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Business In A Time of Scams

Apr 5, 2008
You should be careful about choosing a business. After all, investing in an entrepreneurial venture can make or break you. It can ruin or make your reputation, place a big dent on your bank account or enlarge it and do something to your self-esteem that a therapist cannot. So when faced with an online business opportunity, should you make a go for it or should you run in the opposite direction? Here, we try to make sense of what makes a good online business opportunity and how you can decide for yourself if it's right for you:

Online means just that.

A unique characteristic of online businesses is that they offer the logistical and geographical advantage that more traditional forms of businesses can't. If you're selling health supplements door-to-door, for example, you will be severely limited by your ability to physically cover an area. If there's a potentially big client in another state, you will have to pack up and travel just to meet with them and present your samples.

With an online business, you virtually have the world at the end of your cursor key. Regardless of where your clients are, you can reach them, communicate with them and close a potentially lucrative deal.

However, the very nature of online businesses makes them vulnerable to unscrupulous practices, fraud and hoaxes. If you're not careful, it would be easy to fall for false promises of instant wealth. Think about it: if all these promises were true, we'd all be living like the Donald and Paris Hilton. This is why you'll have to be well informed about the risks of grabbing an online business opportunity you have no prior knowledge of.

Protect yourself.

Never sign up for an online business opportunity that you do not fully understand. So what if your best friend has signed up and is bragging about his thousand-dollar-a-day earnings? It might be different for you.

Instead of signing your soul and bank account away, ask for proof. If the business is legitimate, they should be able to provide you with documentation that they do indeed offer a real opportunity. If there are claims to a specific income for members, ask who these members are or at least how many of them achieved that income and what the overall percentage of top earning members is. Your right to complete information is protected by the law, so use it.

Get claims and promises in writing.

Of course, no business opportunity can guarantee 100% success. There is no such thing as a fool-proof venture. Whether you succeed or not will depend on a lot of factors, such as your ability to sell, the type of market you have, trends, the relevance of the business, the quality of your products and the strength of your competitors, among others.

If the company offering you the opportunity claims a certain amount of earnings, have it in writing. It must be backed up, particularly if the business will cost you $500 or more. Always ask for the information about the earnings as part of your information pack. It's not a guarantee of how much you yourself will earn but it will show you how much income you could potentially generate.

Take your time to study the agreement.

Certain online businesses should have a disclosure document. If you buy into a franchise, for example, the law stipulates that this document be provided to you. This will outline important information about the company and whether or not it has had problems about litigations in the past. Get in touch with other franchisees to learn more about the business. Again, it's your right to know.

When in doubt

Consult someone, preferably a disinterested party. If the investment capital is considerable, talk with an accountant, lawyer or a business coach. Don't be forced into buying an online business opportunity just because high-pressure tactics are being used on you. It's your money, your effort and your future you have to secure.
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