A Pyramid By Any Other Name Will Still Come Tumbling Down

Written by Elena Fawkner

Continued from page 1

"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 ofrepparttar general public, without requiring these consumers to pay anything extra or to join repparttar 117967 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 torepparttar 117968 top ofrepparttar 117969 class.


Not surprisingly,repparttar 117970 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 repparttar 117971 promoters of such schemes, obtaining injunctions and orders freezingrepparttar 117972 assets ofrepparttar 117973 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 forrepparttar 117974 claims you make aboutrepparttar 117975 company, its products and business opportunities. It is no defense that you're merely rehashingrepparttar 117976 same old representations made to you byrepparttar 117977 company. The FTC can require you to verifyrepparttar 117978 research behind any claims you make. For more onrepparttar 117979 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, heedrepparttar 117980 FTC's warning in its Consumer Alert, "The Bottom Line About Multilevel Marketing Plans": "You are responsible forrepparttar 117981 claims you make about a distributor's earnings potential. Be sure to representrepparttar 117982 opportunity honestly and avoid making unrealistic promises. If those promises fall through, remember that you could be held liable."

Finally, here'srepparttar 117983 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, byrepparttar 117984 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,repparttar 117985 number of distributors you recruit. [Don't take this tip out of context - by definition,repparttar 117986 more people you have in your downline,repparttar 117987 more you'll legitimately make in MLM. Whatrepparttar 117988 FTC is saying here is to watch out ifrepparttar 117989 plan rewards you for recruiting per se, rather than paying you a commission on sales of product torepparttar 117990 general public generated by your downline.]

"4. Beware of plans that claim to sell miracle products or promise enormous earnings. Askrepparttar 117991 promoter to substantiate claims.

"5. Beware of shills - "decoy" references paid by a plan's promoter to lie about their earnings throughrepparttar 117992 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 whenrepparttar 117993 claims aboutrepparttar 117994 product or your potential earnings seem too good to be true. [Don't rely too much onrepparttar 117995 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 againstrepparttar 117996 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. Probablyrepparttar 117997 best gut check of them all though isrepparttar 117998 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 ...

Elena Fawkner is editor of A Home-Based Business Online ... practical home business ideas for the work-from-home entrepreneur. http://www.ahbbo.com

How Do I Start a Home Business?

Written by Elena Fawkner

Continued from page 1

If you follow step 2, chances are, if you hearrepparttar same things repeatedly, you've found potential unmet needs or needs that aren't being adequately serviced by your competition. After all, ifrepparttar 117966 need is being met, it won't be repparttar 117967 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. Fillrepparttar 117968 unmet or under-met need

Once you've identifiedrepparttar 117969 unmet need(s) in your sub-category, you can start thinking about how your business can fill that unmet need.


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 torepparttar 117970 table, thenrepparttar 117971 competition is probably going to be too stiff. Onrepparttar 117972 other hand, if that competition is focused onrepparttar 117973 high end ofrepparttar 117974 market leavingrepparttar 117975 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 berepparttar 117976 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 berepparttar 117977 absolute best.


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 "Puttingrepparttar 117978 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 andrepparttar 117979 challenges you must overcome to make a success of your business. Take your business plan and establish objectives, goals (which support attainment ofrepparttar 117980 objectives) and tasks (which support attainment ofrepparttar 117981 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 supportrepparttar 117982 goals. The end result should be a daily to-do list of things that will directly lead you closer torepparttar 117983 achievement of your goals and objectives.


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.


If possible, transition from whatever you're doing now into your business. Testrepparttar 117984 waters, in other words. If you're currently in a paid job, stay there and run your business part-time, takingrepparttar 117985 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 isrepparttar 117986 time to shift into full-time entrepreneurship.


Finally, makerepparttar 117987 leap with faith and courage. Sure, you'll have moments of self-doubt, thoughts of "can I do this?" when you're wondering whererepparttar 117988 next order's going to come from and you think back torepparttar 117989 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, whenrepparttar 117990 time comes to makerepparttar 117991 leap, do it and hold nothing back. Your success or failure is up to you alone. There are no excuses.

So, in answer torepparttar 117992 question "how do I start my own home business?", it's quite simple really. You do what it takes.

Elena Fawkner is editor of A Home-Based Business Online ... practical home business ideas for the work-from-home entrepreneur. http://www.ahbbo.com

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