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Educational Consumer Tips

Business Opportunities - What You Need to Know

Author: Luanne Kadlub

Before investing money in a business opportunity or franchise offer, Better Business Bureau® Serving Northern Colorado and Wyoming advises that you research the business, determine your skills and needs, and the viability of the business within your market. 

While doing your research, contact your Secretary of State’s office to verify that the business is registered and contact trade groups related to the specific industry for information about the type of business you’re investigating.

Be sure to obtain a copy of the company's disclosure/revelation document before agreeing to anything. The Federal Trade Commission requires that the document must state the concessions and opportunities in detail. If the company says it is  exempt from this rule, contact the FTC at to verify. 

Have your attorney review any contracts before signing them. 

When discussing the opportunity with the seller, ask about: 

  • Value and appeal of the product or service.
  • Financial health and history of the company and its officers, including litigation history.
  • Costs and refund policies. Request everything in writing.
  • Names, addresses and telephone numbers or email addresses of other people who have bought the concession or the opportunity.
  • Types of training and field support available.
  • Sites and selection of territories, if applicable.
  • Substantiation of earning potential, with projections of income backed up by specific experiences of other buyers.
Be leery of any offer that:
  • Makes outrageous and unsubstantiated earnings claims that sound too good to be true.
  • Is made in an online or print advertisement, directing you to call an 800 number, resulting in high-pressure telemarketing sales pitches.
  • Requests payment by a wire transfer service.
  • Promises "easy sale" of the products or services.
  • Promises exclusive territories and good locations for machines and display racks or the assistance of professional locators.
  • Fails to provide disclosure documents containing financial statements, company history and substantiation of earnings claims.
  • Fails to provide fee and refund policies. Do not take refund policies at face value. Some fraudulent offers advertise phony refund policies touting 100 percent money-back guarantees, then close shop with no intentions of honoring them.
BBB offers these additional tips:
  • Keep in mind that some multilevel-marketing plans are pyramid schemes, which are illegal and risky.
  • Many work-at-home opportunities are promoted by scam artists. These can end up costing you more than you can earn.
  • Many medical billing business opportunities are not how they’re represented. Promoters provide false information regarding earnings potential and fail to provide key information.
  • Business offers that promise quick and easy income from stuffing envelopes at home virtually never pay off.
  • If you risk a lot of money, you can lose a lot of money. High-pressure offers promising high returns are virtually always scams.
  • “Opportunities” pitched at seminars usually don't live up to the hype. Take your time, ask questions and listen carefully to the answers before you consider an investment.

About the Author: Luanne Kadlub is Communications Specialist for BBB serving Northern Colorado and Wyoming.