4 Steps for Seeing Through Any Business or Investment Proposal

If you’re researching economic opportunities, read this article to discover four specific principles that will determine whether or not you should invest your time, money, and/or effort.

If you apply these principles, you’ll avoid wasting money, time, and effort and learn to quickly identify the right opportunities.

A couple years ago I had an opportunity to apply the lessons that Garrett Gunderson and I teach in Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

I had been studying affiliate marketing to see if it is a viable opportunity with a solid value proposition.

Online affiliate marketing means to market the products and services of others in order to earn a commission from the product creator.

On the surface it sounds like a great model–you don’t even have to create your own products, all you have to do is market, and you can supposedly earn great money.

But the industry is plagued with scams and scammers.

So what were the problems I uncovered, and how can the lessons I learned apply to your life?

1. Backwards Motivation

For most people, the primary motivation for getting into the business is to make money, not to create value.

They go into it asking the question, “How can I make more money?” rather than “How can I better serve others?” or “What does the marketplace need that I can provide?”

If your primary motivation is to make money, you’ll be chasing money for the rest of your life. Even if you end up making a lot, you’ll live in scarcity because your primary concern is money, not value creation.

You’ll be plagued with the worry of losing it. You’ll be less inclined to be generous. You’ll attach more value to material things than to people.

2. Problematic Value Proposition

As Garrett and I write in Killing Sacred Cows:

“A value proposition is simply the identification of how value is created for others through specific actions, investments, business proposals, etc.

“A good value proposition comes in the form of a very clear and concise statement that explains how value is being created and how it will be sustained…

“One excellent way to analyze opportunities and mitigate risk is to ask and answer the following five questions:

1. Is this in alignment with my passion and values?
2. Will it increase and/or utilize my human life value?
3. How will it benefit others?
4. How will it benefit me?
5. Is it based on sound economic principles?”

One could say that the value proposition of affiliate marketing is that it creates value for product sellers by increasing their reach and duplicating their efforts, while creating wealth for those willing to share their product.

The problem comes when we ask if it’s creating value for the ones paying for the entire process-the end buyers.

Most affiliate marketers simply go to Clickbank, a broker of online products, choose a product that looks like it will sell, then promote it without knowing if it’s actually benefiting end users.

They’re not even using the product themselves. The main things they study about the product are its commission rate and popularity, not its value to society and end users.

Some products may create value for buyers. The problem is that affiliate marketers don’t know for themselves if the products are valuable or not.

They’re not in it to create value or to identify a solid value proposition; they’re in it to make money regardless of any such considerations.

3. Unethical Practices

It’s a common practice for affiliate marketers to identify three products in a particular niche, then create a “review” site, such as this one , showing the pros and cons of each.

Again, it sounds like a potentially great service–end users can ostensibly benefit from the research performed by the marketers and choose the product that best fits their needs.

So what’s the problem? Most “reviewers” are rarely reviewing anything–they’re making it all up and choosing three products that will pay them a good commission.

Also, every user of Clickbank, the product broker I mentioned above, agrees to certain terms and conditions when they create an account. Agreeing to an online form is just like signing your name–your integrity is on the line.

In the case of one company I researched, the creator of it admits outright that he is a liar.

After describing a deceitful technique he promotes, he writes,

“Technically, this is against Clickbank’s terms and conditions, but I know of plenty of affiliates who do it (many of whom make $300 and upwards per day –- see if you can draw a causal link). I have only heard of a few people being told to stop offering bonuses by Clickbank, and I have never heard of a single case of an affiliate being banned for doing so. I do it myself, so that should tell you where I stand on the issue.”

Two pages later, after describing another deceitful technique, he says:

“Now once more, this is against Clickbank’s policies (and I have anecdotal evidence to suggest they dislike this more than the bonus offer), but I do again know of some $500/day affiliates who do it. I have tried it myself on two occasions with moderate success…”

In other words, as long as everyone else is doing it and as long as you don’t get caught, it’s all right. Anyone else see a problem with this?

Such practices are not built on solid economic principles and so they will always fail.

There will undoubtedly be a few who make good money doing it, but most people will find nothing but heartache pursuing these types of businesses. And even those who do make money aren’t truly prospering anyway.

No amount of money is worth your self-respect and the talents that will be uncovered when you set out to serve others, talents that remain largely undiscovered if your primary concern is how to make more money.

Unless you’re really creating value for others, serving them, providing them with what they really need in a principled fashion, you will never find prosperity.

4 Steps to Economic Certainty

Follow these four simple steps any time you are presented with a business opportunity to discover if it is the right thing to do:

1. Start by asking, “How can I serve?” and “What does the market need that I can provide?” as opposed to “How can I make more money?”

2. Identify the value proposition, and trace it back through every level down to the end user.

Look beyond the hype and sift through your feelings of scarcity. How is the business/investment creating value for others, for the economy, and for society at large? Is it truly helping others, or just selling them?

Do you personally know how it’s helping others, or are you just believing the hype presented by the seller?

3. Never engage in unethical or illegal practices, no matter how many others are doing it.

Keep your word. Live the spirit and the letter of all of your agreements. Be a person that others can trust and you will always prosper.

You reap what you sow–reap lies and you will sow mistrust and eventual failure. Reap truth and honesty and you will sow trust, loyalty, and prosperity.

4. Never spend time, effort, and money on anything–no matter how much money you can make–that does not align with your passion, values, and Soul Purpose.

Find what you love to do and do it in the service of others.

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Stephen Palmer is a book writer for mission-driven leaders, a small business lead generation website design architect and persuasive website copywriter, a co-founder of The Center for Social Leadership, and the author of Uncommon Sense: A Common Citizen’s Guide to Rebuilding America.

He co-authored the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity, as well as Hub Mentality: Shifting from Business Transactions to Community Interaction.

He is a liberal-arts graduate of George Wythe University and a graduate and faculty member of the “non-traditional business school” Wizard Academy.

Stephen resides in Round Rock, Texas with his gorgeous wife Karina, awesome son Alex, and princess daughters Libby, Avery, and Laela.

Subscribe to Stephen’s blog and contact him at stephen [at] leadershipwriter [dot] com.