Category Archives: ICFO CyberSecurity-CyberCrime

3. Do Your Due Diligence, IUH 2009-12, 2ND Ed, R513A

Author Notes: Reference Copy, links to Original Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

3. Do Your Due Diligence, IUH 2009-12, 2ND Ed, R513A

Due Diligence in the offline world of business is done before you buy into or take over a business. The same goes for large land and real estate purchases, also accompanied by a real estate appraisal. You want to know the owners, what is the value of the company and its assets. If a store, shopping center, hotel and such, what kind of traffic is in the area, occupancy, demographics, etc.? How much and what kind of inventory do they have? The same goes for doing a Joint Venture or buying into a Franchise. If you are buying a big-ticket item such as a car, you will usually shop around. Perhaps you will check some form of Consumer Guide.

The process is often long and drawn out. Offline it is or should be done by an independent third party. The due diligence process nearly eliminates emotional spending. Why should doing business online be any different even though the transaction can be accomplished quickly, for with less MONEY. However, online leaves the due diligence process you, no one is looking over your shoulder; well perhaps, except for the spouse or partner.

We show how to do your own Online Due Diligence with a selected range and number of DD Tools for you to do your own research. Like everything else online, tools and techniques change. As you see such changes share it with us in our groups. We also post updates in our blogs which are later incorporated in a revision to this handbook.

WHAT IS DUE DILIGENCE?

Due diligence is a term used for a number of concepts involving either an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations. A common example of due diligence in various industries is the process through which a potential acquirer evaluates a target company or its assets for acquisition.

The care that a reasonable person exercises to avoid harm to other persons or their property

An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale.

Generally, due diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party.

INVESTOPEDIA EXPLAINS ‘DUE DILIGENCE (DD)

Offers to purchase an asset are usually dependent on the results of due diligence analysis. This includes reviewing all financial records plus anything else deemed material to the sale. Sellers could also perform a due diligence analysis on the buyer. Items that may be considered are the buyer’s ability to purchase, as well as other items that would affect the purchased entity or the seller after the sale has been completed. Due diligence is a way of preventing unnecessary harm to either party involved in a transaction. Investopedia

Research and Analysis of a Company or Organization done in preparation for a business transaction (as a corporate merger or purchase of securities) M-W Dictionary

DUE DILIGENCE CAN BE DEFINED AS:

The examination of a potential target for merger, acquisition, privatization or similar corporate finance transaction normally by a buyer.
A reasonable investigation focusing on material future matters.
An examination being achieved by asking certain key questions, including, do we buy, how do we structure the acquisition and how much do we pay?
An examination aiming to make an acquisition decision via the principles of valuation and shareholder value analysis.

THE DUE DILIGENCE PROCESS CAN BE DIVIDED INTO NINE DISTINCT AREAS:

Compatibility Audit Financial Audit
Macro-Environment Audit Legal/Environmental Audit Marketing Audit Production Audit Management Audit Information Systems Audit
Reconciliation audit. Wikipedia

BUT I AM READY TO ACT NOW

Sometimes DD is a just a troublesome mental thingy, because I am ready to act now!

Offline:

Buyers I want to make this large purchase and don’t want to wait; but my banker, accountant, lawyer or someone requires that I have a Due Diligence done by a third party unrelated to the transaction. Costs are usually borne by the Buyer. Can be and usually is a long-drawn out process.

In my experience, it is surprising how many big money players also react on emotion, save time, save the cost of doing their Due Diligence, only in the end to lose it all. Big enough money to pay cash so no DD requirement was imposed by another, i.e. lawyer, banker, etc.

Example, if the seller creates a sense of urgency or perhaps demand, then Buyers are more likely to react more with emotion than reasonableness. A wealthy Malaysian Chinese Buyer wanted to do business with a Vietnamese Seller. The Agreement was drawn up in only 1 language, that of the seller, the buyer didn’t have it translated into his own language, therefore didn’t understand the fine print. The fine print contained a clause that the caused the buyer to default and forfeit millions in his down payment. Greed, stupidity, a scam, perhaps!

Online:

I want to join this program. I have no idea whether it is a scam, but it sounds great, but my online adviser (Dr Don) says slow down, and do your own Due Diligence. Fast process, can be done in less than a few minutes to an hour. Cost is zero. Why Not! Better Safe than Sorry

Due Diligence can vary with the business type and the purpose. Some for legal, tax, financial, IT, operations, management and the list grows. In simplest terms for us; it means doing our homework.

Our objective is to avoid a fraud or scam, and to join a successful program. If it is a new site, then a Google search will provide us with no help. A Whois search may help us find who the owners to enable us to do further research. We need to know who the owners are, how long they have been in business, what is their track-record, are there any legal actions against them. Are customers or affiliates complaining, and have they ever been accused of a Scam or a Fraud?

Right away, you can see that this process will slow you down. And sadly, most of you will not bother. While it is much faster than doing an offline due diligence process, it is our objective to slow you done enough to help control your emotional spending. Remember, many of your friends will also offer you something that they, themselves have not investigated; we will support them by joining, then we all lose.

12 SIMPLE DUE DILIGENCE MLM INVESTIGATIONS

SIMPLEST MLM INVESTIGATION

Get into the “BRAIN & PUSHBUTTON” MLM Detective mindset! Look at the supposed MLM Company’s website. First suspect clue would be no street or city address, worse yet, only an email address, no phone number. Then look for the pictures and names of the owners of the company. Not having these on a website is a quick absolute reason NOT to join. Some wise, seasoned MLM distributors doing their Due Diligence Investigation will use “http://earth.google.com/” to (free 7 day trial or $20) look at a satellite picture of the size and location of a supposed MLM Company office. Address = trailer house or home? That is a 911= Run!

RUN – TAKING ONLY BANK WIRES, MONEY ORDERS OR CHECKS

Use your MLM Detective Investigative “BRAIN.” Only use a credit card that will accept charge backs and returns? Honest companies allow refunds within 60-90 days (8 states require a year)! Money by FedEx – UPS only? Yikes! Scam Time! A trained MLM Detective will tell you the scam artists do this to avoid Postal Fraud charges! A PUB (private mailbox) address is an indicator of dodging Postal Fraud Investigators = 911 run a SCAM!

EASY MLM INVESTIGATION TRICKS

Next MLM Detectives will go to the Internet and enter the following into one or two of the major search engines:
The MLM Company’s name (owners too) and the word “scam”. Go through two pages! Look for forum message comments for legitimate complaints (see below).
Then do the same for “complaints, lawsuits, and news articles archived on search engines. Also check who registered the website domain of any new company claiming: amazing, incredible, proprietary, never seen before in the universe, revolutionary, products, services or technologies!
Check http://www.whois.net/ for the domain lookup. Companies with good offerings would register a name 6 months to a year ahead of time.
A warning on MLM due diligence for MLM Researchers! There are sad sites and forums that are unfairly negative toward all MLM – Network Marketing companies. Ignore these “Anti MLM Zealots” and only look for appropriate information. A good MLM Detective will ignore 99% of their BS!

A SECRET DUE DILIGENCE TOOL

Alexa can give you Internet Web Ranking Due Diligence that on 1 out of 10,000 knows about. Grab scammers by the throat when they come to pester you!

http://www.mlmwatchdog.com/mlm_due_dilligence_secret_alexa.html

DON’T SPEND OVER $500 TO START

There are over 22 states that require registration if an opportunity (not just MLM but includes MLM) requires you to spend over $500. Two states say it must be kept under $200. If a company says join for free and spent $501 for product – They had better be registered!

A good MLM Detective will run if there is no way to join for under $500 See the new FTC warning (below) this MLM Detective due diligence article and my notes on the $500! SCAM example –Thinking it was MLM Here is a list by the FTC of States requiring “Biz Opp” registrations. Remember this if a recruiter is hustling you for over $500 and no registrations.

Why join? They may get shutdown for not having the state Business Opportunity registrations! Why risk joining? You can lose time and money! There goes your opportunity! http://www.ftc.gov/bcp/franchise/netbusop.shtm

LOT OF NUTRITIONAL PRODUCT HYPE

Raise the dead? Live 130 years? Cure Cancer (which is an illegal claim for any nutritional)! If it is not a nutritional, skip down to next due diligence for MLM Detectives.
Get a list of the MOST critical ingredients in the MLM’s nutritional product and put them beside your computer.
Go to the U.S. Government National Institutes of Health nutritional research website PUB MED. Go to Pub Med after you read the next two sentences! http://www.ncbi.nlm.nih.gov/sites/entrez
Look up the major ingredient(s) by entering its name in the search box.
Read through the scientific studies. Some may be complex, but the END sentence usually gives you a good idea if the study was a Plus or Minus for the product. Read over at least 10 articles use a piece of paper to keep track of studies like this Study #1 Good Study #2 good #3 What did they say? (Or just what?) Study #4 Good Study #5 Bad. Make your own judgment!

NEXT MLM DETECTIVE DUE DILIGENCE RESEARCH

MLM Detective “PUSHBUTTON” Go to the Better Business Bureau website for the city where the MLM-Network Marketing Company is located. Most are free.
You are looking for the number of complaints the BBB has NOT resolved. If there are over 24, hold off joining, it very well could mean problems.
MLM Detectives don’t overly trust BBB reports but we the can be good indicators. Here is the National BBB Advanced Search don’t use the quick search. http://search.bbb.org/SearchForm.aspx?mode=Business

WATCH OUT FOR HOT

An email solicits you to a “HOT” MLM, Party Plan or Network Marketing Company!
Look for exclamation marks and capital letters used to lend legitimacy or urgency!
Beware of disclaimers such as “this is not a pyramid selling scheme or scam” (legitimate offers don’t contain such claims).
Don’t believe promises of fast wealth.
If you feel, see or hear “Get Rich Quick!” Run! If it sounds too good to be true, it usually is!
MLM Network Marketing takes some work, like any good Home Based Business.
MLM, PARTY PLANS & NETWORK MARKETING COMMON SENSE
Don’t let the money over-excite you! Use the products or services being sold first! If they excite you, then look at the money. You should try sharing and selling the products/services to test them out. Spending some money to test a company and their offerings is a wise thing to do.

FOLLOWING RESEARCH FOR DEDICATED MLM DETECTIVES

Check with the Attorney General in the state where the company is located. Be very brief with your email or phone call and stick with asking, “MLM Company XXX is located in city in your state, do you have complaints against Company XXX?” A complete list of Attorney Generals is in MLM WatchDog COMPLAINTS Library.

READ THE FINE PRINT IN THE MLM CONTRACT

MLM Detective “BRAIN.” These are the Enrollment Agreement or Terms of Agreement plus Policies and Procedures. These all together are a business contracts, enforceable in a court of law. The Distributor Rights Association says they shouldn’t be over 15 pages long. Don’t sign if you don’t feel comfortable about the contract.

COPY THE PAY PLAN AND ASK QUESTIONS

Then find an expert to analyze it. If it only pays for signing up new people and not sales of products/services – run! There’s a copy of my MLM Compensation Pay Plans Book on Amazon. Search for my name by author – Rod Cook. No, this is not a shameless promotion for my book. My book is the only one with big pictures, diagrams and detailed to help both the new person and expert. MLM Watchdog ethics let me say it’s a good book! Plus my book has a whole chapter on avoiding Pyramid Schemes. MLM Detective

HOW TO CONDUCT ONLINE DUE DILIGENCE – BRUNO [removed]

Thanks for Reading – 3. Do Your Due Diligence, IUH 2009-12, 2ND Ed, R513A

Dr Don, Founder, ICFO

4. Internet Crime is Big Business, IUH 2009-12, 2ND Ed, R513A

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Author Notes: Reference Copy, links to Original Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

4. Internet Crime is Big Business, IUH 2009-12, 2ND Ed, R513A

This Chapter will give you some background to the magnitude of the Growing Internet crime problem. It will introduce you as to how to get started on your journey to understand and recognize the signs of Internet Crime.

The more you understand about these various scams, the more likely that you will be able to avoid being scammed. Scam Avoidance must rank up there with “How do I turn this thing on? And “OK what’s next?”

2008 INTERNET CRIME REPORT

The National White Collar Crime Centre has just released its eighth annual Internet crime report. “In December 2003, the Internet Fraud Complaint Center (IFCC) was renamed the Internet Crime Complaint Centre (IC3) to better reflect the broad character of such criminal matters having a cyber (Internet) nexus. The 2008 Internet Crime Report is the eighth annual compilation of information on complaints received and referred by the IC3 to law enforcement or regulatory agencies for appropriate action.

From January 1, 2008-December 31, 2008, the IC3 website received 275,284 complaint submissions. This is a (33.1%) increase when compared to 2007 when 206,884 complaints were received. These filings were composed of complaints primarily related to fraudulent and non-fraudulent issues on the Internet.

These complaints were composed of many different fraud types such as auction fraud, nondelivery, and credit/debit card fraud as well as non-fraudulent complaints such as computer intrusions, spam/unsolicited email, and child pornography. All of these complaints are accessible to federal, state, and local law enforcement to support active investigations, trend analysis, and public outreach and awareness efforts.

From the submissions, IC3 referred 72,940 complaints of crime to federal, state, and local law enforcement agencies around the country for further consideration. The vast majorities of cases were fraudulent in nature and involved a financial loss on the part of the complainant. The total dollar loss from all referred cases of fraud was $264.6 million with a median dollar loss of $931.00 per complaint. This is up from $239.1 million in total reported losses in 2007.” Posted on 2009 April 1 by BBVM

INTERNET FRAUD, SCAM, AND CRIME STATISTICS – 2009

Statistics regarding Internet scams and frauds are presented here as snapshots in time January 2009, but below are links to archived statistics from previous years. Web crime statistics are notoriously difficult to obtain, with many sources each calculating them in a different manner and different time frame, using a different source.

To provide the most reliable picture, we use the Internet Crime Complaint Center’s (IC3) statistics as a baseline. The IC3 began operation on May 8, 2000, as the Internet Fraud Complaint Center and was established as a partnership between the National White Collar Crime Center (NW3C) and the Federal Bureau of Investigation (FBI) to serve as a vehicle to receive, develop, and refer criminal complaints

regarding the rapidly expanding arena of cybercrime. These statistics have the advantage of the FBI’s expertise, but the weakness of being 1 to 2 years out of date.

To overcome this, we have added our tracking system statistics to update the FBI / IC3 statistics.

BACKGROUND

The statistics for the current Top 10 frauds and scams list can be found below. A description of these scams is on this page. The greatest challenge in assembling a list and statistics of the frauds is that most fall into several categories. Consumers may characterize crime problems with an easier “broad” character, which may be misleading.

For instance, a consumer that gets lured to an auction site which appears to be eBay may later find that they were victimized through a cyber-scheme. The scheme may in fact have involved SPAM, unsolicited email inviting them to a site, and a “spoofed” website which only imitated the true legitimate site. The aforementioned crime problem could be characterized as SPAM, phishing, possible identity theft, credit card fraud or auction fraud. In such scenarios, many complainants have depicted schemes such as auction fraud even though that label may be incomplete or misleading.

