Should I invest?

Posted on Dec 11 2015, in Resources for buyers

There are many opportunities available in the market place for investors. As a potential investor you will be looking for the following:

1. Returns

Investing in any business opportunity in Southern Africa one would expect better returns in comparison with the risk involved. Each potential investor has his own expectation on the returns he wants from his investments. When dealing with one of our brokers be sure that you give the broker a good indication of the Return on Investment (ROI) that you expect.

2. Involvement

The fact that you are an investor and not a business owner also implies that you do not want to get involved with the day to day running of the business. Normally there would be two types of opportunities:

Firstly you can find yourself to be 100% owner of the business while appointing a manager to run and operate the business for you.
Secondly you might be a shareholder in the company that owns the business with the other shareholders being actively involved in the running of the business.

You should ask your Aldes Business Broker about the many opportunities available in the latter scenario.

3. Risk

Most investments will carry some form of risk. The one major difference between investing in a business versus other investments such as bank deposits or unit trusts is that the risk is in your control. As an example you do not have a lot of input should your bank decide to lower their interest rates on your investment. On the other hand if you are not satisfied with the returns from your business you are able to “step in” and make the necessary changes.

4. Partners

When investing in a business opportunity one should look at your manager or co-shareholders as your partners. These are the individuals that will manage your business investment in order to achieve the expected returns. If one uses the word “partners” it will always be with the word “trust” we can advise that your choice of partners is even more important than your choice of investment. For a good partner/manager/co-shareholder will be able to turn around a poor investment whilst a poor partner/manager/co-shareholder will only cost you tears and stress even if you have invested in a solid opportunity.

5. Business Type

There might be many opportunities available but as a clever investor you will rather invest in a business that you understand and have experience in. it is important to be able to apply your knowledge if the business is not delivering on your expectant returns.

6. Location

A business closer to home is easier to “check-up” on than a business located a distance away.

7. Money

The mere fact that you are an investor means that you do not need to borrow funds in order to invest, but that you have ready cash/capital available to invest. Make sure that your money is available for the perfect opportunity might come along any day.

8. Timing

Time is money and money is time. We have seen many investors pick up excellent opportunities for the mere fact that they were ready and able to step into a deal. As an investor one should always be prepared to conclude a transaction within a week or two.

9. Finally – Ask your broker

There are many opportunities available in the market place. However not all of these are advertised and we invite you to interact and discuss with your broker. It is a good idea to ask your broker to include you in his mailing list and keep you informed of any new opportunities available.