Lesson 4: Learn How To Spot Legitimate Business Opportunities
Learn How To Spot Legitimate Business Opportunities
Being self-employed can be a very rewarding experience, but it’s important to watch out for scams as you explore your options — and once you get underway.
According to the Federal Trade Commission, people tricked by work-at-home ads have lost thousands of dollars, not to mention their time and energy. This lesson will help you stay current on common work-at-home scams as well as other self-employment pitfalls to avoid.
Avoiding Work-From-Home Scams
Scams can take many forms. You can be “hired” and never get paid. You can be asked for an up-front fee and receive nothing in return. You can be scammed for your information and become the victim of identity theft. You can even unwittingly become part of illegal activities.
What’s particularly worrying about these offers is that they can appear on typical and popular job search websites. Unfortunately, many people fall victim to these scams every day.
However, you can protect yourself by being aware of common warning signs:
- The job claims that no skills are required
- The job offers high pay for little/no work
- The job advertises job search sites (most legitimate work-at-home opportunities are done through referrals)
- The job requires you to pay money upfront
The best way to identify a legitimate work-from-home opportunity is to research the company you are looking at. If you think anything about it sounds suspicious, walk away. Many companies offer valid work-from-home opportunities; you just need to exercise caution when identifying them.
Typical Self-Employment Scams To Watch Out For
Envelope stuffing
This is one of the oldest scams around. For a fee, the scammer offers to send you all you need to make “hundreds of dollars a week”… money that you never see. You are not getting paid to stuff envelopes; instead, you are sending out promotional materials to recruit others to send the scammers their money so you can get paid (like a commission).
Home assembly
In this scam, the company offers to pay you to assemble a product at home. The company provides all the supplies and you assemble them. The catch, no person can assemble anything as fast as a machine, so your work will always be subpar, and you will wind up dishing out money for a starter kit that takes you nowhere. Every time you send an assembled product for review, it gets rejected and you don’t get paid.
Rebate processing
Finding genuine rebate processing jobs — where you track rebate claims for products sold — is difficult, though you may find one on specialized, administrative work-at-home communities and forums. A true rebate processing job doesn’t require you to market or promote the company’s products, but simply process forms administratively and be paid a nominal sum for every processed document. There aren’t any sales, commissions, or clicks to keep track of. You’ll know it’s a scam if you have to pay an up-front fee.
Online surveys
While being paid to complete online surveys can be a legitimate way to earn money, scammers often use them to trick people into handing over money or personal information in the belief they’re going to be paid for taking part. If you’re asked to share your bank account number, social security number, or other personal information, it’s a scam.
Pyramid schemes
In the classic “pyramid” scheme, you will be asked to join a team where you mostly earn income by recruiting new participants into the program. You may also be asked to pay for products out of your own pocket to buy into the program. The hallmark of these schemes is the promise of sky-high returns in a short time for doing nothing other than handing over your money and getting others to do the same.
Medical billing
Digital medical recordkeeping is a growing job market, but not all job postings are legitimate. This kind of job requires specific training, and just like other scams, if the instruction service seems too good to be true, it probably is. You should avoid any training that promises you employment, certification, or expertise in anything less than six months. You can learn how to find real opportunities at medicalbillingandcoding.org.
Avoiding Self-Employment Pitfalls
Self-employment can feel like the fulfillment of a long-held dream of working for yourself. Here’s what you need to know to keep track of some standard administrative responsibilities as well as gain an understanding of how working for yourself can affect your taxes and Social Security benefits.
Track Your Time
To ensure correct billing, accurately track your time. There is an assortment of tools available to help you manage and document your time.
Track Your Expenses
Avoid errors in billing by keeping track of your expenses. There are a lot of online options available to you. Expensify is just one example.
File Your Taxes
As a self-employed person, you will need to file quarterly estimated taxes on your income because they won’t be withheld from a paycheck. During tax season, free volunteer tax preparation services, including AARP Foundation Tax-Aide and the Volunteer Income Tax Assistance (VITA) program may be able to help you file your tax return.
Understand Social Security
Self-employed people pay both the employer and employee portion of social security taxes. For more information, visit the Social Security Administration website and search “how work affects your benefits.”