There are many different industries in the U.S. and global economy, but they all have one central operational component in common. They are all generally in the money business. All businesses need financing to establish their brand, and they continually need cash flow to maintain their existence. Indeed, money is the most powerful when it is moving. This can include many aspects of any business, ranging from investment in physical capital to investing in external markets and products that can also help the company’s growth potential. Annual maintenance of any company requires effective and efficient management of all finances, as money is without a doubt the true backbone of the business. The financial statement of any operation will commonly indicate optimum usage of financial capital, including companies that begin with a significant level of borrowed cash. But, the long-term stability and growth of any company can often be best accomplished by building a portfolio of investments outside of the face of the business and industry niche. Given that all successful businesses need a plan for growth, usually set within any given five-year period, here are a few things for managers to consider in long-term company financial viability.
Low Debt
All companies and businesses are built on assets and liabilities. This is also actually true for individuals who have an investment portfolio they use as a personal business. The strongest financial structure for any company or portfolio holders small or large is the debt-to-asset ratio. Having a credit line can be essential to starting or building any operation, but being overly leveraged creates many problems. Compartmentalizing financial inputs and asset holding positions can be a very effective method of capital management, and the number of brick-and-mortar retail businesses filing for Chapter 11 protection is a prime example of this failure to diversify positively. Borrowing operational capital is an important option for any business, but keeping the debt level low is always best. Allocating generated capital from input cash flow is always best when it can be redirected, including investing in certain promising emerging markets.
Emerging Market Investment
The daily stock market roller coaster is an example of how bad investments can end a company quickly, or at least result in some creative financial maneuvers. However, there are some emerging markets that are showing real long-term growth potential and are set to only go upward in the near future. The most promising example of this emerging market strategy is the hemp and cannabis industry. Industrial hemp could be the most lucrative new market in the long run, but the cannabis industry is actually exploding right now as the remainder of states is moving to legalize medical marijuana as well as making the product outright legal. What the new investor needs in any developing market is accurate information, and the Internet is clearly the place to find the details. There are several websites that can help explain how to get started for those new to investing, including how to open a personal brokerage account, but the best cannabis stocks are often found in digital publications that delve into the specifics of why certain cannabis investments are better than others. And it is not vital to have a large sum of investment capital, as many cannabis options can be found in the penny stock market as well, which is often not as subjective to volatility as in upper-level markets.
Getting Started
Individuals or businesses that already have an established personal brokerage account are already ahead of the game in the emerging market investment process. The trick is always knowing when to get into the market and realizing when the trend will be moving downward. However, certain new industries are still truly on the ground floor with nowhere to go but up. Cannabis investments are once again a prime contemporary investing example, although it should not necessarily be a limitation. Watching the ascension of cannabis stock values can be an excellent educational tool for understanding how to invest in other “can’t miss” niches that will be driven by certain market impacts in the very near future. All of the established investment options in today’s market are over-valued to some degree, but the ground floor of emergence is where the real growth begins.
Everyone should remember that this is not a new strategy, as many companies have used external investments as a method of growing their business even though the operational focus is in another particular physical industry. Money generates money while you build your brand in your operational niche. Using your input capital wisely is a proven method of growing a company, and there is no time like the present with certain obvious investment opportunities available for even the small investor. The emerging cannabis and hemp industry is a leading example of how to recognize when to get in on the “next best thing” in emerging markets, which in turn can contribute mightily to the backbone of your business and company growth.
