Watch Your Step

Many people sign on with a multilevel marketing company because they're attracted to the high income potential or the prospect of earning money from home. What they don't realize until after starting the business is that they weren't really cut out for MLM in the first place. As a result, they feel frustrated and embarrassed.

Before you invest, here are four questions that will help determine whether MLM is right for you:

1. Are you a self-starter? With an MLM company, you won't have a boss to tell you how many calls you need to make or what time you need to wake up. To succeed, you've got to be the tough boss who ensures the work gets done. Are you up for the challenge?

2. Are you a people person? "Network marketing is a people business," says Babener. "It's the only way you'll make sales and get recruits. If you're not a people person, [MLM] isn't for you."

3. Are you a positive thinker? As with any type of sales endeavor, you'll face plenty of rejection in a network marketing business. Successful MLM distributors know how to put a positive spin on even the most negative circumstances to keep themselves motivated and achieve their goals.

4. Are you comfortable with the MLM business model? This is the most critical question because, even if you're a go-getter and have a positive attitude, if you're not comfortable conducting business through the network marketing distribution method, you'll flounder in MLM. The high-income distributors are completely sold on network marketing and convinced that it's the best way for them to do business.

The Bottom Line

While the upfront costs of MLM opportunities pale in comparison to the capital requirements for buying into a franchise or starting your own business from scratch, take your decision as seriously as if you were about to invest your life savings because there's more at stake here than money. "The smart multilevel person who looks at an MLM opportunity," says Sheffield, "is going to make sure the company is as solid as it can be and will do their due diligence because they know that their reputation and credibility is on the line."