The Internet Crime Complaint Center, in 2009 released its latest annual report on victims’ complaints received and referred to law enforcement. From January 1, 2008 – December 31, 2008, the IC3 website received 275,284 complaint submissions. This is a (33.1%) increase when compared to 2007 when 206,884 complaints were received. These filings were composed of complaints primarily related to fraudulent and non-fraudulent issues on the Internet.

Other significant findings analyses of referrals include:

Non-delivered merchandise and/or payment were, by far, the most reported offense, comprising 32.9% of referred complaints.
Internet auction fraud accounted for 25.5% of referred complaints. Credit/debit card fraud made up 9.0% of referred complaints.
Confidence fraud (“con men”), computer fraud, check fraud, and Nigerian letter fraud (Also called “Advance Fee Fraud” or AFF) round out the top seven categories of complaints referred to law enforcement during the year.

DOLLAR LOSS

Reporting a Dollar Loss, The Highest Median Losses Were Found Among Check Fraud ($3,000),
Confidence Fraud ($2,000),
Nigerian (West African, 419, Advance Fee) Letter Fraud ($1,650)

AMONG PERPETRATORS

77.4% were male and
50% resided in one of the following states: California, New York, Florida, Texas, District of Columbia, and Washington.
The majority of reported perpetrators (66.1%) were from the United States; however, a significant number of perpetrators where also located in the United Kingdom, Nigeria, Canada, China, and South Africa.

AMONG COMPLAINANTS

55.4% were male,
Nearly half were between the ages of 30 and 50 and one-third resided in one of the four most populated states: California, Florida, Texas, and New York.
Males lost more money than females (ratio of $1.69 dollars lost per male to every $1.00 dollar lost per female).
This may be a function of both online purchasing differences by gender and the type of fraudulent schemes by which the individuals were victimized.
Email (74.0%) and webpages (28.9%) were the two primary mechanisms by which the fraudulent contact took place.
For the full report, go to the IC3 webpage on statistics.

2008 PATTERNS

In 2008, that ranking has changed considerably – Lottery scams are number 1 followed by Auction scams, non- delivery and check fraud.
LOTTERY SCAMS –
INTERNET AUCTION FRAUDS –
CONFIDENCE – NIGERIAN ADVANCE FEE FRAUDs (AFF) – PHISHING AND PHARMING FOR IDENTITY THEFT – “PASSIVE RESIDUAL INCOME” SCAMS –
CHECK (COUNTERFEIT) FRAUDS WORK-AT-HOME SCAMS
MATRIX / MULTI-LEVEL MARKETING AND PYRAMID SCHEMES PROPERTY MORTGAGE AND INVESTMENT SCHEMES FINANCIAL INSTITUTIONS SCAMS

FBI INTERNET CRIME REPORT 25/02/2011 [removed]

Thanks for Reading – 4. Internet Crime is Big Business, IUH 2009-12, 2ND Ed, R513A

Dr Don, Founder, ICFO

7. The $1,000,000 Per day PTC/PTR Scam, IUH 2009-12, 2ND Ed, R513A

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Author Notes: Reference Copy, links to Original Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

7. The $1,000,000 Per day PTC/PTR Scam, IUH 2009-12, 2ND Ed, R513A

This section culminates my 9 months of research, testing and being scammed in the PTC/PTR arena of Internet Scams. Years ago, I looked at various paid to read email programs, but I figured my time was worth much more than $ .05 for reading 10 emails or a $ .01 per email, or anything like that. Such low paying sites are still available today, and do actually pay. However, to make any money with these sites, you need a downline contributing to your income.

It is hard for me to get excited about someone that posts a check for $ 5.00 (as proof of payment) and he or she is happy. How much work did they have to put into to get that $ 5.00; did it pay for his Internet connection, his electricity, computer, etc. This section is another look at todays’ big money PTC/PTR sites, and the scams they represent…

I cannot emphasis the importance of this chapter, as I find too many new users (newbies), are being taken by the promise of big earnings $1 -20,000 per email that will never be taken to the bank

RETIRED AND BORED

I get so very busy in my many endeavors; that I often look for a no-brainer to pass some break time. Chatting is great among the various social networks available, but can lead to problems for you, unless you keep it strictly business, not monkey business. I can say that, as I met my wife online (smiles).

After years of various successful businesses, consulting and coaching, etc., I finally decided to retire. I got tired of the local politics and current business gamesmanship. Moreover, I am a foreigner in someone else’s land; I do not need to take consultation fees when locals claim to be able to do the same job and work cheaper. .

I have been using the Internet for research, financial data/quotes, email, etc. for years in my various businesses. Therefore, I decided to try the net for some productive, paying programs. I believe I already told you that I did not play golf.

Having been used to working 12-16 hours days, I needed something to keep me my brain active. After some time of learning and losing at various other interest business opportunities as discussed before, I took another look at the PTC/PTR community.

As I said, the low-paying sites are still available, but it seems the real way to make any money here is to build a downline, like most online programs. In as much as I had not built a downline for any other program that paid more than these sites. I passed, but then I began finding new PTC/PTR programs that paid, unbelievable, think of it: $20,000 per email?

Wow, how can this be true? It is not possible – I told the wife, maybe this is a new money laundering Scheme. It did not make any sense to us, nor should it to you. However, do read on!

Real or not, I decided to check out these new sites, joining one led to joining another, etc. Before I knew it I had several sites promising ridiculous amounts of money per day.

MY BIGGEST PTC/PTR ACCOUNT – PCASH

The site is now shut down, but below are a few of the details of the scam which will be used to introduce to and help explain some of the similarities and differences between most of the PTR/PTC sites

HOME PAGE SITE STATISTICS

Members: 7,608
Payouts: 62,093,832,222.00
Mails in queue 2296 Ads in rotation 30
Memberships (free and upgraded) Get Paid By Clicking!
All emails are Worth $20000 All PTC are worth $10000
$20000 signup bonus
$2000 referral bonus Redemption starts at only $500000
We send redemption within 48 hours
No downline is required for the payout
Payments Will be Made via Liberty Reserve, Moneybookers, E-Gold!
Fast Payments for Honest Members

2 Ref levels of commission under you; Level 1 – 20%, Level 2 – 10%

PCash is not a multi-level marketing site! This is a Pay per Action Site and the membership is completely free to join. You are not required to recruit or sell anything in order to get paid.

Advertiser Benefits the most cost effective advertising. Guaranteed Clickthru Ad Options.email

ADVERTISING OR BANNER ADVERTISING.

Advertise to 100% opt in membership.

Members are eager to receive your ads. Absolutely no Spam! We will customize your Ad Campaign. Reliable, Friendly Service. Fast respond! Mostly in 24 hours will be processed. Advertising Will Be Made within 24 hours. Choose Your Page

EXPERIENCE

Membership has nearly tripled since I joined this site. Note the claimed payouts of over 62 Trillion, and all this with only 2300 emails and 30 banner ads. Payouts of 62,093,832,222.00 divided by 7,608 members’ give an average payout to each member of $816,000.

Not bad it if were true. But it is not, the payout number increases with each request for payment, but no money changes hands, only the tot board changes. Of course, this is not real, but seeing the numbers get so high, it became a game, a diversion, and sort-of addictive (how high can I go). As you will see, this site and others became a part of my Welcome to My USD 1M or More per Day Strategy. On paper, I was making money with this site, lots of it at a time when I was getting nothing from my other sites or advertising efforts. I accumulated a downline of 58 members. Clearly, this was a winner, by all measures, except that “No Payments” were received.

Even with my mentality that if you owe me a million, then 1% or $10,000 would be great, since although I would have like to have received something, but didn’t really need the money. However, I have learned that scammers don’t give up a dime. There is none of this take a little bit now and I will send the balance later stuff.

You have no contact with your downline, only the name and a $2,000 bonus tally. For that matter, the downline could be random generation of name to fill a list to keep you in the game. Since most of these scammers, as I have learned, own several sites, the same downline name probably shows more than one site.

The home page says payment will be made via different payment gateways. However, PayPal is now missing from the home page. A new name “Liberty Reserve” is shown. Liberty

Reserve came on strong and became the primary gateway for several other sites and No PayPal.

UPGRADE EXAMPLE

When you upgrade your free membership to a Gold Membership, you will receive the following benefits:

Free Referrals (3 x) – Your referral URL will be randomly inserted for surfers visiting the web site without a referral URL.
10,000 PTC Worth $10,000 monthly (?? If each PTC is worth $10,000, Why only $10,000 per month?) 10,000 banner impressions monthly
$20,000 solo paid email to all monthly

ADVERTISING

Are you interested in advertising with our company? Below are the different types of advertising services we provide. We offer many options and are confident; you will find one to fit your needs. How it works:

Click one of our advertisings from below.
If these advertise allow targeting – select your target groups.
When you are done you will have the price that you need to pay, calculated.
After you have paid for your ad package, please fill out the “Order Form” on the last step to complete the advertisement ordering process.
Complete all the information requested on the form then click submit.
Once your payment has been confirmed, we will process your order immediately.

8a. What Is An Entrepreneur?, IUH 2009-12, 2ND Ed, R513A

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Author Notes: Reference Copy, links to Original Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

8a. What Is An Entrepreneur?, IUH 2009-12, 2ND Ed, R513A

This applies to someone who establishes a new entity to offer a new or existing product or service into a new or existing market, whether for a profit or not-for-profit venture. Business entrepreneurs often have strong beliefs about a market opportunity and are willing to accept a high level of personal, professional or financial risk to pursue that opportunity. A Risk Bearer, an Organizer, an Innovator, a Leader

IN-BORN TRAITS OF AN ENTREPRENEUR

Entrepreneurs have a Desire to Achieve: The push to conquer problems, and give birth to a successful venture.
Hard Work: Are mostly workaholics.
A Nurturing Quality: Willing to take charge of, and watch over a venture until it can stand-alone. Acceptance of Responsibility: Are morally, legally, and mentally accountable for their ventures.
Reward Orientation: Desire to achieve, work hard and take responsibility, but also want to be rewarded handsomely for their efforts; rewards can be in forms other than money, such as recognition and respect.
Optimism: Live by the philosophy that this is the best of times, and that anything is possible. Orientation to Excellence: Often desire to achieve something outstanding of which they can be proud
Organization: Are good at bringing together the components (including people) of a venture. Profit Orientation: Want to make a profit; but the profit serves primarily as a meter to gauge their success and achievement. John G Burch Business Horizons, 1986

A SUCCESSFUL ENTREPRENEUR IS ONE THAT

Is motivated and who is able to motivate those around him / her Is able to manage time effectively
Has the ability to leverage off strengths and overcome weaknesses Manages resources well
Considers health as well as wealth
Is flexible and able to adapt well to change
Is willing to learn from others, Reads, Reads and Reads

CHALLENGES OF AN ENTREPRENEUR

Uncertainty of Income Cash Flow Management
Risk of Losing Your Entire Investment
Long Hours and Hard Work
Lower Quality Of Life Until the Business Gets Established High Levels of Stress, In-laws (Now or Future)
Complete Responsibility Are You Easily Discouraged?
Do you feel personally stressed and feel threatened under pressure Constantly stake personal reputation and tend to give guarantees.
Be hard yet more flexible and more streetwise than a corporate executive. Be good at multitasking – able to do everything.
Intermittent, unpredictable income
Self-Discipline, Patience, Listening, reading Personal technological competence, Internet The buck stops with you!
Think of new ideas and deliver them to the market and make a profit.
Provide leadership to his team against established competition with minimal resources.
Raise finance without a track record, collateral or internal experts.
Pay staff first; you get paid when it is prudent to do so.
Be prepared to lose everything if things go wrong

ENTREPRENEURSHIP OPPORTUNITIES

Create your own destiny
Do what you enjoy
Fulfill your vision,
Doing and to have ambition and fun at it Passion
Contribute to society
To be recognized for your efforts Make a difference
Reap unlimited profits Reach your full potential

ARE YOU ENTREPRENEURIAL?

Independence Seeking
Wealth Seeking Opportunity
Seeking Innovative
Venture Seeking Risk
Accepting Intuitive

ARE YOU NON-ENTREPRENEURIAL?

Laborers, Bureaucrats, Lenders, Professionals Managers – Access Yourself

Assess Your Own Capabilities, Resources And Characteristics.

This Helps You Concentrate on Your Strengths As well As Identify the Additional Tools, Resources and Skills You’ll Need – From Financing to Market Planning to Bookkeeping.

What Do You Want?

Do You Have The Right Skills, Temperament and Work Style?
Have You Thought About what is involved?
Are You Comfortable With Having All The Decisions Rest With You
From Employees, To Suppliers, Production, Sales, And Management?

INVESTIGATE – WHY ARE YOU HERE?

IF YOU HAD A CHOICE, WHAT WOULD YOU RATHER BE DOING?

What concerns do you have? What is attractive to you?
What is your idea or marketplace opportunity?
What characteristics of an entrepreneur are important to you?
What skills and experiences do you have that will help you become successful?
What entrepreneurial skills and experiences do you lack at this point in time?
How many months can you live without income?

WHAT IS/ARE YOUR MOTIVATIONS?

I want to be my own boss
I have identified a new business idea or opportunity
I feel I can achieve more in my life through entrepreneurship
I believe my job opportunities are limited due to my age, skills and experience
I want a career that will align better with my personal values

HOW MUCH DO YOU KNOW ABOUT LEADERSHIP?

Planning Problem Solving Vision Innovation Leadership
Emotional Intelligence Delegation Communication
Self-Development Relationship Building Commercial Financial skills Personal Energy Ethics
Transparency

DO YOU HAVE A PASSION FOR BUSINESS?

How do you know if you have this passion?
Ask yourself. If you won the first prize in a competition, would you still want to be online and go into this business?
When you love your work, it becomes contagious, as everyone around you is infected.

BELIEVE IN YOURSELF AND BOOST YOUR SELF-CONFIDENCE

Have trust or faith in a person or thing.
Possess a feeling of assurance, especially of self-assurance.
The state or quality of being certain: I have every confidence in my idea and my ability to succeed.
Do you have a feeling of emotional security resulting from faith in one-self?
Confidence is a firm belief in one’s powers, abilities, or capacities
“You gain strength, courage and confidence by every experience in which you really stop to look fear in the face” (Eleanor Roosevelt).
Self-confidence, trust in one’s own self-sufficiency

Just think: What difference would it make in your life if you had an absolutely unshakable confidence in your ability to achieve anything you really put your mind to? What would you want and wish and hope for? What would you dare to dream if you believed in yourself with such deep conviction that you had no fears of failure whatsoever?

