Avoiding Home Based Business Scams

Sadly, the world of business is full of home based business scams, cons, and outright fraud. Franchises, direct selling and business opportunities have perhaps more than their share of scams, but if you take your time to thoroughly check out your chosen opportunity before you shell out your hard-earned money, you will not become a statistic.

Learn how to avoid home based business scams by recognizing red flags—the warning signs that something is not right—that should cause you to pay extra special attention to a seemingly reputable opportunity.

Franchising Red Flags

While most franchising opportunities are legitimate, there are plenty of less than reputable franchisors. Like with any thing else, you must be vigilant and take responsibility for ensuring that the business is right for you and one of many home based business scams.

Look for the following red flags before committing serious money or you may fine yourself involved in of those home based business scams.

• The franchise has been around for less than five years.

• You do not receive a copy of the disclosure statement required by law.

• You are pressured into signing a franchise statement agreement.

• A franchisor assures itself that you are qualified, and you feel that his or her focus is on selling a franchise, and not on searching for the right person to add to their franchising organization.

• Your gut tells you something is wrong.

• A list of current franchisees does not exist or is curiously short.

Any one of these red flags would be enough to make you hesitate; but if you fine two or three move on, you could be looking at one of those home based business scams. There are plenty of legitimate franchising opportunities out there. Keep looking and you will find the one that is right for you.

Direct Selling Red Flags

There are many great companies with many great products, but there are some home based business scams. You must be aware of the following red flags before you commit to a particular direct sales opportunity.

• You are told that you can achieve great success without selling anything.

• You are not provided with the name of the company until after you listen to a canned sales pitch.

• You are pressured to buy substantial amounts of inventory—more than a few hundred dollars.

• Your gut tells you that something is wrong.

• The direct-selling representative promises you huge profits with little or no work.

Business Opportunity Red Flags

Be aware of the flowing red flags to determine if a business opportunity is a home based business scam.

• You are told that you won’t have to sell or that the product sells itself.

• You are pressured to make an immediate decision to buy into the business opportunity.

• You are discouraged from letting an attorney review contracts or other materials.

• You gut tells you something is wrong.

• When you call the company’s phone number, you never get a live person, only an answering machine, and the company’s address is a post office box.

Internet Red Flags

• It is so simple to earn $2000 to $5000 per week.

• Do you have the discipline to ignore the TV a couple hours a week?

• You have nothing to lose and there’s no risk involved, nor is there any obligation whatsoever, and you may be qualified to earn thousands of dollars per month.

Do not give up looking for the home based business that is right for you. Many people have found the freedom and money they want though a home based business. But it takes work and passion. The home based businesses that are the most successful are businesses that individuals start from scratch, using their own brains and motivation.