Tag Archives: Economy

Evaluating A Home Business – What am I Paying for?

For several years I’ve had these thought floating around in my mind about what makes a good business and what are some warning signs to look out for. Because of my experience in this field, I’ve managed to save myself from falling for a few bad ones (if not out right scams) by using some very basic guidelines. You can find some of those guidelines relevant to the MLM industry here: http://www.firstclassmlm.com/2007/12/07/how-to-evaluate-an-mlm-company/

What I really want to write about is a big basic concept that has saved me some heartache several times: Follow the Money. This combines three different concepts:

  1. What am I paying for?
  2. How do I get paid?
  3. How does the company make money?
In the interest of space, though, let me talk about each question in separate posts, then come back to the big concept to wrap them up all together… lead you down the trail of bread crumbs, so to speak.

“What am I paying for” asks you to consider several things:

  • Is it legal?
  • Is it a good value?
  • Would I share it?

Is it Legal?Is it legal?

When it comes to home businesses, one of the things the Federal Trade Commission (FTC) likes to crack down on is whether or not a product or service is legal to sell. Now this might sound like a no-brainer, but sometimes you have to think for yourself a bit. Maybe even do some abstract analysis needs to come into play.

Now, the FTC is only making sure you’re not selling illegal products or services, or selling legal products or services via illegal means:

  • drugs (or pharmaceuticals),
  • alcohol (ya know the government has to be involved here!),
  • firearms (again, the government has to have their noses in any enterprise of this nature),
  • securities (you know… stocks & bonds & stuff),
  • money exchanges (dollars for euros, for example),
  • operating a Ponzi or pyramid scam,
  • gambling (which is pefectly legal in some municipalities),
  • anything else you can think of that would be illegal for individuals to sell.

While the FTC is looking at the legality, you still need to be concerned with whether or not it’s ethical. For instance there are some network marketing companies out there that promote products to enhance one’s sex life, and other network marketing companies that promote commodities (such as gold & silver), which is perfectly fine. But there are other “businesses” that prey on the weaknesses of others by practically selling sex, thinly disguised drugs, and gambling scams thinly veiled as something else.

For example, a friend was telling me about a business that was making him some good money. (Isn’t that what they always say?)

1) It was free to join.

2) It was real products that people were “winning.”
Winning? REALLY? How is that a business?

3) You earn a commission when people purchase “bid tickets” AND when they paid what they’d bid on that product.
AH! There it is.

Turns out it was an auction-based business. Nothing wrong with auctions. You can get some excellent products for awesome prices at auctions. But look at what the “customers” were paying for. First they had to pay for their participation by purchasing “bid tickets.” Then the “winner” got the privilege of paying for their item.

How many people were purchasing “bid tickets” and never winning a thing? Isn’t that called gambling? And how many people purchased “bid tickets” that they ended up never using? That’s wasted money.

Needless to say, that company has since been shut down by the FTC. Nope not for the gambling aspect, but because they determined that it was a ponzi because too many of their reps were representing it as an “investment” – which is a violation of the Securities & Exchange Commission (SEC).

Sure there are plenty of people out there that have no qualms running legal gambling sites. But I couldn’t do that with a clean conscience any more than I could run a porn site. If you’re running it like a network marketing businesses, though, it’s only a matter of time before the FTC shuts it down. I’m never looking for a quick buck, but a life-time business with which I can be proud to be associated. And I hope you are, too.

Is it a good value?

Yes, the products available via auction were valuable items in this example. But none were necessities, nor consumables. So, once your customer purchased an item which they won via the auction, you’ve lost a customer. Unless they liked the gambling and came back for more. Or until they had a need for another “toy.” Whenever that might be. And hopefully they’d remember to come back to the auction site. That’s called a fad. Again, not a strong company to consider.

Let’s look at another aspect that you should consider for EVERY business you evaluate. No matter what kind of business anyone is trying to get you into, always ask yourself if the entry fee is reasonable.

Another thing the FTC likes to crack down on is whether a company is making its money by “selling memberships” OR by selling real products or services that real people really want. So if a company asks for any money to join, consider how much it is and what that money is used for.

Is your fee simply to pay for your membership kit? If so, that’s the best situation. The next question to ask is, what’s included in that membership kit, and if the amount requested is reasonable for it.

If your fee is quite a bit more than you would expect to pay for what’s included in the membership kit, then you need to know why. Many companies charge $100 – $500 to join. What they do with that money is pay “enrolling bonuses” to the person who introduced you to the biz. And sometimes, bonuses also go to the “up line” of support that build that team.

If that’s the case, then you need to look closer at how people make money from this business. Be careful if they’re making money by selling memberships instead of by selling real products that real people really want.

Would I share it?Would You Share?

Now this last question is only applicable to affiliate or network marketing types of businesses. Because that’s the only time you’re going to be asking others to do what you’re considering doing right now.

In our current economy, is it reasonable to ask people who are struggling to make ends meet, to purchase product(s) or services they’re not already using? If they really need it, they’re already using it.

If they already use these products or services, is it reasonable to ask them to start purchasing from you and/or your business? Why should they?

