Beware Entrepreneur Scams

In my very early experience as an entrepreneur, I've noticed a huge industry built around entrepreneurs to make money from us. These include, franchise companies, web designers, marketing consultants, mail forwarding companies..., the list goes on.

These companies view entrepreneurs as a class of people who are willing to take huge risks with money and time. This ties in with all the start-up self-help books advocating "the only thing to fear is the fear of failure" or "no guts, no glory".

Many of the services offered are genuine, but some sound too good to be true. I'm writing this because I think anyone setting up their business should be very sceptical when being sold something. I try to remember that shrewdness is important for anyone involved in business.

I'm not going into the loud, obvious scams (ones that include sending a cheque and self-addressed envelope to someone who promises you a secret method of earning money at home). The less obvious scams are no less cunning. The online ones are by far the most competent in their pitch for your business.

To call them scams is unfair- these companies carry out unethical selling, often by self-professed marketing 'gurus'. Typically they offer you a free e-guide on how to make lots of money through internet marketing, like they have. There is no real proof of their success nor wealth. Come to think about it, truly rich people don't tell people how much they make every month or year. They show their wealth but don't tell you their profit on every single venture for the obvious reasons. But these 'gurus' tell you about the money they make, right up to the nearest cent.

The guide turns out to have a few good tips, but is mostly leading towards and promoting the product they want to sell. And it's always a hard-sell. They bombard you with emails, telling you there are limited units/spaces so you have to act and buy now. I struggle to understand the mindset of a person who would be tempted to try the product, be it a seminar, software, contacts list or inclusion in directories just because of the 'too good to be true' promises.

Apart from seeing through the obvious scams, it's important to also invest in business ideas that are personally sustainable. I've been offered a vacant shop lot for free to use as a second hand store by my landlord. The location is not great but I won't need to pay rent, is near where I live, and I know where to get stock to sell on. There is a small profit to be made. But I haven't taken it up because I don't see myself doing it for more than a few months. I will end up investing loads of time on it instead of concentrating on a real plan.

I've been advised that common mistake entrepreneurs make is to enter into markets that are easiest start-up in, not the ones that have the most potential. So, the morale is, there are no shortcuts.