What is the best moment to invest in a business?

What is the best moment to invest in a business?

What is the best moment to invest in a business?

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The biggest success stories of entrepreneurs have inspired thousands to realize their dreams, to either start their own business or invest in one. But in many cases they don’t have the correct assistance which leads to failure and loss of investment.

And truly, there’s no perfect process that leads to success when you invest, as all businesses have their risks and difficulties, but there are some determining factors to begin with the right foot.

One of the main factors involved is choosing the right moment to invest in a business. If you’re in this situation, this article is for you.

Economic cushion

The first step is having an economic cushion that supports your investment. While it’s true that every case is different, some previous savings will definitely help you have more comfort and stability, especially at the beginning

You must also comprehend that an investment will hardly give you any positive results or utilities before the first six months, so if you have some savings you’ll be less anxious about the earnings and more patient, which is key for the first stage.

Being in this situation, you’ll be able to focus on how to make faster earnings without being economically challenged, and will be more likely to take risks without significant consequences, as you’ll have a wider margin to invest in your business needs.

Understand your business

Here there are some more specific factors depending on the type of business into which you want to invest:

#1 Basic food industry

As food is a yearlong need and a primary need product, demand is always stable, so any time of the year is good for investing

#2 Dress and shoes

The second and fourth trimesters are the best if you have a business of this kind, as the second brings a change of season for new collections to be released and the fourth includes Christmas, guaranteeing sales.

#3 Tech

There are also two times during the year that are better for investing. The first trimester allows you to create a space for yourself in the market, as users want to renovate and technology penetration is easier. The fourth trimester is even better, as employees get bonuses and make more expenses on more expensive items that they were saving for. Besides, Christmas presents are becoming more often technology-related.

#4 Hotels and restaurants

The key is summer, but it’s a big risk to invest at that very moment, so you must make preparations and invest in spring. The big moment will come a couple of months later, when you’re more stable.

#5 Consulting

First trimester is best because you can fit inside the yearly budget companies make at the start of each year, and you’ll arrive to the end of the period with more experience too.

#6 Bookstores and stationery

The second trimester of the year is best for investing in these, as even if August and September are the strongest months due to children and young adults entering school, being ready before this busy season gives you a wider margin of error to tackle back to school season with more experience and knowledge of the market.


The trend is not equal for everyone

The last paragraphs were just some specific examples you may take into account to analyze the business you want to invest into, but as we mentioned, every one of them has its virtues and complications, so you should take them into account.

A lot of people like to follow global tendencies to start investing; and yes, there are numbers, statistics and graphs that show most people like to invest in the first trimester and the amount goes down in the third.

However, these trends are not equal for everyone and there lies the importance of understanding and knowing the business in which you are going to invest so the losses you experience are less and earnings come quicker.


The importance of fiscal topics

A very determining factor for many, even higher than understanding the business, is taxes.

If you’re in the final stages of starting your investment in a business and it’s already the end of the year, experts recommend to wait for January 1st of the following year.

Why? Because you will pay less taxes.

Consider that in the beginning, expenses are always limited so any chance to save is good. If everything is already set up in November, you will have to pay taxes for those last two  months, even if there are no earnings.

That’s why it’s ideal to wait a couple of months and begin in January so you only pay taxes for the current year.


Hunches also influence

There are spiritual individuals who recommend investing should begin right now, while you’re reading this article. They say you should stop overthinking as the future begins today.

They may have some reason, as sometimes overthinking may cause procrastination, but we should also not leave everything to chance. That is why we suggest you think things through and contemplate that following your hunches may bring more serious consequences.

In the end, there’s no perfect process for investing, but you can always try to take safer steps as to not get lost. If this article has helped you clear some doubts, share it with your partners or that friend who’s about to invest in a less-than-ideal time.