How to Identify a Legitimate Work at Home Business

Not all work at home businesses that come your way will be unfortunately legitimate. To weed out the rotten apples from the golden ones, here are a few things to remember.

Disclosure Document

The Federal Trade Commission (FTC) makes it very clear the even work at home business and franchise opportunities must be backed by disclosure documents. A disclosure document must be in your hands at least ten business days prior to the agreed date of payment.

Read the disclosure document carefully and make sure they include the following details:

Contact Information

The full name, residential address, and phone number of at least 10 people who had previously availed of the same opportunity. These must also be the ones living closest to you so you can contact them to confirm any detail in the document that you find questionable or confusing.

Financial Statement

Disclosure documents always include financial statements that are properly audited.

Experience and Background of Company Executives

As a prospective business investor or taker, you should of course be interested in finding out who’s running the company you’re about to trust your future into. Carefully read the detail about the background and experience of the company’s executives. Verify them if you can. Do you see them as competent and reliable individuals?

Startup and Maintenance Costs

Work at home businesses may be more affordable to set up but rarely are they free to set up. The disclosure document must include a detailed explanation of the business’s startup costs and what they’ll be used for. Finally, the disclosure document must also include detailed explanations for the maintaining costs of your prospective business.


What will your responsibilities be as a prospective work at home business owner towards the seller? What will the seller’s responsibilities be to you in return? Make sure that they’re listed in complete detail in the disclosure agreement as this is more often than not one of the major causes of disagreement and misunderstanding.

How to Evaluate a Work at Home Business Opportunity

If you have several options, here are a few tips to help you choose the ideal work at home business opportunity for yourself.

Interview Current Owners

If you are buying an existing work at home business, you should ask the current owner’s reasons for selling. Ask them how the business has been faring in the past few years. Ask about the business’s history because it could give you clues on how to manage your future business. Don’t be satisfied with online interviews. Take the time to meet the current owners in person as you’ll glean more information from their facial expressions and body gestures.

Evaluate Projected Earnings

Take out your calculator because it’s once again time to put your computing skills at work. Study the projected income sheet in detail. What is the basis for the projected earnings of your future work at home business? What are the critical success factors for the business’s success and will all of them continue to be present once you take up the reins for the business? If not, will the projected earnings continue to be the same?

Know the Statistics

It’s highly unlikely that you’re the first to avail of the work at home business opportunity on offer. There is no reason, therefore, for the seller to refuse sharing information about the success of people who had previously taken up the same opportunity.

Find out who succeeded and who didn’t. Find out the common denominators between those that succeeded and those that failed. If they refuse then they probably have something to hide and that’s worth your time to find out about.

Don’t Succumb to Pressure

In fact, pressure shouldn’t be exerted on you in the first place. If the work at home business opportunity is truly as wonderful as it’s claimed to be then there’s no reason why they have to pressure you into signing up. If it’s as wonderful as they say it is, you should be the one pressuring them to let you join and not the other way around.

If they say it’s urgent, find out why it’s so.

Get It in Writing

If there are certain promises that the seller had made and which you are very much interested in and has in fact convinced you to take up the business opportunity on offer, make sure to get it in writing. If it’s not included in your contract, don’t sign it no matter what argument your seller makes.

Now that you know what makes a legitimate work at home business, good luck on finding the best one for you!


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