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I Want to Start a Home-Based Business. How Do I Make Sure It’s Legitimate?

With tough times, people are looking for ways to either save a little or make a little more money. We’ve been getting more questions about part-time and/or home-based business opportunities. Specifically, we’re being asked how to tell if they’re legitimate.

One of the first things to look at is what they’re promising you. Specifically …

Do they make earnings claims?

george "Many offers will tout how much you can make. Legitimate operators will do one of two things: they won’t make any claim at all, or … they will tell you both the number and percentage of people who actually earn what they’re claiming. In my experience, they’re more likely to not make any claim at all."

Some real world examples

marylynn "I did a search for “home based business opportunities.” I saw six on my screen without scrolling down. Of those six, five made an earnings claim. I saw claims like “$250 thousand or more at home”, “$500 to $8,000 per month”, and $30 to $150 thousand in 12 months”. Then I looked at the most regulated business opportunities – franchises. I typed in “franchise opportunities”. One out of the four franchise opportunities made an earnings claim and it was also one of the home-based business opportunities!"

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We’re not saying that being a franchise automatically makes it a legitimate opportunity. Nor are we saying that just because it’s not a franchise means it’s a scam. But from these examples, you do see differences in behaviors of companies that are more regulated and those that are not.

Do they stand behind their own claims?

marylynn "I went to the site of one of the home-based business opportunities. This was the one that claimed you could make $250 thousand. I scrolled way, way, down to the bottom of the page and clicked on the tiny, little link that said 'Earnings Disclaimer'."

george "Mary-Lynn printed it out. It was in ALL CAPS. Unlike the small font used for the Earnings Disclaimer, this was in 13.5 point type. They’re covering their you-know-what."

Here are some highlights …

“ANY EARNINGS OR INCOME STATEMENTS,  OR EARNINGS OR INCOME EXAMPLES, ARE ONLY ESTIMATES OF WHAT WE THINK YOU COULD EARN.”

“ANY AND ALL CLAIMS OR REPRESENTATIONS, AS TO INCOME EARNINGS … ARE NOT TO BE CONSIDERED AS AVERAGE EARNINGS. TESTIMONIALS ARE NOT REPRESENTATIVE.”

And our favorite part …

“WE DO NOT GUARANTEE OR IMPLY THAT YOU WILL … GET RICH, THAT YOU WILL DO AS WELL, OR MAKE ANY MONEY AT ALL. THERE IS NO ASSURANCE YOU'LL DO AS WELL.  IF YOU RELY UPON OUR FIGURES; YOU MUST ACCEPT THE RISK OF NOT DOING AS WELL.”

So they make a claim and then they disclaim their claim!
When you see this, exclaim your skepticism!

We’re NOT (sorry, we got used to seeing ALL CAPS) saying this particular example is a scam, but you would definitely want more information before proceeding.

The thing about earnings claims, at least here in the U.S., is they are required by law to disclose both the number of people and the percentage of people who are earning any amount they quote you.

So don’t be afraid to ask for documented proof of any claim. Then check out our article that describes your next steps are when investigating a business opportunity.

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(Image from eggheadmarketing.com)

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6 Responses to I Want to Start a Home-Based Business. How Do I Make Sure It’s Legitimate?

  1. Kelly says:

    Great advice today and I like the little pictures of the two of you!

  2. I Want to Start a Home-Based Business. How Do I Make Sure It’s Legitimate?…

    What earnings claims may say about a business opportunity….

  3. Mary-Lynn says:

    Thanks, Kelly! We took some wonderful advice from Liz Strauss over at http://successful-blog.com. We were having difficulty figuring out how to be more personal in our posts when we always had to say “we” and never “I” since there are two of us. We think this is a great solution that allows us to speak as individuals throughout our post.

  4. Ron says:

    Really it all just boils down to using common sense. If something sounds too good to be true, it probably is.

  5. George says:

    Absolutely on target, Ron. With any business opportunity, there’s a certain amount of due diligence you have to do to prove it out. It’s your money until you give it to someone else!

  6. Nice information. One thing I would like to add one thing that the only internet business which runs successfully is the business every successful marketer is running on net. It is selling digital products and services all other are scams;beware please.

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