Anybody considering a potential business investment will be told that the balance lies in a company’s quantitative analysis results, which basically attempts to measure its value mathematically by comparing balance sheets and financial ratios. What many financiers don’t seem to be aware of is that this method can also reveal the superiority of an investment. Recently, financial players have come to realise that a business’ ability to thrive often mirror the instincts of nature’s deadliest creatures. The logical question being – would you choose to invest in the long-term survival of a shark or a butterfly?
3 Traits of an Aggressive Business Investment
- Cosume to live, or live to consume: Sharks tend to kill when the opportunity presents itself, which tends to be advantageous to them over the long run. When making a business investment decision, it is important to choose a company that aggressively pursues growth and profit-making over one that operates in survival mode. Just like Jaws zones in on unsuspecting swimmers, a business should be targeting fresh areas of profit on an ongoing basis.
- Competitive offspring: To carry on with the shark analogy, did you know that certain species of this fierce predator have been known to reproduce by means of ‘uterine cannibalism’? Basically, when the female shark gives birth, its offspring will need to fight to the death to determine which baby shark will have the privilege of being born. The winning shark is deemed tough enough to survive on its own without the help of its mother. In terms of ideal business investment opportunities, you want to find a company that can mimic the principles of ‘uterine cannibalism.’ This comes down to their ability to foster projects that have passed stringent internal tests, by looking beyond viability towards a slower creative process that focuses on thoroughness.
- Save up fat for a cold winter: Sharks eat whenever and wherever they can. Bears do the same in preparation for hibernation. A company that depends on one product heavily for profitability, and has no cash reserves is far more likely to die off in hard time than businesses like Microsoft and General Electric that, like the bear, have cultivated multiple successful product areas and keep a generous cash flow on-hand just in case. These are the types of values you should look for in a new business investment.
When analysing the pros and cons of a potential business investment, it is important to look at every angle of a company’s corporate practices. If you can stand back and say that their behaviours and survival tactics resemble that of a shark’s or a bear’s, their odds of ending up at the top of the financial food chain are worth taking a chance on – more so than the business that resembles a butterfly.