Posts Tagged ‘business opportunities scam’

Avoiding Business Opportunity Scams

Thursday, June 30th, 2011

Too good for real? Beware, it might be a scam

If you really want to invest in a good venture, there are thousands of business opportunities for you to choose from. The recession greatly affects the country’s economy. With this, thousands of people lose their regular corporate jobs. The good thing is, many of them chose to start or buy their own businesses. Buying a business is easy when you know where to look. Check out GlobalBX.com – they have over 36,618 businesses and franchises for sale. Best of all it’s a FREE site! 

Along with this increase is the sudden prevalence of business opportunity scams in various industries. Now, how can you tell a legitimate business opportunity from a scam? During these rough economic situations, many people choose to do fraudulent activities just so they can make a quick buck. One of their notorious practices is to come up with 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

If you are determined to know if a certain business opportunity is a scam, you need to put yourself first in the situation of the scammer. Try to think about certain promises that you would likely offer if you are to scam a person. To successfully target entrepreneurs, scammers would work hard to make their fake opportunities appear plausible. Scammers also notoriously target the greed and weaknesses of their prospect victim. A scammer may also use the apprehension of missing out a once-in-a-lifetime opportunity. They would demand money to be paid up front. Finally, these professional scammers figure out ways on how to be untraceable once their scam has been uncovered.

Avoiding Business Opportunities Scam

Not all scams are executed by strangers who popped out in your browser while you are in a chat room. Alarming as this may sound, but there are hundreds of hoax business opportunities on the Internet that appear legitimate.  These scams are either franchises for sale or existing businesses for sale. Read on below for a guide on how to avoid business opportunity scams:

  • Check all the paperwork.

See to it that you hire a good business lawyer who will review all the necessary paperwork including disclosure statements, business ledgers, sales documents, and all contracts. Hiring a certified public accountant is also important. Your accountant will be the one to go over all financial documents and bank statements.

  • Request for a detailed documentation.

The U.S. Federal Trade Commission is requiring all business opportunities to give out detailed disclosure document to all prospect buyers 10 days before any sale contracts or agreements are drafted and signed.

  • Be vigilant about misleading numbers.

Be wary of companies that do not want to say anything about how they came up with their existing cash flow and earnings figures.  Better avoid business opportunities that promise a minimum profit for a particular time frame.

  • Do thorough interviews.

It is a must to talk and transact directly to the owner of your prospect business. Do not depend too much on the sales agent for communication with the owner. You should visit some of the operational locations of existing franchisees. Ask for their feedback and opinions about the company.

  • Be cautious of surreal earnings information.

It is best to keep this rule in mind, especially if you are determined to buy a franchise opportunity. Note that there is a law that requires all businesses to share information on the number of franchise owners that failed over a given time period and the actual earnings of these franchise owners. See to it that you review all information and get the evidences you need.

Other precautionary tips to keep in mind

It takes many hours of researching and a good alertness to stay safe from notorious business opportunity scams. It is a big no to rush your decision to buy a business. Remember that this transaction involves lengthy writings of the demands and claims of both parties regarding the sale of business. Today, the most common tactic of many business scammers is this scheming phrase: “This deal is only good for today, and then it’s gone”. You should be alert with bad sounding business deals such as chain letters, networking marketing, work at home, vending machine routes, and credit repair services. 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.

Make sure you do your research before you start or buy a business. GlobalBX.com provides a FREE business for sale exchange connecting business buyers, sellers and lenders.  Get free information on any small business opportunity or franchise opportunity –  they have over 36,618 businesses for sale!  Sell your business for sale for free with no listing fees and zero commissions.  Contact over 300 lenders instantly” and get financing for businesses and commercial real estate.