Even in better economies, or considering people who aren’t struggling financially, is it reasonable to ask them to allocate some of their “extra” funds for your (your company’s) products or services? If you’re selling gold (to use an extreme example), do you feel that it’s reasonable to ask them to have that kind of money to tied up into not-so-easily-liquidated assets should an emergency arise? If that’s not a concern for them, then…

Would you feel confident and proud to be asking others to invest or spend their money as you’re considering doing so right now?

In summary, the question regarding what you’re paying for should have you at ease with the answers to it’s legality, value, whether it suits your personal ethics, and whether you’re comfortable sharing your products or services.

Next time we’re going to consider the question you should ask: How do I get paid?

Biblical Prose as Commentary of Current Events

Here’s something a few friends & family members have sent to my email. You’ve probably seen it, too. It’s definitely good enough to share!

Pastor’s wife’s letter

How’s this for apocalyptic literature. This was written by a pastor’s wife in biblical prose as a commentary of current events. It is Brilliant.

And it came to pass in the Age of Insanity that the people of the land called America , having lost their morals, their initiative,and their will to defend their liberties, chose as their Supreme Leader that person known as “The One”.

He emerged from the vapors with a message that had no meaning; but He hypnotized the people telling them, “I am sent to save you. My lack of experience, my questionable ethics, my monstrous ego, and my association with evil doers are of no consequence. For I shall save you with Hope and Change. Go, therefore, and proclaim throughout the land that he who preceded me is evil, that he has defiled the nation, and that all he has built must be destroyed.”

And the people rejoiced, for even though they knew not what “The One” would do, he had promised that it was good; and they believed.

And “The One” said “We live in the greatest country in the world. Help me change everything about it!”

And the people said, “Hallelujah! Change is good!”

Then He said, “We are going to tax the rich fat-cats.”

And the people said “Sock it to them!”

“And redistribute their wealth.”

And the people said, “Show us the money!”

And then He said, “Redistribution of wealth is good for everybody”

And Joe the plumber asked, “Are you kidding me? You’re going to steal my money and give it to the deadbeats??”

And “The One” ridiculed and taunted him, and Joe’s personal records were hacked and publicized.

One lone reporter asked, “Isn’t that Marxist policy?” And she was banished from the kingdom!

Then a citizen asked, “With no foreign relations experience and having zero military experience or knowledge, how will you deal with radical terrorists?”

And “The One” said, “Simple. I shall sit with them and talk with them and show them how nice we really are; and they will forget that they ever wanted to kill us all!”

And the people said, “Hallelujah!! We are safe at last, and we can beat our weapons into free cars for the people!”

Then “The One” said, “I shall give 95% of you lower taxes.”

And one, lone voice said, “But 40% of us don’t pay ANY taxes.”

So “The One” said, “Then I shall give you some of the taxes the fat-cats pay!”

And the people said, “Hallelujah!! Show us the money!”

Then “The One” said, “I shall tax your Capital Gains when you sell your homes!”

And the people yawned and the slumping housing market collapsed.

And He said, “I shall mandate employer- funded health care for EVERY worker and raise the minimum wage. And I shall give every person unlimited health care and medicine and transportation to the clinics.”

And the people said, “Give me some of that!”

Then he said, “I shall penalize employers who ship jobs overseas.”

And the people said, “Where’s my rebate check?”

Then “The One” said, “I shall bankrupt the coal industry and electricity rates will skyrocket!”

And the people said, “Coal is dirty, coal is evil, no more coal! But we don’t care for that part about higher electric rates.”

So “The One” said, “Not to worry.. If your rebate isn’t enough to cover your expenses, we shall bail you out. Just sign up with ACORN and your troubles are over!”

Then He said, “Illegal immigrants feel scorned and slighted. Let’s grant them amnesty,Social Security, free education, free lunches, free medical care, bi-lingual signs and guaranteed housing…”

And the people said, “Hallelujah!!” And they made him King!

And so it came to pass that employers, facing spiraling costs and ever-higher taxes, raised their prices and laid off workers. Others simply gave up and went out of business and the economy sank like unto a rock dropped from a cliff.

The banking industry was destroyed. Manufacturing slowed to a crawl. And more of the people were without a means of support.

Then “The One” said, “I am the “The One” – The Messiah – and I’m here to save you! We shall just print more money so everyone will have enough!”

But our foreign trading partners said unto Him, “Wait a minute. Your dollar is not worth a pile of camel dung! You will have to pay more…”

And the people said, “Wait a minute. That is unfair!!”

And the world said, “Neither are these other idiotic programs you have embraced. Lo, you have become a Socialist state and a second-rate power. Now you shall play by our rules!”

And the people cried out, “Alas, alas!! What have we done?” But yea verily, it was too late. The people set upon “The One” and spat upon him and stoned him, and his name was dung.

And the once mighty nation was no more; and the once proud people were without sustenance or shelter or hope. And the Change “The One” had given them was as like unto a poison that had destroyed them and like a whirlwind that consumed all that they had built.

And the people beat their chests in despair and cried out in anguish, “Give us back our nation and our pride and our hope!!”

But it was too late, and their homeland was no more.

You may think this is a fairy tale, but it’s not. It’s happening RIGHT NOW !!!