If you are thinking of becoming a self-employed sales person, distributor or agent then it’s worth reading the Trading Schemes Guide on the Department of Trade and Industry’s web site. It gives an idea of some of the pitfalls, and what is and what is not currently permitted.
You need to be aware that in the UK the sector is regulated by statute. The regulations are there to protect not just customers, but also people new to business who can end up in debt and with unsold stock on their hands. The rules give you rights as well as obligations, so they are not just red tape, but a response to past business malpractice.
The sort of businesses that must comply with the Trading Schemes Act, the Trading Schemes Regulations and the Fair Trading Act include direct selling, network marketing, multi-level marketing and multi-level franchising.
Franchising that only involves two levels – franchisor and franchisee, is covered by different rules, and is largely self-regulated. PRIME has produced a free guide about the pros and cons of ventures of this type for the over 50s called Buying a franchise which you can download here.
If you are considering getting involved in this sort of off-the-shelf business we recommend you also check out the British Franchise Association and Equal Create Project web sites.
Anyone thinking of taking up an off-the-shelf business opportunity that isn’t proper franchising needs to do some very careful checks first – to make sure everything is above-board and legitimate. A first port of call might be the Direct Selling Association www.dsa.org.uk which has codes of conduct that are worth reading and that members sign up to.
The government-funded Business Link network is a good source of advice on a whole range of business issues, including trading schemes and franchising as well as original one-off businesses. You can find your local Business Link at www.businesslink.gov.uk
Citizen’s Advice can also often help with specific problems, such as business and personal debt and legal disputes. But if you are investing much money selling something for someone else you probably need your own lawyer. The BFA has a list of solicitors experienced in this area.
Finally for those thinking of becoming self-employed or setting up their own original business the UK has a network of local enterprise agencies that offer free impartial help. Enterprise agencies in partnership with PRIME can be found on this site – just click on the relevant map or symbol for your region.
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