Hard Questions for Business Opportunity Sellers

So here you are, tired of the corporate rat race or tired of not having enough cash, or just looking to get out on your own and you want to start your own business. Many people in the same boat get on the web and look for a business opportunity to purchase and of those unfortunately many get taken for a little and in some cases a lot of money. As I have discussed in some of my previous posts, franchise for the most part, by law, must disclose a lot more information than business opportunities. Also as has been mentioned previously, there are states which do regulate both fairly closely in the same way but definitely not all. In the 26 states which require registration, (search the posts) and you will find the link the first question you should ask is, "Are you registered with the state"? If they are not you may want to reconsider, if they are they should already have supplied the business opportunity disclosure document. In States where registration is not required here is a list of questions and also some of the intricacies of asking these questions.

1. Who are the owners of your company?

Many times you will be told that the company is a corporation and has shareholders. While this can be true, there are almost always major and minor shareholders. Who is in charge and who makes decisions? Many states and cities have search able court records online. Search under any of th key players names and see if there are any present or past lawsuits or complaints against them. Call the State and see what information you can find about the company.

2. What have your owners done in the past as far as businesses go?

The reluctance to give this kind of information is a red flag. Anyone that does not want to be open and honest about such things should be looked upon with great suspicion. Also anything that is said needs to be verified. Ask what you can do to verify the information.

3. What information can you send me, including but not limited to an agreement that I can look at or have my attorney review? Just the mention of attorney sometimes will cause a scam artist not to want to deal with you.

4. How long have you been in business? CHECK IT OUT

5. Who else has purchased this opportunity that I can talk to? You need to make sure these are not the same people that they always give out as references. You would be surprised at how often this happens. Have a relative or friend of yours call up from another State and act like an interested party and see if they give the same list of people.


6. Do you have any lawsuits against your or this company because of it's actions? Most states and jurisdictions have online searches.

7. How many people have not made it and did not really do well out of all the business opportunities that have been sold? If they tell you that they have sold quite a few and have not failures, then it's a MAJOR RED FLAG.



Take the name of the Business Opportunity and put it into Google with the term "scam" after it. Depending on how many people have looked at it, or bought it, you will be amazed at what this will uncover. Be advised though, some competitors use this as a tactic take business away from the business opportunity that you are investigating.

Ultimately if you spend your money on anything it is your responsibility to check it and the people offering it out. The more you are going to spend the more homework you should do. When is it all said and done it is Caveat Emptor.