If you're looking to go into business for yourself but don't want to struggle through start-up, the best advice is to proceed with caution.
Thousands of companies offer "business opportunities" for sale, says Paul Edwards, a home-business expert and co-author of six books on the subject. "Maybe 10 percent are legitimate" opportunities to earn more money than you put in, he says.
"If it looks like you can make it without working very hard, you probably don't want to be in it," says Denny Harris, a spokesman for the Small Office, Home Office Association. Half of all new businesses don't last a year.
In their book "The Best Home Businesses for the '90s," Paul and Sarah Edwards recommend red flags if:
* You feel pressured to sign a contract or check to get started.
* The seller is slow to produce financial disclosure statements, names of previous buyers you can contact, or allow you to inspect his office.
* The seller discourages you from hiring a lawyer.
* The investment required is more than $500 for a multi-level marketing business.
* The sale of products or services is downplayed.
* The seller doesn't check you out thoroughly.
* You're promised big profits for few hours of work.
* The seller claims to be exempt from local, state, or federal laws.
* The seller lists only a post-office box or has no recent history of a permanent address.
* The seller is new to the business or, worse, new to the business but not new to selling such "opportunities."
* Your first instinct says the seller is untrustworthy. Edwards says to trust your first instincts in such situations.
Even if none of these alarms go off, keep your guard up. Check the company's record with the Federal Trade Commission, state authorities, and the Better Business Bureau.
Beyond that, experts say, examine your reasons for buying the business: Are you desperate for the money? Do you like selling? How much of it will you have to do?
Barbara Williams of the American Association of Home-Based Businesses shares this advice: "If people are going to start a business, it's not going to go any faster to buy it in a box."