How To Investigate A "Business Opportunity" or "Turnkey" Package

A fast way to start a small business is to purchase a “business opportunity” or “turnkey” package. These “kits” come with a manual, DVD, inventory, promotional products, ads, and marketing & bookkeeping software, too. They often come with a lot less! There are no royalties to pay as with a franchise, but there is often no follow-up support such as an 800-hotline for help, etc.

The theory with a “turnkey biz opp package” is that all you have to do to launch the business is buy the package, read the material, study the manual, "turn the key" and open your business. Some of these start-up business opportunity packages cost $100 or less. Others cost thousands of dollars. But there is one common denominator: the opportunity should be investigated. Remember, let the buyer beware.

I sent for an “envelope stuffing biz opp” to see what it was: $25 and all I got was a letter suggesting I place ads in magazines and online offering “Envelope Stuffing From Home Business Opportunities”!!!!!

There are several ways to investigate a business opportunity. Do this before you send any $$$$ to anyone:

1. Call the Better Business Bureau in the city where the company is based. Ask if they have a "reliability report" filed on the company. This report provides information on the company and will include whether or not complaints have been filed on the company. It will also let you know how the company handled those complaints. Also visit: www.fraud.org for the National Fraud Information Center and phone the Call for Action Hotline at 301-652-HELP.

2. Call the Chamber of Commerce in the town where the company is based. Just because the company might not be a member doesn't mean they aren't reputable. But ask the Chamber of Commerce if they know of any reason why someone shouldn't do business with them. It doesn't hurt to hear what the word of mouth is about a particular enterprise.

3. Call the Attorney General's office in your state--often located in the State Capitol's office. Also check with the Secretary of State's office to see if there are any complaints filed on the company or if there are investigations pending.

4. Where did you hear about the business opportunity? At a local trade show? Through an ad? If it's in an ad, call the magazine who carried the ad and ask to speak to the advertising department. Do they have information on the company? How long have they been in business? Do they pay their bills on time? Has the magazine or trade sponsor received any complaints about the company?

5. Use your judgment. As you study the ad, ask yourself, "can I figure out what the business opportunity is from this ad?" If not, then run in the other direction. They are trying to be evasive. If you can't contact the company and get more information on what it is you are sending money to receive, then don't send a dime. Remember the old line, if it sounds too good to be true, it probably is! Not in every case, but in many.

6. Ask the company offering the business opportunity package if you can get a list of folks who invested in the package during the last two years. If they are legit, and if they are proud of what they are offering, they will be happy to put you in touch with their satisfied customers. If they won't do this, there very likely is something shady going on with that particular business opportunity program. Companies that have a legitimate business opportunity package for you to look over should not be scared or dismayed if you want to receive some free additional information about the company before you invest in the program. This is a perfectly acceptable request.

7. Perform a Google search on the company and see what turns up.

8. The Federal Trade Commission offers a free package of information about the FTC Franchise and Business Opportunity Rule. Write to: Public Reference Branch, Federal Trade Commission, Washington, DC 20580 or call the FTC at 202-326-2222.

9. Use your instincts. If the opportunity doesn't sound or seem just right to you, stay away. Do some more research before you get involved with the company and follow tips one through 8 to conduct your "due diligence" investigation about the business and the specific opportunity.

10.Don't send money unless you completely understand what you are buying into, and even then, check it out before you send any money.