5 Things To Consider Before Investing Fund In A Business

Business investment is considered risky and investors are always advised to calculate properly before taking a step in order to minimize and prevent loss of resources and time. Reliable information is the guidance that is required for good investment decisions.

Therefore, persons who are considering putting their money into any venture that they perceive gainful should consider the following:

It should be a legitimate business

When you are planning towards engaging in business, the first thing to consider is whether where your investment interest lies is legal in order to avoid consequences that range from fine, imprisonment or death sentence. There are several types of businesses that are in line with the laws of the country and these areas have vacuums that can be exploited profitably being it production, manufacturing or service delivery.

It should be viable

It should be something that is possible and doable and not a venture that can be likened to building castle in the air. The mode of operation of the business should be clear, practicable and possible return on investment is definite within a period that can accommodate cost, bring forth break even and generate profit.

It should be sustainable

An entrepreneur should analyze all the factors that will hinder the continuity of his intended venture. A business should be able to sustain its raw material inflow, continuous presence of professionals, experts and other important inputs. Considering businesses and schemes without product/service and clear source of revenue is gambling, ponzi schemes are not sustainable investments and should be avoided as they tend to be bleak in terms of continuity.

It should have clear competitive strategies

A very popular saying in business is “innovate or die”. It simply means, an entrepreneur must be ready, willing and fast at getting ahead of competition. Always make new discoveries that set you apart and ahead in your industry.

Investor should be open to diversification

Always make new business moves when you have to. When you diversify, you get new business and new means of income which will also help you against business failure. It is like having your eggs in different baskets, there always something left in the event of calamity. It sometimes create market for the first business as in the case of a popular bookshop in the country that deals in primary and secondary school books, the bookshop also went ahead to set up schools.

 

This article was written by Sule Muhammed Lawwal

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