Question
I was just offered a potentially lucrative business proposition wherein I am required to invest about $250,000 per transaction with between 2% to 4% ROI. The business proposer will manage all operational duties.
If I was to go ahead, how should the business be structured?
What are the steps I can take to protect my investment?
How should any potential net income be shared if the proposer does not invest a single penny?
What are the pitfalls of such an arrangement?
Any other suggestions and advice would be highly appreciated.
Answer
Below steps should give you clarity:
1. Conduct due diligence - only after having this report, you know what to plan next.
2. If the business is genuine, then develop strategies to:
a) secure your investment by implementing an Internal Control system, legal document, and business structure.
b) cash flows strategies to set payment in a secure manner.
c) implement a risk management system and contingency plans.
d) an exit strategy
Good luck
