How to Use the Pyramid Scheme Business Model

In a pyramid scheme business model, money is generated by recruiting new members and inserting them into a multi-level structure, much like a pyramid. Money is distributed to individuals in the higher levels. In its purest form, a pyramid scheme business model offers no services or products and is usually considered illegal because it is non-sustainable. However, you can use certain elements of this model in other business applications, such as multi-level or network marketing.

Instructions

Difficulty: Moderate

1. Offer a specific product or service to go along with your pyramid business model so that it is not deemed illegal. Pyramid schemes fail because only money is exchanged or because they involve products that are priced so highly that they no longer represent a fair market value. To use a pyramid scheme that will continue to generate income for its members, a fair service or product must be given in exchange for the cash investment.
2. Develop a persuasive sales pitch to your prospective participants. Since pyramid schemes are at least 100 years old, it is important to differentiate your plan from every other one that has failed in the past and to communicate the differences effectively. You must develop a thick skin, since most people will immediately reject this pitch as soon as they realize it is part of a pyramid scheme.
3. Establish a core membership of close friends and associates to use the pyramid business model. It will be easier to convince others to join if you can show that individuals are already committed to the enterprise and are currently generating income.
4. Draw up specific diagrams that illustrate how the pyramid works, how cash is generated and how much the participants can expect to earn within a specific time. Be realistic and downplay the "get rich quick" aspects, which a majority of people will interpret as a scam.
5. Assist the members in levels below you by helping them demonstrate the pyramid venture to other prospective members. The idea is to expose as many people as possible to a pyramid scheme business model, since the rejection rates are usually high.