5 Organizational Issues for a Pyramid Scheme

This is a follow up to the post What is a Pyramid Scheme?  The basic issue encountered was that many organizations have a pyramid shape, such as government, military, churches, schools and businesses.  So, how can we determine whether one of these organizations is legitimate?

Here are five questions to make sure the organization is legitimate:

1. Can you clearly identify the product or service being offered?  Every business offers either a product or service.
2. Is the organization using deceptive practices?  While no organization would welcome criticism and negativity, a legitimate organization generally welcomes questions arising from interest and curiousity.
3. What are the chances of a new peson acheiving the exceptional financial success in an organization?  Small businesses fail 90% of the time so if 1% of an organization acheives exceptional financial success, this is a good indicator.
4. What is the wealth distribution of the organization?  The more transparent an organization, the better.
5. What risk does the organization have if resources are wasted on a new person who does not produce profits either directly or indirectly?  In general, a legitimate business whose product or service is not related to training or education should take a definable risk, losing an investment in the form of time or money.

Continue reading the article 3 Personal Tips to Avoid Losing Money from a Get Rich Quick Scheme.

This post was reposted from http://finlit.biz/business/5-organizational-issues-for-a-pyramid-scheme/, originally written on March 27th, 2013.