Fast forward to the other day when I was reading an article about the pitfalls of Multi-Level Marketing Companies, commonly known as MLMs. It occurred to me that the article might have been more memorable if it had been written in the Jeff Foxworthy format. For example, you might be involved in a MLM if… those hyped-up promises aren’t really coming true!

Of all the home businesses out there, old-fashioned MLMs are the most problematic. If you get sucked into one, you risk losing lots of time and money. Of course, someone is always making money in one of these operations but usually those few souls at the top of the organization rely on a fresh supply of people willing to invest time and money in the business.

You might be involved in a MLM if … you feel pressured to increase your own personal volume in order to qualify yourself or your team for bonuses. In other words, are you buying more stuff than you need or want?

You might be involved in a MLM if… you feel pressured to attend meetings that spend more time on cultish team building activities than teaching sound business strategies.

You might be involved in a MLM if…you must carry inventory.

You might be involved in a MLM if…you are ashamed to show anyone your earnings.

You might be involved in a MLM if…you feel guilty about getting people you care about involved in your business.

What should you do if you realize you’re stuck in a MLM?

1. Appreciate that it is never too late to change horses!

2. Understand that your sales background and contacts are worth a fortune.

3. Recognize that there is a home business out there that will compensate you on introducing real products to real people who have a real need. No fluff. No hype. No empty promises.

There are many home business opportunities out there that tell their new recruits: “It takes money to make money.”

Obviously, it takes capital to start most kinds of traditional businesses. For example, it would be impossible to open a restaurant or a flower shop without investing real money, and lots of it!

However, the beauty of a home business should be not having to make a big monetary investment. Unfortunately, most off-the-shelf home businesses ask their distributors to invest a tremendous amount in either inventory or training.

Perhaps the biggest offender over the years has been Amway. I can’t tell you how many people I’ve met over the years with hard-luck stories about losing money with Amway. The most disturbing part of the picture is that while the distributor lost money, the company did just fine.

While you’re sorting through the home business options, do not lose sight of the simple fact that a fair and ethical company would not ask you to jeopardize your financial well-being by “investing” thousands of dollars in their products and training.

A fair and ethical company would set up their home business opportunity so that everyone involved is a winner — from the business person down to the end user of the product or service.

Think about it!

The proliferation of home-based business opportunities on the web is due to several factors. The idea of working from home, of being one’s own boss, has always held a tremendous appeal to many folks frustrated by traditional work. Given today’s grim economy, more and more people are looking to supplement or even to replace incomes.

Over the next few months, we are going to run a series of short articles on the pitfalls of home business opportunities in the hopes of shedding light on a confusing subject.

1.Never invest in a business with products you would not really be using if you weren’t in the business

This tiny piece of advice seems so obvious and yet all too often people fall prey to business models that emphasize the recruitment of distributors over the marketing of top quality, useful products that real people really want to buy.

2. In today’s economy, steer clear of companies hawking non-essential or luxury items.

In recessionary times, people tighten their belts and look to cut expenses. Stick to businesses that manufacture products customers can’t live without so that they will come back again and again.

Although there are wonderful companies out there promoting everything from cosmetics to clothing to air purifies to pots and pans — the smart choice today would be a home business based on high quality, exclusive products that you personally would continue to buy even if you won the lottery, retired to the beach, and never had to work again a day in your life.

Think about it!