A Step in the Right Direction

Consult The Right Organizations

Unfortunately, there is no trade organization that issues a seal of approval for business-opportunity sellers. Finding out whether the seller is on the up and up will take a bit of guerrilla research.

First, head to the library and check out the business-opportunity seller in back issues of business magazines. If they have been in the business for a while, they will likely be listed in the "Business Opportunity 400" issue of Business Start-Ups, which has been the September issue for the past few years. Check out this listing and any of their advertising that appears in the publication. Also, check for any books on the business that interests you.

Your next stop might be your state's office of consumer affairs. Ask whether there have been any lawsuits, investigations or complaints against the company in the last year. If the answer is yes, there may be information available at the agency to give you insight into the problem. Don't let just any legal action scare you away; most U.S. businesses carry multiple legal battle scars from our litigious society, and business-opportunity sellers are no exception. But if the records show criminal convictions for fraud, securities law violations, or violations of business-opportunity or franchise laws, you may want to look elsewhere to invest your money.

You can also check with the Better Business Bureau in your area for a list of complaints on file, and contact the Federal Trade Commission for free investor information about investing in a business opportunity. (See "For More Information . . ." on pg. 46.)

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This article was originally published in the June 1997 print edition of Entrepreneur with the headline: A Step in the Right Direction.

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