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Buying a business? Better do your homework

The secret to buying a successful business: Know what you're getting into before you and your money part ways.

As a potential business owner, you have to separate the out-and-out scams from the genuine businesses. Then further divide the latter pile into the good and not-so-good opportunities. Finally, of those remaining, which one truly suits your time and talents?

The two big questions going in the door are: Will you love doing it, and why are you paying someone else to get started?

Ask yourself, "Why can't I do this independently?" says Rieva Lesonsky, co-author of "Start Your Own Business" and senior vice president and editorial director at Entrepreneur magazine. "For the money that I am giving this company, am I getting back what I need?"

Starting a business, even part time, is hard work.

"If you're going to give that much of yourself, it needs to be something you enjoy doing," Lesonsky says.

With a good opportunity, you should know exactly what you're getting for your money. Beware of hazy details, vague promises of customer leads or tantalizing allusions to marketing "secrets" that will be given later -- possibly for additional money.

"If you have to give money upfront, the odds of you getting anything of value are pretty slim," says Norman Scarborough, co-author of "Effective Small Business Management" and professor of business and entrepreneurship at Presbyterian College in Clinton, S.C.

Evaluating the opportunities
When it comes to weighing your business opportunity options, "there are descending degrees of danger," Lesonsky says.

Evaluating the opportunities:
 
 
Next: "Talk to anyone who has purchased the same opportunity."
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