NASE Blogs

How to become rich in business ... and lose your shirt on the way!

Jul 26, 2010

When it comes to putting information out over the Internet ... I hold everything pretty close to the chest. But I must have done something in a past life that has gotten me on every business opportunity sucker list in the country. There isn't a week that goes by that I don't have emails slipping through my spam filter inviting me to a seminar that will change my life or promises just by opening my checkbook I'll be on the way to changing my address to 840 Easy Street, U.S.A. I don't really think I'm any smarter ... or less greedy ... than the average bear, but I just don't understand how the people and companies selling some of these snake oil programs can stay in business. I mean, how many P.T. Barnum-followers (there's a sucker born every minute) are out there?

It's not as if it's some secret that the vast majority of these programs are out to rip you off. I've talked with hundreds of people who have fallen victim to the promises of a good pitchman. These folks didn't just arrive from the depths of some jungle or a remote Pacific island either. For the most part, they are educated people who either want to start a business or are looking for new opportunities. The worst part is that after they have been snuckered they often say they had a feeling that something wasn’t on the up-and-up, but there was a money back guarantee, so they figured they didn’t have anything to lose.

Of course, they found out the money-back guarantee was only valid if they called a 900 telephone number (cost $24.95 a minute) between 4:00 and 4:30 a.m., on the third Tuesday of the month, while standing on one leg and clucking like a chicken.

Although I'm one of the last people to call for more government regulation, when it comes to stopping the Shylocks who have the moral ethics of an amoeba, it's time to call out the National Guard. It's time for the Federal Trade Commission and every states attorney general's office to regulate business opportunity programs, as they did with franchising years ago. It's sad we have to turn to government for something that should be common sense. The problem has been around for over 20 years and just continues to get worse with so many people getting ripped off, I don't see any other way to stop this scourge afflicting hundreds of thousands of people across the country.

While we're at it, we need to do a little backyard clean-up of our own. It's time for legitimate small-business publications and websites to stop selling space to advertisers who are selling nothing more than blue sky. Pick up any national small-business magazine and you'll find it filled with advertising for these types of businesses. The publishers might tell you they screen advertisers, and unless an ad is highly questionable, immoral or illegal, they have to sell the ad space. Ditto for websites and their pop-ups and banner ads.

Well, it just ain't so! A magazine or website can choose whether or not to sell to anyone just like the rest of us. My response to these folks is, "how much credibility do you think I have in a magazine or website that lets con artists advertise?" If you tell me you have no way of knowing which ones are legitimate and which ones aren't, I have to seriously question your intelligence!

As for the root of the problem ... that would be us, folks  ... we need to stop letting unscrupulous people take advantage of us. If we cut off the source of their cash cow, they will shrivel up and crawl back into their hole.

Here are a few tips about how not to become a victim:

  • If you go to a business opportunity seminar, don't take your checkbook or credit card.
  • Don't watch TV past midnight because some infomercials make it look like you're watching "Nightline" but the stations don't have all those legal disclaimers plastered on the screen because they think the shows are credible.
  • Never be pressured into spending money, giving your credit card number or signing anything without having time to check an opportunity out.
  • Don't fall victim to the ruse: "You have to decide immediately, to get a special price" or "keep the opportunity open." If someone throws this line at you, run ... don't walk ... to the nearest exit or hang up the phone.
  • If you look at a business opportunity website and after reading the entire site still don’t know what product or service they are trying to sell you ... they are hiding that information for a reason.
  • Get information about the company: how long have they been in business and where is the company headquartered? Call the Better Business Bureau and the attorney general's office in the city and state it is headquartered in for a record of any complaints that have been filed.
  • Talk with at least 15 people involved in the business for six months or more. Frequently, you will get two or three people whose job is to help sell the deal. If you can't get at least 15 names, the opportunity can't be doing too well.
  • Last, but not least, trust your intuition. "If it sounds too good to be true, it probably is."

There is no free lunch and anyone trying to sell the idea, that you can be successful with little or no work is probably too lazy to make an honest living themselves. Don't be fooled, people selling these programs are good ... they're real good ... at getting your money!

If these opportunities are so great, I have to wonder why the people are selling the idea, equipment or products. Why aren't they putting all their efforts into doing the business themselves? Who knows, maybe the majority of people who plunk down their $300 or $3,000 but don't succeed in these businesses are the exception to the rule? Or maybe they didn't follow the plan. Or maybe, just maybe, the people selling the opportunity were very, very good at selling their snake oil. Selling the great American nightmare without regard for anything except how to get their hands on your checkbook or credit card!

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