Business Matters-Illinois

Other General Information

Small businesses are prime targets for scams and rip-offs. Always be on the lookout for walk-in salespersons ready with a sales pitch. Don't assume a salesperson is honest merely because he was referred to you and you were expecting him. Unless he was sent by a close friend, you should treat him the same way you would a walk-in.

Never sign an agreement or put money up front until you have verified that the salesperson is legitimate. A person's identity can be confirmed through a simple background check while he waits in your office. While the background check is far from fool proof, it should tell you if something's fishy. Indeed most con men have gaping holes in their stories. Trust your gut and see if he passes your "smell test".

Begin with the following: "I'm sorry. I'd like to see your presentation, but these days we have to be careful with whom we do business with. I'm sure you understand. Do you mind if I first get some information about you and your business? (get him to say yes. Kindly escort him out if he balks). Great!"

a. Get his name, and a business card.

b. Ask him how long he's been doing business here locally. If it's been awhile then he may need to have a business license. Each state may have different requirements, so this is not a sure thing.

c. Ask for a driver's license and write down the address. Make sure the name on his license matches the name on his business cards.

d. If he's part of a larger company get its name and phone number if such is not on his business card.

e. Verify his identity with his office and/or his parent company (if applicable). See if your call is answered by a real person or by voicemail. The latter could point to a small-fly-by-night operation. If a person answers, does it sound like you've reached a residence or a business?

f. If the firm name ends in "Co.", "Inc." or "Corp." check that it has registered with the Secretary of State. All corporations must list themselves with this agency. Even outside corporations or those incorporated in other states are often not exempt from these provisions.

g. Check the BBB for complaints against him and his company. (Find out the nature of these complaints.) If possible, talk to a BBB operator, not the automated system. The latter only checks up on telephone numbers which change frequently.

I. See whether his business is listed in the business white pages. (new firms may have missed the deadline) While some small firms will not invest the $600 per year for a listing, fly by night operations will almost never make this commitment. By investing in local advertising, firms show they intend to stay in the area. Those who advertise in the community have a stake in the community and usually take greater pains to treat customers fairly.

See Find Or Background A Business (Consumer-SOS)

Things To Watch Out For When Signing Sales Agreements
If you see a sales presentation and are asked to sign and agreement, Make sure to:

A. Look out for the word "independent contractor". Companies often call their agents independent contractors to avoid liability for their mishaps. Check the sales agreement for disclaimers that distance the company from any wrongdoing caused by their representative. If the company won't vouch for their agent then why should you trust him?

B. Be careful when dealing with out of state companies. Far away firms can be hard to reach when something goes wrong. They're also less likely to ensure the quality and training of their out of state representatives.

C. Read all the fine print. Contracts often have default provisions which allow the salesman to keep the money you give him. Watch out for terms like "non-refundable" or "no refunds" Don't be fooled when the salesperson claims a deposit is required to "keep the offer open" or to show his company that you're "serious". These lines are just their way of parting you from your money. And never rely on verbal promises from the salesman without first looking at the contract. The contract will almost always have a disclaimer which says such promises are void. If the salesman promises not to cash your check, get him to put his promise in writing. Otherwise it will be your word against his and the contract will probably support his side of the story.

See Find Or Background A Business (Consumer-SOS)

Determining A Legitimate Business Opportunity

Protect Your Small Business Against Scams (Illinois)
Other Legal Matters

Franchises: Forms, Tips, Complaints and Rules Governing Illinois Franchises

Administrative Rules Governing Illinois Businesses & Commerce

Other Good information

1. Listen carefully to sales presentations. If it sounds too easy then it probably is. Earning money usually requires hard work.

2. If it's a franchise offer, ask for the disclosure document. Such is required by law and should provide detailed information to help you
evaluate the offer.

3. Check out the firm with the agencies listed in Sections A and B above.

4. Get all promises in writing. Oral promises are probably no good.

5. Talk to current and former owners and employees about their experiences. Don't rely entirely on a list of references given to you by the
firm. They may be paid to say only good things.

6. Investigate all earnings claims. Ask for documents that back up these claims. Ask others who have purchased the offer about earnings.

7. Before buying any offer, get the firm's cancellation and return policy in writing.

8. Hire a lawyer, accountant, financial advisor or other financially savvy person to read disclosure documents and proposed contracts before
buying.

See Find Or Background A Business (Consumer-SOS)