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Reality Check

The 9 things you must know before buying a business opportunity.

Business Opportunity of a Lifetime!

Earn $5,000+/month. Part-time, homebased opportunity. Allow yourself more leisure time, and earn more money. Work smarter, not harder. No training necessary. Be part of a $4 billion explosive industry. Territories available; total investment no more than $1,000. Call now, toll-free, (800) 555-1234.

Who wouldn't be interested? For an investment small enough to fit on most credit cards, you can buy a (part time!) job that will kick out $60,000 a year! Where do I sign? To get the full story, let's take a look at two entrepreneurs who answered this ad.

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Entrepreneur One calls and learns the opportunity is a rack distribution program for a new line of chocolate bonbons. "Six-figure incomes are common," the salesperson says, "and you will spend no more than two and a half hours a week on this business. You'll buy all product from the company, and location advisors will work with you to place the racks in the best spots in town."

"Even if I lose the entire $1,000," the entrepreneur rationalizes, "I can afford it." After buying the initial inventory, though, he's into it for $5,000, and it starts to look a bit more intimidating.

Six months later, broken display racks line his garage, bonbons are melting in his basement, and what product he has placed in stores is not moving. Let's put it this way: He's a long way from that six-figure income.

This ad also catches the eye of Entrepreneur Two. The difference is that this business opportunity buyer does her homework.

She looks into the product carefully, taking the time to talk to retail store owners in her town about displaying the line (they are not enthusiastic). She checks with the Better Business Bureau and finds out the seller has an unacceptably high number of complaints on file; what's more, three states have taken legal action for trade violations.

So she moves on with her search and finds a stronger business opportunity company with a more attractive product line and a lot less hype in its sales presentation. She visits company headquarters, meets senior management and walks through the manufacturing facility. Retailers show far more interest in this product. She contacts three current distributors who report fairly good success, long hours and strong market acceptance of the products.

Six months later, she's not making a six-figure income-but then, our second buyer was not led to expect pie-in-the-sky results. The business is providing a solid secondary income, one that could allow our savvy buyer to leave her job in a year and pursue the business opportunity full time.

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