Ten-ish years ago I realized my business took too many bad checks. Looking into check-guarantee services I realized we didn’t take in enough checks to make the service profitable. So I stopped accepting checks. No tax avoidance involved, I just want paid. Cash or credit card, but no checks.
This is a problem that may not have a solution. How do you identify shady businesses? We can make lists of things that shady businesses do, like…
- drive around in unmarked vans
- insist on being paid in cash
- answer the phone without saying the name of the business
- fail to get required licenses and permits
- don’t bother collecting sales tax
- perform low-quality work
- refuse to honor their guarantees
- don’t obey labor laws (like worker’s comp & minimum wage)
- don’t pay their fair share of taxes
But the fact is that there’s not a single item on that list which is 100% reliable. There are plenty of shady businesses and actually do good quality work. And plenty of them will get the required licenses and permits, for example. When you think about it, this is probably an unsolvable problem. I mean, suppose we finally figured out a 100% telltale sign of a shady business: they all wear black hats. So we go around telling consumers “don’t hire anyone wearing a black hat”. What would happen? The disreputable businesses would hear this advice and they’d switch to a different colored hat.
But if you look at the list as a whole, that can give you clues about whether a particular business is shady or not.