I have ventured into many investments areas and portfolio. Most of which failed before it can even return any serious ROI. To which, I would lose some and at worst (where mostly worst), 100% of the investment.
I sit with people who at first excited about what they have thought of. They explain and present beautiful ideas (beautiful is from their perspective), although some of it is something I do not encourage (e.g. F&B), but their eagerness and persistence normally led me into thinking "Ah... what the heck, why not?". Now, it's not that I do not think F&B will not work, but not from a perspective of an Investor. Let me explain further.
A Food truck, Cafe, Restaurant ....
1. There's just too many of it.
2. Too competitive.
3. Unique concept will not last unless you keep innovating. And Innovation don't last. Someone will copy and beat ahead of you.
"BUT, If you're planning to feed yourself. Then yes."1. Food trucks can easily score 100 sells a day.
2. Fusion concepts with 5-10 bucks per meal can do 500 a day (15k a month sales)
3. 40% goes to your Cost-of-goods-sold. 10% goes to assistance salary and maybe another 10% to MICS & maintenance. Now, this is considered efficient and optimized to which your waste-management is top-notch. Those in start-ups normally failed to leverage this and their end-day income are usually 30% or less.
4. Roughly, at 15k sales. You're still able to walk away with 4-6k a month and this is self sustainable. To an individual? Yes. From an investment standpoint? No.
5. Lets not dwell much on why it's not invest-able as the risk factors are too dynamic and the single-point-of-failure can wreck the entire business down. (Single point of failure? ... Well, if the guys runs it decide to take a break or give-up, investment is screwed).
Drop Ship? Well, the market is dynamic now with online retailers are popping everywhere. Something unique today is too competitive in a month and will be obsolete in 6 months.
Investors needs something not just around the ROI, but something that they can see running even after 2-3 years in business. We need something solid. Youngsters nowadays failed to look beyond that point that is why when they just jump into a portfolio, most of them failed. They do not know how to manage their accounts, risk, diversification, use the best tools, find the best options, sit down and really dig into the business concepts and thoroughly simulate it. Their lack of patience and critical to comments, makes them a risk to the eyes of investors. The moment someone challenge their concepts, run against it, comments on it.... they get hot headed, blocking you out completely rather trying to explain and face the challenge.
Many nowadays failed when it comes to that. Challenge them, and they will give up trying to convince you. These are not the kind that investors look. We want our money to go to someone that could really stand their ground, convince and push forward. How the heck do you convince the public and keep things running when it gets hard when you can't even convince the investor?
What investors need.1. We need something that's not just break-even
2. Something that could last
3. Driven by someone that is serious and would persevere.
4. Even if the business model is similar, existing concepts, but they know how to make it work. Convince. Show data. This is where they lack.
5. We don't need someone that give up answering before it even start. (E.g. How do I know? We haven't done it yet.... kinda mentality)
Many business fail because they lack "Sustainability". And when the word sustainability comes ... all they can think of is "More Capital". From my experience, most of the youngster I've meet are just too pampered (manja). They want something. Hoping to get it done fast. Hoping to make it big fast. Hoping to get rich fast. Hoping to live the easy life fast.
(to be continued.....)