Spot Pyramid Schemes Before You Sign Up

Spot Pyramid Schemes Before You Sign Up


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. Before you invest your time and money, it’s important to ask good questions and do some research on 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

Find more information on identifying pyramid schemes and how to protect yourself at This information is also available in Spanish.

Spot Pyramid Schemes Before You Sign Up

A Good Man (Contractor!) Isn’t Hard To Find

After 19 years of operating my Homeowner Referral Network (HRN) business, I (humbly) consider myself an expert on the art of finding a good contractor. The number one complaint I hear from homeowners nationwide is that a “good contractor is hard to find”. Believe it or not, reliable contractors do exist–it’s simply a matter of knowing where to find them and, more importantly, how to screen them. 

Whether you’re planning a large home improvement project or need to hire subcontractors to handle small repairs around your home, below are a few strategies to help you find a contractor you can trust.

Where to find them?

When looking for a contractor, many homeowners ask their friends and family for recommendations but in my experience, getting a contractor referral from another tradesperson is far more reliable. While your friend may have been satisfied with a contractor he/she used once or twice, their project may be very different from yours. Trades people (i.e. contractors, painters, plumbers) deal with other contractors repeatedly, over a long period of time and in a variety of projects. In my opinion they are therefore in a better position to offer a contractor referral. And, if a recommended contractor tells you that he’s too busy to take your job, ask him to refer you to one of his colleagues who may be suitable.

How to screen them?

Once you’ve found a potential contractor for your job, ask the contractor for the names and phone numbers of three to five customers for whom he has completed a similar project in the past two years. This will make it more difficult for a contractor to “hand pick” only his best references. Call each reference and ask the homeowner what they liked and didn’t like about the contractor. Ask him if the final cost of the job exceeded his estimate and if he completed the work in a neat and timely fashion. Most importantly, ask them if they would hire the contractor again for another home improvement project.

How to check their credentials?

Before checking to see if the contractor you’d like to hire is adequately insured and licensed, you’ll need to contact your county offices to research what credentials are required for home improvement contractors in your state and in your county. I also recommend that the contractor you hire have a minimum of $1 million in general liability insurance. Be sure to get a copy of his license and insurance for your records.

How do your personalities mix?

Are you the type of person who likes to be involved in every decision or do you prefer to “leave your job to the experts”? Believe it or not, your contractor’s personality can make or break the success of your project. I have contractors in my network who prefer not to be micromanaged and others who want the homeowner’s input on every aspect of the job. The best way to find out if you and your contractor’s personalities are a good fit is to be upfront about how involved you’d like to be on your renovation. And, ask your contractors to tell you how comfortable they are with customer involvement. If your approaches aren’t compatible, it’s a good sign that he might not be the right person for the job.

Did you get it in writing?

If your contractor is hesitant to put the details of your job in writing, I would be concerned. Also, in addition to getting a written cost estimate for the job, ask the contractor to document details about the type of materials he plans to use, his anticipated start date, project schedule and completion date.

Once you’ve signed a contract, most contractors will request a down payment ranging from 10-30%. The remaining balance will be paid in increments in stages throughout the remodel and a 10% balance should be held until the final details of the project are completed to your satisfaction.

Also, I wouldn’t necessarily disqualify a contractor if he warns you that the cost of the job could exceed his estimate. There’s always the potential for unexpected surprises in general contracting projects and it’s good to allow for a 10% cushion (at least) before beginning any project. If there is an added expense, ask the contractor to provide you with documentation that justifies the additional material and labor costs.

Spot Pyramid Schemes Before You Sign Up

What’s Holding You Back? 5 (Bad!) Excuses For Not Starting A Home Based Business

Starting a home based business can be scary.  And, it’s not uncommon to come up with excuses that keep you from pursuing your dream of working from home.  (I know because I had a long list of them when I started my home based business!)




  1. I don’t have the money. Is there ever a time when you have enough money?  Most home based businesses start on a shoestring budget and grow from there.  Consider the money it costs to launch a home business as an investment in yourself and your future.  (And by the way, did you know that business expenses are tax deductible?)



  1. I don’t have the time. As the saying goes…Want something done?  Give it to a busy person.  Most people launch Homeowner Referral Network (HRN) businesses while still working a full time job.  (I launched my HRN with a newborn at home!).  If you really examine your day, you can carve out a few hours to get something started, especially if you love it!



  1. There’s too much competition already. Do McDonald’s and Burger King operate in the same market? The answer is yes!  And, as far as the HRN business goes, online lead generation companies and national referral services pose no competition at all.  If you have a proven business model and offer local, personalized and a professional service, you’ll succeed.  That’s why the HRN business has lasted for the past 19 years!



  1. I can’t take the risk. I know one thing for sure….if you don’t try, you’ll regret it.   When you look back at your life one year from now, ask yourself “Do I want to be in the same position as I am today?”  You can either let your fear of risk hold you back or use it as fuel to do whatever it takes to succeed.



  1. I’ll be embarrassed if I fail. Join the club.  Failing in public can be embarrassing.  (Personally, I didn’t want to tell anyone about my business when I first started because I was so afraid of failure!)  But, what I’ve learned is that you’ll be surprised at the number of people who will respect you for taking a shot.


And more importantly, you’ll respect yourself.

Spot Pyramid Schemes Before You Sign Up

Will An HRN® Work In My Area?

How do I know that a contractor referral business will work in my area?

That’s one of the first questions people ask me when they’re considering the launch of an HRN®. The truth is that there is a universal need for the services provided by an HRN, but, if you want some reassurance, here are a few indicators that an HRN will do well in your community:

1. Dual Income Families. After working a 40+ hour work week, driving kids to afterschool activities, etc. most busy homeowners don’t have the time to call around looking for a reliable painter, plumber, general contractor, etc.

2. Aging Homes. Homes need to be maintained and updated. If you live in an area with homes or developments that were built in the late 1990’s, chances are they are in need of repair or upgrades.

3. Vacation Properties. Absentee owners of vacation properties need someone they can trust to find the most reputable contractors to care for their properties in the off season.

4. Growing Senior Community. Seniors, more than any other market segment, need to be sure that they can trust the contractors they hire and HRN owners are positioned with a unique business model to serve this growing need.

5. Commercial Real Estate. HRN owners refer commercial contractors as well. Whether it’s paving a parking lot, replacing a roof or cleaning services, building owners are also looking for the best contractor at the best price.

If your area has at least one of the five demographics listed above, chances are a contractor referral business will do very well in your market!