The business world can be cruel. Numerous companies each year fail to meet their targets, or they simply teeter on the edge of success or disaster. Unfortunately, some eventualities such as a reduced market, poor sales figures, and an economic downturn cannot always be planned for or easily overcome, but there are a few things that businesses can do to help secure their future. For example, a business plan is absolutely vital. It enables you to create goals, strategize for reaching those goals, and detail your expectations. Efficient management and a good location are also a must. Are you making the most of the skills on offer, or pushing your business forward? A lack of capital, or decreased cash flow are, unfortunately, all too common in the business world. One lifeline for a failing business is foreign investment. It is a cash injection from an overseas company and business advice intended to improve trade. As with all things in the business world, though, there are several factors for a company to consider before accepting investment.
Why do small companies thrive on foreign investment?
There are numerous advantages for smaller, failing businesses to accept foreign investment. One of these is the opportunity to thrive once more. Foreign investment will feed a failing business with experience, guidance, and encouragement, as well as money. There are few companies that could turn down that kind of assistance. In addition, foreign investment will provide access to technology that may not be in use in the business’s country. It can encourage the job market in both countries, and help failing companies to expand within the global market. It can improve a country’s economic development, create demand within both nations, and allow such a business to stand out at international summits. Countries with increasing amounts of foreign investment are often recognized at business expos, and during global economic reviews. Of course, there is also an element of risk when a failing company accepts investment, particularly from outside of its own country. While freedom is offered to those receiving finance, foreign investors may make certain demands, or expect conditions to be met. This has the potential to limit a company’s operation. Exchange and inflation rates can have a huge affect on foreign investment too, leaving either company out of pocket. There is also the risk of dependency in a business that has previously failed to thrive. CEOs must look at why a company has been failing, and ascertain whether a financial boost will fix such issues.
That said, foreign investment is becoming an increasingly popular lifeline for failing businesses around the world, with Middle Eastern entrepreneurs and companies stepping in to offer assistance to numerous companies within and outside of the United States.
Foreign investment from the Middle East
The Middle East, once seen as an economically developing region, is now regarded as one of the biggest investors in foreign businesses. Numerous American and European ventures receive their funding from companies such as the Kuwait Real Estate Investment Consortium, which specializes in building projects and the sale of properties. Boasting an illustrious career in banking, investment, and property, and with a resume that comprises numerous chairman and director roles, Fahad Al-Rajaan is one of the biggest investors in the Middle East. His experience, encouragement, and financing can be the difference between a company floundering or succeeding, and his portfolio is impressive, to say the least. Al-Rajaan is also the head of a private equity firm, Alrajaan Investment, which boasts “global expertise”, and numerous, “unique investment partnerships”. It is little wonder that the MD, Fahad Al-Rajaan and his contemporaries are becoming so renowned in the business world.
Failure is perhaps the most feared word in business, and it has the power to signal the end of operations whatever your experience or determination. While it is essential to prepare for every eventuality during the early stages of business, there are some occurrences that cannot be planned for. Cash flow issues, for example, are often unforeseen. Foreign investment is quickly becoming a savior to businesses around the world, enabling them to thrive and meet their full potential.