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Six Ways To Avoid Business Opportunity Scams

Aug 17, 2007
More often than not, when you are setting out to start your own business a lot of things will seem uncertain. Purchasing someone else's business that you know has been reasonably profitable for over one year can therefore be a tempting alternative to starting from scratch. Not only will you have some reassurance that the business is indeed viable but you will also have an existing customer base to rely on - you can reap any and all advertising costs that the company has put forth thus far. Unfortunately, you should treat business purchases like an investment - here are six ways to make sure that you aren't getting scammed.

1. Think Objectively

Despite how many years youve been dying to get into your industry of choice, you need to objectively think about your offer. Happiness can't put food on the table, so be sure to be critical of the business before you buy into anything.

2. Take Your Time

If you feel like you are being pressured into making an offer, just walk away. You deserve the time to make an informed decision. The more you are pressured into buying, the more suspicious you should be. Are they trying to sell because they know something you don't? Perhaps their business is going under and theyre looking to recover their losses? Don't get stuck as the captain of a sinking ship.

3. Never Buy Into Special Offers

Business tactics such as saying that the price will go up tomorrow or that if you don't act now they may sell to another buyer should be heavily frowned upon. You are undoubtedly buying a business that should be viable in the long run. If these underhanded business tactics are being used on you, imagine what might have been inflicted upon this company's customer base.

4. Refusing To Give Information

You have the right to know the name of the business as well as their registered income tax information. You should also be able to demand reports of the company's sales or other measures of sucess. In addition, be sure to call up a few of their partnerssupplierscustomers and really get the full story - you just might be shocked at what theyre not telling you.

5. Proceed With Caution

If you have second doubts of any kind, trust your gut and walk away. There will always be another investment you can make at a later date. It is far better to be absolutely sure of what you are buying into than to risk anything.

6. Disaster Response

What would happen in the worst case scenario? Of course the current business owner isn't going to tell you anything that would undermine their ability to make a sale. Most things that sound too good to be true usually are. Purchasing into a business should never require money in the first place. You should not have to pay a bidders fee, a finders fee, or any other kind of fee.
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