Top 8 Tips For Avoiding Business Opportunity Scams

In the age of the internet, it’s difficult to avoid falling prey to scammers. Many apps and websites have pop-up ads that take you to suspicious pages where you’re asked to pay a certain amount to benefit from a business opportunity. 

Avoiding business opportunity scams is a skill that must be mastered by an investor. With the help of these crucial tips, you can do so effectively:

1. Scam Recognition

Be knowledgeable regarding online and offline business opportunity scams. Make sure you only go for those opportunities that are offered by reputable sources. Sources that you’ve never heard about are not safe and must be avoided. You can also ask your friends, family members, and peers regarding the opportunity and its viability. 

2. Trust Your Gut Instinct

There are times when business opportunities are so lucrative that it seems something isn’t adding up. Trust your instincts in these matters and probe whether the party extending you the opportunity is making any money. If it’s not making any money or the margin is so low that it’s unfeasible, then most probably it’s a scam. 

Moreover, the compensation must be proportional to the work you’re putting in and the size of your investment. A promise of unrealistic returns is a sign that the scheme is dubious. In these situations, trust your gut instinct and then research to ensure that it’s not a scam

3. Avoid Unsolicited Emails

There are times when you open your email account and see fantastic sales pitches promising unprecedented returns. Note here that these are unsolicited emails, and you haven’t asked for them. This is the first sign of alarm, and you mustn’t open these unwanted emails. 

If you do open them, make sure that they’re from credible sources.

4. Be Thorough In Your Research 

It’s always beneficial to doubt anything you see on the internet. This applies to fantastic business opportunities as well. That’s why it’s advisable to do your research. Research must be done on the industry to which the business opportunity pertains. You can look for things like what are the average returns in the industry. Compare these returns with those offered by the new business opportunity. 

If they’re not comparable, the business opportunity is likely to be a scam. Doing proper research will instantly help you to identify whether you’re entering a fraudulent deal. 

Moreover, there are many websites that you can visit to make sure that the opportunity is legitimate. These are government and non-government websites that can verify the company. You can also check if the company is publicly listed. It’s safer to pursue an opportunity extended by a publicly listed company. 

In any case, the company must be registered, and the business must be legitimate and legal. In this scenario, when you file a fraud case against the company, there are higher chances that you’ll win.

5. Avoid Sharing Personal Details

Many websites gather data from you, and many people give away personal data willingly. These are probably scammers that’ll target you later. You mustn’t share your bank account, credit card, or debit card details without proper authentication. 

Sometimes there’s no business opportunity, and the website is solely designed to gather financial information from you. The information can be used for fraudulent activities and illegal purposes. 

6. Think Rationally and Not Emotionally While Planning

At times, scammers play with your emotions. The feelings here are associated with earning big in a small amount of time, with minimum investment. This isn’t financially feasible, and no one is willing to give you unrealistic returns for low investments. Sometimes the business opportunity is your dream venture. Like opening a coffee shop or anything that you’ve always desired. 

Remember that the scammers know about your inclinations and can play on them. Therefore, avoid taking an emotional decision. 

7. The Return on Investment Must Make Sense 

Whatever information and data the new opportunity is offering, it must make sense. Unrealistic and farfetched numbers mostly mean you’re walking into a scam. 

Check the data with government websites, stock exchange websites, and industry averages. Pursuing business opportunities is all about research. Do it as much as possible to be safe. 

8. Report Fraudulent Activities

If you come across a fraudulent website, report it to your internet service provider or the government agency tasked to curb scamming activities. Prompt reporting will not only save you but also keep others from getting defrauded.

Key Takeaway

Scams are widespread nowadays and can be very harmful to your business. If you’re a part of an organization, make sure you ask your company’s legal counsel to examine the opportunity that appears to be a scam. Follow through the tips mentioned above to ensure that you and your business remain safe from scammers.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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