22 Sep 08 Is A Substantial Income Opportunity Just A Click Away?

It is not hard to get sidetracked on the Internet with all of the hyped-up advertising that often associates business opportunities. Some claim to be a substantial income opportunity while hiding behind an illegal business. So what makes a legitimate home based business and what makes a scam? Keep reading, and your substantial income opportunity may be just a click away.

When evaluating business opportunities, it is important to know the following in regards to its legality:

1. The business’s product or products

2. The business’s sign-up fee and how they are handled

3. The business’s practice in the field

For a business to be a legitimate home based business it must have a product or service that can be sold to someone who has no vested interest in the business. In other words, the product is a “retail” sale, or a sale between someone inside the company and someone outside the company.

An example would be selling a nutritional product to your Uncle Bob if your Uncle Bob was not in the business. His only interest is in using the product.

Often times companies will attempt to hide behind personal use products or services. The law, though, is quite clear on what a retail sale is and is not. If the company does not offer a product or service that can be sold to someone outside the business, it is not a legitimate home based business.

Another area of concern is sign-up fees. It is perfectly legal for a company to have a sign-up fee. All businesses have some type of cost associated with them, whether it be time or capital. In the case of a home based business, most companies require a start-up fee of $500 or less.

A lot of companies will also have a product kit that can be purchased at the time of start-up at a substantial discount over normal retail and wholesale prices.

The fees for sign-up cannot be paid out to anyone else in the company unless it is tied to an actual product or service being sold. In the example of companies that have start-up kits that products, a portion of the sign-up fee can be paid since actual product was involved.

If a sign-up fee is taken and paid out based on recruitment only, though, this is considered to be a pyramid scheme. If the company pays out bonuses when products or services are sold, though, this is a legitimate home based business as products or services changed hands to someone outside of the business.

Finally, and a point rarely considered, is how the field is handling the opportunity. A legitimate home based business will promote the need to sell products to non-business users.

A company can be legitimate on paper. It can have products, can have proper paying of sign-up fees, and everything else needed to be compliant; however, if the field is actively promoting a system built on principles against pyramiding laws, the company could still be shut down.

So is your substantial income opportunity just a click away? It may be! Take some time to evaluate the company against these criteria to know whether you have found a legitimate home based business or something else.

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