Although I have been writing a series about the process of starting your own business in my last few articles, today I have decided to change the subject because I feel so passionately about this issue. While these opportunities are not scams because the companies providing them are offering a legitimate business model, they are extremely difficult to successfully implement.
The types of businesses that I am speaking about are Internet-based businesses that offer the opportunity to sell a service or product via their Web sites. As previously mentioned, these business models are legitimate, and in some small cases viable, but overall the chances of succeeding are rare. Most of the time, the opportunity is to sell some product or service, from books to travel agencies, to individuals who want to make a few extra dollars in their spare time. The investor is told a Web site will be provided for a fee, and all the investor has to do is generate traffic to the Web site. The provider will ship the product being offered, and the investor will reap the rewards.
The first problem with these business models is that most of the time the investors do not know very much about the industry in which they are placing their faith. Additionally, the products, while plentiful, may not be very good.
The worst part about these types of “opportunities” is that the company offering them always demands upfront money for providing a Web site that is nothing more than a template. After investing $1,000 to $2,500 in these Web sites, investors realize they do not know how to generate traffic. In an effort to salvage their initial investment, the investor will turn to the same company who will sell them Web site optimization solutions for a substantial fee.
My advice about such companies is to do some research into what other people are saying about them. You can do this by Googling the company’s name and including the word “scam.” Most of the time you will find relevant message board material or filed complaints against these companies.
The last thing you want to do is simply invest your money without checking into the background of the people that you are handing your money to.
Written by Pedro Ramirez, Business Development Specialist and Certified Business Advisor II of Angelo State University’s Small Business Development Center. Contact him at Pedro.Ramirez@angelo.edu.
