When you want to start your own home business, you are looking for a legitimate home business opportunity, and you must be able to make the difference between different internet business models. The choices for a work from home business in today’s home business industry are almost unlimited. There are two different categories of home businesses: you can decide to start your own business offering your own product or service to consumers, or you can become an independent distributor or affiliate for an existing product or service. In this article I will focus on the second category, as this is the most chosen by people who start in the home business industry.

The home business industry can allow ordinary people to match or even exceed the earnings of executives and CEO’s of corporate America. Choosing the right business or company can propel you to a five or six figure yearly income, regardless of your educational background or your previous experiences. It gives motivated people the opportunity to start and build a business on a small budget, and to then go on to earn a significant income.

It can also be the playground for many deceptive businesses, so it is important to know how to tell the difference.

First I want to address the issue of “pyramid schemes” and how to spot one, because they are not legitimate businesses, they are scams and you should avoid them. An illegal pyramid scheme is a situation where there is no product or service offered, only the exchange of money. It’s a situation where you are encouraged to join an organization for a certain amount of money, and the promise is that your “investment” will grow to several times that amount. You don’t buy a product, you don’t sell a product, you simply find other people who agree to pay the same amount to join the organization. Sometimes these programs are called “gifting” programs…just “people helping people.” It’s still an illegal pyramid scheme and not a legitimate business. So the first thing you want to look at is if there is a product or service offered. If not, stay away.

Then, there are the multi-level marketing (MLM) companies, who offer a legitimate home business opportunity, and who use network marketing as a distribution model. Network marketing is often the distribution method of choice for companies with unique and high-quality products. This is a person-to-person method of distribution that allows for more product information to be given to the consumer than what could be accomplished by selling the product through retail stores.

Before starting a home business in the MLM industry in 2009, however, you should keep this in mind: first, the attrition level facing MLM’ers is very high. 97% of people in this industry are still failing to make money. And  people get started in your team but drop out within the first 90 days, all the more so as the initial investment is often so low that people don’t loose much money by quitting. Then, the old-school methods of prospecting (buying leads, doing surveys, handing out flyers, cold calling, chasing friends & family) are far from attractive and most of the time will not bring you any results. You can be very successful in MLM, but if you really want to succeed in an MLM business, you’ll need to have access to a very good training and a marketing system that will enable you to generate leads, brand yourself and attract people to you.

Eventually, there is what is called GPT (stands for Get Paid Today). This model gives serious entrepreneurs the opportunity to quickly achieve 5 to 6 figure incomes. Most of your commissions are paid upfront by the company, and you also have the opportunity to earn a substantial residual income from your team. The initial investment varies from a few hundred dollars to several thousands, and entrepreneurs who join at the higher levels of investment are less likely to quit because of their investment. Now, if they do quit it isn’t such a big deal for you because you have been paid your commissions upfront. This commission structure tends to attract more committed entrepreneurs than the MLM model. You also have access to a turnkey marketing system that eliminates or highly reduces cold calling, selling, pitching, as well as a complete training and support system you can depend upon to actually train you on how to market and leverage the internet.

So, when you want to start your home business, make sure you do your due diligence. There are some awesome companies out there that meet and exceed all the principles above, but there are also plenty that don’t. If you do your research then you can find the company that suits you and have the success and the lifestyle you are looking for.