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How to Buy a Business Opportunity

Business opportunities that you can buy into come in all shapes and sizes. In general, a business opportunity can be an idea, product, system, or service that someone has developed and offers to sell to others to help them start their own, similar businesses.

Business opportunities can take most any form, but they all fall into one or more of the following categories:

  • Broker: A broker is someone who buys or sells products or services for a parent company, often acting as an agent.

  • Dealer: Dealers represent lines of products, which are purchased from a parent company and sold directly to consumers.

  • Distributor: Distributors buy products from wholesalers (and sometimes from manufacturers) and resell them to direct-sales organizations, brokers, and dealers.

  • Licensee: Licensees buy the right to sell, market, produce, or use established product brand names, technologies, or systems. A bit like a franchise, licensees have much greater freedom to run their businesses as they see fit.

  • Mail-order business: Mail-order businesses take orders for products over the phone, or via e-mail or the Internet, and send those products to end users.

  • Manufacturer: Manufacturers build and produce products that are eventually sold to consumers.

  • Vendor: Vendors sell materials and supplies to other companies for their own consumption, for use in their own production processes, or for resale to consumers or other companies.

  • Wholesaler: Wholesalers buy products directly from manufacturers, mark up the price, and sell them to retailers.

Business opportunities aren't as strictly managed by parent companies as franchises. This provides the owner with substantial independence and freedom to run the business as he or she sees fit.

The federal government does little regulation of business opportunities, and state and local regulations vary. Beware of scams! If it sounds too good to be true (getting rich stuffing envelopes, clicking Web sites), it probably is.

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