One of the most frequent questions on the business forums is "are any of these work from home jobs or business opportunities for real, and if so, how can you tell them from the scams?". The short answer is yes. Determining the difference between legitimate and scam is more difficult.

Work From Home

Home Businesses – Legitimate or Scams

Dick Bendtzen,author of “Yes You Can Start And Run A Small Business” provides small business consulting advice from his website and forum http://www.smallbusinessyesyoucan.com and on Blog Talk Radio at http://www.blogtalkradio.com/Dick-Bendtzen

One of the most frequent questions on the business forums these days is “are any of these work from home jobs or business opportunities for real, and if so, how can you tell them from the scams?”

The short answer is yes, some of these jobs or business opportunities are for real and are legitimate. Unfortunately, many (if not most) are scams, or at best an opportunity in which very few people will be able to succeed.

How can you tell the difference?

Are there some signals that may indicate one from the other? Are there ways to research the potential opportunity? To get the answers to these questions it’s important to differentiate between work from home job, and work from home business opportunity. Examined closely, most will fall into the “business opportunity” category.

A “job” infers some sort of employee/employer relationship, usually similar to a part time worker. Pay is by the hour or by the amount of satisfactory work produced. A “business opportunity” is just that – a business. Remuneration is in the form of your profit (or loss) or commission, usually from sales of a product or service. A “business opportunity” does have some advantage in that you can deduct business expenses from your profits.

Before we go any further let’s examine facts, as they can be determined, about success in these type ventures. Real numbers are hard to come by as many people who start get discouraged, quit and never report any income, but two facts seem to jump out:

• The average income from a work at home job seems to be between $200. to $300. per month.
• Over 90% of all persons who enter into a work from home business opportunity fail, and do not make any profit from their business.

Why? It takes very special type of person to operate their own small business, and working from home is very difficult. Without the structure of the traditional workplace, distractions and interruptions often make it impossible to focus or adhere to any system, and character traits are magnified.

What are some of the characteristics of a person who can run their own business or work from home?

• You must be extremely self disciplined.
• You must be a master planner/organizer.
• You must be a self-starter.
• You should be a self confident positive thinker.
• You must be highly motivated to succeed.

Assuming you meet these qualifications and are confident you can beat the averages noted above, I suggest you do some reading before going further:

1. A series of very good articles can be found at “Business.Gov” (“The Official Business Link to the U.S. Government”). Look under “Resources for Home Based Business” for a lot of excellent information. Also check “Starting an Online Business” for more information.
2. The Federal Trade Commission (www.ftc.gov), under “Facts for Consumers” has an excellent article entitled “Work-At-Home Schemes” that is a must read. The Federal Trade Commission is also the agency where you should report a business scam if you encounter one.

This knowledge will put you in a much better position to evaluate any work at home job or business opportunity. You should also consider making sure you have the answers to the following questions for any position or opportunity you are considering:

• Exactly what will you have to do? What tasks will you perform?
• Will you be paid a salary (hourly or piecework), or will your pay be based on commission?
• When will you get your first paycheck?
• Who will pay you?
• Is there an up front cost to you like a registration fee? (Very bad warning sign!)
• Do you have to purchase equipment, goods, or product to re-sell?
• Do you have to recruit others to work under you (a “down line”)?
• If this is Multi-Level-Marketing with “up and down lines”, is there a promise that you will make most of your income from others as you build your down line – as opposed to making most of your income directly from product sales or commissions? (many such operations are nothing more than Pyramid Schemes with only people at the very top making any money)

And here is a key question to ask yourself – would I like doing this work, could I get excited and turned-on by doing it? The worst mistake you could make in trying a work from home job or business opportunity would be to start doing something that you did not enjoy. The lack of structure and distractions involved in working from home make it almost certain you will fail unless you truly enjoy the work. Let me repeat – the work at home opportunity may be perfectly legitimate and on the up and up, but if you don’t enjoy doing the work you are almost certain to fail.

Some of the best places to find work at home jobs? Start with your local newspaper and see of there are any local employers offering this type employment. Ask friends if the place they work has any such arrangements. If it’s a local employer you can be pretty sure it’s on the up and up. Another source is job posting boards on the internet. Some are good, some are not, but with the information you’ve gained you have an advantage.

There are certain groups or types of work at home jobs which seem to generate the most complaints, and which you should be especially cautious about:

• Data Entry Jobs – Usually just a sales pitch.
• Assembly Jobs – You may have to buy assembly kits, and then sell them.
• Stuffing Envelopes – A company of any size will have this automated. They don’t need you.
• Processing Claims – Usually requires you to pay for training and job never materializes.
• Posting Ads – You may get paid only if people sign up.

As for work at home business opportunities, the best advice I can give is that you should never waste your time (or money) on someone who promises you can make a large amount of money, working only a few hours a week, by following their “Secret System”. The only one who is going to make a lot of money is the person selling you the “Secret System”. Doing business on the internet is hard work, the learning curve is steep, and success comes – if it comes – only after a long period of learning and trial and error. As pointed out at the beginning of this article, over 90% of all people who try to make money on the internet fail and, in fact, lose money (sometimes a great deal of money) rather than making money for their efforts

Any opportunity you are seriously considering should be checked out with the Better Business Bureau, your state’s Attorney General (you can’t believe how many of these companies are being investigated for fraud) and if local, the Chamber of Commerce. If you encounter what you consider to be a scam or fraud, report it to the Federal Trade Commission

In summary, yes there are many legitimate work from home jobs and business opportunities, but there are just as many more that are scams or frauds. Do Your homework and remember two old sayings – “Buyer Beware”, and “If it sounds too good to be true, it probably is”.

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The review "Home Businesses – Legitimate or Scams" was last updated on 18/9/09.