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Honest Business Opportunity Or
Fraud?
Copyright 2004 Android Technologies,
Inc.
INTRODUCTION
There are so many small business opportunities
out there it can be very hard to tell a scam from a good way to
make money. The internet seems to have generated more scams than honest
business opportunities, but you can turn the tide against scams and learn
what is legitimate from illegitimate almost at a glance these days. (If you
are armed with the right information!)
ARE ALL MLM COMPANIES
SCAMS?
The most common of the scams these days seems to be many of
the
multi level marketing or MLM companies around. Many MLM
companies offer a
legitimate way to work from home but they are given a bad name by the ones
that are involved in the pyramid style of business that has been in existence
for probably as long as the existence of currency.
SEPARATING THE GOOD
FROM THE BAD
The way to tell them apart is very easy and it is done
by looking at whether or not you are paid purely on the basis of getting
more people to join the organization. If it runs purely on this principle it
is a scam and it is also illegal.
In America there is an organization
that was put together for the specific purpose of protecting the small
business opportunity from people who are selling fraudulent ideas called
the FTC. They have a list of all the scams that have been registered with
them so it is a good idea to check any prospective business opportunity
against their data base of frauds so that you don’t catch this after
the
fact. Most countries have an equivalent of the FTC. For example in
Australia it is called the Department of Fair Trading. It is just a matter of
finding the one in your locality and getting in touch with them.
Most
scams for the small business opportunity work on the
principle of over
charging for a particular good or service, so it may be helpful to compare
what you will have to charge to make a profit with other types of
companies that are providing the same or a similar good or
service.
Many others target the work at home business with the idea of
the investor having to outlay many thousands of dollars for an inventory of
stock which the investor will have little or no chance to move in the
foreseeable future. One way to get around this is to make sure that your
small business opportunity only needs you to buy a sales kit
or demonstration goods that are provided at little or no mark up from the
cost incurred by the parent company.
The company that offers a small
business opportunity without any form of training is also very likely to be
a scam. A company that does not do everything in its power to make sure
that all of its members are capable of making the company money is either
incompetent or fraudulent, and either way you do not want to be
involved.
RESOURCES
There are also many websites that offer a
service of legal advice on not only the small business opportunity but
every facet of home business, and you can access this information at
relatively low cost. These sites usually revolve around preventative law so
it is best to consult them before you sign any checks. One of the best is Rod
Cook’s site MLM RESOURCES and it specializes in the laws which govern
the most popular work at home business, the MLM.
Another very helpful
web site is the MLM WATCHDOG INDEX.
This site is dedicated to letting people
know about the home business scams that are new to the market and
they have warnings posted often before any government agency can do
anything about a small business opportunity that proves later to be a scam.
It pays to do your home work before you invest in a home business idea
because, not only may you be the victim of a scam, but you may be an
unwitting accomplice in an illegal home business.
About the
Author:
Ted Riley is an entrepreneur and educator interested
in
teaching others on the benefits and rewards of having your own home
business. He writes frequently for the web site "A Grandmother's Business", a
web site dedicated to the needs and equirements of the mature woman
entrepreneur and job-seeker. To see more articles like this visit: http://www.grandmabiz.com/
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