One of the ways you can position yourself and your business for continuous profiting and increase is to invest in emerging markets. Loads of investors from the United States, Europe and Asia are all heading towards Africa and some parts of Asia and South America to position their businesses for future profiting. The truth is that the potentials of emerging markets are unlimited hence it is indeed very lucrative for investors.
Emerging markets are business opportunities available in developing countries; basically Africa happens to be the major destination for investors seeking to invest in emerging markets. As a matter of fact, countries like Brazil, China and even Russia are considered to be emerging markets because of the potential high growth of their economy et al.
In as much as you stand the chance to get huge turn over on your investment within a short period of time in an emerging market, you also stand the chance to loose a great deal of your capital because of the potential risks involved in investing in emerging markets. The growth rates of emerging markets are not even; it is unpredictable and political risk is greater. As a matter of fact, a change of political status quo may result to change in economic policy and that might turn the tide against investors. That is why it is advisable to consider the volatility of emerging markets before investing in it.
Now let us quickly consider some surefire tips that will guide you if you want to invest in emerging markets;
Investing in Emerging Markets – 5 Low Risk Steps to Take
No doubt as a big time investor seeking to invest in emerging markets, you should be aware that you are expected to conduct detailed feasibility studies before investing in any industry and country. What is expected of you to do is to build a team of professionals that will work with other business consultants in any of the emerging country of your choice. It is important that you work with professionals in your host country if you want to maximize your investments.
Once you are able to conduct thorough feasibility studies of emerging markets of your choice and you have made your choice on the country to invest in, then you are expected to write a detailed business plan. You business plan should include strategy on how to mitigate the risks involve in emerging market and also how to generate the required capital.
The truth is that you should contract the writing of your business plan to business consultants if you want it to pass reality check in the country you intend investing in. It is important to point out that a business model that can work in the United States of America will likely not work in Nigeria; you would have to tweak it to conform to the reality on ground in Nigeria if it must work. That is why extensive research should be done prior to writing a business plan – business model et al.
Investing in emerging markets is capital intensive hence you would need to pull together investors of like minds if you know you don’t have the capacity to generate the required capital. Aside from the money you are expected to pay to obtain the required business license from the government of your host country, you would need to bring in expatriates. The truth is that paying expatriates can be very expensive. And also, in most countries, the tax for foreign investors is usually higher when compared to the tax for indigenous investors. So it is important that you generate enough capital if you are considering emerging markets.
Although, you stand the chance to double your investments within a short period of time when you invest in emerging market, you also stand the chance of loosing a large chunk of your investment within a short period of time in an emerging market. The truth is that the risks involve in emerging market is very high. For example, a change in political power can lead to a change of economic policies and this in – turn can affect foreign investors. In essence, emerging markets are highly volatile. So part of what you need to do if you want to invest in emerging markets is to conduct proper risks analysis before committing your money. It is better you invest wisely when investing in emerging markets; if you are carried away by the huge profits you stand to gain, you might likely get your fingers burnt.
5. Choose a Country and an Industry to Invest In
If you are able to conduct thorough feasibility studies and you have done your risks analysis, then the next thing that you are expected to do is to choose a country and an industry to pitch your investment tent. For example if you choose to invest in Nigeria, investing in the power sector or the telecommunication sector might be your best bet.
As a matter of fact, foreign investors sees Nigeria economic landscape as very green especially the power sector, telecommunication sectors and other key industries. This is so because Nigeria has the population and also the leadership of the country is becoming stable by the day with favorable economic policies for foreign investors unlike the era of military juntas.
Investing in emerging markets is not meant for small investors, so if you intend investing in emerging markets, you would have first and foremost try your investment skills in your country before exporting it.
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