Getting an opportunity become an entrepreneur when one is still young is something that excites a lot of people putting into consideration that most souls including the young investor’s own parent might have failed to become business persons.
On the positives, young investors are full of energy and have age to their advantage. That gives them a lot of time to explore into the business world.
The two factors mentioned earlier don’t guarantee success in young investor’s endavours. There is a lot that requires attention if the young investors are to remain in business or at least reap profits.
Experience
Sometimes young investors might base their success on the knowledge that they acquired in tertiary education. This is where they get lost. Formal theory education is good but if it is not supported by practical experience, their ventures might head in the jungle. That is why many corporates hire experienced staff to run their operations on daily basis. It is wise that the young investors get guidance from mature and experienced staff.
Finance
Issues that have to do with finances are where a business’ survival lies. If young investors fail to treat finance with the respect it requires, it is easy for a once flourishing business to go broke.
A business should have someone who runs accounts and all the accounts should be audited as well. Unbudgeted or unnecessary drawings must be avoided at all costs. It is not a crime for young investors to pay for all products or goods and services that they get from their businesses. If they don’t pay in cash, there should be an arrangement of a credit facility that is well managed.
Assets
Acquisition of assets is very important in businesses. Properties, vehicles, computers and telecommunication devices are needed in running businesses. But these assets should be acquired according to the enterprise’s cashflow. We have seen young investors getting lost on this.
Some are forced to impress the world that their investments acquired state of the art assets. They may rent expensive properties and buy porshy cars but their businesses will not be making huge profits that match or sustain the investors’ spending power. Most of these young investors end up living in prolonged debts.
Expansion
There is no need for young investors to open so many branches for the sake of matching their competitors. Investors should expand if there is need for doing so. Forcing to open new branches when profits are little will only lead to huge overheads versus a strained capital base. Young investors should learn to cut their cloth according to the size of their linen.