"Some people confuse pyramid .. schemes with multilevel marketing. ... [U]nlike pyramid .. schemes, MLM's have a real product to sell. More importantly, MLM's actually sell their product to members of general public, without requiring these consumers to pay anything extra or to join MLM system. MLM's may pay commissions to a long string of distributors, but these commissions are paid for real retail sales, not for new recruits."

Now consider how our "wealth distribution program" above works. Which is it, do you think? Pyramid scheme or MLM? Bzzzz ... time's up. All who think it's a classic pyramid go to top of class.

FEDERAL TRADE COMMISSION GUIDELINES

Not surprisingly, U.S. Federal Trade Commission ("FTC") pays close attention to so-called MLM's that are, in reality, nothing more than pyramid schemes. It regularly prosecutes promoters of such schemes, obtaining injunctions and orders freezing assets of promoters to be applied in redress of victims. If you knowingly participate in a pyramid scheme, you too can be named as a defendant in such an action.

Bear in mind that as a distributor (whether you're participating in a legitimate MLM program or an illegal pyramid scheme), you're legally responsible for claims you make about company, its products and business opportunities. It is no defense that you're merely rehashing same old representations made to you by company. The FTC can require you to verify research behind any claims you make. For more on subject of representations and your obligation to be able to back them up, read "Not Just Six Lines ... 65 Characters" at http://www.ahbbo.com/adsftc.html .

In addition, if you solicit new distributors, heed FTC's warning in its Consumer Alert, "The Bottom Line About Multilevel Marketing Plans": "You are responsible for claims you make about a distributor's earnings potential. Be sure to represent opportunity honestly and avoid making unrealistic promises. If those promises fall through, remember that you could be held liable."

Finally, here's FTC's tips for evaluating a multilevel marketing opportunity:

"1. Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid. [And, by way, calling it "benefactoring" won't help. Just a handy hint ...]

"2. Beware of plans that ask new distributors to purchase expensive products and marketing materials. These plans may be pyramids in disguise.

"3. Be cautious of plans that claim you will make money through continued growth of your downline, that is, number of distributors you recruit. [Don't take this tip out of context - by definition, more people you have in your downline, more you'll legitimately make in MLM. What FTC is saying here is to watch out if plan rewards you for recruiting per se, rather than paying you a commission on sales of product to general public generated by your downline.]

"4. Beware of plans that claim to sell miracle products or promise enormous earnings. Ask promoter to substantiate claims.

"5. Beware of shills - "decoy" references paid by a plan's promoter to lie about their earnings through plan.

"6. Don't pay or sign any contracts in an "opportunity meeting" or any other pressure-filled situation. Insist on taking your time to think over your decision. Talk it over with a family member, friend, accountant or lawyer.

"7. Do your homework! Check with your local Better Business Bureau and State Attorney General about any plan you're considering - especially when claims about product or your potential earnings seem too good to be true. [Don't rely too much on BBB though - companies pay to be listed with them so they're not as authoritative and independent as they seem. Asking whether they have complaints on file about your particular program is worthwhile, however.]

"8. Remember that no matter how good a product and how solid a multilevel marketing plan may be, you'll need to invest sweat equity as well as dollars for your investment to pay off."

By testing any opportunity against above tips, you'll go a long way to ensuring that what you're getting yourself into is a legitimate MLM program and not an illegal pyramid. Probably best gut check of them all though is good old "if it sounds too good to be true, it probably is".

Hmm ... $1.1m in 39 days for an investment of $60 ... somehow, I JUST don't think so ...

If you follow step 2, chances are, if you hear same things repeatedly, you've found potential unmet needs or needs that aren't being adequately serviced by your competition. After all, if need is being met, it won't be subject of repeated questions.

4. Inventory your experience, interests and competencies

In order to decide what to focus on in particular out of a group of potential unmet or under-met needs, take account of your experience, interests and competencies. People are generally good at what they enjoy and are interested in, after all.

5. Fill unmet or under-met need

Once you've identified unmet need(s) in your sub-category, you can start thinking about how your business can fill that unmet need.

=> SURVEY THE MARKET AND YOUR COMPETITION

At this stage, you need to take your business idea and survey your niche market and your competition.

If you have competition, can you be better? If your market is dominated by a few large, well-established players and you really don't bring anything new or different to table, then competition is probably going to be too stiff. On other hand, if that competition is focused on high end of market leaving lower end largely uncatered for, then this could well be an excellent niche for you.

The bottom line is to identify your best competition in your niche and decide whether you can be better.

Only if you believe you can be best in your niche should you proceed. If not, keep looking until you find a niche perfectly suited to your particular blend of experience, interests and competencies in which you can be absolute best.

=> BUSINESS PLAN

Once you've identified your niche and surveyed your market and competition and are reasonably confident you can be at least as good as your best competitor, it's time to get down to brass tacks.

This is where you take your business idea and shape it into a battle plan. Formulating a business plan is goal-setting for your business. For a more detailed treatment of writing a business plan, read "Putting Plan Back Into Your Business Plan" at http://www.ahbbo.com/busplan.html .

Once you've thought through and recorded your business plan you should have an extremely thorough understanding of your industry and challenges you must overcome to make a success of your business. Take your business plan and establish objectives, goals (which support attainment of objectives) and tasks (which support attainment of goals).

Put your tasks and goals into action to achieve your objectives. Decide where you want your business to be in five years time and work backwards until you have 5, 4, 3, 2 and 1 year objectives and goals to support them and tasks to support goals. The end result should be a daily to-do list of things that will directly lead you closer to achievement of your goals and objectives.

=> ACTION

Once you have your daily to-do list, DO IT! The best laid plans of mice and men are useless if not translated into action. It's action that will propel you and your business towards success. Mere thoughts and plans are necessary but insufficient. They must be translated into activity.

=> TRANSITION

If possible, transition from whatever you're doing now into your business. Test waters, in other words. If you're currently in a paid job, stay there and run your business part-time, taking risk on someone else's nickel until you can be confident this thing's going to float. Know when you're better off devoting your full time and attention to your business (i.e., know when an hour of your time is worth more when spent invested in your business than your job) for that is time to shift into full-time entrepreneurship.

=> MAKING THE LEAP

Finally, make leap with faith and courage. Sure, you'll have moments of self-doubt, thoughts of "can I do this?" when you're wondering where next order's going to come from and you think back to nice, safe, secure paycheck you used to be able to count on in your job. But recognize these insecurities for what they are. They are your mind playing tricks on you. You can do anything you set your mind to. You just have to want it badly enough. So, when time comes to make leap, do it and hold nothing back. Your success or failure is up to you alone. There are no excuses.

So, in answer to question "how do I start my own home business?", it's quite simple really. You do what it takes.