More and more people are looking for ways to supplement their incomes, as the economy continues to slide and people feel increasingly insecure about the future. Many people are keen to start their own home-based business so they can earn extra money or perhaps even quit their dead-end jobs eventually. One of the most popular routes to starting a business these days is by joining a multilevel marketing company, but before you sign up you should take the time to make sure you choose the right MLM company for you and your interests.
When you join an MLM program, you will be an independent distributor for the company. This means you must operate within their guidelines because you are representing the MLM network marketing company, yet you are not an employee so you will operate as a separate entity and as an independent business person. MLM distributors earn commissions and overrides, not salaries, so your earnings are reported at the end of the year on a 1099 form and you are responsible for paying your own taxes on your earnings.
When you sign up with an MLM company as a distributor, you are an independent contractor but you do represent the company you have signed on with. Anything that you do will reflect on the MLM and this is why these companies have such strict rules that they require their distributors to follow. Even if you claim you are not familiar with all the rules, if you step outside those guidelines there is a good chance you will have your position of distributor terminated.
At the same time, the company and their products will reflect on you and your fledgling business. Aligning yourself with a company that has poor business practices, bad customer service, low quality products, or shady ethics can quickly and easily tarnish your reputation and not only crush your new business, but squelch your hopes and dreams of success.
Because of these factors, it is very important that you spend some time studying and researching an MLM before you join it. Even if you have a friend who is fired up about a business and who wants you to jump into business with them right away, you should step back and exercise due diligence before filling out the distributor paperwork and creating a business association with any company.
One of the first things to find out is how long the company has been in business. It is well known that most companies, whether MLM business opportunities or otherwise, will fail in the first three years they are in business. If an MLM marketing company has been around for longer than three years, then you might have a winner. Many people say that it is best to get into a brand new MLM because you are on the ground floor and the growth potential is huge. While that might be true, there is also a much higher risk of the company going out of business and of all your hard work going right down the drain.
The next thing you should look at is how financially stable the MLM company is. You will find that virtually all of the MLM companies that have been around awhile will boast about being a debt-free company. This is a good sign and does show a certain level of maturity, but be sure to verify their claims. Be leery of brand new MLMs that have already taken on a lot of debt because they will be much less stable and run a high risk of never getting to the point of being viable. In addition, it never hurts to find out if the company has any negative marks with the Better Business Bureau in the city where they are based.
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