Don't get scammed: Start-up checklist for small business
People buying or starting a new small business now have a handy, pocket sized reference guide to assist them in their investment decision called Trade practices start-up checklist for small business.
"Starting a small business can be rewarding, however, there is always a degree of risk involved", Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel, said today. "Managing these risks takes time and care. We recommend that all information relevant to the decision to invest in a small business is checked and verified prior to signing any contracts because sometimes, what looks like a legitimate business opportunity may in fact be a fraud.
"The ACCC has a strong focus on fighting fraudulent behaviour targeting small businesses. For instance, the ACCC recently successfully concluded a case relating to an online trader who promoted the sale of websites for home-based Internet businesses. The online trader falsely represented that people with limited computing and business experience (and working from home) could create profitable online retail businesses using an online business package and that prompt, accessible technical support would be available to them.
Addressing the COSBOA 2006 National Small Business Summit, Mr Samuel recognised the role played by small business industry associations in alerting the ACCC to such scams.
"Small business industry associations play an important advocacy role in bringing issues to the ACCC's attention.
"While most vendors are honest and willing to provide all relevant information, small business operators need to be wary of claims that seem too good to be true, are unsubstantiated, or where financial and written records are lacking.
"The checklist will help ensure that key areas of concern are addressed even when emotions and excitement at the prospect of a new venture are running high".
The Trade practices start-up checklist for small business covers key things to consider before signing any contracts, including:
- warning signs to look for when buying a business
- professional advice from lawyers, accountants and/or business advisors
- financial and background information searches
- ensuring representations are put in writing
- reviewing documents before signing
- qualifications or permits you might need, and
- leasing issues.
The checklist is available free through the ACCC small business helpline on 1300 302 021 or on the ACCC website.
- Trade practices start-up checklist for small business (link removed as item has been retired)