In the media and on the Internet, the term investment attractiveness is often mentioned. And recently, many consulting firms offer services to increase the investment attractiveness of an enterprise and even to manage it.
Economic theories and textbooks offer a complex and confusing definition of the term investment attractiveness. A layman has to understand the academic language in which these concepts are written for a long time.
For a simple and logical definition of this term, one should, first of all, be familiar with the concepts of investment and investment activity. Investments are cash, bank deposits, shares, stocks and securities, technologies, machinery, equipment, various licenses, intellectual values invested in entrepreneurial or other activities to make a profit or achieve a positive social effect. Investment activity is an investment and a set of practical actions in the implementation of investments.
Hence the conclusion that investment attractiveness is the ability to arouse commercial interest in a real investor, the ability to accept investments and dispose of them in such a way as to improve the quality of products, increase production volumes, and capture new markets. And in the end - to get a net profit.
It must be said that from the point of view of an investor, not all enterprises have investment attractiveness. But on the other hand, almost all business owners have the opposite point of view. That is, they believe that their enterprise is able to interest investors by 100%. Such entrepreneurs can actively search for investors for years and not find them, sincerely surprised by this.
Therefore, all business owners should know what affects the investment attractiveness of their business. First, the investments made in the business must definitely bring it to a new level of production, technology and quality. Therefore, a detached store in an uncrowded place will never be attractive to investors. Secondly, the payback period for investments should be no more than 2.5 years for trade enterprises, no more than 3 years for the service sector, no more than 5 years for the manufacturing sector and no more than 2 years for innovative business activities. Thirdly, the investment object must be highly liquid. In other words, it should be possible to sell the entire enterprise, quickly and without problems. And fourthly, the business should have the widest possible opportunities for development.
Enterprises in decline, as well as enterprises operating in limited markets with very limited opportunities for development, will always be unattractive for investment.
Based on the foregoing, each entrepreneur can assess the degree of investment attractiveness of his business on his own. And if it is high - to work out ideas, prepare an investment project, look for and convince investors. And if it is low, try to increase it.
