Since every day I receive at least one email from someone asking me whether or not a company is legitimate I thought it would be useful to post some information on how I research a company.

The first place I go is always The Better Business Bureau. It can be a bit tricky to find a company report. I use the advanced search form and try plugging in the company name, url and/or any other information I have. Sometimes you have to play with the name a bit, for example you may not find a report on Acme Widgets, but there’s one for Acme Widgets, Inc.

A great way to get more contact information for a website is to do a Whois lookup. I like BetterWhois.com. You just plug in the domain name and it will give you the contact information for the person who registered the domain. Now, most of the time this is the owner of the website, but sometimes it’s a web hosting company. Common sense can usually help you to determine which is the case. Doing a whois lookup can give you a phone number, an alternate company name, an address or all of the above.

Another thing I like to do is a google search for the company name. What I look for here are forum discussions. Sometimes I have better luck adding the word “scam” to the company name. That can turn up negative discussions if there are any. Of course, this type of information has to be taken with a grain of salt as posts on bulletin boards are not verified in any way. It could be that someone didn’t follow through with the business and then turns around claiming that the company scammed them. Again, use common sense. If you find one bad post, that may not be good enough evidence. If you find many negative posts then a red flag should definitely go up. This is just one small part of my evaluation of a company. I put much more weight on a BBB report than someone’s rant on a website.

Of course a good look at the company’s website should give you some clues. Is there contact information? Is it clear what the business is? If the website is badly designed or unprofessional then you might want to take a closer look. On the other hand, there are some scams out there that are promoted with some very slick, professional looking websites, so that is not always a guarantee.

If you are able to contact someone who is already involved in the business, that can be helpful. Ask specific questions like, “how long have you been in this business?”, “what is a typical work day like for you?”, “how much money have you invested and how much have you earned?”.

The important thing is to research as thoroughly as possible and follow your instincts. I’ve found that if I had even a vague feeling that something just wasn’t right, it just about always turned out to be a scam. Do you homework and you’re less likely to get burned.

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3 Responses to “How do you know if a company is legitimate?”

  1. josh hill says:

    You have done a great job with this blog, I have seen so many people get trapped in a false business venture, including myself, from not investigating first. This should be first priority when dealing with any new company. Thanks for the blog.

  2. ebusinessmom says:

    great job! This can help a lot of people land a scam free online job. It’s true that there are a lot of scams out there. It’s nice to know tips to prevent being trapped on a wrong job.
    ebusinessmom recently posted..Miracle Traffic Bot – Free Traffic Generation Software Suite

  3. Billie Wilson says:

    I have learned alot from your advice and I just want to thank you for taking the time to share with us.

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