INVESTMENT BY CALCULATOR
Two men met at a hotel lobby and started chatting. As these complete strangers continued talking, they took a liking to one another. Their names were Hussein and Ali. The conversation quickly got past the pleasantries and go into business. Hussein was intrigued by Ali. He was a good speaker, calm by nature and a great pitcher. Ali explained to Hussein about the current project he was undertaking that was likely to experience a boom in the coming months. He pulled out a calculator and showed Hussein the numbers. If someone was to invest in the product with Ali, he or she would be able to double their investment in less than a year.
Hussein fell for the idea hook, line and sinker. It was too good to be true. He had never known Ali before that day, but he could feel a strong connection. It almost felt like they were long lost brothers who had reconnected. After the thirty-minute conversation, a deal was formed and they shook on it. Hussein was going to invest in the product. In the following months, Hussein pumped in capital in order to own half of the shares of Ali’s company. It was after this, that Hussein realized that he had lost all his money to a conman.
Like most people who are either starting or investing in another business, Hussein did not hire a business consultant who would have conducted a due diligence. He just believed in himself and saw no need to engage with a professional. In that respect he:
1. Found out that the company he invested in had never done any statutory returns and it owed a lot of taxes
2. The share value of the company was grossly overstated so that he could pump in a lot of money
3. The product he invested in had no market that could warrant the kind of investment he made
4. Ali had no expert knowledge of the product he was selling.
5. Immediately after investing, a pending bill was passed altering the business of the product
6. The quality of the product was wanting
7. Ali’s company had numerous outstanding debts to creditors including banks. …. Etc
Once realizing that things were bad, Hussein hired a consultant. But by that time, it was too late and he had already lost all his money. The opportunity cost of not hiring a business consultant is high. Whenever, you want to start a business, expand or even acquire another business it is prudent to hire a consultant who can help to lower your risk.
Zeroln Consultants Ltd
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