Unfortunately there is no simple answer to the question of how to identify sound business opportunities. For one thing, a business opportunity might be good in the hands of one person with certain skills and aspirations, but a disaster in the hands of another. However, this article is concerned with the general attributes of good business ideas compared with downright scams.

When you are looking for a business opportunity you need to do a lot of work. Unless you have an obvious passion for something, and see no alternative but to set up a shop or service serving that passion, you need to carry out extensive due diligence to see if a business is worth investing time and money into for a long time into the future.

The first thing to examine is how the business is being marketed. Is it a very hard sell? If so you have to look behind the marketing to see the bare bones of what is on offer. Promoters of a sound business idea will not be afraid to give you facts and details which you are free to check. Ignore the long list of comments and praise from previous customers – if the opportunity is one of mass appeal, such as Internet Marketing. Better to find independant viewpoints from real people who have been developing the particular business and ask some searching questions. Look behind the glamour and easy promises – try to find verifiable data and if you are unable to do so, steer clear!

So you are satisfied with the presentation and ethos of the business idea. You have determined that it is suitable for your needs – it may be part time, full time, scaleable etc. The next and most important step is to carry out some testing.

Testing a business opportunity

Any offer of the ideal money making opportunity that wants a significant payment up front, such as a franchise or Internet business offer, needs testing before you part with any real money. Promises of refunds if not completely satisfied are not enough. How then do you test a business without committing yourself. This does vary on the type of business – but here are some common methods:

• Internet Marketing – dont pay up front for a course. The best ones will want a monthly subscription and one month of committment is easy to bear. Try a system for a month and if you are happy you let it run.
• Franchises – the best franchises are always the ones that are clearly visible – on the high street, in Yellow Pages etc. A good franchise company will let you spend time at the outlets to get to know the business before committing.
• An established  business advertised in an estate agency or other online agent – this is the hardest, you cannot try out such a business before you buy and the seller is going to want to paint as rosy a picture as he can in order to sell to you. In this case you really need to take professional advice and hire an accountant to carry out proper due diligence once you have gleaned as much basic information as you can.
• Business Opportunities found on the Internet – generally. Unless you can find some way of backing up the offer, some way of finding word of mouth recommendation or reference to the idea in the “real world” you would be safer to back away. There are no easy ways to make money and any that do work with determination, investment and perseverance – can usually be seen to be working anyway.

So spotting a good business opportunity is not easy! Things always sound good when somebody wants to sell you something and a clever pitch is used. I would advise caution always, be a cynic and fear the worst. Try to get involved a bit at a time to reduce your financial risk and wherever possible accumulate as many independant views and opinions as possible. Please remember that I would be happy to supply the main areas to look out for, for any business idea – for nothing. The quid pro quo is that you let me add an article to Business Opportunity Market’s archive database!

My first post for this new blog site is going to take a very general look at the problem of fraudsters in the business opportunity marketplace.  As a “fraudbuster” (people like to glamorize my role – it has its moments but work is work!) I tend to come into contact with a lot of marketing material for a whole range of dubious get rich quick schemes.  However, when I describe one or two of them I think you will start to see that the whole subjecy is a very grey area.  What is fraud and what is sharp business practice is not always clear – and many of the get rich quick schemes could work if the person wanting to get rich was prepared to work hard, perhaps invest some money and realised that “quick” could mean within a year or two (not overnight).

Many scams that I investigate are set up and run by very clever and enterprising people.  The only difference between them and (hopefully) you or I is that they want it quickly and easily without the slog.  If you are not prepared to put in the effort do not expect the returns.

I will digress from schemes that people are selling to schemes that people set up to get rich at others’ expense.  The example I have in mind is called “support publishing” and I have investigated several of these.  I will post a more formal article on the problem in a later post.  Support publishers ring around small businesses using yellow pages or contacts from the local press.  They pretend to be “supporting” charitable organsisations or good causes such as the police or fire brigade.  They offer you an advertisement in a booklet they are preparing on say “road safety for children” to be distributed widely around alll schools in your area.  You would feel mean if you did not take out an ad showing your support – anything from £100 to £1000 a time!  200 advertisements in a regional booklet, 50 regions – do the maths!

And the number of second rate booklets published (if at all) will be one for each advertser and maybe one or two to a school here and there.  Money for old rope and a waste of your advertising budget.  You will get no business from it and will have the satisfaction that you have funded the publishers’ lavish lifestyle.

So I hope to cover these scams as well as the money making ideas – as they are essentially get rich quick schemes that the police will chase you for if you start one!