Most people start off with little or low self-confidence, but as a result of their own efforts, they become bold and brave and outgoing. And we’ve discovered that if you do the same things that other self- confident men and women do, you, too, will experience the same feelings and get the same results.

The key is to be true to yourself, to be true to the very best that is in you, and to live your life consistent with your highest values and aspirations. Brian Tracy

COMMITMENT

A pledge to do, an obligation
Something pledged, especially an engagement by contract involving financial obligation
The state of being bound emotionally or intellectually to a course of action or to another person or persons
“What one has, one ought to use: and whatever he does he should do with all his might” –Marcus T. Cicero
“A person with half volition goes backwards and forwards, but makes no progress on even the smoothest of roads” – Thomas Carlyle

HOW ABOUT ATTITUDE?

Your attitude is a frame of mind with which you approach a subject, a problem, a person or any circumstance.
It is positive, negative or indifferent.
The most important aspect of attitude is that you and you alone are in full control of it , the choice is totally yours,
Hence, if you choose to look at things in the positive light, then you will find that many doors will be opened to you because positive outlook presents you with a “can-do” attitude.

DO YOU HAVE A FEAR OF FAILURE?

If you are paralyzed by the fear of failure, you will remain inactive. No one wants to fail but when it happens, there is nothing to fear. Courage is not the absence of fear; it is moving forward through fear.
Walt Disney formed his first animation company in Kansas City in 1921. Flushed with success, he began to experiment with new storytelling techniques, his costs went up and then the distributor went bankrupt. He was forced to dissolve his company, at one point could not pay his rent, and was surviving by eating dog food. PopCrunch

Henry Ford. Unfortunately, he focused too much on the engineering and not enough on marketing, resulting in poor sales and bankruptcy. He was forced to leave the business in 1902 after investors threatened to withdraw their capital. FreeInfoSociety

It is the Kiasu syndrome, a self-defeating emotion that creates fear that gets in your way – FEAR of losing, One who is afraid to lose out to someone else, often to the point of selfishness; an over-cautious person; afraid of losing out to someone else, and therefore often behaving selfishly and disregarding others; dog in a manger

OVERCOMING YOUR FEARS

Use fear as a propellant.
The Dalai Lama: “Unless you have a strong feeling of self-confidence based on a strong self, it is difficult to do battle with negative emotions”.
It is the role of intelligence with the full awareness that is provided by education, to judge and accordingly utilize the potential for one’s benefit or well-being
” We have nothing to fear, but fear itself”. U.S. President Franklin Delano Roosevelt
Your effective decisions are limited by your knowledge and understanding of business

USE YOUR FEAR AS A MOTIVATOR

On the positive side, fear can be a Motivating Factor.
“In this business, by the time you realize you are in trouble,
it is far too late to save yourself, unless you are running scared all the time.” Bill Gates
“Courage is doing what you’re afraid to do. There can be no courage unless you’re scared.” — Eddie Rickenbacker
If the fear is rational, it serves as a warning alarm about real risks you may be taking.
If you pay attention to it, apply some reason to it, and think it through objectively, you can keep yourself from taking foolish risks.
You can minimize the unavoidable risks. (Inc)

ARE YOU A PROCRASTINATOR?

Procrastination is to put off doing something, especially out of habitual carelessness or laziness, or to postpone or delay needlessly.
Some people just never get started. If you want to change your life, then you must take action.
No Guts – No Glory
Damn the torpedoes, full-speed ahead – Admiral David Glasgow Farragut, First Admiral of the United States Navy
The Early Bird Gets the Worm – Meaning: Success comes to those who prepare well and put in effort. John Ray’s a collection of English proverbs 1670, 1678
Nothing Succeeds like Success – Meaning: the idea that success breeds further success. Sir Arthur Helps, in Realmah, 1868
TIP: You got the idea! The Scammers love to use these same phrases: Take action now, Do it today, Last chance! Only 5 copies are left
You are right; even some legitimate marketers may use some of these techniques

ARE YOU READY TO ACCEPT THE RISK?

Are you well suited to running a company, what is your business experience? How much are you willing to stake, and what are the potential risks you will face? Will I be dedicated to this venture?
How much of my time and myself can I commit?
Can I manage the stress on myself and my family and friends at the start-up stage? How can I manage my time effectively?
Long hours will test your character in many ways. Can you handle that? Does your venture motivate you enough to make you go for it?
What is your MINDSET?

HOW MUCH DO YOU KNOW ABOUT THE FOLLOWING TOPICS?

Marketing – Types And Various Methods of Online Marketing, email, Traffic Sites, Lead Providers
Pricing – Selling EBooks, Or Reselling Books and Products? Regulations (Laws)
Spam Licensing
Record Keeping – Track Your Sites, IDs and Passwords Financing
Capital/ Other Expenditures – Desk, Computer, High-Speed Internet Provider, Printer, Supplies Technology – Keep Your Computer Running
Cash Flow Management – Some Sites Charge A Monthly Fee Competition – Big Boy Affiliate Marketing
Taxes Employees Benefits/Perks
Suppliers – Affiliate Products, Shipping, Payment, Legitimate Health Community – Online Communities and Groups
Social/Ethical Issues – Spam, Social Networking Scams
TIP: If you have taken the time to go through the preceding and have been fair and honest with yourself; then take the time to make a Plan of Action for Your Personal Development.
Take little steps, but DO take the first one.

STEPS TO A GREAT BUSINESS PLAN

We have discussed your personal Plan of Action for your Personal Development; now we need a Plan of Action for your Business. You can make a business out of your hobby, but you cannot treat your business like a hobby. Failure to plan is said to mean that you plan to fail.” Your banker, JV Partner, or sometimes a supplier usually requests business plans Even if you are not looking for a banker, Joint Venture partner, etc., it is wise to have some idea of a plan, what your product or service is, how you are going to market it, what milestones are your using, what is your budget, financial projections, etc. It should include your strengths and weaknesses, and your plan of action to improve your potential for success.

Write out your basic business concept.
Gather all the data you can on the feasibility and the specifics of your business concept. Focus and refine your concept based on the data you have compiled.
Outline the specifics of your business, using a “what, where, why, how” approach.
Put your plan into a compelling form so that it will not only give you insights and focus
Plan should become a valuable tool in dealing with business relationships that will be very important to you.
Keep it simple English, use graphics and tables

A SIMPLE BUSINESS PLAN [removed]

HOW TO SET UP YOUR BUSINESS PLAN

By setting up YOUR business plan, you are road mapping your way to success. It will help you to develop your business goals and strategies, as well as providing you with a better understanding of the marketplace. It will also highlight any business strengths or weaknesses that you may have, as well as provide you with an opportunity to take a close look at your competitors.

If you want, you can also include financial projections, historical data and growth expectations into your plan. With any good business plan, it should show who the target audience is, and just how the product or service that is to be provided will meet or exceed their needs and expectations.

ORGANIZING: BREAK IT DOWN INTO SECTIONS SUCH AS:

Business Summary – The product or service you want to provide.
Market Analysis – Research the product or service. Find out what the competitors are doing Product Positioning – How to make it more prominent compared to your competitors.
Market Strategy – How are you actually going to market it? Customer Analysis – Look at what the customer wants or needs.
Financial Analysis – What you need to invest in order to set up the business and to keep it going while it is just getting started
Overall Business Goals – What you hope to achieve in, say, a year’s time. HomeBusiness

The forgoing is another example of various online resources to help you, free. However, if you do not take the time to make and use a plan, at least prepare a schedule of things to do, and allocate the time for each task. Big jobs can be broken into daily tasks.

Thanks for Reading – 8a. What Is An Entrepreneur?, IUH 2009-12, 2ND Ed, R513A

Dr Don, Founder, ICFO

8b. Preparing to do Business Online, IUH 2009-12, 2ND Ed, R513A

Leave a reply

Author Notes: Reference Copy, links to Original Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

8b. Preparing to do Business Online, IUH 2009-12, 2ND Ed, R513A

Perhaps the greatest contributor to our failure on or offline is our lack of personal preparation to do business. Offline business usually start with you, your passion, interest or perhaps a hobby. It is easy to recognize what your need to get started: Money or capital, home or rental/lease location, business cards, signage, etc. Online; it looks so cheap and easy, but soon you find it is not!

Entrepreneurs are not always business minded; most have little or no business experience. Both off and online businesses suffer the same problem with their owners. I believe it is reasonable to say that starting an online scam site is easier than a legitimate site. All you have to sell to get paid is satisfaction to someone’s need, whether you can deliver or not.

All legitimate business off or online, can run into problem with cash flow, management and other business ailments, so just because they fail does not mean that they were a scam.

With that said, this chapter concerns your personal capability to run a business and works fine both off and online businesses. You are given the opportunity to you to assess your strengths and weaknesses, assess your business potential and facilitate a personal plan of action. Your business will not grow and you will lose most of the potential growth or your business until you realize how important personal preparation is to you.

Be fair and honest with your assessments! Take notes and develop your personal Plan of Action for starting or growing a Success Business Online

PLANNING TO DO BUSINESS ONLINE?

Too many new users (newbies) think that doing business online is easy, and will solve their financial problem. According to the hype It Is! Just look, the start-up costs for doing offline as compared to starting online.

However, if you think you can jump into any business without being personally prepared, without a plan and a without a proper mindset to treat your online experience as a BUSINESS, instead of a HOBBY; then you are destined to join and be one of the 95% +/- failure rate statistics that may be found for both offline as well as online businesses. The statistics for Forex failures is even higher at 98%.

However, according to a Dr Jeff Cornwal l of Belmont University “Ask an average group of people what the survival rate is for entrepreneurial ventures and the figures you usually get are 10-20%. The truth is much rosier than common wisdom assumes.

As reported by the National Dialogue on Entrepreneurship , a new study from the Bureau of Labor Statistics “examines the survival rates of new businesses started between 1998 and 2002. It finds that 66% of new establishments started in 1998 were still operating two years after they started; forty-four percent were still operating in 2002.”

The only sector that showed significantly lower rates was the dot.com group, which crashed during this time. Factoring that group out and we are getting closer to the 50% figure that most experts believe to be an accurate estimate. Studies that examine entrepreneurs who have had training and/or education in entrepreneurial skills consistently show a much higher success rate (as high as 80-90%).

While we are here to learn to avoid scams; we are also here to help you succeed. Take your time and see what skills you can improve. Those of you that have joined us, and are already successful online, great, we can use your help. Others, use this section to help determine your needs and to develop your plan of action. With proper planning, learning, mindset and treating your business as a business, you can significantly increase your potential for success. In following sections, we will help you to identify, understand and avoid the Scams. Avoiding Scams will further increase your opportunity for success, but using your resources where they can help you instead of filling the scammer’s pockets.

Business failures are difficult to track because the facts vary with the source and the way the numbers are gathered. For example, we can measure the number of Offline Businesses that start within a year or two and deduct those that do not renew their business license. However, no license is required for an Online Business.

While we can document the change in the number of bankruptcies, but just because a business did not renew their license does not mean the business went bankrupt. All we know is that the business may have closed for some reason; wrong business, wrong or obsolete product, timing, lost motivation, divorce and for that matter any reason will do. Online hobbies can be ceased at any time – no paper trail.

IF YOU ARE CONSIDERING A NEW BUSINESS?

Have You Evaluated, Researched and Really Understand Your Idea Or Opportunity? Have You Evaluated Your Personal Needs?
Does Your Idea or Product, Service Fulfill A Need? Do You Have Start-Up Capital And Reserves?
Can You Face and Make Decisions? Are You Ready To Stick With It?
Do You Have Adequate Skills, Resources, and Credit? Do You Know Where Get Assistance, Information?

GENERAL ASSUMPTIONS

Keep it simple and let us just accept the general numbers of 90% +/- failure rate and accept that that is after 5 years. Of these, the failure rate for online business is 50% within the first 6 months to a year, while offline the percentage is say 50% after 2 years.

Most of us understand that offline businesses require a greater investment to set up the business, licenses, location, furniture and equipment, etc. Offline businesses are lucky if they breakeven in months to a year, while most take longer, if at all.

These entrepreneurs must concern themselves about matters of government regulations, policies and politics, brick and motor location, capitalization, payrolls, risks, etc. Most of the offline business failures are a result of undercapitalization and miss-management., no plan.

Your capital investment for an online business is much less; but that does not mean or guarantee that you can or will be an overnight success, as others would have you believe. Unlike offline business, you are not so concerned about matters of government regulations, policies and politics, brick and motor location, capitalization, payrolls, etc.

As said before, those that have some basic business skills or background, training and an entrepreneur sprit have a much greater chance of success and are better suited for business. Add to that, those that have a plan; i.e., business, financial, and marketing plans have a significantly better chance of success. Offline entrepreneurs may have a passion, interest or idea, a product or service that they feel can be marketed online. Those that start online may also have an idea, product or service, but the majorities are just looking for extra money. They most likely become an affiliate of someone else’s product or service.

A fulltime commitment is better that a part-time effort for any business. Regardless of the type business, you undertake, you should understand your suitability to go into that business, assess your strengths and weaknesses, what are you needs, and what is your understanding of the risks.

The Scammers will tell you, you do not need money, or not that much, and that they will do everything or most of the work for you. Just sit back and collect your money. If you believe that, then you may as well stop reading further.

In business, we must understand ourselves, what is involved. Some of you want to be your own boss, or you have already started your business, some of you are retired, or work at home moms, whether online or offline. Maybe some you want a change of career or just want to supplement your income.

Look at the following and be honest with yourself. Many items are applicable to the offline business, but some for both. Consider them, i.e. what can you do, what do you know, what are your interests, can you do it online?

INVESTIGATE – WHY ARE YOU HERE?

IF YOU HAD A CHOICE, WHAT WOULD YOU RATHER BE DOING?

What concerns do you have? What is attractive to you?
What is your idea or marketplace opportunity?
What characteristics of an entrepreneur are important to you?
What skills and experiences do you have that will help you become successful?
What entrepreneurial skills and experiences do you lack at this point in time?
How many months can you live without income?

WHAT IS/ARE YOUR MOTIVATIONS?

I want to be my own boss
I have identified a new business idea or opportunity
I feel I can achieve more in my life through entrepreneurship
I believe my job opportunities are limited due to my age, skills and experience
I want a career that will align better with my personal values

HOW MUCH DO YOU KNOW ABOUT LEADERSHIP?

Planning Problem Solving Vision Innovation Leadership
Emotional Intelligence Delegation Communication
Self-Development Relationship Building Commercial Financial skills Personal Energy Ethics
Transparency

DO YOU HAVE A PASSION FOR BUSINESS?

How do you know if you have this passion?
Ask yourself. If you won the first prize in a competition, would you still want to be online and go into this business?
When you love your work, it becomes contagious, as everyone around you is infected.

