We constantly get inquiries from our members about investment opportunities. Most inquiries involve members saying I have x amount to invest and asking for advice. All investment inquiries start with I have this amount of money and therefore asking us to help with investment options. In this article, ZBIN will try to help members to broaden their thinking when it comes to investment. You may not need to always start with capital monies when thinking of investment. You may need to consider capital last and we will explain how this works. We will explore 2 investment schools of thoughts with the old school of investment being the most prevalent one within our community and beyond.
The Old School: The old school to investment is coming up capital and then deciding what to invest in -you should are guided by the amount of capital available. If say you have $2.000, then your thinking should be restricted to $2,000 and below.
The advantages of this approach is that it is straight forward. You do not waste time thinking of proposals out of your range.
New School thinking
The old school to investment limits your scope to what is only available-you do not think beyond what is currently available in your coffers. Those who use the old school thinking usually come up with few investment opportunities when compared to someone who is looking at broad investment opportunities.
The new school approach starts with what do you enjoy doing? What are you good at? It is important to enjoy an activity because you need strong will to stay in business when the going gets tough. When the going gets tough as it usually does, then the driving force is going to be the fact that you enjoy doing something. Even when no one pays you, you will still keep pushing.
So in the new school of investment, you start with what do you enjoy doing? What are you good at and then move on to the next stage:
Opportunities available in the environment
You brainstorm on available opportunities in your environment. What are the gaps, what are the problems that need to be addressed? What are people complaining about? What canbe found in other territories and not where you are based? What are regional trends? You just list opportunities without fear of capital constraints.
Costing the Opportunities
After coming up with an expanded list of opportunities the next stage is assessing which opportunities you would like to pursue, whether they are viable and how much you may need in capital money.
Capital Options
Having put financial figures to a shortlist of investment options, the next step is to determine the source of funding for your selected project. Are you going to fund it 100%, are you going to part fund it? Where will the funding come from? What is the environment like? Some of the options can be as listed below:
- Bank loan access
- Homelink cross border/SME credit facility
- Partnerships
- Crowdfunding
Accessing bank loans is a big challenge as they require collateral back up and most youths do not have the collateral and yet this is the group with the most business ideas. So what are some of the options to consider when you have no collateral? Crowdfunding and Partnerships models are the in thing especially in an economy like ours. If you hav a great idea and have prepared a business plan then approach institutions such as ZBIN for help, we are always willing to assist and for our members its a free service.
In summary
Do not limit your thinking when it comes to investment and instead of coming up wit capital and asking what you can do with it-we encourage you to think in other terms-consider capital last!
