Understand The Degree of Regulation Inherent in the Market

Ask questions and perform research regarding the general structure of the industry. For example, you’ll want to know if the government or other large players are active in the market. Do you need approval to enter the market? In a highly regulated market, you’ll need to satisfy certain financial requirements in order to enter the market. These financial requirements can take the form of deposits, surety bonds, escrow accounts, or even outright written approval from the powers that be.

If the market is highly regulated or controlled by a few large players, their interest is in supporting the current players, it is NOT in supporting new entrants. Bear in mind, there are players who will want to see you fail. There are others who don’t want to see you fail, but could care less about supporting your cause. At the end of the day, they don’t want to upset the status quo, they just want to run their business.

Thumbs UpTry this: talk to people in the market who have failed. Understand why they failed. See if the market is worth the effort.




Thumbs DownDon’t try this: Don’t ever try to avoid or skirt regulations. Don’t try to fly under the radar. If you do this and it comes to light, the authorities will come down on you particularly hard.

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