I see this topic debated on forums regularly.

It is worth giving some thought to if you are looking at starting a business.  What do you want from your new business, and what do you expect to put into it?

As far as starting a business goes, there is no cheaper way to begin than what is traditionally called a home based business – a Multi Level Marketing or MLM business. But is this really a “business”?

I suggest that MLM businesses are actually commission based sales jobs and not businesses. As a “distributor” you are bound by the rules of the company that you belong to. You run the risk of losing your “business” should the company deem you to have broken any of the rules. You have no control over the direction the company may choose to take, and many people have lost their incomes when the company decides that the MLM business model is no longer in their best interest so they switch other forms of marketing.

I have been told that I am wrong in my assertion, but I see no difference to someone working in MLM as compared to someone selling life insurance for example. A life insurance sales person gets monthly residual checks based on their clients continued business with the company, they may get an initial signing bonus, and they may get performance based incentives. Some companies also pay bonuses for every new sales you bring to the company. It sounds very similar to an MLM pay scheme, and the control over the way you conduct business is equally similar. Again you are usually penalized for poor performance in both – if not being fired, then by lower/lost commissions.

Does this mean that you should not enter into an Multi Level Marketing or Network Marketing business?

Absolutely not. They generally have a very low entry cost, and many millionaires have been created in this industry. If you treat it like a business and work hard there is every opportunity to make a good income in MLM. It can be worked in conjunction with another job until such time as you are making enough money from your part time job that you have replaced your income from your full time job should you choose. Just remember that despite the hours it is still a job and not a “business.”

A more expensive option that is closer to a “normal” business is a Franchise. These are often considerably more expensive to buy into as they require a premises or specialist equipment, stock, and branding rights. Once you are established any franchise worth their salt will provide you with the training and systems to help you build your business. Although you are running your own business, it is again not fully your own business. The franchiser can at any time revoke your right to the brand should you break any of the terms, and they can take the company in a direction that you have no say over.

The reasons to get into a franchise are similar to the reasons to enter into Multi Level Marketing; they are generally cheaper than starting from scratch with no brand recognition, and they provide the training and systems that a new business does not offer.

But there are advantages of starting your own business if you have the capital do so. The rewards can far exceed the other options, and you have complete control over the business – you won’t be fired. A good business will continue to grow without your input if you hire good staff and a growing business is going achieve good capital gains.  For me the ability to run the business as I choose is worth the extra investment.

Your goals may be different, and the vehicle needed to get you to your goals may also be different. Just do not blindly believe what you are being told by someone trying to sell you a business. Make an informed decision.