Investing in a business that you have no full knowledge of

[Alexandoy]

My friend had the experience of investing in a franchise business. They rented a place in a small mall because their product is a beef meal called "tapa" which is a popular dish in our culture. The price is quite high so the mall is the best place for that business. But my friend didn't know anything about the franchise business and he just relied on his 2 partners (they are good friends so fraud is out of the question). Unfortunately the business did not do good after 5 months because the sales are moderate only. With a franchise you need very high level of sales otherwise you tend to lose because the overhead is so high. You have to pay a maintenance fee to the franchiser for the basic products (ingredients of the food) and also the advertisement that the mother company is spending for.

When I learned of that fiasco my first reaction is why did you invest in a franchise when you do not know anything about it? That is a neat lesson to learn that before you invest in a business you have to know the details and the ins and outs otherwise you will be left with the pots and pans that you will divide among yourself and your business partners.

 

[Kendy]

Investing in a business that you have no knowledge about is sailing a ship when you are not a sailor, flying an airplane when you are not a trained pilot or operating a patient in the surgery room or theatre when you are not a Surgeon. It is really an unwise and unstructured decision to venture into a business where you have no experience and no idea. Ideas and experiences can always be sourced for, you do not just start a business without conducting a market research or a feasibility study. Some business owners just venture into business with the sole aim of maximizing profits which is not prudent. Knowledge on the business is very vital and should not be taken in laxity.

Any business which is rooted on lack of knowledge and inexperience is just savouring in the pleasures of facing decline in the short run, this is because, no business can succeed without atleast a little knowledge of what is required to make a business successful.

It is not always compulsory that you must have your own personal experiences before starting a business but atleast by employing the services of experts, and other market strategies, you will have a guiding factor that would help the business stand the test of time.

 

[Kingsley]

It can be really disastrous to invest in anything you have little or no know an of or about, it is just like throwing your money into the the sea, because there will certainly no returns, it is like going to gambling house to gamble with ones valuables. That is one major reason why so many people have themselves to blame when they invest their precious time and resources into a type of business before gathering all the relevant information about the business, and in the end they end up losing all their funds in the business. So it is advisable to learn Al that is possibly available about the business before venturing into the business.

One major advantage of learning about a business very well before investing in it is that it helps us to have a deeper understanding about the and how to make good profit from the business. It saves us time and stress that we would have incurred if we lack the initial knowledge of the busienss.

This saves us the expense we have spent repairing damages resulting from lack of technical know how, it will also help us aviod the loss of customers because they will see us as inexperienced.

 

[PICKFORD]

That is definitely a risky act to take , investing in a business which you have no idea of could be very risky and the rate of losing your heart and money is high , no one earn money just to lose it so it is important that before investing your money into some sort of investment it is important to make proper research as well as proper analysation on the investment platform itself. Doing this will show that you are consistent and also persistent to acquire the knowledge or necessary idea about the platform before investing.

There are a lot of scam sites who target business organisation with huge number of wealthy assets , to avoid search sites or to differentiate such site from various legitimate site you have to make proper research and have full and equip knowledge about it investment process , the it is also advisable to use a scam site detector one of discounts I detector I know about his sure detector . comone important feature about this website is that it allows you to read reviews of others who have made use of the site in order to fully detect whether the site is actually paying it investors or not.

 

[Abigael]

That is a story that teaches a very good business lesson. It is important to invest in a business which you have enough knowledge about. That way, you will run it as it should be ran. Investing in a business that you have zero or less knowledge on is a recipe for making losses.

If you don't have enough knowledge about the business, you can take sometimes first and do your research about it. One of the best ways to learn is through reading. So take your time and look for a good book that talks about that business. You can even search online and read articles or ebooks on it.

Another way to gain knowledge on the business you want to do is by being guided by an experienced person who has done this business before. The person will give you all the tips you need in running the business. They can also share the challenges they face and how to respond.

Just make sure that the sources of that knowledge you need vie correct and upto date with the current trends. That way, you don't follow ways that don't work anymore. I am sure that your business will run well if you have the knowledge right needed.

 

[moonchild]

Investing in a business you have no idea about is not advisable at all, your friend have learnt his lesson hopefully and not repeat such mistake again, we see this happen all the time especially in the tech industry(I'm more conversant with the tech world) a lot of people have given entrepreneurship a go but they failed woefully and they go back to 9 to 5 with the mindset that entrepreneurship is hard bla bla bla.

The thing though is, they don't have knowledge on what they're doing most people can't think for themselves, they follow the herd and as you all know herd are mostly headed to slaughterhouse.