BELIEVE IN YOURSELF AND BOOST YOUR SELF-CONFIDENCE

Have trust or faith in a person or thing.
Possess a feeling of assurance, especially of self-assurance.
The state or quality of being certain: I have every confidence in my idea and my ability to succeed.
Do you have a feeling of emotional security resulting from faith in one-self?
Confidence is a firm belief in one’s powers, abilities, or capacities
“You gain strength, courage and confidence by every experience in which you really stop to look fear in the face” (Eleanor Roosevelt).
Self-confidence, trust in one’s own self-sufficiency

The key is to be true to yourself, to be true to the very best that is in you, and to live your life consistent with your highest values and aspirations. Brian Tracy

COMMITMENT

A pledge to do, an obligation
Something pledged, especially an engagement by contract involving financial obligation
The state of being bound emotionally or intellectually to a course of action or to another person or persons
“What one has, one ought to use: and whatever he does he should do with all his might” –Marcus T. Cicero
“A person with half volition goes backwards and forwards, but makes no progress on even the smoothest of roads” – Thomas Carlyle

HOW ABOUT ATTITUDE?

Your attitude is a frame of mind with which you approach a subject, a problem, a person or any circumstance.
It is positive, negative or indifferent.
The most important aspect of attitude is that you and you alone are in full control of it , the choice is totally yours,
Hence, if you choose to look at things in the positive light, then you will find that many doors will be opened to you because positive outlook presents you with a “can-do” attitude.

DO YOU HAVE A FEAR OF FAILURE?

If you are paralyzed by the fear of failure, you will remain inactive. No one wants to fail but when it happens, there is nothing to fear. Courage is not the absence of fear; it is moving forward through fear.
Walt Disney formed his first animation company in Kansas City in 1921. Flushed with success, he began to experiment with new storytelling techniques, his costs went up and then the distributor went bankrupt. He was forced to dissolve his company, at one point could not pay his rent, and was surviving by eating dog food. PopCrunch

OVERCOMING YOUR FEARS

Use fear as a propellant.
The Dalai Lama: “Unless you have a strong feeling of self-confidence based on a strong self, it is difficult to do battle with negative emotions”.
It is the role of intelligence with the full awareness that is provided by education, to judge and accordingly utilize the potential for one’s benefit or well-being
” We have nothing to fear, but fear itself”. U.S. President Franklin Delano Roosevelt
Your effective decisions are limited by your knowledge and understanding of business

USE YOUR FEAR AS A MOTIVATOR

On the positive side, fear can be a Motivating Factor.
“In this business, by the time you realize you are in trouble,
it is far too late to save yourself, unless you are running scared all the time.” Bill Gates
“Courage is doing what you’re afraid to do. There can be no courage unless you’re scared.” — Eddie Rickenbacker
If the fear is rational, it serves as a warning alarm about real risks you may be taking.
If you pay attention to it, apply some reason to it, and think it through objectively, you can keep yourself from taking foolish risks.
You can minimize the unavoidable risks. (Inc)

ARE YOU A PROCRASTINATOR?

Procrastination is to put off doing something, especially out of habitual carelessness or laziness, or to postpone or delay needlessly.
Some people just never get started. If you want to change your life, then you must take action.
No Guts – No Glory
Damn the torpedoes, full-speed ahead – Admiral David Glasgow Farragut, First Admiral of the United States Navy
The Early Bird Gets the Worm – Meaning: Success comes to those who prepare well and put in effort. John Ray’s a collection of English proverbs 1670, 1678
Nothing Succeeds like Success – Meaning: the idea that success breeds further success. Sir Arthur Helps, in Realmah, 1868
TIP: You got the idea! The Scammers love to use these same phrases: Take action now, Do it today, Last chance! Only 5 copies are left
You are right; even some legitimate marketers may use some of these techniques

ARE YOU READY TO ACCEPT THE RISK?

Are you well suited to running a company, what is your business experience? How much are you willing to stake, and what are the potential risks you will face? Will I be dedicated to this venture?
How much of my time and myself can I commit?
Can I manage the stress on myself and my family and friends at the start-up stage? How can I manage my time effectively?
Long hours will test your character in many ways. Can you handle that? Does your venture motivate you enough to make you go for it?
What is your MINDSET?

HOW MUCH DO YOU KNOW ABOUT THE FOLLOWING TOPICS?

Marketing – Types And Various Methods of Online Marketing, email, Traffic Sites, Lead Providers
Pricing – Selling EBooks, Or Reselling Books and Products? Regulations (Laws)
Spam Licensing
Record Keeping – Track Your Sites, IDs and Passwords Financing
Capital/ Other Expenditures – Desk, Computer, High-Speed Internet Provider, Printer, Supplies Technology – Keep Your Computer Running
Cash Flow Management – Some Sites Charge A Monthly Fee Competition – Big Boy Affiliate Marketing
Taxes Employees Benefits/Perks
Suppliers – Affiliate Products, Shipping, Payment, Legitimate Health Community – Online Communities and Groups
Social/Ethical Issues – Spam, Social Networking Scams
TIP: If you have taken the time to go through the preceding and have been fair and honest with yourself; then take the time to make a Plan of Action for Your Personal Development.
Take little steps, but DO take the first one.

STEPS TO A GREAT BUSINESS PLAN

Write out your basic business concept.
Gather all the data you can on the feasibility and the specifics of your business concept. Focus and refine your concept based on the data you have compiled.
Outline the specifics of your business, using a “what, where, why, how” approach.
Put your plan into a compelling form so that it will not only give you insights and focus
Plan should become a valuable tool in dealing with business relationships that will be very important to you.
Keep it simple English, use graphics and tables

A SIMPLE BUSINESS PLAN [removed]

HOW TO SET UP YOUR BUSINESS PLAN

ORGANIZING: BREAK IT DOWN INTO SECTIONS SUCH AS:

Business Summary – The product or service you want to provide.
Market Analysis – Research the product or service. Find out what the competitors are doing Product Positioning – How to make it more prominent compared to your competitors.
Market Strategy – How are you actually going to market it? Customer Analysis – Look at what the customer wants or needs.
Financial Analysis – What you need to invest in order to set up the business and to keep it going while it is just getting started
Overall Business Goals – What you hope to achieve in, say, a year’s time. HomeBusiness

Thanks for Reading – 8b. Preparing to do Business Online, IUH 2009-12, 2ND Ed, R513A

Dr Don, Founder, ICFO

9a. Follow Your Passion – Online Business, IUH 2009-12, 2ND Ed, R513A

Leave a reply

Author Notes: Reference Copy, links to Oringnal Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

9a. Follow Your Passion – Online Business, IUH 2009-12, 2ND Ed, R513A

Thus far; you have had the opportunity to assess your skills and develop your plan of action, or a personal action plan for doing business online. I hope you took advantage of that opportunity. Every business person, off or online, needs personal growth to help grow their business as well. Otherwise you will spend too much of your budget (hopefully profits) outsourcing these tasks to others. Take your plan seriously, implement and follow up often to check your progress.

We have introduced you to Our Internet Scams Anonymous Groups and how our members can supplement this Handbook to help you do business online while recognizing and avoiding the scams We have warned you and given examples of the various Scams that you are likely to encounter online, Spam and how to deal with it as well as Managing your email

In this chapter, we start looking at various types of online business. It is widely accepted that the more successful online marketers follow an interest or passion start their own business and have their own website.

Unfortunately, most new users are already looking for money by the time they turn to the Internet. Often is desperation they respond to the first email or site that triggers their need to make money. Admit it or not, they often are taken by scammers who are Masters in taking your money in return for false promises.

They just join this and that program as an affiliate, and never realize the real potential that the Internet has to fulfill their passion.

COMMON QUESTIONS – WHERE DO I START? WHAT IS BEST?

You have been allowed to learn more about yourself, now let us try and find a suitable business for you. Doing business online is not much different than doing business offline, except for the obvious differences; location, brick and mortar, leases, licenses, signage, business cards and letter head, etc.

It is not a simple, single step, sign up. We do all the work for you and sit back and collect your money process

What do you already know about business and it its various functions, products and pricing, sales and marketing, distribution, after sales support, etc.

You need a plan(s); plan for your business, plan for your marketing, a financial plan and a personal action plan. What do you and your business need and where are you going to get it.

Most offline business starts from an interest, a hobby or a passion. (Sure you get buy a franchise and they train you, but this is going to be your business)

Online should not be much different: What is your passion? Then Google find products or services that help fulfill your passion. Pick perhaps 3 or 4 and do your own due diligence, Join 1 or 2 and take responsibility for your decision

WHAT ARE YOUR INTERESTS? OFFLINE

In starting an offline business, it is simple; you may already have a hobby or an interest that you want to turn into a business, or you have a passion for an idea that you believe will be a great business opportunity – so you follow your interests.

These off-liners may take their business to the Internet for purposes of widening their marketing efforts. This is simple for various professional services, including specialized Doctors and Lawyers.

ONLINE

This in itself creates a full range of online service providers; designers, programmers, graphic designers, website developers, online marketing specialists, payment gateways, hosting and copy writers. eCommerce provides a fairly cheap way of gaining exposure for your product.

Just for fun; a search for Online Shopping sites = 13,000,000, while a search for Online Shopping Websites = 48,800,000 so go ahead, get your own shopping site. Of course you may have a niche product such as one successful eBay marketer that sells only “Big Men’s Clothes.”

Perhaps you are a writer; you can take advantage and ease of being a self-publisher. There is a great demand for Informational sites. Blogs, forums, online news, e-magazines, almost anything that where you are a specialist. Freelancing is an option to consider.

Even songwriters introduce themselves and their music online. Many of these free writers, bloggers, etc. are all trying to steer you to a favorite of theirs, so free is free, but do your homework.

Therefore, there are many different types of successful online businesses. For almost any product, or service that is offered, there are types of online businesses. Many of these types of online business are very successful. To succeed in any business, you must have a good business plan, be hard working, offer a good product at a fair price, and offer great customer service. WSI Corporate

THE IMPORTANCE OF PASSION

Whichever business model you choose we believe it should involve something you are passionate about. Something you love to do. Do you LOVE playing video games? Awesome, make that the focus of your business. Do you love chocolate (and who doesn’t?), but do you really love chocolate? Great, create a web business around that.

Every web business that I have ever started has been based on something I have a passion for and enjoy thoroughly. I cannot tell you how important this is. Because making money online is great, but making money online doing something you, love is even better.

I have a passion for eBusiness (hence this site). The reason I wanted to start this guide was to (yes, hopefully make a little extra money) but also to help other people start web businesses of their own. Not necessarily to become millionaires or retire at the age of 30 or any of that, but to maybe help make ends meet, or maybe provide a little extra cash so they can save for their daughter’s education, or provide a little bit of passive income so they can retire a few years early.

Not everybody who starts an Internet business is going to be able to give up their day job and to do it full time like I do. However, I am certain most of you can; at the very least, create some incremental revenue for yourselves.

When I meet people and tell them what I do, they say, almost without exception, something like “That sounds great, I wish I could do something like that.” I tell them that they can, anybody can, and you just have to be willing to try it.

When I mention this people; generally they say something like, “But I wouldn’t even know where to start.” Therefore, I put this guide together so that when people say that, I can just hand them a business card with this web address on it and say, “Now you do” ThreeBusGuide

Sure you may have an interest or an idea, but you don’t have the resources to develop them online. You can always try the same avenues of getting money as the liners; friends, family, relatives, partners, bankers, etc.

But online, most just turn to the net to supplement their income or to make a quick buck as promised by the scammers. Unfortunately, they lose to the first scam the sounds like it solves their problem

It has little to do with their real interest; their interest is making money to pay bills, send the children to college, and improve their lifestyle and retirement.

TIP: You are more likely to succeed in a business that you have some interest in and are passionate about. You are less likely to become a victim of a scam.

WHAT ARE THE BEST TYPES OF INTERNET BUSINESSES?

The Writer Asks

I want to start an Internet business, but haven’t yet sorted out my options.
I want something that has the potential to grow. I would greatly appreciate your responses. Thank U
Didn’t I read this elsewhere?
You should read ‘Rich Dad Poor Dad’.
You can start any business and be a success or failure It all has to do with mindset. Work on that first
BE — DO — HAVE Luc Arnold

FIVE PERFECT ‘SPARE-TIME’ ONLINE BUSINESSES

It does not take much time or effort to start moonlighting on the Internet. With all the doom and gloom news about the economy, there has never been a better time to make an extra paycheck online with a minimal amount of time and effort. If you have an Internet connection, you can get started on the road to having the Internet pay for your mortgage, car payment, kids’ college tuition, or even that special vacation you have wanted. Now, do not worry that you have to be a tech whiz to start a business online-

-I am a complete techno-dunce.

A perfect part-time business would have to be very easy to start, require little time and money and no technical expertise, be easy to maintain with just a few hours a week and have a proven track record with a high probability of success.

There is actually one other important criteria–it has to be perfect for you! Experience has taught me that it is different strokes for different folks, and there is no “one size fits all” perfect business. You are much more likely to be successful if you do something you find fun and interesting. With that in mind, here are five of the best ways to make extra cash moonlighting on the Internet:

AFFILIATE MARKETING

This may possibly be the absolute laziest way to make money because it doesn’t require you to have a product, make a sale or ever have any interaction with customers. This is essentially a “referral” business, or as one of my book contributors likes to call it, “passionate recommendations.” Basically, you can get paid a referral commission just for sending people to sites (or vendors) that are set up to pay affiliate fees once a sale is made. The vendor does all the selling, fulfills the purchase and handles any customer service issues–and you just collect your check….not bad!

Some people choose affiliates based on whom or what is paying the highest commissions and that certainly is a viable option. Most people opt to choose products or goods they are passionate about so that the process is much more fun and engaging.

Insurance and credit card companies pay high commissions for referrals that convert to customers ($40 to $150 and up), but the competition is fierce. It may pay well, but is this something you’ll enjoy doing for the long haul?

Alternatively, you could take a look at your hobbies and other things you enjoy and see which affiliate programs are good matches. As always, do your research to verify the viability of your market. A good place to look for ideas (and downloadable products just waiting for an affiliate) is ClickBank.com.

BLOGGING

This business is best suited for folks who enjoy communicating about a particular subject. Think of blogs as journals of sorts. Although you can have a personal blog, writing about a particular topic will have a higher chance for financial success. The range of topics is virtually endless–photography, sports cars, parenting, dieting, star gazing, the latest gadgets, Hollywood gossip–you name it, as there are blogs on just about everything you can imagine. Don’t worry about competition. Folks who read one blog are apt to read others on a topic they’re passionate about, as long as you have something interesting to say.

Once your blog starts getting traffic, you can make money passively with things like AdSense (Google’s ad revenue sharing plan) or actively by doing a little bit of affiliate marketing.

You can see both types of moneymaking strategies at SparkleCat.com, which is a blog about a person’s cat. What makes it interesting is that it’s written from the cat’s perspective and often refers to her “human.” At the top of the page are Google AdSense ads, and sprinkled throughout are suggestions for things like cat furniture and premium cat food, which are tied to an affiliate program. Pretty cool, no?

