How to Avoid a Scam When Choosing a Home Based Business

RED FLAG #1

Avoid Companies that are less than 10 years old (Not enough time to prove it will stand the test of time).

RED FLAG #2

Avoid Companies that pay out less than 40% of its earnings to distributors. Most companies pay out as little as 10% and most won't even show you the financials.

RED FLAG #3

Avoid Companies that don't publish an annual report.  Transparency is a must in today’s market-if they don't publish an annual audit for you to review - there is something negative they're trying to hide. 

RED FLAG #4

Avoid Horizontal or Hybrid Binary compensation plans (the average person building a home base business statistically can only build less than 2.8 legs successfully). Any more than 2 legs and the average person will fail. Also Hybrid Binary is a system that combines horizontal flaws with binary building and pays out LESS THAN 1/2 of what this company pays. 

RED FLAG #5

Avoid one industry or one product line companies. Market conditions change all the time - if you are a one industry or one product company - you will experience challenges that could wipe out your business. Also, not only are you limited on your customer base, but also on whom you can bring on as a partner.  Being a product broker allows us to change with trends, get paid on every dollar people spend and expand our business with a large variety of people. 

RED FLAG #6

Avoid MLM's. MLM's were created in the 1950's and have failed the majority of builders. The idea was to pay people different percentages to a specific level to encourage expanding the business. Problems in this system include:

• Top experienced leaders don't help the new people because there is no payout on their level
•  New people teaching new people - Blind leading the blind
•  People build wide (horizontal) to get paid the highest % and spread themselves too thin
• Competition is created and will slowly erode your relationships and your business
• Break-a-ways. If a partner does well, the MLM Company could take that person and move them to pay you less. This creates a structure where you don't want anyone to succeed because then you'll be paid less on their success.