How To Spot A Bogus Business Opportunity

So you’re an entrepreneur, and you’ve been searching high and low for a business opportunity that’s going to work for you and the lifestyle that you want to lead. Obviously, any person or company that’s selling a something is invested in making it sound like the best thing that you’ve ever heard of. But what’s behind all of those claims? Are the things that you’re hearing and reading really true?

If you’re the skeptical sort, then maybe you’re constantly inclined to think that you’re about to be scammed out of all your hard-earned money. While your skepticism is certainly warranted, you shouldn’t let it cost you the chance to pursue a business opportunity that could work out for you in the long run. However, you should use that healthy dose of skepticism you have to guide your thorough research into every opportunity that you’re considering.

But, even if you’re being vigilant in your approach, it may not always be clear what steps you should be taking to ensure that what you’re pursuing is legitimate. Below, you’ll find some helpful tips that will guide your vetting process and should also help ensure that you’re not scammed out of your hard-earned money.

Steps You Should Take 

The Federal Trade Commission (FTC) offers some spectacular guidelines for things that you should expect and be prepared to research when you’re considering signing up for something new. There are two documents in particular that the FTC advises that you vet thoroughly, the Disclosure Document and the Earnings Claim Statement. People and companies that are selling business opportunities are required by law to present you with these documents before any contracts are signed and before any money changes hands.


If you don’t receive these documents, then that is an immediate red flag and you should head straight for the exit. However, if you are provided with these documents, then you will have the opportunity to look them over and conduct further research on the business opportunity that’s been presented to you. There are a lot of things in these documents to sort through, though, so it’s important to know what to expect.

How to Vet the Disclosure Document

According to the FTC, the Disclosure Document will have to provide you with some key information. This will include the name of the seller, as well as information about any previous, pending or current legal action that involves the seller. Obviously, you’ll want to consider this information closely and look further into any legal action that might be surrounding the opportunity that you’re interested in. It could, after all, have very dire consequences for your bottom line if you get involved, and it’s better to know about these thing sooner rather than later.


In addition to this, you’ll also find information relating to refunds and cancellations. It’s always important to have a potential exit strategy, and this will go a long way toward helping you plan for that eventuality. Finally, you should also find a list of references for the seller. Take the time to check and thoroughly vet these references; you may be able to find out things that the doesn’t want you to know.

What to Look for in an Earnings Claim Statement

When someone is selling a business opportunity, they will naturally try to inform you of the potential earnings you can expect to make. In addition, they will likely use other people as examples for what you can expect from the business opportunity. If the seller has made these claims, then the seller is required by law to provide you with an Earnings Claim Statement, which will break down the nitty-gritty of the claims that they’ve made. Naturally, you should take the time to read through this information and compare the claims that have been made to your current situation and what you can expect from it. Often numbers can be misleading, so be sure that you’re careful as you pore through the information.

Some Final Words of Advice

As an entrepreneur, you’re going to be putting your money on the line, so make sure that you cover yourself! Any seller is, at the end of the day, trying to sell you something, so make sure that you approach the situation with that in mind. If you listen to claims that the seller makes from this mindset, you’ll be better able to sift through the nonsense and develop an honest portrait of the opportunity that’s been laid before you.

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