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iQuestions Faculty, Ron Blue 
 
 
Question: 
 
How would you evaluate Home-Based Businesses to know what to look 
for? 
 
Answer: 
 
RON BLUE: Generally, when I would get the question on home-based 
businesses, it would come to me this way, “Is this a pyramid, is this 
multi-level, is this network marketing?” First of all, pyramids are 
illegal. Pyramids are kind of like a chain letter, and every state has 
outlawed anything that smacks of a pyramid. And so, if somebody 
says this a pyramid, that can’t be, because they’re illegal. And 
pyramids—it’s where you get compensated for signing people up, and 
the only ones who win are those at the top. No legitimate home-based 
business is a pyramid.  
 
They idea of multi-level marketing or network marketing are terms 
that have been used, and the reality is that there’s a lot of confusion 
on those terms. Multi-level marketing basically means that people get 
compensated at different levels for doing different things. That’s not 
an illegitimate of means of compensation. Most businesses operate 
that way—on multi-levels. In other words, the CEO gets paid a lot 
more than the salesman, generally speaking.  
 
And is it network marketing? A lot of times the word “network” 
marketing is perceived as being negative. The reality is, most 
marketing that is done, is done on a relational basis. Almost all 
products that are bought are bought because somebody makes a 
recommendation. That’s called network marketing. That’s called 
relational marketing. 
 
 
 
JUDY BLUE: And I think that’s one of the most valuable things for 
people to understand, and that I’ve seen. We re-did our house last 
year, and just to realize that basically everybody that I used was the 
result of a network. You know, somebody knew somebody that had 
done a really good job.  
 
So, all of life is about networking, and leveraging the relationships that 
you have—not leveraging in a bad way, but leveraging in a good way. 
 
RON: I think it’s important for people to understand that just when 
you hear the word “multi-level” and “network”—that doesn’t make it 
bad.  
 
Here are some questions that you can ask to evaluate whether or not 
this is legitimate. And these are questions that I would ask.  
 
First question would be: “Does the product that is being sold meet a 
need?” Now, it could be jewelry, for example, which would meet a 
need—I think it’s a legitimate product. Maybe it’s make-up. That’s a 
legitimate need that people have. They’re going to be buying those 
products. In Judy’s case, it’s a health product, and so it’s a very 
legitimate product. And when I was evaluating her company, before 
she got into this, it was a very legitimate product. I think it’s important 
to understand, does the product really meet a need? 
 
Secondly, and this was a big one, was, when Judy first approached me 
about the business that she’s in, my first question was, “Do you have 
carry any inventory?” Because so many of these businesses, they 
make their money by putting the inventory in your garage. 
 
JUDY: And then you have to work really hard to sell it, and if you 
don’t, you just get to use it for however long it takes to get rid of it. 
 
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RON: I’d be really cautious, if you have to buy inventory in a network 
marketing, multi-level marketing, home-based business, if you’ve got 
to put inventory in your house or in your garage, I’d say, be very, very 
careful, because what they’ve done is they have just transferred the 
risk of the sale from themselves to you.  
 
So, question number one is, “Does the product meet a need?” And 
secondly, “Do you have to carry any inventory?”  
 
And then another one: “Is the company legitimate?”  
 
I know the company that Judy’s been involved with has been in 
business for 34 years, so they’ve got a real history. If this is a brand-
new company, I’d be really cautious about getting involved in it.  
 
I would also ask some questions like this: “Why are you doing this? 
What’s your motive? How are you being compensated?” 
 
JUDY: Well, I think that on, “Why are you doing this?” all too often 
that people are doing it because they want some quick money. 
 
RON: Yep. 
 
JUDY: And most network marketing opportunities, multi-level 
marketing opportunities, home-based businesses are not quick money. 
It’s “get rich slow,” which is your favorite philosophy. 
 
RON: Right. So, you have to ask yourself the question now, “Why am I 
doing this?” And if it’s to get rich quick, don’t do it, because there are 
no such things. And what are you being promised is a really big one. 
Are you being promised something that sounds too good to be true?—
because if it does, it probably is. 
 
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JUDY: And I think it’s what are you being promised, what the product 
will do, or products will do, for you, and what you are being promised 
about the business opportunities. You know, it’s got to be realistic, and 
it has to fit within who you are and what you want to accomplish. 
 
RON: And then, I think also “What are you being compensated for?” is 
a big question. Are you being compensated for selling a product?—
which is very legitimate? Everybody’s compensated for selling a 
product. Or are you compensated for signing people up? If you’re 
compensated for signing people up, it’s not a legitimate business. It is 
really a chain letter approach, but if you’re compensated for selling a 
product, then chances are, it’s very legitimate. 
 
I’d say, just lastly, in evaluating this, most of the people involved in 
home-based businesses are women, almost by definition, because it’s 
a home-based business. Here’s a piece of counsel. Husband and wife 
should sit down together and make this decision, and it should be a 
joint decision. I’ve seen a lot of men who are involved, but typically it’s 
after their wife was involved for a while. But a husband and wife 
should be doing this jointly. They should be making the decision 
together, and they should be supporting one another in the business. 
 
JUDY: Just like you should in all areas of life. 
 
RON: Just like you should in all areas of life! Thanks. 
 
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