Thinking of Launching a Small Business? Watch Out for the "Start Your Online Business" Scam

While it's possible for anyone to start a small business, it requires consistent effort and time to make it substantial and sustainable. Scammers are aware of this and prey on individuals seeking shortcuts by making promises of quick fixes and easy money.

As more people have become wary of "get rich quick" schemes, scammers have adjusted their tactics and now offer "assistance" in starting your own digital business. They hope that you lack knowledge about the process and will eagerly accept their offer, giving them an opportunity to exploit you.

How the “Start Your Digital Business” Scam Works

You may see an ad on social media with claims about someone who has "changed their life" by starting a "digital business." These ads usually feature a success story about earning money effortlessly while having more time to spend with family. The ad amy also encourage you to sign up for a free workshop or webinar to learn more about this "amazing opportunity."

The idea is to make you believe that anyone can replicate this success by joining their digital business. The comments are usually flooded with people claiming they've found the same success, creating a false sense of legitimacy.

Once you click the ad, you're invited to a free workshop or webinar. This event is designed to pump you up with promises of financial freedom, but they won't give you concrete details about the business. Instead, they'll use vague language about the potential to earn passive income. By the end, you're pressured to take the next step. You must pay a fee to access their "exclusive system" or training, promoted as a necessary investment in your future. They may also offer different packages, often pushing the more expensive ones with the promise of higher returns.

This is the moment you start losing money.

Once you've paid, you're told that in order to succeed, you need to run ads similar to the one that drew you in. The goal is to recruit more people into the system—this is how the scam sustains itself. The more people you recruit, the more you're promised to earn. Essentially, you've become part of the scam, promoting the same misleading opportunity to others.

The reason it's hard to pinpoint the exact nature of this scam is because they use generic phrases like "digital business" to remain vague and avoid detection. It could be a mix of pyramid schemes or even Ponzi schemes, but either way, it's built on deception.

Real-life story from a victim

"However embarrassing it is for me to admit to, I will share my experience. I spent 149 usd for what I was convinced would be a coaching session, which turned out to be an attempt to sell me on an $11,000 water filter. They tout true out there presentations that the $149 has got a money back guarantee. As it turns out, their guarantee is a lie. I am battling with them as we speak. I assured them that if I don't get my money back that I will be telling everyone in the world how much of a scam they are. They call themselves Digital Business Online. They should call themselves 149 US Dollars scam online because who in the world actually has $11,000 in their Hip Pocket to buy a system that they don't even know whether it works or not. It's all based on the claims of all of these so-called distributors who of course all stand to get paid 50 US dollars for their individual coaching efforts, which really are not coaching effort they are selling efforts. Anyhow, that's where I am at right now."

How to Spot a Fake "Start an Online Business" Opportunity

These tips will help you identify which online opportunities are legit and which ones need to be investigated further.

Red flags:

·  Hard to Reach or Vague Responses: Legit companies welcome questions. If a company is hard to contact or avoids giving straight answers, it's a red flag.

·  Hype with Little Substance: Watch out for offers that promise large sums of money without clearly explaining how you'll earn it. These scams often begin with a webinar or event designed to get you excited but provide little actual information. Be wary of ongoing "investment" opportunities such as training, membership sites, or conventions.

·  Mysterious Ads: If you see an ad that doesn't clearly explain what the business is or how it generates income, ignore it.

·  Turnkey Systems: Scams often promise to set up a "business" website for you, claiming that you can start an online business with minimal effort. They assure you that they will handle everything, and all you need to do is pay them to start making money immediately. The catch? You'll end up paying more than if you set it up yourself, and you'll receive much less in return. While there are legitimate services that can help you set up online and make it easier for you to get started and operate, such as e-commerce platforms, it's important to investigate further before committing.

·  Affiliate Programs with Upfront Fees: Legitimate affiliate programs don't charge fees for the privilege of promoting their product or service.

·  MLM Disguised as Business Opportunities: If an opportunity focuses recruiting over selling products, it could be a MLM, ponzi, or pyramid scheme, you may want to avoid.

·  Unrealistic Income Claims: Legitimate business opportunities do not guarantee instant riches, and easy money is rare in legitimate businesses. If you come across ads like "Make $$$ posting ads on Facebook," filling out forms, or other promises of easy money, it's likely a scam. Claims of substantial income by 'real people' who have made a fortune should also be viewed with caution. While a few individuals may have made a lot of money through certain schemes, it doesn't mean you will, too.

·  Pressure to Act Fast: Scammers use pressure tactics to push you to "buy now" or make you feel like you'll miss out. While urgency and scarcity are legitimate marketing tactics, if you feel pressured to make a purchase before you're ready and don't have time to thoroughly research the opportunity, it's best to avoid it.

·  Stolen or Low-Quality Content: If a website appears unprofessional or contains copied or poorly written content, it's a major warning sign. You can often detect this type of scam by copying/pasting the link of the website into Scamio, our free, AI powered scam detector.

These so-called 'experts' simply copy information from the internet. They usually try to rephrase it using AI. But if they don't have the expertise to create their own high-quality content, they are not reliable sources for advice or products.

The Cost of Falling for an Online Scam

The consequences of online business scams go beyond just losing money. Your reputation could take a hit, and in some cases, involvement in illegal schemes like pyramid scams can lead to legal action or even fines. Additionally, being a victim of an online business scheme might discourage you from starting a genuine business. However, don't lose hope. There are more legitimate opportunities to make money online now than ever before.

Related: 8 Ways to Protect Your Very Small Business Reputation Online

How to Start a Business Safely

There are many ways to start an online business, but they all require effort, time, and planning. Here's how to protect yourself and get started safely:

1.     Do Your Research: Before committing to any opportunity, research the company thoroughly. Look for reviews, check their credentials, and ensure they have a solid reputation.

2.     Start with a Business Plan: Create a plan that outlines your goals, target market, and strategy for growth. This will help you stay focused and avoid distractions from too-good-to-be-true offers.

Related: How to Start a Small Business with Cybersecurity in Mind: A Simple Step-by-Step Plan (with Printable Checklist)

3.     Learn the Basics: Educate yourself about business practices, online marketing, how to create a website for your business and legal requirements. There are free resources available that can guide you step by step. 

4.     Seek Professional Advice: If you're unsure about a business opportunity, consult a legal or financial professional to review the offer before investing any money.

5.     Avoid Fast Money Schemes: Real businesses take time to grow. If someone is promising fast, effortless money, it's probably a scam.

Related: Top 10 Scams Targeting Very Small Businesses: How to Stay Safe and What to Do If You're Scammed

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