One important thing that you should know as you start your business is that not all people are genuine. Some are out there trying to defraud you.
As Kelechi Ononuju, author of Unknown Transactions: Avoiding Scams Through Understanding says, scams are on the increase and fraudsters are getting more sophisticated.
Losing money can be a painful experience and can set you back substantially. Here are ways to avoid getting scammed in business.
Carry out due diligence
Due diligence is the process of acquiring information in order to understand a business and its services before completing a transaction. You can get the information by checking out the service provider online, if they have a presence, or ask friends whether they have heard about them.
Ask questions
An online search may not yield meaningful results and the only option left could be for you to ask the person you are dealing with as many questions as possible. If they are genuine, they will be able to address all your reservations and give you the answers you are looking for.
Do your research
Before investing your money, you should have as much information as you can about the person or business you are dealing with. This may cost you time, but it will help you to avoid losing money. Ask other people the experience they had dealing with the person or business. Check their credentials on the Internet.
If they are providing professional services that need accreditation, are they accredited? Are they listed as members of a professional body? If they are not, they will probably disappoint you by providing you with sub-standard service, or no service at all.
Don’t be impulsive
You must weigh all the options before making a purchase. You have to routinely check what you are told by the salespeople and make decisions based on facts. This also means checking what the market has to offer by comparing prices from different sources that you want to engage.
Create a contract
Have it in writing. Putting things in writing makes both parties accountable.
Get a lawyer
If the amount of money involved is huge, you should seek the services of a lawyer before completing the transactions.
Lawyers will help you review documents produced by other parties and makes sure that nothing falls through the cracks.
Educate your staff
It is important that your employees are taught how to be extra careful. If it is an M-Pesa business, for instance, your employee should know how to spot fake currency notes.
Make it a multi-layered process
Trevor Kitching, author of Purchasing Scams and How to Avoid Them, says that a single person should not be involved in looking for the suppliers and making payment.
In this case, the scam merchant has to get past two people to obtain their money and this makes their work hard. It’s good to involve at least two people in the deal.
Ask for commitment fees
If you are the one supplying the services, you can ask for a commitment fee. Better half a loaf of bread than none if the deal goes awry.
Also, commitment fees will help cushion you from jokers.
Insure yourself
You can insure your business against external fraud. There is an increase in sophisticated thieves that deceive companies by posing as customers, suppliers or even CEOs with the intention of stealing from you.
Have Internet security
You will do some of the businesses and financial transactions online.
To be safe with such transactions, you should have computer and Internet protection. Without this, you will not only lose money but also important information such as customer details.
In conclusion, entrepreneurs often make mistakes and learn the hard way.
Your success in business will be determined by the decisions you make, including how well you manage your money.
To manage your finances well, you must differentiate scams from genuine business transactions.
A simple mistake such as putting your money in a wrong financial institution could give you a setback that you may never recover from.
