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We live in a capitalist society where everyone has something to sell and the market for these goods and services for a company that plans and seizes opportunities is without limit. I for one appreciate the hustle, particularly in this economy where many are left with no other choice but to take control over their own destiny. However, we all know that there is a dark side to business where greed and power prevail turning the American Dream into something that can only be fulfilled to the detriment of others.

Cults, Multi-Level Marketing, and Pyramid Schemes are everywhere we look and whether you are a budding entrepreneur or just someone who is seeking an opportunity to supplement your current income, it would be in your best interest to do a little investigating before springing into anything that sounds too good to be true.

On the surface, these opportunities sound amazing offering flexibility, extra income, and a product that sells itself. But what they don’t tell you is that 99.8% of people involved in these schemes never make any money at all and instead lose money, valuable time, and friends in the process.

Research shows that modest success (minimum wage) is rare in these operations and that the people who benefit the most are those at the very top of the pyramid-people you never see and only hear of.

It seems a little unfair to refer to these organizations as cults except for the fact that they function a lot like one with people invited to the event to act like “first-timers” excited about the product who are pre-arranged to sit next to you going “ooo…and ahhhhh…” To the hard sell and numerous phone calls, emails, text messages, other invasions of your privacy you will have to endure until you tell them to get lost. Even then you will not be done with them because they will have someone else contact you seemingly unknowing that you were previously contacted by someone else and declined. You will waste even more valuable time recapping the situation for them and in the end they will ask you for the name and telephone number of someone else to call and put through the same thing.

I believe in helping people whenever I can, and for those of you that know me, I will go to no ends to do so. I get a kick out of being able to connect people to opportunities that I believe will be good for them. I care about my good name and that people know that they can only expect the best when they are dealing with me or those I advocate for. That is why I am reluctant to subject the one’s I care about to scams and empty opportunities that will hurt them both financially and professionally in the long run.

I may make some enemies with this post, but one of the most important things I have learned as an entrepreneur so far is that it is difficult to remain an angel in the eyes of everyone. No matter how good my intentions are with this article, there will be people who do not like what I have to say. I must then be sure to note that not all mutli-level marketing businesses are scams and not all people involved in them are out to pull the wool over your eyes. Many are also chasing the American Dream and do not know the impact the business is having on them or on the ones they love. Others are careful in targeting their product to people who truly need it, or could benefit from being involved. These people respect your time, are not overly aggressive on the sale, and have given much thought to the fact that not everyone needs their product or service and graciously back off.

Having said that, here are some red flags when you are dealing with a representative of a company or group that relies on multi-level marketing.

1) Beware of any business where each person is recruited and given incentives to recruit other participants who are then given incentives to recruit more participants in an endless chain where no apparent good or service is ever sold.

2) Beware of any business where advancement in the company is dependent soley upon participants purchases or an increase in the amount of money you spend.

3) Beware of any business where the payout at the top is equal to or exceeds the total payout to all participants or the individuals selling the actual product or service.

4) Be mindful of the fact that as you are networking, traveling, and promoting the company, you are not being compensated for these expenses and you are in fact losing money.

While I would not categorize trade associations and networking groups as pyramid schemes or cults, it is important to be mindful of your participation in these as well. Any business association that is unwilling to understand how a membership fee in any amount impacts your business is not worth joining. Sometimes it is not that you do not see the benefit in participating, it is that the timing is not right for your business. You must find benefit beyond the network to make it worth your while unless you are at a point where your business could benefit from just being associated with the “name” of the organization for which you are a member. It is never okay for you to feel pressured to join an association or trade group. If they are a solid organization, they will be around when your business is ready and is in a position to budget for that expense.

When you do decide to join a group, be sure that the group will provide you access to people and resources that you would otherwise not have been able to come into contact with as easily. Also be sure that the workshops offered are conducted by professionals in that field with a proven track record. There are many “overnight experts” who are willing to sell you the very basic knowledge they have on the topic- information that you could have “googled” for much less.

Buyer beware and be confident in your own ability to do things. Do your own research unless you can afford to have someone else do it. Individuals that have been successful in building their business have been because they are careful to invest it where it is truly needed and do without some of the glorified marketing schemes and shortcuts. You wouldn’t take a job with no pay, so don’t join a group or a business that doesn’t have a direct impact on your bottom line.

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