EBAY

One of the largest online marketplaces makes it a piece of cake to get your own business going. You can open an account and start making money within hours on eBay!

While I dislike that whole “sell your garbage on eBay” thing, there is some validity to it as many people get their start on eBay by selling items from their garage or attic that pre-eBay would have been thrown out. This approach is fine, but where is the business once you run out of those items? If you want to create an eBay business that doesn’t require tons of time and effort, you need to leverage products that can be sold over and over again.

This is one of the reasons I’m not a fan of the “eBay seller for these” kinds of opportunities, where you sell things on eBay for other people. You get access to stuff people want to sell, but because each item is unique you have to work to list each and every one. There’s no leverage there!

Take a look at some of the largest eBay Power Sellers and notice how they specialize in very specific products (iPods, cell phones, dog grooming kits, etc.). This allows them to leverage their efforts. A listing is created once, and money is collected over and over again.

Unlike information marketing, this business requires the handling of physical goods, but even that can be automated, so it shouldn’t prevent you from considering this idea.

INFORMATION MARKETING

We’re in the information age, and the Internet provides you with the ideal medium to exchange know- how for money. Do you know the best fishing holes? How to play guitar? The secrets to a successful marriage? A recipe for moist and delicious brownies? A trick for saving gas? Think about your career, your hobbies and your interests. Virtually anything you know can be turned into extra cash. And don’t worry if you think you’re not an expert–as long as you know more than the average person on the topic, that information is valuable.

However, if you do not believe you know anything those others would pay for (highly unlikely); you can take someone else’s know-how and make money that way! It could be as easy as interviewing a veterinarian to help you create a dog-training product. Ninety-two percent of people go online looking for information, and you could be one of the many people cashing in on selling it.

YAHOO! STORE

This business is very similar to eBay in the sense that it’s a monster-sized marketplace but more similar to a store in the true sense of the word. Think having your own retail outlet but without the hassles of rent, employees, utilities and all the other expenses of a traditional brick-and-mortar store. The neat thing is that it can be as hands-on or as hands-off as you want it to be because of companies called drop-shippers, which can do most of the work for you. In fact, you don’t even pay for the inventory until you make a sale. How cool is that? Most people think the hard part of this business is creating your virtual store, but nothing could be further from the truth. Yahoo! has made the templates and wizards so easy that, dare I say, even a caveman can do it!

The best way to ensure your success is to do your homework and research what products people most want to buy. You need to find a niche. Once again, start with things you enjoy. Let’s say you love fishing. What products do fishing folks want to buy most? (Or get even more specific, like, what are bass fishermen looking to buy?) Then the task is to find the right source of those products so you can carry them in your Yahoo! Store. In most cases, you’ll be able to pull pictures and product descriptions directly from your sources and plug them right into your store. Yanik Silver

Thanks for Reading – 9a. Follow Your Passion – Online Business, IUH 2009-12, 2ND Ed, R513A

Dr Don, Founder, ICFO

9b. Which is Better, a Product, or a Service Site?, IUH 2009-12, 2ND Ed, R513A

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Author Notes: Reference Copy, links to Oringnal Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

9b. Which is Better, a Product, or a Service Site?, IUH 2009-12, 2ND Ed, R513A

This is one of the fiercest (and most childish, in my opinion) debates in network marketing, and I feel the need to address it head-on for two reasons. The first and most important reason is that infighting between network marketers for the sake of making their individual home-based business opportunities look superior is silently one of the biggest cancers that attack the credibility of all of network marketing as a whole.

The second reason is to provide some clarity for those unfortunate prospects and/or distributors who may have been confused, misinformed, or misguided (probably a mix of all three) by this catty nonsense.

Here’s the simple answer: it really depends on YOU. What inspires you, what jives with you, and what you feel most comfortable with? Contrary to its notoriously cookie-cutter image, network marketing is one of THE most customizable home-based business opportunities or businesses period that has

ever existed, which is one of the things that I absolutely love about it. So now for the longer answer! The first time I caught wind of this little debate was about 10 years ago when I had started my first home-based business in MLM. It was a well-respected service company that is still going strong to this day. A leader from the front of the room was making a snide, tongue-and-cheek remark about how he didn’t want to “sell lotions and potions or fill up the trunk of his car with products”.

I didn’t think much about it at the time. I was one of the flocks, and what he said made perfect sense to me. The more experienced team members that surrounded me nodded their heads in agreement like pew-sitters in a Baptist church. (It was much later that I would find out that almost NONE of them were making any real money after YEARS in the business but that’s another article!)

So, my first impression on this whole issue was formed: service companies were the way to go, and product companies were absurd, laughable affairs where you had to carry a trunk full of stuff. This was my way of thinking for years until I joined a product company!

I can’t speak for ALL companies (neither product nor service), but here are just a FEW startling comparisons between my first two companies—one product, one service. The biggest eye-popper was the fact that in my first product company, people were making bigger checks with much smaller organizations. The #1 money earner (my upline) at that time was making about $100,000 each month (I saw his checks with my own eyes). He had 1,000 distributors and 10,000 customers in his organization.

The leader of my former team (in the service company) was making about $30,000 each month. This guy had at LEAST 10,000 distributors and tens of thousands of customers. My jaw dropped when I realized this.

In my product company, it was easier for me to help others be successful. In the first service company that I was in, you’d never make any decent money unless you were able to recruit large numbers of people into your business. So what about people who weren’t that good at recruiting?

In my first product company, I noticed that each time I or one of my distributors got an additional customer that equated in several additional dollars in RESIDUAL income. In that company, I was making

$100 per month in residuals with just 16 customers. In my service company, I had 20 customers and made about $5 in residual each month.

In my service company, your residual never amounted to much unless you had a huge organization that was at least 6 levels deep. The problem with this is that most people will NEVER see 6 levels in their organization. And in home-based business it is critical that people make enough money to keep them in the game until they either “wake up” and start producing, or eventually recruit a superstar.

There was a huge difference in the attrition rate. Because almost nobody made CONSISTENT money in my service company (recruiting bonuses don’t count. These are promotional. In network marketing, the only income that REALLY matters for longevity is a residual check from real customers); the attrition rate was the typical 90% that exists in MLM. In my product company, that attrition rate was much closer to 50%-60% percent.

The people that I brought in made more money. This was what struck me the most. Due to where I was mentally at that time, I never had much success in that product company due to my own unwillingness. However, I learned THE most valuable lessons of my entire network marketing career. One of them was that I noticed was that due to the compensation plan, EVERY person that I ever brought in made money-

–that was not the case with my service company. Because of this, even when people quit, none of them could say that they had not made money and this helped to not put a strain on my friendships as people decided not to do the business anymore.

Now, please understand that this is NOT a cheerleading article for product companies vs. service companies! I am comparing two very specific experiences from two companies that I have personally done business with.

If you were to choose a random service company and a random product company and compare the two, you would find a great deal of variation as far as which one was “better”-and that is my point.

There is no “hard and fast rule” of “which is better” when it comes to the service companies vs. product companies debate. As a matter of fact, as soon as I hear anyone, and I do mean ANYONE going in the direction of making the argument one way or another I immediately know that I am dealing with an amateur that does not get the bigger picture of the network marketing home-based business world outside of their company. So should you. LawrenceCole

THE DEBATE: PRODUCT OR SERVICE

For me that was a question when I started online. As I have said, offline many years ago, I had done the AMWAY, Tupperware etc. Online, I can still do all those; but here is the problem. If you are located in the USA, then products are easy to deal with; you can load your car and garage and sell your products. If you are overseas, many products have to be approved for import unless you claim for personal consumption. In some case, the country must license any products to do business in that country. Even then, some of the products that you may want may not be importable.

Not all products are properly labeled. If health or diet-related, may be dangerous. Often these types of products do not come with USDA approval and all you have is the claims and guarantees of the manufacturers. You take the risks. Nowadays, health drinks of one kind or another and healthy chocolate seem to be the rage. Unlike going out of business in the USA, you cannot easily return products; most online companies are once sold, and there is no return policy.

Over my beginning years online, I tried several product affiliations since most product sites typically have a better compensation plan than do service sites.

MY EXPERIENCE WITH PRODUCTS

XXXXXX Health Net, now out of business, where I learned to understand “autoship” and “bundling” You will receive a shipment every month and you don’t get to pick individual products; you have to take one of the pre-bundled packages. Good for them; not so good for you.

XXXXXX, a health drink, was a terrible experience, If you like downlines, they give you spillover, lots of it – nearly 30,000 names, but the downline is useless to you – if it is even real?

Because you only have a name, no access, the sponsor retains access. With downline, you need access to your team, to motivate them, help them, etc.

Sponsors claim to be available to solve problems, but they were not. Too busy getting more signups than taking care of present members.

They wanted a US address, because when I first signed as they were not shipping to Malaysia, at that time. I would have had to re-ship for personal use.

This should have been disclosed in advance of any sign-up or upgrade.

I upgraded for a $500 shipment during their transition to open Asia operations. Several attempts to get sponsors, support, and management, to stop the shipment for re-shipment to me in Asia,

The company did not attempt to reconcile the matter; then claim backs the shipment, since no one was there to accept it, etc.

Failed. Lost $500. Nobody helped or even read their emails.

XXXXXXX Chocolate, similar problems, wanted a US Address, willing to ship to local and reship, lots of workarounds, helpful, but for $1300 I passed. I had already joined, but wasn’t made aware of the problem until I tried to upgrade, and then only after I had made the order and they wanted to ship.

Most of the better, organized product sites, advise you in advance before your signup that they do not do business here or there. Check the FAQ’s and Terms.

Most products pay better, if you can manage your shipments, etc. For me, I have learned that I prefer to babysit paper as opposed to products. Make sure the company can do business in your country.

LAST NOTE ON PRODUCTS

I have a concern about all the dietary, sliming, health drinks, and beauty products that are pushed via our online affiliate programs. Some come with certifications, research, etc. Few if any are FDA or equivalent agency-approved. And yes, I have seen those that even after stringent FDA approval guidelines still suffer the recalls.

Many companies that market their products through distributors sell quality items at competitive prices. But some overpriced offer goods, have questionable merits or are downright unsafe to use.

The Federal Trade Commission warns consumers to apply a healthy dose of caution before buying products advertised as having “miracle” ingredients or techniques and guaranteed results. Many of these “quick cures” are unproven, fraudulently marketed and useless or even dangerous. Before using one of these products, the best prescription may be to check with a health professional. FedTradeCommission

10 REAL WAYS TO MAKE MONEY WITH YOUR WEBSITE

These days we can all use a bigger income, but it is easier said than done. But the Internet has given us all opportunities that were never possible before to create our success.

Many people make a good living online and many claim to have gotten rich, but many people are trying and trying but nothing is happening. I tried for several years before I started making a good living online so I would like to share some of the things that helped me increase my income. Although I have not tried every method listed below, I have tried several of them and they have worked for me.

AFFILIATE PRODUCTS

Find quality products and services that offer a commission and sell them on your site. Be sure they are relative to your site and if possible try the product out first so you can give a personal recommendation. Personal recommendations can help increase your sales. You can find affiliate products at AffiliateSeek, Clickbank, and AffiliateTips.

CLASSES AND WORKSHOPS

Organize some informative classes and workshops to teach your visitors how to do ‘whatever’.

Sell space to attend these events. Offer a variety of classes such as a week-long class, month-long, etc. You could also produce some effective webinars. You can also recruit affiliates for these services as well.

DONATION BUTTON

You see this more and more often these days. People offer a lot of free resources and content on their sire and ask for donations from the people who utilize this information. You can get the buttons directly from PayPal and place them on your site. To do this, you must provide quality content and value to your visitors so they feel a donation would be appropriate.

DROPSHIP SALES

Dropship means you can sell products without having to ship them or stock them. You find a company that offers drop shipping, sign up with them and start selling their products on your blog. Anytime you get an order, you send it to the main company and they ship the product out to your customer. The customer will think the product came from your store and you get a portion of the profits. You make money simply by taking orders and the dropship company does the rest. Dropship companies will usually require a membership fee, either monthly or annually.

SELL RESELL EBOOKS AND SOFTWARE

You can easily add a digital product store script to your existing blog and sell eBooks and software with resell rights. EBooks are very popular and the demand for them is increasing. You can also sell videos, music, and other downloadable files from your digital store.

EXCLUSIVE ACCESS

Offer private content, forums, classes, etc. to members only. Charge a monthly or annual fee for this membership. People will pay for valuable information they can’t seem to find anywhere else.

GOOGLE ADSENSE

This is not my favorite but it does work well for some people. What this entails is placing numerous ads on your site, chosen by Google. Anytime these ads are clicked on, you will get paid a portion of what the advertiser has paid Google. Google will choose ads that are relevant to your site’s contents. So, what this means is that if you sell jewelry Google will place ads on your site to other people who sell jewelry and related products. So, in essence, you are sending people to your competitor’s sites. Although I do not agree with this, many people claim to make a good chunk of change each month using Google AdSense!

SELL ADVERTISING

Offer advertising space on your blog. You can offer text ads, banner ads and even video and audio ads. You can charge monthly and annual fees to give your customers a better value.

10a. Affiliate Programs, IUH 2009-12, 2ND Ed, R513A

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Author Notes: Reference Copy, links to Original Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

10a. Affiliate Programs, IUH 2009-12, 2ND Ed, R513A

In this chapter, you will see that almost anything that can be sold – can be sold online. Find out the differences between the three online networks, legitimate Affiliate, Affiliate multiplier and MLM and the illegal Pyramid schemes.

Trying to rank these programs, as to which is best for you, is difficult because most site owners are selling their affiliations or MLM.

Learn the differences between each scheme. What legitimate ways to earn and be successful online are? As in the previous Chapter, find something of interest to you

WHAT IS AN AFFILIATE PROGRAM?

TIP: As you review the various materials and references, you may note that many references are still confused and treat any multi-tier program or MLM as a pyramid – it is not, as we hope to clarify for you herein. Again, as in the previous section, try to find something that interests you and do your due diligence.

The affiliate is the middle man/woman that exists between the customer and the seller. Other names include associate, broker, agent, dealer, etc.

Affiliate program marketing is one of the best ways for newbies to learn how to make money on the Internet and to make a lot of money. There are thousands and thousands of ordinary people, who are making an extraordinary living from affiliate program marketing.

For the newbie’s affiliate program marketing is when you go to a company A, who sells a product or service. You complete the quick application process. The company approves your application. The company provides you with a unique link. This link contains your own unique affiliate ID. It is up to you to market this product and when you make a sale you get a commission on the sale. Don’t worry about how to make a sale. It can be done without moving from your couch. To join the affiliate marketing program is free.

One of the things you may be wondering about is where do I find these companies to become affiliated to? The best way is to go to a search engine on the net and type in Affiliate program marketing directories.