So before starting a business you need to do a thorough research on what you are planning on doing if it is not a solution to a problem then don't even bother because it's just a waste of time and valuable resources.

Before, I tried out several businesses and I failed but after I learnt my lessons I became very reluctant in starting a business because most the times I realised my ideas are not profitable.

The take home is, when starting a business make sure you're solving a problem and your market research gives a positive result

 

[Dora Wi]

In this case I agree with you. Getting into a franchise business requires a lot of knowledge both about the company and about the niche itself. There is a lot that goes into running a food franchise.

 

[eldavis]

Investing in a business you have no knowledge about is one of the worse moves an entrepreneur would ever take. There is every possiblity that you can easily be cheated in the process since you know Notting about the business, in other places it could end up making losses cause probably you did things that are against the ethics of the business or worse it could turn out to be a scam business. It's best you take your time to study and learn all that there is to know about the business before you join. Do not rely on someone to help you manage the business.

 

[Mataracy]

Investing in a business that one did not know is very dangerous and can ruin some ones life if care is not taking.
Before one make or embark Ib any investment there are many things that one needed to put in to consideration and one of it is to have good experience on what one is about to do.
Without having good idea about what some one is planning to do ; it might be very difficult to attain any success there at all.
One can make findings or consult people that has one idea or the other on the business and allow them to mentor some one.

 

[Sotherefore]

Personally I do not consider it as a wise decision for someone to just invest on something they don't have an understanding about because if you don't have an understanding about anything you are investing on you won't be able to handle anything concerning such a business or the challenge that comes with it. Spending a little of your time to learn this thing is not something that will prevent you from making money but a lot of people are always carried away by the profit potential of the business to a points that they are so eager to make money and fail to do the right thing.

There are so many topics on this platform concerning some of the disadvantage that is associated with people establishing something they do not have an understanding about and one of such disadvantage is always failure in the area of business because you will definitely not be able to handle all the problems that comes with it.

Even if you are not taking your time to learn and understand how these things should be done perfectly , at least you should have an expert to help you in the business , at least this will cut of the risks of losing in your business organisation.

 

[TOZZIBLINKZ]

It is one thing to have capital to establish a business of your choice and also it's another thing to have full knowledge about the business you intend to establish. a lot of people have gone ahead to invest in a particular business that will do not even have full knowledge about , and most of this individual's business end up going bankrupt , liquidate , and even shutting down . It is important that we have the knowledge about a particular business before investing it . Over confidence in oneself claiming to know what you are doing who absolutely need you to failure . People who are wealthy and successful today did not depend on themselves or being over confidence in themselves before earning such title as being rich or wealthy , rather it was as a result of acquiring of knowledge about the business they intend to establish that makes them wealthy and Rich .

Having knowledge about the business you intend to establish determines your potential to make loyal customers . Majority of clients customers tend to be unhappy and unsatisfied with an individual or a business owner who have not treated them well and most of this business owners are those who do not have full knowledge about the kind of business they run . which makes it important for us to know and have full knowledge about the kind of business we intend to establish .

 

[Mika]

I do not see any problems in investing in a business that you do not have any knowledge of. When you are investing, you need to have knowledge on how to manage your funds, other business works can be done by other people. For example, when you invest, you need to know how much of that money is going into product development, how much is going for office management, how much into the promotion and marketing, and how much into building the brand.
If you have money to invest, you can also hire the best workforce to manage the business. Well having knowledge of the business that you want to establish is an advantage but that is absolutely not a retirement. I know a lot of people who have built the big business without actually having any relevant knowledge of the busness. They became successful because they were able to hire the best team that developed the best product, the best team that launched the best marketing campaign, etc.
A lot of people invest in the share market, they are investing in various companies, do they know how these businesses operate, do they know about the business niche, do they have specialization on the business?

 

[Richee84]

It is very important that we have a sound and good knowledge of the business we intend to venture into before embarking on such mission. Understanding Business background is very key to the success of any business. There is a lot of advantages when you have a deep knowledge about the business u intend to go into. Some of the merit and demerit of having a knowledge about a business are given below:
When a person have a sound and good knowledge about his or her business then the person will be able to handle or run the business smoothly and just need little supervision on it staff. The person will be able to oversee the day to day running of the business without much stress. Having business knowledge will help the owner of the to have full details of it business and he or she can not be easily defrauded in his line of business.
When a business owner does not have the business knowledge he or she needed in his or her line of business then it will become very difficult for him or her to run it successfully and the need for an expert in that line of business will be require to manage the business which will be additional cost on the owner.