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How To Avoid Potentially Fraudulent Business Opportunities

Guest post by: Global BX

Article Overview: There are a lot of opportunities available for people who are interested in entrepreneurship. Due to the economic downturns, more employees lose their regular corporate jobs, resulting to a drastic increase in the number of individuals who want to start and run their own business.

How To Avoid Potentially Fraudulent Business Opportunities

Too Good to be True?

It might be a scam There are a lot of opportunities available for people who are interested in entrepreneurship. Due to the economic downturns, more employees lose their regular corporate jobs, resulting to a drastic increase in the number of individuals who want to start and run their own business. Along with this, business opportunity scams have also become quite prevalent these days. How, then can you tell a legitimate business offer from a hoax? Many individuals resort to fraudulent activities to earn a crooked buck during these tough economic situations, and one of the most common practices is to run a business opportunity scam. With this, what are the necessary precautions that one needs to remember to avoid a business opportunity scam that might eventually appear on your pop up browser window and emails?

How to Spot Notorious Business Opportunity Scams

For you to know if a business opportunity is a scam, you need to put yourself in the shoes of a scammer. Think about the promises you would most likely offer if you wish to scam a person. To target prospective entrepreneurs, scammers usually make their hoax opportunity appear plausible. A scammer also tends to targets a person's greed or weakness. He may also prey on someone's apprehension of missing out on an excellent opportunity. A scammer would want its prey to show and pay money up front. Finally, a professional scammer figures out a way to stay untraceable or anonymous once the scam is revealed or discovered.

Avoiding Business Opportunities Scam

Not all scams are perpetrated by a friendly stranger you happen to meet in a chat room online. There are numerous hoax business opportunities all over the Internet that are legitimate sounding. These scams can be franchises for sale or opportunities that state existing businesses for sale. The following are ways on how you can avoid business opportunity scams:

• Beware of the paperwork - Make sure that you seek the assistance of an attorney to review contracts, business ledgers, disclosure statements, and sales documents. Also, hire a certified accountant to review bank statements and other financial documents.

• Demand for detailed documentation - The U.S. Federal Trade Commission requires a business opportunity for sale to have a detailed disclosure document to be forwarded to interested buyers not less than 10 days before a purchase agreement is signed.

• Be vigilant about misleading numbers - Beware of companies that do not want to divulge details on how they came up with the existing cash flow or earnings figures. Also, be wary of those that guarantee a minimum profit over a particular time period.

• Do thorough interviews - Make a point to talk directly to an owner of any existing business and don't depend solely on communications via a sales agent. As for franchises, you should visit an operating branch to validate if the franchisees' stories coincide with what you heard from the parent company.

• Be wary of exaggerated earnings claims - Always keep this rule in mind, especially if you are aiming to buy a franchise opportunity. Remember that the law requires all companies to divulge information regarding the number of franchisees who failed over a certain period of time as well as the actual earnings of these franchisees. Make sure that you go over this information and get corresponding evidence as well.

Other Precautionary Steps to Avoid Business Scams

It takes a lot of legwork and intelligence to stay away from business opportunity scams. Rushing to make a decision in buying a business is unnecessary, as this process requires tedious writings of claims and demands that all information is accurate. One of the known hallmarks of notorious scammers today is this high pressure tactic - "This deal is only good for today, and then it's gone". It is best to be cautious of business opportunities that sound like a bad deal, such as vending machine routes, chain letters, credit repair services, vacation awards, networking marketing, and work at home schemes. While not all opportunities under these categories are scams, there is a big chance that you will likely stumble into one, especially if you are not too careful in scrutinizing their legitimacy.

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Article Tags: Business Opportunities, business opportunity, Business Opportunity Scams, Business Scams, scams



Related Forum Posts
You can see my Bank statement......... - Hi there, Today we are bombarded with 'Business Opportunities' by the multitude. I believe it is possible to earn a lot through the internet, but it is hard work. Nobody gets it very easy on a long term basis. [b][b]How much notice do people take[/b], [/b]when the Bank Statements are shown as means of 'how credible' their business idea is? Are they always totally true? They look authentic. The whole industry is growing rapidly. What is your experience? Is there any regulation in presenting the 'Bank Statement' or other statements from 'Click Bank' etc ? Kindest Regards Beat "Unlock People's Potentials!"
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Re: Work At Home EStore (13775) - Maybe we need a folder where people who want to post this type of stuff can post it, rather than scattered throughout the forums... Something like Opportunities for Entrepreneurs... or something?
Re: Search Engine Friendly Web Development - I would like to add some more things in search engine friendly web development. 1. PPC campaign 2. Viral marketing 3. Social Media Marketing Avoid flash in website and other use CSS files to shows the content style.
Exclusive: Interview with Results - Hi Forum Members, I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles). As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business. This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business. I am looking to interview about 30 businesses across North America over the span of 3 months. At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews. I would like to extend this opportunity to members of the Forum. If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM. Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.


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