The Blog - Where Business Collides with Human Nature

If you’ve ever been told that you could make easy money and it sounds too good to be true, it probably is. Pyramid schemes often sound like enticing business deals, but fraudsters may use this “business model” - to take advantage of you.

"The SEC’s guidance on pyramid schemes advises investors to “exercise caution...if what is being sold is speculative or appears inappropriately priced.” But experts say this can be difficult to judge.

Pyramid-scheme operators have “learned the techniques of saying we’re a legitimate company,” by purporting to want to make money mostly from sales, rather than new recruits, said Joseph Mariano, chief of the Direct Selling Association.

There is no hard-and-fast test of whether a scheme is legitimate, according to lawyers. Instead, the decision rests on what is often a complicated analysis of revenues and other factors. “It can be like nailing Jell-O to a tree proving they’re pyramids,” said Kevin Thompson, an attorney for multilevel-marketing companies." - WSJ,com

Before you invest your time and money, it’s important to ask good questions and research the company.

Here are some typical characteristics of a pyramid scheme:

• Emphasis on recruiting
• No genuine product or service is sold
• Promises of high returns in a short period of time
• Easy money or “passive income” (money you earn without doing anything)
• No demonstrated revenue from retail sales

Websites, social media and the Internet feed psuedonymity and anonymity while claiming "copyright" to their content.  It is simple enough to give yourself a fake name.  Even under a fake name you can own the copyright to content.  Your Twitter name can be a meme, mantra or brand.  Your eBay name can reflect the product you sell.  No one needs to know your real identity.  Even a website which has photos, videos and content can be fake, fake, fake.  The more technical term is that the website owner could have "psuedonymity and/or anonymity".

To understand the language we will review a few definitions.  Once these definitions are better understood, you can determine if your marketing strategy will be about standing behind a curtain and acting like the wizard in the Wizard of OZ or standing tall with pride and transparency to build a reputation which gains trust and forms relationships.

A hand-shake agreement where both parties agree to keep things between them is replaced with a confidentiality agreement.  Such a document could be vital to protect your company (or person).   When egos. drugs & alcohol, dissappointments and greed are involved... human nature takes over.  "What the mind knows, the mouth wants to disclose."  Another more serious risk is related to unethical opportunists who work inside a company.

Change is certain in business but is often difficult to manage. Considering all aspects of the law while managing critical business issues will require an experienced authority who can help smooth the impact of change by providing guidance in how to structure the new and protect against the bad. 

Litigators are trained on the law and the litigation process, not on how to run and grow a business.  Furthermore, many litigators fail to fully appreciate and properly advise their clients on how hugely distracting the lawsuit will be, and the huge risk this imposes on the business.

Making matters more complicated is the economic reality that litigation firms profit from clients that file and prosecute lawsuits. Indeed, unless the litigation firm has clients that pay them to file and prosecute lawsuits, the litigation firm dies.

40,000 new laws went into effect this year.  It is impossible for a small business to perfectly comply with laws and regulations.  There are too many variable, the laws change without an email notification.  If you are not well read and staying in tune to the requirements, it is easy to get behind the game.

If you are new to freelancing or thinking of becoming a freelancer, you’ll no doubt have lots of questions, especially about the legal and regulatory paperwork you need to obtain and manage throughout the business year.

Freelancing, particularly if you are unincorporated, is one of the least paperwork-intensive forms of business ownership. Nevertheless, you are still a business and you need to be sure you have the right licenses or permits, make estimated tax payments on time, report your earnings each year, and deal with client paperwork such as contracts, non-disclosure agreements, and more.

During the evolution of your business, there can be confusion about the trade name and the the process of business name registration.  What is the difference between a trademark and tradename?  Is there legal branding protection with a trade name?  Can a trade name be the same as your trademark?