acquaintances. Warm market prospecting is often easier as there is already a level of trust and familiarity. It can be a fruitful source of initial recruits and customers.

A webinar is an online seminar used to present the MLM business opportunity, product information, and training. Webinars allow distributors to reach a large audience without geographical limitations. They are an effective tool for recruiting and training in MLM.

Withholding is the amount of money taken out of your paycheck for taxes. It’s sent to the IRS throughout the year. Withholding helps ensure you don’t owe a large tax bill at the end of the year.