Being an entrepreneur in today’s world means wearing many hats. Managing distribution chains, meeting with clients and ensuring products and services are delivered to customers are just a few of those responsibilities. However, the successful business owner learns how to delegate certain tasks so they can focus on their company and its growth. The right business opportunity can facilitate this, but only if the deal is legitimate. Here are a few ways to spot bad business partnerships before they steal your company’s profits.
1. Be Skeptical of Bold Promises
When it comes to promises, the clichéd idiom “if it is too good to be true, it probably is” transforms into the golden rule. Promoters of illegitimate business opportunities often make bold promises that rarely pan out. By using milestones in your business agreements, you can fight these false opportunities. A business attorney can help you apply milestones to your business agreements in the form of opt-out clauses. These opt-outs will provide you with an exit strategy should the arrangement sour.
2. Look Into Your Potential Business Partner’s History
Another method to suss out the truth of a business opportunity is to look into the person offering the deal. Does this promoter or potential business partner have a history of starting multiple ventures that go belly up? Did this person build a reputation for overcharging businesses that they were allied with? Past dealings can often predict future behavior. So, if your potential business partner’s history does not inspire confidence, then it may be better for you to pass on the opportunity.
3. Beware of Misrepresented Figures and Testimonials
Showering entrepreneurs with research is another method used to tempt people into a sham business opportunity. You should never take research that is presented to you at face value. You need to review that data yourself and confirm whether the sources are reliable. Even testimonials can be suspect, considering that anyone can be paid to say anything. Insist on personally contacting references so you can determine if the accolade is credible.
Though there are many genuine business opportunities in our country, there are just as many scams. Being thorough when it comes to your research can help unravel many of these schemes, but you are not alone. An experienced business attorney can provide insight that you may not have considered.
Our Redwood City Business Attorney Could Be the Right Fit for Your Business
Here at Winghart Law Group, Inc., we are aware of many other pitfalls when it comes to business arrangements. We may be able to help you draft an agreement that not only benefits your business, but also protects it. Contact our offices for a free 30-minute consultation and discover the strong, cost-effective business law services that have our clients recommending us to their family and friends.