Continued from the post on Friday.
Evidence of earning projections need to be provided before considering investing. Have a list of questions for the promoters and interview them in person where the business is in operation. Never conduct business over the internet without the potential of meeting in person. It is important to be face to face in order to spot false statements by fake companies.
Check with your state attorney general’s office and the consumer affairs bureau to see if any complaints or wrongdoings have been reported against a company, prior to handing over any money. If there are licenses required to run this business, check to see that all paperwork has been submitted.
There are twenty six states with business opportunity laws. It is important to know which ones apply to you before you begin the investment process. Most states have laws in place whereas companies cannot sell their business opportunities without providing potential purchasers with a presale disclosure document. These documents must be filed first with a designated state agency. Franchise investment laws are in place in fifteen states. The laws require franchises to provide presale documents to all potential purchasers prior to investing.
Before you raid your college or retirement funds, or take out a home equity loan, or deplete your savings, be sure to do your homework on any new small business endeavor. As the old saying goes, look before you leap.