You will find thousands and thousands of companies who would kill to get you to market their products or services. The one that I like and use is at clickbank.com. It has a great selection (thousand) of products to market.Clickbank.com also guarantees that you will get paid your commission. They also have a 30-day money-back guarantee on the products.

SELECTING A PRODUCT

Now selecting a product is one of the most important aspects off affiliate marketing:

To start select a product that you now have an interest in or are passionate about. This will make it easier for you to market.
Do some research on the product.
See if it is popular and does what it claims to do.
Look at the commission that you will be generating.
It can be anything from 25% to 75%.
It takes the same effort to make 25% or 75% commission.
I would take the 75% commission product.
Last but not least. All affiliate program marketing programs are in essence the same, but do differ in some small ways and these small differences can make a big difference in money.

Most affiliate program marketing programs are in essence the same, but there are some small differences and these small differences can make a big difference. The difference comes in the amount of money you can generate per month.

The first and one of the major differences between different affiliate program marketing programs is, is in the amount of commission that are paid to you. This could be from 25% to 75% it takes the same effort to sell a 25% or 75% commission product. There are lots of programs that pay 75% commission and the product cost more than $100.I know which program I will be promoting. The major reason being the fact that it takes the same effort and expenses to make a lot more money. Don’t fool yourself making money is what it is all about.

The next kind of affiliate program marketing program to consider is membership websites or as it is also known a residual income program. Here you are marketing membership to an affiliate marketers program or website at a monthly subscription.

When people join the program through your efforts, you receive a commission for your sale, but it does not stop there. You also get a percentage of the subscription fee of these members who joined because of you. This you get every month for as long as the person stays with the program. You work once and are paid forever.

There are even same of this affiliate program marketing programs that gives you commission on the subscription of the members who joined the members who joined you. This adds up to a lot of money. This is cold leverage, doing more with less.

The next difference comes in the form of customer care and training. This is the biggest difference between the different affiliate program marketing programs. This one can make or break you, so focus. The good programs will have great customer care and would bend over backwards to help you succeed. This will come in the form of pre-written solo-ads-mail, training video etc.

The great programs will have all of the above plus a plan that you can follow to make a success of your Internet business. This is a win, win situation if you succeed and make money they succeed and make money. AffiliateProgram

Sometimes it can be an automated marketing program where a Web advertiser or merchant recruits webmasters to place the merchant’s banner ads or buttons on their own Web site. Webmasters will receive a referral fee or commission from sales when the customer has clicked the affiliate link to get to the merchant’s Web site Web site to perform the desired action, usually make a purchase or fill out a contact form. The most common types of affiliate programs include pay-per-click, pay-per-lead, and pay-per-sale.

HOW AFFILIATE MARKETING WORKS

If you have a Web site or blog and are looking for a way to earn income from your online property, consider affiliate-marketing programs. Affiliate marketing is the term used to describe a revenue- sharing plan where an online automated marketing program lets Webmasters place an advertiser’s banner ads or buttons on their own Web site. Webmasters will receive a referral fee or commission from conversions when a customer has clicked the affiliate link and performs the desired action, such as make a purchase or opt-in for downloads or newsletters on the advertiser’s site.

Advertisers invest in affiliate programs for lead generation, and, of course, sales. Not all affiliate plans work in the same way or pay the same rates. Some enable you to place text or image hyperlinks to products or a Web site, others allow you to set up a shopping or store page that offers products related to the content of your Web site, and others require you to place general advertising banners or buttons. The payouts for Webmasters also varies, but in the most common forms the affiliate is paid per click, each time a person clicks the ad (pay-per-click) or you may be paid a commission when a sale is made (pay-per-sale) or you might be paid by lead (pay-per-lead).

LEARN THE LINGO – [removed]

If you’re in affiliate marketing, here is a quick reference of some of the more common terms used in conjunction with affiliate marketing. By familiarizing yourself with the terminology you will be better able to understand the affiliate agreement, how different programs work, and how you can earn money. Below you’ll find direct links to common affiliate marketing terms from Webopedia.com.

TYPES OF AFFILIATE WEBSITES

Affiliate websites are often categorized by merchants (i.e., advertisers) and affiliate networks. There are currently no industry-wide accepted standards for the categorization. The following types of websites are generic, yet are commonly understood and used by affiliate marketers.

Search affiliates that utilize pay per click search engines to promote the advertisers’ offers (i.e., search arbitrage)
Comparison shopping websites and directories
Loyalty websites, are typically characterized by providing a reward system for purchases via points back, cash back
CRM sites that offer charitable donations
Coupon and rebate websites that focus on sales promotions Content and niche market websites, including product review sites
Personal websites (This type of website was the reason for the birth of affiliate marketing; however, such websites are almost reduced to complete irrelevance compared to the other types of affiliate websites.)
Weblogs and website syndication feeds

Email list affiliates (i.e., owners of large opt-in -mail lists that typically employ email drip marketing) and newsletter list affiliates, which are typically more content-heavy

Registration path or co-registration affiliates who include offers from other merchants during the registration process on their own website

Shopping directories that list merchants by categories without providing coupons, price comparisons, or other features based on information that changes frequently, thus requiring continual updates

Cost per action networks (i.e., top-tier affiliates) that expose offers from the advertiser with which they are affiliated to their own network of affiliates

Websites using adbars (e.g. AdSense) to display context-sensitive, highly-relevant ads for products on the site Wikipedia

ADVERTISERS

Different advertisers offer different types of affiliate programs. If you join a search engine affiliate program you most likely will be placing text links or banners to their advertisers and you’ll work on a pay-per-click fee. email list affiliates promote email newsletters and are usually paid when a person joins the advertised opt-in email list. Being an affiliate of any merchant usually means you are paid a commission per sale on the advertiser’s Web site. Pay-per-click affiliate programs pay the least amount, as affiliates are often paid per thousand clicks (CPC).

PAY-PER-LEAD PROGRAMS

Pay-per-lead programs are when you provide the links to downloads, trial offers, email optin lists and so on. Depending on the advertiser you may be paid per lead generation or you may not be paid unless the user subscribes and pays for a full service from the advertiser.

Again, you may also receive fees for both instances.

PAY-PER-SALE AFFILIATE

Pay-per-sale affiliate programs (also called revenue sharing) usually offer the highest commissions, and you will typically receive a set dollar amount per sale or a straight percentage of the total sale. Because a user has to purchase something, you may find this program best suited to high-traffic affiliate sites.

HOW DO THEY WORK?

Knowing what ads to place and what revenue your Web site generates isn’t magic.
Once you join an affiliate program, you then are able to choose the products or banners you want to include on your Web site, and then receive the code you will need to insert on specific Web page or throughout your Web site.
This changes, however, when you select an ad revenue partnership, such as Google AdSense, for example where you have little or no control over the advertisement displayed.
In joining the affiliate program, you will agree to their terms of service, called an affiliate agreement, which will tell you what requirements you must meet and how the click-through, lead generation or sales are tracked.
For the most part, affiliate programs work by using a combination of a unique user ID and cookies to track your leads and subsequent revenues.
Most will offer a private affiliate section on their Web site where you can get your HTML code and also check your affiliate account status and information.
Through the use of browser cookies, any person who uses your link to make the desired action within a set amount of time contributes to your affiliate revenue.

For example if a user follows your link and looks through an online software store they are tracked as “your referral” by the browser cookie. If the person makes the purchase before the cookie expires, you get the referral commission. So even if a user sits with items in their shopping cart but doesn’t go back and make the purchase for two weeks, you can still get the commission, provided the cookie is still active.

For the Webmaster, one of the hardest things about using an affiliate program to earn money is finding a good one that will actually produce results for you. To better your chances of earning revenue from affiliate marketing here are some tips to get you started;

Always read the fine print. Make sure you understand how the payouts are structured, if you need to earn a minimum dollar amount before a payout, and, of course, compare commissions between similar affiliate programs.

Once you have narrowed down your options to a handful of possibilities, take a look at the merchant or marketers’ Web site rankings and traffic. If, for example, you have your choice narrowed down to three computer software e-tailers, you can use Google and Alexa rankings to help you determine which may have a better volume of traffic.

While their Web site traffic won’t directly help you promote their products, this may tell you which company has a larger customer-base (more traffic). A well-known name that your Web site visitors may be familiar with might encourage them to click the advertising links on your own site

Choose affiliate programs that complement your Web site content. If your site is all about sports, then chances are you’ll want to skip on setting up a co-branded Web store for cartoon themed car accessories, for example. Also, if affiliate programs offer customizable banners, buttons or splash pages that can be edited to reflect elements of your own site design, be sure to take advantage of those options.

Don’t be afraid to play the field and try a couple affiliate programs, or opt out of one and choose another if you’re not seeing any results after time. Results are going to be based on how much traffic your own Web site gets. If your site serves only a couple visitors a day, you can’t expect high click-through numbers.

CHOOSING AN AFFILIATE PROGRAM

Because there are such a large number of affiliate programs to choose from and many are structured differently, here are some tips to keep in mind while looking for a good match. First, you need to be sure you are comfortable with the product you’re promoting or selling and you have confidence in the advertiser you are linking to.

Check the pages on the advertiser’s Web site. If it’s something you yourself would never consider purchasing, or it possibly looks a bit unreliable, then chances are your visitors won’t be interested in it either. If you’re running a content-based site, you don’t want to sell anything that might offend visitors or lower their opinion of your site.

The best rule of thumb is to pick affiliate programs that offer something that’s relevant to your site. For example, if your Web site is about registering domain names, look for affiliate programs that are related to the topic such as Web site hosting, Webmaster tools and software, Web site templates and so on.

There is nothing worse than advertisements that stand out like a sore thumb on your pages (e.g., online casino ads placed on a Web site about elementary school math tutorials). Even niche sites can find affiliate programs that are a good match.

What is the Advertiser really offering its affiliates? Make sure you really understand the affiliate agreement and that you’ll be able to comply with it. Take the time to check out the advertiser before joining to ensure they really do pay out to affiliates and that their program is not a scam. Look at what the advertiser is offering in terms of tracking and reporting tools for affiliates. Good programs will provide you with a way to access real-time automated statistics to view conversions, sales and commissions.

Be sure you have ad and product display options to integrate the advertising into your Web site. Can you change the colors, themes and choose from a selection of different sized banners and buttons? With this type of service it means a little less work for you, the affiliate, and it also means your affiliate program meshes with your site. Some higher-pay programs may look attractive, but may offer a higher commission because they might not provide support and tools to their affiliates. If this is the case, make sure you determine if this program will be too high-maintenance for you before joining.

Pay-per-click programs offer the lowest dollar value for conversions, and you will need a higher click through rate to earn money. Pay-per-lead and pay-per-sale programs will usually offer a higher commission, but you will have less visitors clicking through to complete the transactions, so you need to have many unique visitors. Use your own traffic and reporting tools to determine which type of program will have a better chance of success on your own site. WebOPedia

DEFINING A GOOD AFFILIATE PROGRAM

Affiliate programs are a popular way to earn money online. But do you know what to search for in an affiliate program? It is important that you know what constitutes the best affiliate program before you sign up with any program. 8 Key factors that define a good affiliate programs are as follows:

REPUTABLE, HIGH QUALITY PRODUCTS, SERVICES OR BUSINESS OPPS

If you join up an affiliate program that does not have a good reputation, you will be wasting your money and time, and your online reputation will also be affected. An affiliate program with high reputation will also enable you to succeed because it will be easy for you to make sales

GOOD REFERENCES AND STABILITY

The Internet is full of scams. You will therefore need to join an affiliate program that has some good reviews and references; and the company must be stable and financially sound.

If you do not research this, you risk joining an affiliate program which is a scam.

PAYS HIGH COMMISSION

Various affiliate programs offer a wide range of commissions. You will need to look for an affiliate program where your earnings are high. The affiliate program’s commission structure is therefore very important, and you need to be fully informed about the potential commissions you can earn for each sale before you join any affiliate program.

RESIDUAL INCOME OPPORTUNITY

The best affiliate program is one for which you are rewarded several times over, just from a single sale. For example, if you make a sale today, some affiliate programs will reward you if that customer makes another purchase in the future, or if they refer someone who will make a purchase. This will simply increase your earnings in the long run.

RELIABILITY OF PAYMENT

Research on how reliable the affiliate program is at paying its affiliates. When you are in business, you will have some ongoing costs, such as marketing your business, and driving traffic to your affiliate website. You will therefore need to have constant payments to help you with the cash flow. Equally important is how frequent the program pays its affiliates. You would not want to wait months before you get paid.

AVAILABILITY OF SUPPORT AND MARKETING TOOLS TO AFFILIATES

You will need all the support and tools you can get in order for you to make sales and earn some commission. Some affiliate programs are good than others in terms of proving this support. Do your research and find an affiliate programs that offer support and tools that will make your job easier.

A PROGRAM THAT SUITS YOUR INTERESTS OR MATCH YOUR ONLINE BUSINESS

It is important for you to choose an affiliate program that has products or services that are of interest to you, so that you will enjoy marketing them. If you already have an online business and a website, you will need to choose an affiliate program that matches or complements what you already sell on your website.

Your affiliate business is a long-term commitment, so you will need to make the right choice so that you sign up with a program that has products that you will enjoy marketing.

A PROGRAM THAT IS STILL GROWING AND HAS A HUGE POTENTIAL MARKET

You must avoid signing up with a program that is not popular or is declining in its reputation. While it is important to choose an affiliate program that has been in existence for a while and is stable, avoid joining a program that has exhausted its market growth potential or is simply losing its attractiveness. You want to sign up with a program that is in high demand and will be easy for you to sell.

By using the guideline presented above, you will be able to pick an affiliate program that pays you well and on time. You will also join an affiliate program with easy-to-sell products that have high reputation and are in demand; and you will get the necessary support to make it easy for you to make sales.

As an affiliate, you will want to see your commission checks increasing gradually over time; and the above factors will make this possible for you, if you select the right affiliate programs. HomeBasedBusiness

ISSUES WITH AFFILIATE MARKETING

Since the emergence of affiliate marketing, there has been little control over affiliate activity. Unscrupulous affiliates have used spam, false advertising, forced clicks (to get tracking cookies set on users’ computers), adware, and other methods to drive traffic to their sponsors. Although many affiliate programs have terms of service that contain rules against spam, this marketing method has historically proven to attract abuse from spammers.

ADWARE

Although it differs from spyware, adware often uses the same methods and technologies. Merchants initially were uninformed about adware, what impact it had, and how it could damage their brands. Affiliate marketers became aware of the issue much more quickly, especially because they noticed that adware often overwrites tracking cookies, thus resulting in a decline of commissions.

Affiliates not employing adware felt that it was stealing commission from them. Adware often has no valuable purpose and rarely provides any useful content to the user, who is typically unaware that such software is installed on his/her computer.

