Inspired by many of the postings here in the forum, I have thought about defining a business in terms of legit or not in regards to Home Based Business. I understand that many people are looking for the "Holy Grail" so to speak. Once, groups met in homes, now it is done over the internet. Without using any one particular business as an example (or scape goat), and without any condemnation, I thought it would be interesting to see if collectively we are able to come up with some business definitions.

I would like to propose that first, a business may require an investment in equipment, product, marketing expense, licensing, and so on, but may not require the new enrollee (business owner) to purchase or subscribe to any company product as a condition of enrollment.

While it is perfectly acceptable and expected for a company division leader (up-line) to override and profit from sales within his marketing group (down-line), it is not acceptable for them to profit from the sale of marketing materials or electronic media that is designed to promote sales of products or further the growth of the business. These shared marketing expenses should be provided by the company, or at cost basis to the enrollee.

Any enrollee who wishes to solely market the products of the company, without enrolling others, should have a reasonable chance of success in making a profit from his product sales in a competitive marketplace for those products.

I have more ideas...but what are yours???

To be honest, I don't think whether a business is home-based or bricks and mortar based really impacts on the legitimacy of the business itself - it's the actual business model that's been applied from whatever location. There have certainly been plenty of bricks and mortar business scams.

An incorporation, a business license, a tax id number and good contact information. We have dealt with so many companies in the past like Traffic Power who claimed to be legit but ended up just scamming people and then moving on and creating a new company to sell their crap under.

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I think many businesses who have a corporation, business license and tax ID number may be considered LEGAL (until proved otherwise), but as you pointed out they may struggle with being ethical in their dealings.

Selling "crap" is not a crime. People choose to by low quality items every day. But selling a perception that something has greater value than it really does, that is wrong in my book. I remember as a kid learning this lesson.

Some cereal company had a deal for kids that if you would save up some huge amount of boxtops, you could send them in to get an 8-piece train set. I coaxed my mother into buying their cereal, I even went around the neighborhood to ask people to save cereal boxes for me. It took a while, but eventually I got enough boxtops to send in. After waiting forever, (probably 6-8 weeks) I got a small box in the mail. Inside was an even smaller plastic train that would fit in one hand. Sure enough, there were 8 pieces, all cast in a single piece of plastic. No turning wheels, no tracks, not even big enough to set out on a shelf and admire. One gulp and the dog could eat it.

That was the end of saving boxtops, but the beginning of some of life's hard lessons. I'm sure they had all their business licenses, corporate charters, and more, but the pictures on the cereal box of trains, the "sales gimmick" they used, was to me false advertising.

So having the "Legal" papers does not make you automatically legit. In fact, that ploy is often used to "Front" an illegitimate or illegal business.

The biggest thing I would suggest since I have looked around for home based work is not to promise unreasonable amounts of money per week you can make. Those are to me a dead giveaway to stay away from them and they scream scam to me.