Running
a successful business means having to make tough financial decisions.
ADEMOLA ALAWIYE highlights some guidelines to be considered in making
such decisions.
Sometimes it’s hard to predict the
outcome of your decisions, more so if you don’t have a great deal of
experience in that particular area. Although it is practically
impossible for one to be 100 per cent infallible in predicting a good or
bad investment, it is possible to narrow down the playing field by
following basic principles while investing.
Experts note that this will help
beginning or advanced investors to ensure a margin of error when
investing their funds for a good return earning. It is therefore
important for an investor to adopt the basic principles of making good
investment decisions if he wishes to trim his risks and make
considerable progress in his venture.
Business professionals say whether it is
cheap insurance, good insurance or just plain savings bonds, in today’s
unstable economy, one cannot ever be 100 per cent certain in investing.
They, however, note that choosing wisely will definitely be an asset in
achieving success or avoiding financial disaster and cutting risks.
Below are simple tips to making excellent investment decisions in an
unstable economy.
Take enough time to think
At the moment, Nigeria’s economy is
unstable and harsh to businesses. Businessmen, in separate interviews,
often complain of the unfriendly economic policies which they have to
contend with in order to survive. As a result, they note that whoever
wishes to invest in Nigeria must take enough time to think through what
venture he plans to dabble into.
Investing in one’s future is definitely
not something to just plunge into without a careful thought and
consideration. Experts say the lightening-fast nature of the Internet is
conducive and geared towards convincing surfers to make quick and
impetuous decisions. Consequently, this fact needs to be on one’s mind
continuously before making any investment decision as any error might be
regretted. Of course, no one loves to regret in business.
How much risk can you take?
You should know how much risk you are
willing to tolerate in whatever business you do. Knowing the difference
between an average savings/money market account and investment vehicles
which form part of a portfolio is vitally important when making
successful investment decisions, experts say. So, as an investor, are
you ready to take risks? The Managing Director, Silex Limited, Mr. Steve
Obong, says that calculated risks should be taken in business to
succeed. According to him, every form of investment has its associated
risks, and any investor should be ready to undertake such risks, but
shrewdly.
Never give up easily
Do not succumb to pressure in business.
You must understand that every business has its own pressure and it is
not wise to give up easily after encountering some challenges.
Generally, families, friends and the
shoe-shine boy on the street will all offer financial advice. Most of it
will not be qualified, expert advice. Most of them will know of a cheap
insurance policy, promising stock or a well-performing company that has
good future potential. Whatever they may advise or try to push, in
order to avoid bad investments, it is crucial for a person not to
succumb to outside pressure. Put in your best and be wise.
Undertake detailed research before investing
Experts advise that in today’s highly
volatile economic environment, it is necessary to carefully research
into a particular financial vehicle which carries out one’s financial
goals the most. Meticulously checking out the specific investment
offers, competitive offers from other sources and how well the
investment is performing is a crucial prerequisite. You should ensure a
detailed research before investing in any form of venture.
Also important is to painstakingly
research the reputation, integrity and track record of the financial
institution offering the investment. Experts say this is just as
important as the investment itself. Some of the basic tips for this
include taking the time to implement a savings and/or an investment plan
with a diversified portfolio; determining how much risk one is willing
to assume: research which investments are insured, non-secured and/or
low-risk; and never bow to friendly advice if it does not adhere to your
short, medium or long-range goals.
Are you adventurous?
The Managing Consultant, Beatrex
Consultants, Mrs. Beatrice Okolie, says many of our entrepreneurs want
to sit in a place and expect things to work out fine. She notes that you
must have a dream and that dream must influence your entrepreneurial
vision. She says, “The moment you have that dream, you should understand
that it doesn’t come easy, you must drive it. What do I mean by driving
it? It is not going to be easy. So, how do you as an entrepreneur
identify your priority? Even in the face of making it, when the returns
begin to come in, how do you determine your priority? Do you forget
where you are coming from? What informs your taste? You have to be
adventurous. When people talk of lack of funds, I laugh. You see, when
you talk of lack of funds, I see it as the least of all your problems.
The idea that you want to develop as an entrepreneur is key and
paramount.”
She explains that one needs to diagnose
the efficacy, relevance, workability and feasibility of one’s idea. She
states that these are the issues that many entrepreneurs tend to push
aside and they begin to talk about the issue of funds. “People talk
about issues of policy and infrastructure, but these are only essential
and secondary, they are not primary,” she adds. She notes that as an
entrepreneur, one must have the drive and understand one’s dream and
idea.
She says, “Why are you in this business?
Can you explain or is it because your brother, sister, or uncle is
doing it? No! If you go into business because of that, you have messed
up everything and your problem starts from there. So, when you have
gotten your idea right, you can now talk of money or funding.”
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