Investing entails a keen feasibility study. Making a decision on investing should not just rely on the amount of money that you can invest, because solving an investment problem can’t be done in just a snap. You cannot magically replace a lost investment. It takes a long process and a series of systems improvement to get back in the game.
Here are some significant factors to consider when investing:
1. Management Perspective. If there is an aggressive management and a positive marketing perspective with an opened eye for innovations then there is a better chance for favourable results, success and productivity. Electronics and communication is an example of industry that needs to aim for continuous improvement and latest innovations. There should be no room for idleness when investing.
2. Tactics of the competitor. The tactics and marketing strategies of your competitor should be hardly taken into consideration. If your competitor is very aggressive in investing modern machines and gadgets to increase profitability, make sure that you can cope with it or else your investments will eventually turn down and be wholly swallowed by the competitor.
3. Different opportunities presented by a higher technology. You should know when to salvage your present equipment in order to cope with the demands of your customers. Be sure to have reached your desire rate of return (ROI) by the time that you need to upgrade your whole system.
4. Sales Forecast. Whether it is for short term or long term, your market study should always be visited and forecasted to ensure, maintain and increase sales. To avoid putting your investment on critical phase, potential market should always be taken into consideration.
5. Taxes. Every investment entails a certain amount of tax to be paid. Make sure to consider those in doing your feasibility study.
6. Budget and Cash flow. Aside from determining the right budget to capitalize business, investing should know how that certain budget will flow during the actual business itself. Cash flow should include proper timing of expenditure and the in and out of money should be properly anticipated.