What to Look for in A Company Before Investing
Expending money in investment companies is not as easy as 1-2-3. It’s not a sure thing; it’s very risky to commit to long-term investments, so you need to think multiple times before investing. Of course, you need to work in advance and must be diligent enough to increase the chances of your success. You are being in the act of committing money to an investment company with the expectation of acquiring an additional income or profit. According to successful investors, here are some things you need to look for in a company before investing:
Know and have a conversation with the CEO
Talking with the CEO helps you decide whether it is a good idea to invest in his company or not. You will be able to know if you share the same vision, values, and ideas. You will also have the chance to analyze how they execute them. By talking with the CEO, you will understand the risks associated with your decision to be a part of the company.
Some companies actually encourage their potential investors to email the top dog in their company to understand better the company’s philosophy and strategies in investing.
Know the company’s business model
This is also known as the business blueprint. This will help you know the overall identity of the business, their strategy, the internal assets that assist the business to achieve its goals and the external background in which the business competes and most importantly, how the company will grow your money. On the other hand, a company’s business model is not always evident and difficult to understand, but some references offered by companies can give you a real insight into a company’s business model.
Be aware of the company’s competitive advantage
You need to make sure that the investment company you are investing in has a competitive advantage. It is being gained by providing the consumers greater value than the competitors; it could either through price reduction or additional freebies, benefits, and service that justifies higher fees.
For example, Breadtalk Group Ltd – one of Singapore’s leading companies in the food and beverage industry. They are known for creating distinctive flavors and introducing new food cultures, which is a noticeable difference from their competitors. These factors have led to the company’s expansion and received different awards all over the world. Without a competitive advantage, a business has limited economic reason to exist. The same thing goes with an investment company. If they are nothing but just the same as the average company, then what’s the point of entrusting your money to them and not their competitors, right?
Get the customers’ Feedback
You need to gain more customer data to understand the first-hand experience. From them, you will learn the reasons why they engage in the products or services the business you want to invest in is offering. Listening to their feedback can be incredibly helpful. You can ask relative questions like “What if the competitor drops prices, would you remain loyal?” or “Most importantly, would you recommend the products and services?” An ideal thing to do to get your customers’ feedback is conducting a survey.
It’s vital for an investor to acquire as many information as possible about the investment company, and business. Indeed, it’s very risky, but the more you’re knowledgeable about the business, the better your chances of success.
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