Affiliates discussed the issues in Internet forums and began to organize their efforts. They believed that the best way to address the problem was to discourage merchants from advertising via adware.

Merchants that were either indifferent to or supportive of adware were exposed by affiliates, thus damaging those merchants’ reputations and tarnishing their affiliate marketing efforts. Many affiliates either terminated the use of such merchants or switched to a competitor’s affiliate program.

Eventually, merchants and affiliates to take a stand and ban certain adware publishers from their network also forced affiliate networks. The result was Code of Conduct by Commission Junction/beFree and Performics,] LinkShare’s Anti-Predatory Advertising Addendum, and ShareASale’s complete ban of software applications as a medium for affiliates to promote advertiser offers.

Regardless of the progress made, adware continues to be an issue, as demonstrated by the class action lawsuit against ValueClick and its daughter company Commission Junction filed on April 20, 2007.

EMAIL SPAM

In the infancy of affiliate marketing, many Internet users held negative opinions due to the tendency of affiliates to use spam to promote the programs in which they were enrolled. As affiliate marketing matured, many affiliate merchants have refined their terms and conditions to prohibit affiliates from spamming.

CLICK TO REVEAL

Many voucher code web sites use a click to reveal format, which required the web site user to click to reveal the voucher code. The action of clicking places the cookie on the website visitor’s computer. The IAB have stated “Affiliates must not use a mechanism whereby users are encouraged to click to interact with content where it is unclear or confusing what the outcome will be. “Answers

COOKIE STUFFING

Cookie stuffing involves placing an affiliate-tracking cookie on a website visitor’s computer without their knowledge, which will then generate revenue for the person doing the cookie stuffing. This not only generates fraudulent affiliate sales, but also has the potential to overwrite other affiliates’ cookies, essentially stealing their legitimately earned commissions.

LACK OF SELF-REGULATION AND COLLABORATION

Entrepreneurs who are working at the edge of Internet marketing drive affiliate marketing.

Affiliates are often the first to take advantage of emerging trends and technologies. The “trial and error” approach is probably the best way to describe the operation methods for affiliate marketers. This risky approach is one of the reasons why most affiliates fail or give up before they become successful “super affiliates”, capable of generating US$10,000 or more per month in commission. This “frontier” life combined with the attitude found in such communities is likely the main reason why the affiliate marketing industry is unable to self-regulate beyond individual contracts between advertisers and affiliates.

Affiliate marketing has experienced numerous failed attempts to create an industry organization or association of some kind that could be the initiator of regulations, standards, and guidelines for the industry.] Some examples of failed regulation efforts are the Affiliate Union and iAfma.

Online forums and industry trade shows are the only means for the different members from the industry—affiliates/publishers, merchants/advertisers, affiliate networks, third-party vendors, and service providers such as outsourced program managers—to congregate at one location. Online forums are free, enable small affiliates to have a larger say, and provide anonymity. Trade shows are cost- prohibitive to small affiliates because of the high price for event passes. An advertiser they promote may even sponsor larger affiliates.

Because of the anonymity of online forums, the quantitative majority of industry members are unable to create any form of legally binding rule or regulation that must be followed throughout the industry. Online forums have had very few successes as representing the majority of the affiliate marketing industry. The most recent example of such a success was the halt of the “Commission Junction Link Management Initiative” (CJ LMI) in June/July 2006, when a single network tried to impose the use of a JavaScript tracking code as a replacement for common HTML links on its affiliates.

LACK OF INDUSTRY STANDARDS – CERTIFICATION AND TRAINING

Affiliate marketing currently lacks industry standards for training and certification. There are some training courses and seminars that result in certifications. However, the acceptance of such certifications is mostly due to the reputation of the individual or company issuing the certification. Affiliate marketing is not commonly taught in universities, and only a few college instructors work with Internet marketers to introduce the subject to students majoring in marketing.

Education occurs most often in “real life” by becoming involved and learning the details as time progresses. Although there are several books on the topic, some so-called “how-to” or “silver bullet” books instruct readers to manipulate holes in the Google algorithm, which can quickly become out of date, or suggest strategies no longer endorsed or permitted by advertisers.

Outsourced Program Management companies typically combine formal and informal training, providing much of their training through group collaboration and brainstorming. Such companies also try to send each marketing employee to the industry conference of their choice.

Other training resources used include online forums, weblogs, podcasts, video seminars, and specialty websites. Affiliate Summit is the largest conference in the industry, and many other affiliate networks host their own annual events.

SEARCH ENGINE SPAM

As search engines have become more prominent, some affiliate marketers have shifted from sending email spam to creating automatically generated Webpages that often contain product data feeds provided by merchants. The goal of such Webpages is to manipulate the relevancy or prominence of resources indexed by a search engine, also known as Spamdexing. Each page can be targeted to a different niche market through the use of specific keywords, with the result being a skewed form of search engine optimization.

Spam is the biggest threat to organic search engines, whose goal is to provide quality search results for keywords or phrases entered by their users. Google’s PageRank algorithm update (“BigDaddy”) in February 2006—the final stage of Google’s major update (“Jagger”) that began in mid-summer 2005— specifically targeted Spamdexing with great success. This update thus enabled Google to remove a large amount of mostly computer-generated duplicate content from its index.

Websites consisting mostly of affiliate links have previously held a negative reputation for under delivering quality content. In 2005 there were active changes made by Google, where certain websites were labeled as “thin affiliates”. Such websites were either removed from Google’s index or were relocated within the results page (i.e., moved from the top-most results to a lower position). To avoid this categorization, affiliate marketer webmasters must create quality content on their websites that distinguishes their work from the work of spammers or banner farms, which only contain links leading to merchant sites.

Some commentators originally suggested that Affiliate links work best in the context of the information contained within the website itself. For instance, if a website contains information pertaining to publishing a website, an affiliate link leading to a merchant’s Internet service provider (ISP) within that website’s content would be appropriate.

If a website contains information pertaining to sports, an affiliate link leading to a sporting goods website may work well within the context of the articles and information about sports.

The goal in this case is to publish quality information within the website and provide context-oriented links to related merchant’s websites. However, examples that are more recent exist of “thin” Affiliate sites which are using the Affiliate Marketing model to create value for Consumers by offering them a service.

These thin content service Affiliate fall into three categories: Price comparison

Cause related marketing Time saving

TRADEMARK BIDDING

Affiliates were among the earliest adopters of pay per click advertising when the first pay per click search engines such as Goto.com (which later became Overture.com after being acquired by Yahoo! in 2003) emerged during the end of the 1990s. Later in 2000 Google launched its pay per click service, Google Adwords, which is responsible for the widespread use and acceptance of pay per click as an advertising channel.

An increasing number of merchants engaged in pay per click advertising, either directly or via a search marketing agency, and realized that this space was already well-occupied by their affiliates. Although this situation alone created advertising channel conflicts and debates between advertisers and affiliates, the largest issue concerned affiliates bidding on advertiser’s names, brands, and trademarks. Several advertisers began to adjust their affiliate program terms to prohibit their affiliates from bidding on those types of keywords. Some advertisers, however, did and still do embrace this behavior, going so far as to allow, or even encourage, affiliates to bid on any term, including the advertiser’s trademarks.

THREAT TO TRADITIONAL AFFILIATE NETWORKS

Cost per action networks may be viewed as a threat to “classic” affiliate marketing networks. Traditional affiliate marketing is resource-intensive and requires continual maintenance. Most of the maintenance includes managing, monitoring, and supporting affiliates. The goal of affiliate marketing is directed toward long-term and mutual beneficial partnerships between advertisers and affiliates.

Cost per action networks, however, eliminate the need for the advertiser to build and maintain relationships to affiliates, as that task is performed for the advertiser by the cost per action network. The advertiser makes an offer, usually CPA-based, and the cost per action networks handle the remainder of the process by mobilizing their affiliates to promote that offer. Cost per sale and revenue sharing are the primary compensation models for classic affiliate marketing, and are rarely found in cost per action networks. Affiliate marketers typically avoid the topic of cost per action networks; however, if it is being discussed, the debates can become heated and explosive.

Thanks for Reading – 10a. Affiliate Programs, IUH 2009-12, 2ND Ed, R513A

Dr Don, Founder, ICFO

10b. Pyramid Programs, IUH 2009-12, 2ND Ed, R513A

Leave a reply

Author Notes: Reference Copy, links to Original Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

1.1 PYRAMID SCHEMES

Pyramid Schemes are not illegal in many parts of the world, but more countries are getting on onboard. You need to understand them to avoid them. See Speech Below

In the classic “pyramid” scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same.

The fraudsters behind a pyramid scheme may go to great lengths to make the program look like a legitimate multi-level marketing program. But despite their claims to have legitimate products or services to sell, these fraudsters simply use money coming in from new recruits to pay off early stage investors. But eventually the pyramid will collapse. At some point the schemes get too big, the promoter cannot raise enough money from new investors to pay earlier investors, and many people lose their money. The chart below shows how pyramid schemes can become impossible to sustain:

NASecuritiesExchangeCommission(SEC)

FTC GUIDE TO PYRAMIDS

I would like to thank you for the opportunity to speak about the growing international problem of pyramid schemes. What is striking about these schemes is that while they are very old forms of fraud, modern technology has vastly multiplied their potential for harming our citizens. The Internet in particular offers pyramid builders a multi-lane highway to world-wide recruits in virtually no time.

WHAT IS A PYRAMID SCHEME AND WHAT IS LEGITIMATE MARKETING?

Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic.

They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure.

There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company’s incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company’s distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements.

A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.

PONZI SCHEME

A Ponzi scheme is closely related to a pyramid because it revolves around continuous recruiting, but in a Ponzi scheme the promoter generally has no product to sell and pays no commission to investors who recruit new “members.” Instead, the promoter collects payments from a stream of people, promising them all the same high rate of return on a short-term investment. In the typical Ponzi scheme, there is no real investment opportunity, and the promoter just uses the money from new recruits to pay obligations owed to longer standing members of the program.

In English, there is an expression that nicely summarizes this scheme: It’s called “stealing from Peter to pay Paul.” In fact some law enforcement officers call Ponzi schemes “PeterPaul” scams. Many of you may be familiar with Ponzi schemes reported in the international financial news. For example, the MMM fund in Russia, which issued investors shares of stock and suddenly collapsed in 1994, was characterized as a Ponzi scheme.

Both Ponzi schemes and pyramids are quite seductive because they may be able to deliver a high rate of return to a few early investors for a short period of time. Yet, both pyramid and Ponzi schemes are illegal because they inevitably must fall apart. No program can recruit new members forever. Every pyramid

or Ponzi scheme collapses because it cannot expand beyond the size of the earth’s population. When the scheme collapses, most investors find themselves at the bottom, unable to recoup their losses.

Some people confuse pyramid and Ponzi schemes with legitimate multilevel marketing. Multilevel marketing programs are known as MLM’s, and unlike pyramid or Ponzi schemes, MLM’s have a real product to sell. More importantly, MLM’s actually selling their product to members of the general public, without requiring these consumers to pay anything extra or to join the MLM system. MLM’s may pay commissions to a long string of distributors, but these commission are paid for real retail sales, not for new recruits.

HOW PYRAMID SCHEMES OPERATE

Let’s look at how a pyramid scheme operates from three points of view: the potential investor, the promoter or con artist, and the victim. Many pyramid schemes will present a payout formula or matrix much like this one:

	# Payment of $500
Level 1 $150 x 3 = $450	# #	#
Level 2 $30 x 9 = $270	# # # # # #	# # #
Level 3 $30 x 27 = $810	# # # # # # # # # # # # # # # # # #	# # # # # # # # #
Level 4 $30 x 81 = $2430 ——- $3960	etc. # # # # # # # # # # # # # # # # # #	# # # # # # # # #etc.

This example illustrates what is known as a three by four matrix. Each investor pays $500 to the promoter and is told to build a “downline” by recruiting three new members, who then each should recruit three more members. The investor is told that he will be paid $150 for each of the three members whom he enlists at the first level. The investor is also promised $30 commissions for each recruit at the next three levels. Thus, the investor should receive commissions for four levels of recruits below him, each of whom must recruit three more members, hence the name — a three by four matrix. To the potential investor/recruit this may look like a very appealing opportunity. The pyramid promoter is likely to persuade the investor that he is “getting in early” and that he should consider himself at the top of the matrix. From this perspective, it appears that he can earn $3,960 on an investment of $500, a whopping 792 percent return.

VICTIMS

Now consider the pyramid from the investor/victim’s perspective — after the entire scheme has collapsed around him. The victim, like the first investor, thought of himself at the top of the pyramid

but suddenly realizes that he is actually at the bottom, unable to find people interested in the program to build out his downline. He is not alone because mathematics shows that MOST investors will find themselves at the bottom of the pyramid when it collapses. The very structure of this matrix dictates that whenever the collapse occurs, at least 70 percent will be in the bottom level with no means to make a profit.

A Ponzi scheme could yield even worse results for investors, because it does not pay out any commissions at all. This can have disastrous consequences, as exemplified by Charles Ponzi’s infamous fraud in the 1920’s. Charles Ponzi, an engaging ex-convict, promised the Italian American community of South Boston that he would give them a 50 percent return on their money in just 45 to 90 days.

Mr. Ponzi claimed that he could pay such a high rate of return because he could earn 400 percent by trading and redeeming postal reply coupons.

These coupons had been established under the Universal Postal Convention to enable a person in one country to pre-pay the return postage on a package or letter sent back from another country. For a short time after World War I, fluctuations in currency exchange rates did create a disparity between the cost and redemption value of postal reply coupons among various countries.

However, Mr. Ponzi discovered that he could only make a few cents per coupon and that handling large volumes of coupons cost more than they were worth. He stopped redeeming any coupons but continued to collect investors’ money.

When he actually paid a 50 percent return to some early investors, his reputation soared and more money flowed in from around the country. Mr. Ponzi bought a stylish house in the best part of town and purchased a large minority interest in his local bank, the Hanover Trust Company.

Eventually his scheme began to unravel, bringing ruin to the bank and thousands of investors. When

Mr. Ponzi began to overdraw his accounts at Hanover Trust, the Massachusetts Banking Commissioner ordered Hanover Trust to stop honoring Ponzi’s checks. The bank refused and even issued back-dated certificates of deposit to cover Mr. Ponzi’s overdrafts. A few days later, the Banking Commission took over Hanover Trust, and Mr. Ponzi was arrested for mail fraud. In the end, Charles Ponzi owed investors over $6 million, an enormous sum of money for that time. He was convicted of fraud in both state and federal court and served ten years in prison.

