Raising Money

Identifying Investment Opportunities

Written by Brenda Stokes for Gaebler Ventures

There are many investment opportunities, but what investment opportunities are worthwhile? Knowing can help you make the wisest investment opportunity of your life.

You want to ingrain yourself into the business world, so you want to invest in a business opportunity that will yield great returns for you.

Identifying Investment Opportunities

In other words, you want a premium return on investment, or ROI. You don't want something that is going to cause you to lose your money.

What to look for

There are certain aspects of a business idea that you need to look at before investing in it. Yes, your best friend may say, "You know this business idea is going to take off," but there have been a lot of good ideas that haven't taken off. Ask yourself, "What is my gut saying to me?"

Look at these aspects of the opportunity:

  • The profit margin - How much is the investment and how much is it expected to bring back to you? The idea is to invest a small amount for a large return. This minimizes loss of the investment opportunity does not work.
  • Is there any room within the market? - You may want to ask friends and family or even conduct a poll on the internet as to whether others would be willing to buy the product. This is you doing a little bit of inexpensive market research.
  • If the business is already established and you want to invest in some way, you need to take a look at how the business is managed. A business that is poorly managed is a business investment you don't want to make. The reason is because poor management eventually leads to the demise of the business.

If the business is already established and it is showing success, you still want to evaluate such areas as its annual income, annual operating costs, depreciation and value, development impact on the environment and socially, its financial obligations, and anything else that could ultimately make the business investment a bad one.

How much should you invest?

How much money you invest is a very good question. Of course the more stable the business, the more you may invest. You get higher returns that way. However, you do want to take into consideration that you don't want to invest more than you can afford. If you wish, you can invest a specific amount and then invest more money later as you receive returns.

Think of business investing this way: Pretend the money you have invested doesn't exist. When you get a return, reinvest that money into the business. If you keep doing this, you can make the same money grow again and again. This is a strategy frequently used by mutual fund investors on the stock market. Investors can invest additional money over time, but the same returns will keep growing until the investor decides to cash out.

When you identify the right business investment opportunity, then you are able to sustain large returns that will aid you in living the life you have always dreamed of. And what's great is that you don't have to limit yourself to one opportunity. Once you start seeing returns, you can invest in many businesses.

Brenda is a graduate of California State University and a professional writer covering a variety of business topics. To learn more about Brenda, check out her website at The Digital Inkwell.

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