subject: The World Of Capital Investment [print this page] For any type of company, money is at the root of all needs. Whether it is a freelance Search Engine Optimisation consultant who simply requires a website to be created and a handful of business cards to be printed or a new toy store that not only needs monetary assistance with stock, but also with the building premises, utilities and staffing, money is required in some level to help a business get off the ground and stay afloat.
Some businesses manage to secure the necessary funding by simply saving a certain percentage of their profits until they have a sum that is substantial enough to be able to reinvest into the business. This, however, is often only available to those companies who have been operating for some time and are making a respectable profit, as the majority of new businesses fail to make any considerable profit, or any profit at all, in their first year of trading.
Those businesses that are new and require money to grow or that are simply an idea that the owner is wishing to progress into a fully operational business do not have the ability to take a percentage of their profits and need to look down other avenues. Of the several options that are available, capital investment is one that is often looked at first.
Defining capital investing is easy and can generally be considered to be providing money to a business so to increase its productivity and therefore profits, in turn providing a respectable financial return on the initial money from the investor. Similarly, finding a person or company that offers capital investment is relatively straightforward and there are a vast range of small, medium and large companies who can provide monetary assistance in the form of capital investment.
However, securing and receiving capital investment is a completely different story and can require some extremely difficult and lengthy processes before any decision is made.
The people who offer capital investment primarily look at one aspect and one aspect only, which is the risk factor. In the world of finance and investment, it is widely regarded that a low risk option will yield a small return, whilst a high risk option will yield a greater return. Capital investors, however, are looking for something that is low risk but has high returns.
It is understandable that companies and individuals that offer these types of investments are not looking to invest their money into a high risk option, as it is their own money and they do not want to invest in something which they believe has the chance of bringing them a great return, rather than something that more than likely will. But, it must be noted that investment companies are generally looking to invest in long term projects and would often be more interested in a company who had a five year business plan with long term finance projections, rather than a company who believed they could offer a greater return in one year, but whose projections were limited to two years only.
Capital investment can be key to the success of any company, but it must be remembered that the business must be one that can be a success because of full and proper planning, rather than as part of a dream from a budding entrepreneur.
by: Christopher Reinhold
welcome to Insurances.net (https://www.insurances.net)
