Before You Start Your Business Opportunity (Part 2 of 2)

Cliff Ennico on

Some states require that you register your business opportunity with state regulators. This will involve preparing an application form, a disclosure statement and certain other documents, and submitting them for filing along with a fee, which is usually in the $100 to $500 range.

As part of the application process, some states will require you to submit financial statements (income statement, balance sheet and statement of changes in financial condition) for your most recently completed fiscal year. If more than three months have elapsed since the end of your most recent fiscal year, you may be required to submit updated financial statements for the current year-to-date.

In most states, your financial statements do not need to be reviewed or audited. A handful of states, however, require all financial statements to be audited, a process which may cost you as much as $10,000 to $15,000 in accounting fees.

If you are making claims that purchasers will earn at least a specific amount of money, or if you guarantee purchasers a return of their money at some point, some states will require you to post a surety bond, letter of credit or some other guaranty that you will be able to honor those claims when the time comes. (Kentucky requires a $75,000 bond from all registered business opportunities.)

A number of states limit the amount of money you can accept from purchasers until they complete their training. If you require purchasers to pay the entire fee up front, you will have to put most of this money into escrow until you have delivered the training you promised.


Finally, a number of states require you to give purchasers up to three business days after signing your contract to change their mind and get their money back.

Do not attempt to set up a business opportunity without the assistance of a good lawyer AND a good accountant. You will need them.

Cliff Ennico ( is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our webpage at

Copyright 2023 Creators Syndicate Inc.




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