It’s sometimes so exciting to find potential new distributors for your MLM or Network Marketing opportunity that it’s easy to forget one very important rule: never encourage someone to invest more than they can afford. This will be especially important in this tough economy. It’s a sad truth, but not all of your prospects will or should be the best new members for your downline. Home business should be one of many solutions to a person’s financial problems; it should never be the cause of yet more problems! However, there is a trend that’s cropping up everywhere among distributors and affiliates in these industries, and if left unchecked it could easily become the downfall of the entire home business industry as we know it!

So what’s the problem? Unfortunately, it’s over-eager distributors. In their quest to recruit as many new members for their downline as possible, many distributors don’t stop to think about every aspect of those new members joining their team. Aside from whether or not the new member will receive the proper guidance and training, seldom do distributors look at how joining a home business will affect those new members financially. The important thing to realize is that there is usually far more financial investment needed with starting an MLM opportunity or home business than distributors are taught to discuss with prospects. As a result, there are false expectations of earning established, without the proper knowledge of just how big an investment will have to be made. Once you factor in monthly fees, product fees, domains, website hosting & marketing costs, the costs of running a home business can easily exceed $200 or $300 a month. And often times start-up costs can range from $400 to $1500 depending on the program. In a few horror stories I’ve both heard of and seen, new distributors were encouraged to use their credit cards or even take out loans to get started, and once in they were further encouraged to buy into every product under the sun to boost their chances of success (products that usually had little if anything to do with the original program and were just ways for the sponsor to make more money through their affiliate programs). Most folks are looking at home business as a way to earn extra money to pay off debts and save, but due to the unethical practices of some distributors it can end up causing them even more debt.

I foresee this as being one of the best seasons ever for the home business industry. With the country losing so many jobs due to the economy, more and more working individuals are looking to home business as a way to get through the financial drought. While this should be a time for the home business industry to shine, it is also a perfect climate for scam artists to taint the reputation of the industry by causing more financial trouble for new distributors. It’s not just one company’s or one person’s duty to uphold integrity. It is up to every distributor to operate in an ethical manner so that newcomers to home business and MLM will understand exactly what to expect. It’s also up to you as a distributor to ensure that you’re part of a prospect’s solution to their financial issues, and not part of the problem. Do what you can to make your prospects aware of all initial fees associated with joining, and if you can what those fees are for (and if you’ve studied your business thoroughly, you should be able to do that). Make sure that prospects are aware of any monthly fees and advertising costs that they may be responsible for once they join. And most importantly, don’t force your opportunity on any prospect who cannot adequately pay those costs without causing themselves more financial damage. No one should ever have to borrow or take out loans or max out credit cards to join an MLM opportunity or home business. If you sense that this may be the case, be sure that your prospects understand what affect this could have on them. One practice I suggest to distributors is to set up a survey for interested prospects and ask them (without being too intrusive) specific financial questions such as how much they have to invest, what their financial obligations are and how long they’re willing to invest their time and energy in the opportunity. This has helped me, as well as several of my past team members, to understand the personal situations of prospects and guide them in the best direction for their financial situations. I’m also a big fan of business opportunities that have more than one membership level, because they allow new distributors to start small and work their way up, giving them a chance to earn a bit before investing any more. If you have prospects who are truly interested in joining your opportunity, but who may not be able to handle the financial obligation, suggest beginner levels or less expensive affiliate programs to help them get started so that they can work their way into your opportunity without emptying their pockets. This helps you build a relationship, build trust, and build confidence in the industry at large.

Remember, it’s up to you as well as every other distributor to uphold ethical behavior and help to maintain the reputation of the MLM & home business industry. Otherwise, most opportunities will continue to be thought of as scams and will be avoided by potential prospects. When recruiting new members, remember to make sure your opportunity will be part of the solution, and not part of your prospects’ financial problems. It may seem like that will cause business to slow down, but it will build a lasting platform for success in the future.