What are the warning signs of a home-based business scam?

Many entrepreneurs choose home-based businesses, and some of those want to work from home with an established operation. For example: sales representative businesses or online home business programs. With these home-based businesses you’re part of an established brand and you get support from the company. However, not all home-based business programs are as good as they seem.

Some warning signs of home-based business scams:

  • Read the terms and conditions on the company’s site very carefully. You may be asked to pay a small fee for the start-up DVD or instruction guide. Be sure you can return the information without incurring even more fees.
  • Look for money-back guarantees or free, no-obligation trials. Make sure there aren’t sneaky clauses that mean you have no recourse if you change your mind.
  • If you’re being encouraged to “invest” in a “guaranteed” money-making business, be wary. Nobody can guarantee income, and they rely on you to pay a lot of money before you realize that.
  • If you’re being pressured or convinced to cash a cheque to pay for supplies, or provide personal or banking information early on, it’s most likely a scam.
  • Look for a contact number. If you can discuss the program with someone directly, then there’s a good chance it’s a legitimate home-based business opportunity. Be wary of people who can’t do in-person or virtual meetings, are evasive about your questions, or pressure you into signing up on the spot or paying for more information.
  • Research the company as thoroughly as you can. This can take the form of online searches on messageboards or member blogs, or it can also involve talking with people you know who may be involved with the program. If all you find are glowing reviews, that might be a sign of a scam. There isn’t a business around that’s 100% perfect.
  • Be wary of sites offering mind-blowing income promises. No business can promise you $10,000 a week for three hours’ work. If it sounds too good to be true, it probably is. Trust your gut feelings!
  • Even if income promises are realistic-seeming, many companies post the income expectations of their highest earners – not the average.
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