A typical hype residual income business is… the one which tells you that you do not have to do anything to earn hundreds and thousands of dollars every month. Don’t even listen to it. Walk away! If not, you will end up losing all your investment in that hype business because it will definitely disappear before you could cash out your “earnings” (although you do not earn them).
How can you identify whether it is a real, legitimate, sustainable business opportunity or just another hype? Here are four useful steps you can use to determine that without failure.
Step 1: What Product/Service It Provides
Find out what product or service they offer. Then answer this question: whether their product or service has a highly potential market? That is if you or most of the people would need their product or service, that business will be a sustainable business.
If they do not provide any product or service, it must be an illegal business. Usually these businesses will emphasis on recruiting members rather than providing valuable product to attract customers. You’d better stay away from them.
Step 2: What About Their Pay Plan
Read its pay plan. Do you have to be the paid member to make money? Actually some of them do ask you to become paid member first to be eligible for all benefits. That’s perfectly OK and legal. But if they insist you to invest first before they can show you how to earn so much money they promised, you’d better think about it twice.
Sometimes you will find that those businesses which allow free enrolling will attract much more leads. It’s simply because most of people are hesitate to get involved in something new unless they test drive it first. These business models are highly effective in getting leads which will make your recruiting jobs much easier.
Step 3: How Will You Be Rewarded
Now look at its pay plan in details. Can you tell that it rewards people who join it earlier more than those who join it later? If yes, it’s a typical pyramid scheme and definitely illegal.
Now there is so called “power line” recruiting system which basically puts many members in your team before you become a paid member. Then it will encourage you to take action and upgrade because you see many members in your team have upgraded.
It does not necessarily mean you will get paid more than who upgrade later than you by utilizing that recruiting system. In order to identify whether it’s a legal business or a pyramid scheme, you still have to look at its pay plan.
Step 4: Check Its Terms of Service
Don’t forget to check its terms of service. Does it offer money back guarantee? If yes, how long is the guarantee period? If not, which is also OK, but will you be bound for that fee for a long time? For example, you are requested to subscribe its service for at least 6 months. Will they charge you a cancellation fee if you cancel your subscription any time?
Check its minimum payout amount required and payout processing time. Do you believe a business with $1000 minimum cash out requirement and 60 days payout processing time is a legitimate one? Of course not. So you can easily spot that hype and stay away from it. Use your common sense, if it sounds ridiculous to you, it won’t make sense for other people.
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