Why Should You Invest in a Local Business? That’s a good question. See my blog post about that here.
If you already know you would like to invest well keep reading below!
Are You Looking To Invest In Local Businesses?
When you want to be able to grow your money by investing, it is going to take a little bit of finesse and a good personal finance strategy. A lot of people will look for secure, stable investments like mutual funds and also work to diversify their portfolio by making sure that they invest in bonds and stocks. However, there can be a great deal of profit to be made from investing in some of your local businesses. These are some steps that you can take to select the perfect businesses that will have the highest potential for profit.
Finding The Business
Take some time to network with the people from your community that may have experience with some of the local businesses, either by investing or having their own. You can also see about finding a group of current investors that you talk talk with about their experiences in the region. It is always going to be in your best interest to find a number of entrepreneurs that will give you advice on looking for startup capital or helping you to evaluate the worthiness of potential investments.
Talk With Your Lawyer
When going into such a major investment, it is a great idea to talk with your lawyer so that you can determine the best way to proceed. If you are going with a lawyer that is out of your local area, he or she may also be able to give you some sound advice on some of the entrepreneurs and local businesses that will be prime for investing.
Set Up Some Interviews
As it starts to come down to the time to invest, you need to think about setting up some interviews with the entrepreneurs that have any of the experience and business ideas that really caught your attention. If there are businesses that you are already interested in, make sure that the owners are part of the group to be interviewed. Discuss business plans and find out what each business needs so that you have a clear picture of what your investment may mean to them. The goal should always be to enter into a partnership that is going to be worthwhile for every party that is involved.
Helpful Hint – Investing in a business that is non-profit can bring about even more benefit to you, as it will be tax deductible. This rings true whether or not the particular investment ends up leading to personal profit.
When you are going in as a first time investor in local business, you need to take the time to do your research and make sure that you are working with people that have the experience and goals that are worth the investment. With that being said, it may be worth it for you to stick with some of the franchises or businesses that are already well established.
Case Study We Had
We are constantly expanding our portfolio of investments. We currently have stocks, bonds, CD’s, 401k, Roth IRA’s, Gold, Silver, Commercial Real Estate, Residential Rental Properties, and now, ownership of a local water damage restoration business – WaterDamageColoradoSprings.CO. We sought out ownership of this company simply because we know the great ROI these type of businesses can have and it will be fun working on it over the years. We have had the business for about 6 months now and we are on track to be profitable within 12 more months or so. Once we grow this business over the next handful of years we can turn around and sell it for high six figures and possibly into 7 figures. We will keep you updated on how things progress.