The biggest mistake we see budding entrepreneurs and seasoned business owners alike make is they fall victim to the latest and greatest get-‐rich-‐quick schemes.
The lure of a large ROI with minimal effort seems to entice even the most savvy of people. And why not? There’s a reason why the Strip at Las Vegas and the lottery still exist. Something deep inside us seeks the freedom and excitement of flash-‐bang success. And sometimes you get lucky. Sometimes you stumble upon business opportunities at the right time in the right place and POOF you become the next success story.
But most of the time we hear the sad stories of money ventured and nothing gained. The weird thing is that the culture of success-‐seekers appears to have accepted this yo-‐yo risk ride. But there is an easier way.
What if you could establish a gauge to determine the likelihood of success BEFORE venturing in?
What if you could hone your BS detector and identify scams and frauds quickly before taking the bait?
What if (gulp) you could actually vet business opportunities?
Okay, okay, I’m being a bit tongue-‐in-‐cheek, but we really do get calls from otherwise intelligent individuals asking our opinion about “a great business opportunity.” The frustrating part is they rarely want us to vet the opportunity, they just want us to tell them it is, indeed, great.
It’s a very peculiar phenomenon that, of course, led us to develop a theory about it. And here it is…once people get emotionally invested in an idea it’s very difficult to talk them out of it, regardless of how bad the information is that we uncover.
We actually have clients who pay us to vet people and then argue with us when we try to tell them the results. Those clients already convinced themselves they want to go through with the deal. They only go through the motions of due diligence as a check-‐the-‐box necessity. This is NOT how we recommend vetting business opportunities.
The alternative, and more successful, method is employed by our clients who resist becoming attached to a plan or idea until they complete the vetting process. These clients are committed to making informed and confident decisions. They know the only way to do this is to make sure they have all the information necessary. And they don’t become attached to the opportunity before completing the vetting process. These clients willingly walk away from deals if the information suggests things aren’t what they seem. These clients experience success over and over.
So what is this magical vetting process?
We’ve coined it the Due Diligence Process and it’s rooted in basic common sense. In fact it’s very similar to most decision-‐making processes. But as I mentioned earlier, when it comes to business opportunities and get-‐rich-‐quick ideas, we’ve seen highly intelligent people throw process to the wind and lose obscene amounts of money.
It’s unfortunate when if they’d employed a few simple techniques they could invest their time and money in legitimate deals.
1) The first step of the process is figuring out what information you know and what information you need to know. Knowing information is very different from assuming information. The way charlatans continue to deceive is they lead people to think they know information. The best scammers never actually have to lie. It’s amazing what people believe with simple suggestions.
2) Once you’ve ascertained what you know and what you need to know, the next step is figuring out how to get the rest of the information.
The biggest mistake people make in this step is asking the wrong questions. Consider the difference between asking, “Is this really a good opportunity?” versus “What makes this a good opportunity?” Or even better, “Do you have experience with these types of opportunities?” versus “What experience do you have with these types of opportunities?” A simple tweak of questioning techniques aided with the use of basic interrogatives helps you gather information for the third step.
3) Once you have the information necessary to make a decision, the final step is making sure that information is valid.
This step really illustrates the importance of asking specific questions. In the examples above, the responses from questions asked using basic interrogatives are easier to verify than those gained from simple yes/no questions. This step of the vetting process is incredibly crucial and most often skipped. Unfortunately, skilled con artists know this and they bank on being able to sell people opportunities using quick wits and silver tongues. And it works, over and over and over again.
There’s nothing particularly earth-‐shattering about this process. It’s simple, easy-‐to-‐use, and effective. The biggest obstacle we see is people truly not wanting to know that the latest and greatest business opportunity might be just another pipe dream. The irony is once our clients implement this process as a cornerstone of their business practices, they cease to attract frauds and scams and start to attract legitimate deals that lead to success.
Do yourself a favor and get in the habit of vetting business opportunities (including vendors and team members) before you get involved…especially emotionally.