Multi-level Marketing Business Opportunities

Multi-level marketing businesses ("MLMB") can be a successful business venture for some people. Following are some of the questions that, in my opinion, need to be dealt with prior to entering into such a business.

  • Is the product or service a good one? Am I comfortable/happy using/selling it?
  • Does this business venture allow me to make current forms of expenditures tax deductible or must I mostly incur new forms of expense?
  • Are my skills, abilities and personal nature suited to be a self-employed individual?
  • What is the realistic probability that this venture will be profitable for me?

    I find a number of MLMB's attempt to sell people on the idea that they can become wealthy with part-time efforts, or perhaps a person could quit their job and reap the benefits of this new venture.

    A prospective candidate for this type of business needs to ensure that they are capable of dealing with being self-employed and with selling themselves plus the product or service.

    Office in the home expense is an example of a form current expense that might be deductible in a home-based business. However, this expense is not deductible unless the business is profitable.

    Note that, as an employee you might be eligible to deduct, from your employment income, certain expenses (eg: auto expenses) if such expenses are required in order to fulfil the terms of your employment conditions. Do not assume that your only opportunity to obtain tax relief for "personal expenses" is to start a home-based business.

    Canada Revenue Agency requires that a business be conducted with the "reasonable expectation of profits." Losses incurred in a business that does not meet the criteria will be denied. "Hobby-type" ventures, such as photography, carpentry, artistry, etc., could fall into this category of a business without a reasonable expectation of profits. Whether a multi-level marketing venture, that consistently produces losses, would result in those losses being denied would depend on the facts and circumstances surrounding that particular business venture.