AMWAY CORP

In re Amway Corp., another landmark decision from the 1970’s, the FTC distinguished an illegal pyramid from a legitimate multilevel marketing program. At the time, Amway manufactured and sold cleaning supplies and other household products. Under the Amway Plan, each distributor purchased household products at wholesale from the person who recruited or “sponsored” her. The top distributors purchased from Amway itself. A distributor earned money from retail sales by pocketing the difference between the wholesale price at which she purchased the product, and the retail price at which she sold it. She also received a monthly bonus based on the total amount of Amway products that she purchased for resale to both consumers and to her sponsored distributors.

Since distributors were compensated both for selling products to consumers and to newlyrecruited distributors, there was some question as to whether this was a legitimate multilevel marketing program or an illegal pyramid scheme. The Commission held that, although Amway had made false and misleading earnings claims when recruiting new distributors, the company’s sales plan was not an illegal pyramid scheme.

Amway differed in several ways from pyramid schemes that the Commission had challenged. It did not charge an up-front “head hunting” or large investment fee from new recruits, nor did it promote “inventory loading” by requiring distributors to buy large volumes of nonreturnable inventory. Instead, Amway only required distributors to buy a relatively inexpensive sales kit.

Moreover, Amway had three different policies to encourage distributors to actually sell the company’s soaps, cleaners, and household products to real end users.

First, Amway required distributors to buy back any unused and marketable products from their recruits upon request. Second, Amway required each distributor to sell at wholesale or retail at least 70 percent of its purchased inventory each month — a policy known as the 70% rule. Finally, Amway required each sponsoring distributor to make at least 1 retail sale to 10 different customers each month, known as the 10-customer rule.

The Commission found that these three policies prevented distributors from buying or forcing others to buy unneeded inventory just to earn bonuses. Thus, Amway did not fit the Koscot definition: Amway participants were not purchasing the right to earn profits unrelated to the sale of products to consumers “by recruiting other participants, who they are interested in recruitment fees rather than the sale of products.

PYRAMID SCHEMES IN THE 1990’S

The 1990’s first brought an important refinement in the law. As the Commission pursued new pyramid cases, many defendants proclaimed their innocence, stating that they had adopted the same safeguards — the inventory buy-back policy, the 70% rule, and the 10 customer rule — that were found acceptable in Amway.

However, an appellate court decision called Webster v. Omnitrition Int’l, Inc., pointed out that the Amway safeguards do not immunize every marketing program. The court noted that the “70% rule” and “10 customer rule” are meaningless if commissions are paid based on a distributor’s wholesale sales (which are only sales to new recruits), and not based on actual retail sales. The court also noted that an inventory buy-back policy is an effective safeguard only if it is actually enforced.

While new cases were refining the law in the 1990’s, radical changes were underway in the marketplace. Pyramid schemes came back with a vengeance. Like most economic activity, fraud occurs in cycles, and new pyramid schemes exploited a new generation of consumers and entrepreneurs that had not witnessed the pyramid problems of the 1970’s.

Also, the globalization of the economy provided a new outlet for pyramiding. Pyramids schemes found fertile ground in newly emerging market economies where this type of fraud had previously been scarce or unknown.

In Albania, for example, investors poured an estimated $1 billion into various pyramid schemes — a staggering 43% of the country’s GDP.

In the U.S., probably nothing has contributed to the growth of pyramid schemes as much as Internet marketing. The introduction of electronic commerce has allowed con artists to quickly and cost- effectively target victims around the globe.

After buying a computer and a modem, scam artists can establish and maintain a site on the World Wide Web for $30 a month or less, and solicit anyone in the world with Internet access. Pyramid operators can target specific audiences by posting messages in specialized news groups (e.g., “alt.business.home” or “alt.make.money.fast”). In addition, through unsolicited email messages — known on the Internet as “spam” — pyramid operators can engage in cheap one-on-one marketing.

Whereas it might cost hundreds or thousands of dollars to rent a mailing list and send 10cent post cards to potential recruits, it costs only a fraction of that to send out similar email solicitations. On the Internet, you can acquire one million email addresses for as little as $11 and spend nothing on postage. The Federal Trade Commission’s current law enforcement efforts reflect this new wave in pyramiding. The Commission has brought eight cases against pyramid schemes in the last two years, and six of those have involved Internet marketing. One recent case, FTC v. FutureNet, Inc., is particularly instructive because it starkly reflects the potential for abuse in hi-tech and newly deregulated industries. FutureNet allegedly claimed that, for payment of $195 to $794, investors could earn between $5000 and $125,000 per month as distributors of Internet access devices like WebTV.

The FTC filed suit, charging that FutureNet’s earnings claims were false because the company really operated an illegal pyramid scheme. Near the time of filing, FTC investigators discovered that FutureNet had begun to sell electricity investments as well, riding a wave of speculation in advance of the deregulation of California’s electricity market. The Commission obtained a TRO and an asset freeze over the defendants’ assets and eventually reached a $1 million settlement with the corporate defendants and two individual officers.

The settlement requires the defendants to pay $1 million in consumer redress, bars them from further pyramiding activity of any kind, requires them to post a bond before engaging in any network marketing, and requires them to register with state utility officials before engaging in the sale of electricity. The Commission continues to litigate its case against three non-settling individual defendants.

CONSUMER EDUCATION

Law enforcement is the cornerstone of the Commission’s fight against pyramid schemes; however, we also try to educate the public so that they can protect themselves. In our educational efforts, we have

tried to take a page from the con artists’ book and use new online technology to reach consumers and new entrepreneurs.

For example, on the agency’s web site at “www.ftc.gov“, the Commission has posted several alerts regarding pyramid schemes and multilevel marketing problems. The Commission records over 2 million “hits” on its home page every month and receives several thousand visitors on its pyramid and multilevel marketing pages.

The staff of the Commission also has posted several “teaser” web sites, effectively extending a hand to consumers at their most vulnerable point — when they are surfing areas of the Internet likely to be rife with fraud and deception. The “Looking for Success” site is one example. It advertises a fake pyramid scheme. The home page of “Looking for Success” promises easy money and talks in glowing terms about achieving “financial freedom.” On the second page, the consumer finds a payout plan common to pyramid schemes, as well as typical buzz words like “forced matrix,” “get in early,” and “downline.” Clicking through to the third and final page in the series, however, brings the consumer to a sobering warning: “If you responded to an ad like this one, you could get scammed.” The warning page provides a hyper-text link back to FTC.GOV, where consumers can learn more about how to avoid pyramid schemes.

LOOKING AHEAD

Unfortunately, pyramid schemes are likely to continue to proliferate both here and abroad in the near future. However, we can all help stem the tide by working together. Finally, you can encourage the relevant officials in your countries to combat pyramid schemes by educating consumers and businesses about how to recognize and avoid this type of fraud. This can be particularly important in emerging markets, where experience with investment opportunities may be scarce.

1.2 MULTI-LEVEL MARKETING PROGRAMS

The benefit of multilevel marketing could be also known as multilevel earnings. A single avenue of earning is you selling your product or service results in a one-time sale. There are no residual benefits to you unless you have a store such as ClickBank will you possible earn an additional sale of the same customer. Adding a multiple tier opportunity enables you to gain earning from your downline, perhaps one level or more – giving you greater and perhaps residual earnings from your one time sale.

In another Pay per Click or Pay to Read Section, you will see that those sites that actually pay you, pay your very little and the only way to make any real income, is to get paid from your work and the work of others – your downline.

The likelihood of a top guru joining your affiliate or MLM site is nil, because they can make their own sites faster that you can join them. So you either take your time and slowly build your downline, or you create your own site with enough content and value, that perhaps your will attract a Joint Venture partner, or o a top performance joins under you and brings his or her downline with them. For one opinion on the differences, see the following video

MLM VERSUS AFFILIATE MARKETING

An interesting MLM versus Affiliate Video. (Subtle selling vs. recruiting and selling) Also discusses Cash Gifting Programs and Pyramids Scheme – Legal issues. Do your homework. Limited money made from 2 tiers, 98% do not make money. Worth seeing! Search for 2 create a website and you will find a very aggressive and successful lady. See the difference ways she advertises from blogs to videos. MLM and Affiliates Marketing, Difference Between Affiliate Marketing and MLM

This site wants your direct view so we cannot publish the article, but we can link to the article. Link only site. AffiliatesSeeking.com is a good source of information on this subject and others.

IS IT MLM OR A PYRAMID?

TIP: Without your Due Diligence to check out a program before you spend your money, you may be at risk of participating in a pyramid scheme

Multilevel marketing plans, also known as “network” or “matrix” marketing, are a way of selling goods or services through distributors.

These plans typically promise that if you sign up as a distributor, you will receive commissions — for both your sales of the plan’s goods or services and those of other people you recruit to join the distributors. Multilevel marketing plans usually promise to pay commissions through two or more levels of recruits, known as the distributor’s “downline.”

If a plan offers to pay commissions for recruiting new distributors, watch out! Most states outlaw this practice, which is known as “pyramiding.” State laws against pyramiding say that a multilevel marketing plan should only pay commissions for retail sales of goods or services, not for recruiting new distributors.

WHY IS PYRAMIDING PROHIBITED?

Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people — except perhaps those at the very top of the pyramid — lose their money.

The Federal Trade Commission cannot tell you whether a particular multilevel marketing plan is legal. Nor can it give you advice about whether to join such a plan. You must make that decision yourself. However, the FTC suggests that you use common sense, and consider these seven tips when you make your decision:

Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.

Beware of plans that ask new distributors to purchase expensive inventory. These plans can collapse quickly — and also may be thinly-disguised pyramids.

Be cautious of plans that claim you will make money through continued growth of your “downline” — the commissions on sales made by new distributors you recruit — rather than through sales of products you make yourself.

Beware of plans that claim to sell miracle products or promise enormous earnings. Just because a promoter of a plan makes a claim doesn’t mean it’s true! Ask the promoter of the plan to substantiate claims with hard evidence.

Beware of shills — “decoy” references paid by a plan’s promoter to describe their fictional success in earning money through the plan.

Don’t pay or sign any contracts in an “opportunity meeting” or any other high pressure situation. Insist on taking your time to think over a decision to join. Talk it over with your spouse, a knowledgeable friend, an accountant or lawyer.

Do your homework! Check with your local Better Business Bureau and state Attorney General about any plan you’re considering — especially when the claims about the product or your potential earnings seem too good to be true. FedTradeCommission

LOTIONS AND POTIONS: THE BOTTOM LINE ABOUT MLM PLANS

Lose weight! Firm up!

Look better! Live longer!

‘Tis the season for consumers to be confronted with a wide range of health, beauty and fitness products and promotions. Many of these items aren’t available on store shelves and are sold only through distributors.

WHAT ARE YOU BUYING?

Many companies that market their products through distributors sell quality items at competitive prices. But some offer goods that are overpriced, have questionable merits or are downright unsafe to use.

WHAT ELSE IS FOR SALE?

Some distributors sell more than diet and exercise plans, vitamin supplements or wonder creams. Many may sell “opportunities,” too-a chance for you not only to buy, but also to market, the products. In addition to describing the benefits of their product or program, these distributors may encourage you to become a distributor.

If you sign up as a distributor, you may be promised commissions or other rewards-for both your sales of the plan’s goods or services and those of other people you recruit to become distributors. These plans, often called “multilevel marketing plans,” sometimes promise commissions or rewards that never materialize. What’s a worse, consumer are often urged to spend or “invest” money in order to make it.

WATCH OUT FOR PYRAMIDS

Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. They are actually illegal pyramid schemes.

Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people- except perhaps those at the very top of the pyramid-end up empty-handed.

HOW TO EVALUATE A PLAN

If you’re thinking about joining what appears to be a legitimate multilevel marketing plan, take time to learn about the plan before signing on.

What’s the company’s track record? What products does it sell?

How does it back up claims it makes about its product? Is the product competitively priced?

Is it likely to appeal to a large customer base?

What up-front investment do you have to make to join the plan?

Are you committed to making a minimum level of sales each month?

Will you be required to recruit new distributors to be successful in the plan?

Use caution if a distributor tells you that for the price of a “start-up kit” of inventory and sales literature

-and sometimes a commitment to sell a specific amount of the product or service each month-you’ll be on the road to riches. No matter how good a product and how solid a multilevel marketing plan may be, expect to invest sweat equity as well as dollars for your investment to pay off.

YOUR RESPONSIBILITIES

If you decide to become a distributor, remember that you’re legally responsible for the claims you make about the company, its product and the business opportunities it offers. That applies even if you’re simply repeating claims you read in a company brochure or advertising flyer.

When you promote the qualities of a product or service, you’re obligated to present those claims truthfully and to ensure there’s enough solid evidence to back them up. The Federal Trade Commission advises you to verify the research behind any claims about a product’s performance before repeating those claims to a potential customer.

Likewise, if you decide to solicit new distributors, be aware that you’re responsible for any claims you make about a distributor’s earnings potential. Be sure to represent the opportunity honestly and to avoid making unrealistic promises. If those promises fall through, remember that you could be held liable. FedTradeCommission

ND Ed, R513A

Dr Don, Founder, ICFO

10c. MLM Programs, IUH 2009-12, 2ND Ed, R513A

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10c. MLM Programs, IUH 2009-12, 2ND Ed, R513A

1.2 MULTI-LEVEL MARKETING PROGRAMS

MLM VERSUS AFFILIATE MARKETING

This site wants your direct view so we cannot publish the article, but we can link to the article. Link only site. AffiliatesSeeking.com is a good source of information on this subject and others.

IS IT MLM OR A PYRAMID?

TIP: Without your Due Diligence to check out a program before you spend your money, you may be at risk of participating in a pyramid scheme

Multilevel marketing plans, also known as “network” or “matrix” marketing, are a way of selling goods or services through distributors.

WHY IS PYRAMIDING PROHIBITED?

Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.

Beware of plans that ask new distributors to purchase expensive inventory. These plans can collapse quickly — and also may be thinly-disguised pyramids.

Beware of shills — “decoy” references paid by a plan’s promoter to describe their fictional success in earning money through the plan.

LOTIONS AND POTIONS: THE BOTTOM LINE ABOUT MLM PLANS

Lose weight! Firm up!

Look better! Live longer!

WHAT ARE YOU BUYING?

WHAT ELSE IS FOR SALE?

WATCH OUT FOR PYRAMIDS

Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. They are actually illegal pyramid schemes.

HOW TO EVALUATE A PLAN

If you’re thinking about joining what appears to be a legitimate multilevel marketing plan, take time to learn about the plan before signing on.

What’s the company’s track record? What products does it sell?

How does it back up claims it makes about its product? Is the product competitively priced?

Is it likely to appeal to a large customer base?

What up-front investment do you have to make to join the plan?

Are you committed to making a minimum level of sales each month?

Will you be required to recruit new distributors to be successful in the plan?

Use caution if a distributor tells you that for the price of a “start-up kit” of inventory and sales literature

YOUR RESPONSIBILITIES

Thanks for Reading – 10c. MLM Programs, IUH 2009-12, 2ND Ed, R513A

Dr Don, Founder, ICFO