Looking around on groups and message boards, something has become some what of a trend - starting new direct sales companies. There's nothing wrong with an established business doing this. However, I can't tell you how many times in the past year alone I've seen companies open and close within a few months. Kits were purchased and reps signed up, but in just a few short weeks the company was closing its doors. It may not seem like a huge deal to the company to move on to something else, but the reps have wasted much time and often money as well.

Although, how do you know the company won't last?

There's a few points to look for when considering joining a new direct sales company.

1. Has the company been around before the consultant program?

If it's brand new and opening with the consultant plan in place, beware! While this isn't always the case, do think twice about a company that hasn't been able to sell the product on their own.

2. How well was the business planned out?

Don't be afraid to ask personal questions! You have a right to know if they have planned their costs out for several years. Regardless of the business, a business owner must understand there is a slim chance of any profit being made in the first year. If they haven't planned to be in debt for at least a year or more, then chances are they will cut their losses before the year is even up. Should they not reveal their business plan, you might want to just move on.

3. What type of shopping cart do they use?

While there's nothing wrong with PayPal, if this is the only type of payment offered by the company you may want to think twice. A professional shopping cart set up doesn't cost that much, and if that cost has been skipped they may not be planning well.

4. Are catalogs and samples available?

If you get a "coming soon" when requesting a catalog, think twice about joining. Catalogs are a very basic part of business, and to not have them ready shows the owner "rushed" to get the business open.

5. How is customer service?

Put in a test order and see how fast things work in the business. If you can't order products yet, but reps are being signed up already, you'll want to wait until they are fully open before actually signing up yourself. Not being able to test out products ahead of time isn't a good sign.

With business comes risks, and no one can be completely sure how solid a company really is. However, being able to spot certain signs is important in protecting yourself and your credibility with your customers. Not to say the tips above will tell if the company will survive or not, but they may be able to give you a better idea if your business will last.