Investing in the right market at the right time can be difficult, but there are many areas of business that can bring high returns on investment. Volatile sectors may be more risky to begin with, but they can be extremely rewarding in the long term if managed correctly. There are certain guidelines you can follow to ascertain whether an investment is wise and whether it will reap dividends for you or your company. These include researching compliance, operational, financial, strategic and reputational risks as part of a thorough assessment beforehand.
Many of the world’s largest organisations embraced risks during their formative years, including IBM, Microsoft and Google. Exploiting risks successfully can generate higher returns on new investments, and this is something that successful companies have done many times. A study of oil companies over a 20-year period found that those that took more risk on development and exploration ventures earned higher returns than their cautionary counterparts, but you need to do so carefully and not recklessly to ensure continued success. Those involved in international trade, for example, will have to examine the credit score of an overseas client as well as research foreign exchange rates and interest rates to get a clearer picture of the investment.
Middle Eastern companies have been particularly successful at diversifying their products and services and the markets in which they operate. Lebanese company M1 Group purchased Façonnable in 2007 as they saw huge potential in the French-based brand, which had been struggling prior to the acquisition. Following M1 Group’s investment, Façonnable opened new boutiques in the Gulf region and in Asia while pushing its retail development to more states across the US. This has been a profitable venture for M1 Group as the brand now operates in 80 locations across the globe. M1 Group is an example of how risk-taking can be beneficial as it is now a multi-million-pound empire with interests in a range of premium sectors and markets.
Getting the help you need to explore new business areas may require new investors. You can begin this process by creating a strategic list of around 50 investors that are deemed a great fit for the profile of your business. Fellow entrepreneurs and other businessmen are a hugely valued source of information on investment and risk-taking, so you may wish to ask about their experiences during the process. You may also want to prioritise those that you know personally or with whom you have a mutual acquaintance. Another way to court investment is to increase the visibility of your business via social media and personal blog posts. You can get further investment advice from the government’s gov.uk service, which allows companies to apply for overseas business opportunities and offers other useful information for new investment plans.
Professional and diligent planning coupled with an assessment of the risks will make it much easier to identify and take advantage of new and lucrative opportunities and investments. Organisations that are selective about their risk-taking will usually make better investments, so it is important that you create a foundation for sensible decision-making.