Finance Advice

7 Steps Of Investment Planning For Business Owners

7 Steps Of Investment Planning For Business Owners

As a business owner, you know as well as anyone that success requires careful planning and a process being implemented and followed that makes sense. If we take that same principle into the world of investment planning, a financial planner will almost certainly be telling their clients that to realise a decent return on their investment, the same need for planning and a logical series of steps is just as important.

To take that a stage further you need to consider how you, as a business owner, might wish to take the same sound principles you follow when running your business and apply them to your investment planning. The solution is simple and that is to follow the seven steps we have outlined for you below.

Evaluate Your Current Financial Position And Determine How Much You Have Available To Invest

Investment planning is going to be pointless if you do not know your starting position and by that, we mean knowing where your finances are currently. This will involve knowing what income from your business you can set aside for investing, what assets you may wish to sell to realise additional funds, and also what money you have available in saving accounts, for example.

Set Your Short, Medium, And Long Term Financial Goals

Numerous personal development quotes relate to not having goals and the problems that can create, and they equally apply to financial investing. That is a cue for you to take time to consider what you believe your short, medium, and long term financial goals are. By doing so, when you get to the point of choosing specific investments,  these goals will mean you make better choices.

Determine Your Level Of Risk Aversion

If you did not know already, investing comes with risks, which is why every advertisement for an investment product always has a disclaimer that values can go down as well as up. Thankfully, losses can be mitigated and even avoided but that will be dependent on what risks you are comfortable with. High-risk investments could mean high returns, but also losses. Low-risk investments are safer, but the ROI is lower.

Speak To A Financial Planner To Learn What Your Investment Options Are

Possibly the most important step you can take in this process is seeking the advice of a financial planner. Their knowledge and experience of investment options along with their ability to match an individual’s financial goals to them will make a huge difference in the level of return that your investments realise. Financial planners can also provide you with additional advice on other financial matters that could benefit your business.

Decide What Specific Investments You Want And Apportion Funds To Them

This is when the rubber hits the road, and you take the hugely significant step of choosing your investment options and how much of your available funds you wish to allocate to each of them. You might choose to start with small amounts across the board or focus on just two or three asset classes. Whatever you do you should not place your entire capital onto a single investment, You must diversify in as many ways as you can.

Monitor And Review Your Investments Regularly

You would certainly not leave any aspect of your business performance to chance and that is the same attitude you must take with your investment planning. By this we mean you should regularly monitor performance, review results and where necessary discuss making changes with your financial planner.

Continue To Build Your Investment Portfolio

Once you are comfortable with how your investment planning is operating and have seen the values of your investments increase, it makes sense to build upon that success by increasing and diversifying your investment portfolio further. Again, this is where speaking to your financial or investment planner will be necessary especially if you wish to start investing in a new asset class.