A business opportunity is a situation in which someone can buy, lease or hire a product or service that allows them to begin a business. Other criteria that define a business opportunity is that the investment should come with a location that the purchaser can buy to use for business.
Business opportunity criteria vary between states. However, many include the following:
- The person buying or hiring the product that produces the opportunity should be able to make more from it than the price they pay.
- The initial fee paid to the seller must range between $400 and $1,000, as of 2015.
- The seller must agree to buy back any products that the purchaser cannot sell.
- Products made by the seller are bought by the purchaser.
- The seller should give the buyer a marketing program to assist them with their opportunity.
Different types of business opportunities include:
- Someone who agrees to buy stock from another seller and sell it without using the original seller's business name or branding is taking part in a distributorship. Some distributorships require the businessperson to sell its products only.
- Rack jobbers enter into an agreement with a parent company to sell their products to various stores. They attempt to place the products strategically within the store to achieve the best selling outcome.
- People who buy and place vending machines operate in a similar manner to rack jobbers, except they purchase the vending machine as well as the products.