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Almost a good business plan there!

Always on the lookout for a good business plan which could make a lot of money, I happened to go past a pet shop and suddenly had a bright idea. Rats were on sale for 5.00 each, and it would be a reasonable guess that the pet shop was buying them for a sensibly lower price as a business needs to make a profit. (More about this fact of economics is explained at the page "How to Run a Business"!).

There are a few things that are well known about rats:

* Rats can eat almost anything, which is good news if a business were to run on the basis of keeping rats, as it would keep the running costs low.

* If you start off with a few rats, then there is quite a good chance that after a while you will have more rats than you started with. In fact, it's generally regarded that rats will multiply at a rate somewhat faster than money in a bank account. Without quoting any interest rates, I'm sure you can see what I mean.

* Rats are cute furry intelligent creatures which are well-liked by many people, and so the potential market demand would be high. Also, as the shop was buying rats, it's likely that there would be a good resale market for rats. Plus, as most people have no rats, or at least none they know about, the market penetration is currently low, so the idea has a good prospect and presents an excellent opportunity.

OK, so that's quite a good conclusion: Buying a few rats, feeding them on all the stuff which human society is too fussy and litigious to eat because of the best before date, and then selling rats, would be a good profitable business!

The idea had a snag, however, as it was only possible to make a moderate amount of money, the idea could not be immediately expanded to make a large fortune, so then we get the next step:

Many people would like to run a business, and they'd be interested to hear about a new business plan which might make some money, so maybe I could sell them a rat breeding franchise! In fact the idea itself could sell. I could make a fortune selling the idea of rat breeding!

And then all the people who were buying the rat breeding business plan could sell the idea too, and tempt other people into setting up their own rat breeding business. The whole business plan would snowball as more and more levels of business expanded.

Great! So, more and more rat breeding companies would be able to set up and everyone would make a fortune! Whe-Hey!

... But then a doubt arose. Surely, if rats were such a great money-spinning idea, then this would have been sussed out hundreds of years ago, as rats have never been in short supply in medieval times, or at any other period in history, and so the idea might just have a flaw in it?

Yes, this is where a moment of sensibleness dawns, as the idea is fundamentally flawed. The rat business? Nothing much wrong with that, even though supply outstrips demand. The problem is that the idea of selling the idea and then other people selling the idea and so on, is recognised as a problem. It's known as MLM - multi level marketing, and that's something which is a losing plan. MLM and Pyramid Schemes really are not a clever way to make money!

Setting up an honest business selling rats might or might not make money, but the natural evolution would mean that the business would succeed or fail on its own merits.

In contrast, the idea of selling the idea, has fundamental flaws, and that's where the problem comes in. People would buy into a belief system, a dream which was not likely to succeed for most people. In some variants of MLM, there is no worthwhile product at all, not even rats. Where the whole scheme is based on selling the scheme itself it is a scam. If you see that kind of a thing, beware! It's a pyramid scheme. Whether it's selling rats, reports, soap, or just the scheme itself, it's belief based and unfounded.

Thinking for myself through the consequences of the idea I could see it would lead to a severe level of problematicalness, and that's even before considering the downside of society having a greatly increased number of rats! It didn't take a lot of figuring out that the idea wasn't so good. But some people fall foul of schemes as silly as this, or even worse, and end up believing in faith based nonsense which then leads to ruin, sometimes where friends and family have been caught up in the scheme and the MLM / pyramid scheme problem has spread like a plague.

For more sensible advice see how to set up and run your own business