Working for yourself and making your own money may seem like a dream come true. But before you launch headlong into your sales strategy, consider the legality of your new enterprise. Here are five seemingly smart business ideas that are in fact crimes.
Playing The Stock Market
There are plenty of legal and legitimate ways to play the stock market. But here’s an investment strategy that’s highly criminal. You invest in a small company without much growth potential. You then talk up said company all over the internet and through a bunch of cold calls, encouraging others to invest their money too. The value of the stock rises. You can then sell your stock for a profit, leaving everyone else facing a loss. It’s not ethical, it’s not legal and it’s not a good business idea.
Selling Your Own Alcohol
So you brew your own beer? Or you fancy yourself as a budding winemaker? Looking to become the next beer brewing tycoon like Jim Koch of Sam Adams fame? It’s fine to make alcohol at home to consume yourself. It’s also totally legal to give your boozy products to friends and family as gifts. But woe betide the person who sees the business potential in such an enterprise.
Alcohol licenses require a lot of time and money to acquire. And they’re 100% necessary if you intend to sell any kind of alcoholic product. Without the proper licenses you could see yourself in need of a lawyer, landed with a hefty fine and maybe serving some prison time too.
Setting up a Pyramid Scheme
Oh, the joy of making money from nothing. When something seems too good to be true, it usually is. And a pyramid scheme is a prime example. You recruit members who have to pay for the privilege of joining. They are persuaded by the promise of payment when they enroll new members in the scheme. Each time a person pays to become a member, existing members (and you) get a cut for your growing dowline.
Whilst this multi-level-marketing (MLM) business model may seem like an easy way to make yourself some cash, it’s actually often times considered financial fraud in countries around the world. There are many top MLM companies that are legitimate, but yes some of them are pyramid schemes that should be avoided.
Growing & Selling Marijuana
Laws on marijuana are relaxing around the world. You can now grow your own small supply in certain states in America (although still illegal on a federal level) and in Spain. Other countries have decriminalized the smoking of marijuana. And in Uruguay it’s even legal to sell marijuana to local residents (not tourists).
But, unless you’re supplying a medical dispensary in a country like Australia and have all of the necessary licenses or unless you’re Uruguayan, setting up your own marijuana shop is still a very bad – and illegal – idea. The law would see you as a drug dealer and punish you accordingly.
Making Fake Insurance Claims
Insurance companies aren’t the best-loved of organisations. But it’s still illegal to try and rip them off. Say, for instance, you get into a car accident and claim that you’re no longer able to work. You get a doctor to say you have whiplash and you ask the insurance company to pay out in compensation.
Unless you keep up the charade 24/7 you’re going to be rumbled. Insurance companies don’t like to pay out when they don’t have to. They may monitor your house and talk to your neighbors to see whether your story really adds up. Making a living out of fake insurance claims is not only illegal, it’s also very unlikely to work. Wouldn't you rather put the time and effort into something productive and beneficial to society instead of being a leach?
There's no quick route to business profit. Any good business idea requires a lot of hard work and determination to get it off the ground. Steer clear of these illegal business ideas and spend your energy working towards a legal enterprise with the real potential to succeed.
I hope you enjoyed this article about somewhat intelligent business ideas that are actually illegal and morally wrong.
Interested in more articles about business law?
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