One way to offset the risks of investing in a business opportunity is to consult with qualified advisors. Ask for help from a mentor, your spouse, a family friend, an attorney or your accountant. One of these trusted advisors might be able to bring a fresh perspective to your decision and help you think it through.
For any substantial investment (read: money you can't afford to lose), seek the guidance of an experienced advisor such as an attorney or an accountant. They'll typically ask tough questions about the investment, which could save you from making a costly mistake.
And yes, it does cost money to get that kind of advice. But although a lawyer might charge you $500 to review a package and give you counsel, it may save you thousands of dollars that you might have invested in the wrong program. Consider this fee not an unnecessary extravagance, but a reasonable insurance policy premium.
An accountant can run a break-even analysis and tell you how many widgets you have to sell before you begin to make money, as well as how long it should take to earn back your initial investment. Whether this move represents a dramatic career change or a part-time experiment, you need to know the break-even numbers. Quite simply, accountants tell you if the investment makes sense for you.
Check with the Authorities
State and federal authorities may also be able to provide some assistance. Call the Federal Trade Commission's (FTC) consumer help line at (202) 326-3128. The FTC may not have specific information about the investment you're considering, but it does offer some useful general investor information. For you knights of the Net, the FTC's Web site (www.ftc.gov) is also quite useful.
State consumer protection agencies can tell you a lot about investing in business opportunity programs. Expect some rather shrill warnings about investing in business packages after all, these agencies are in the consumer protection business. Ask whether agency officials know of any investigations or problems with the company you're considering if they do, you'd be smart to look into the situation further.
Your Holy Grail of a business opportunity is out there, but it's up to you to find it. Persistence and critical inquiry are the keys to your quest. Be bold!
Andrew A. Caffey is a practicing attorney in the Washington, DC, area, a former general counsel of the International Franchise Association, and an internationally recognized specialist in franchise and business opportunity law. His e-mail address is ACaffey@Compuserve.com