Things To Know Before You Invest In Any Online Business

Things To Know Before You Invest In Any Online Business

Sometimes, no matter how much research you do, good businesses can fail for a lot of reasons. Especially in a clime like Nigeria. So every time you choose to put your money in something, please understand that sometimes you might never get it back.
That’s the more reason you are advised to always Invest your spare cash that amount you can afford to lose, especially in any business that’s Online based.

If in any case you ever have to take crazy risks and invest your entire life savings and rent, before doing that, please ensure that there’s someone in your life that will come through for you if you need a quick loan because there’s always a 50/50 chance that such investment might either click or fail.

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Also Read 7 Secrets You Need To Know Before Becoming An Entrepreneur

Now let’s get to the main gist.
You come across a post by a social media influencer asking you to bring a certain amount for a fixed ROI, you should ask these questions before you give them your money. If they can’t provide answers, use your money for something else even if it means eating pizza with it. No matter who is asking you to invest, even if it’s Kim Kardashian

1. Why does this company have a fixed ROI? Let me explain better.
Fixed ROI’s are huge red flags. Especially for companies that have been in existence for less than 5 years. Listen, most of us here are entrepreneurs. Can we categorically guarantee a certain return on our new business every month?
A new business that hasn’t gained its foot yet in the industry. A new business with multiple competitors but somehow is able to guarantee you that your capital is safe. Nope. I hate fixed ROI’s. They give me the creeps. See I don’t care about how high or how low the ROI is.
I care about what the business is doing. There are legit investments like options that will offer 200% in 10 days. I know and I have done them. But they also burn you deep.
Don’t be deceived that because the ROI is small, your money is safe… lol. That itself can be a fraudster move.

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2. What do you do as a company? What are you selling or buying? Real estate? Ok. How many buildings have you sold in the last 5 years?
Give me a list. Research and confirm. If you live outside Nigeria, hire someone to help you. Wait, you are still building? So how can you pay ROI if you are not yet making any revenue?
Do you sell and buy goods? Ok. Who are your suppliers? Which market can I see your goods in? Katanguwa? Take a bus there or ask someone to go to Kantanguwa market and purchase the product for you then waybill it.
Test the product. Is it good? Is there room for improvement? Is it basic? If it’s basic, do you think they can scale and grow? You MUST understand the product before you invest.

Also Read NNPC/SPDC Joint Venture University Scholarship Awards 2021/22

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3. The most important part. Do you share a report with investors every month?
Listen any company that can’t be bothered to share reports to you investors every month is not a company you should be investing in.
This is how much we sold this month.
We sold 39 sachet water
We sold 50 houses – these are the addresses
We sold 30 Ankara at the rate of 50 nairas per Ankara.
We expected revenue of # 30M but we only made # 25M. We intend to increase production and reduce the cost of sales next month to meet the deficit.
You MUST receive an investor’s report.
The minute you give someone your money, it’s no longer a one-man’s business. It’s now ‘our business’ even if your money is # 10k there. You deserve to know how your capital is being utilized. There is NOTHING private about a company’s books. Especially a company with investors. If they refuse to share, they are fraudulent.

Things To Know Before You Invest In Any Online Business

4. Are they paying Taxes to IRS?
Listen this part is so important because the IRS is vindictive. The IRS can wake up one morning and freeze a legitimate business with all the capital inside the account for not paying taxes. You don’t want to be caught up in that battle. Please ensure they are paying taxes. Not paying enough taxes is better than not paying anything at all oh. The day IRS will catch you.

5. Yearly Audit?
What is the plan for a yearly audit? Do you intend to hire auditors and share the audit report with investors? There are many affordable accounting firms that will do it for them. You need to be sure no one is using the company’s account to give away or using the company’s account to blow # 1M at the club.

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6. Last but not least – How much is this company trying to raise? Every company needs a fixed amount they are trying to raise. How much is it? # 200M? How much have they raised? Any company that receives investors’ money all year round is a fraud. Take that to the bank.
The crowdfunding must close at a point. Even public companies issue a certain amount of shares to raise certain figures.
But somehow this company is collecting investor’s money ALL YEAR ROUND?
Say they want to open a new restaurant. It’s easy.
We want to open a new restaurant. It will cost us #15M. We want to raise this between now and December so we can open our restaurant by January.
As soon as they hit #15M, the investment window closes.

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If by December, they don’t hit # 15M, they inform you the investors that look, this is how much we have raised. We still need # 5M more, so we will open the investment window for another few weeks.
Again, any company that is collecting money all year round without closing the window is a fraud. At what point do they actually use your capital?
Again, this list is not exhaustive. You might agree or disagree with some of the things I wrote here. But if you follow it to the T, you most likely won’t be burned.
And if you don’t find an investment that can provide you all these, please open a Bamboo account and start trading stocks.

Things To Know Before You Invest In Any Online Business

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