Investment Selection Criteria for an Entrepreneur



Abstract

The main purpose of this research paper is to determine the factors that an entrepreneur should kept in his mind while selecting the particular investment. Also this research paper is highlights the options available to an entrepreneur for the investment. This paper accentuates on the core know how of the factors that entrepreneur should encounter before selecting the particular investment.

Investment Selection Criteria for an Entrepreneur

Introduction

Entrepreneurs are known to be major contributors in the growth of economy, development, and Prosperity. They are responsible for technological innovation in products and production processes, international trade and driving economic transformation. Entrepreneurs are those people who establish new forms of organizations new types of business strategies, who take the appropriate investment decisions. An entrepreneur basically plays the central role in the economy growth because as they are known as the prime movers and the makers of the firms. Entrepreneurs are also the fundamental to economic equilibrium because they are the people who set the economy in motion. Firms are basically responsible for all the activities related to the economy that comes outside government activities like pricing, innovating, contracting, resources, employing, labor, raising financial capitals, marketing foods and services and organizing production. According to some economists the entrepreneur is the person who is willing to bear the risk of a new venture if the significant chances of earning profits are present in its investment. While some economists say that an entrepreneur is a person who develops or introduces new goods or processes that markets demands. In economic equilibrium, allocation of goods, including prices, and all the structure of transactions, depends upon the actions and decisions of entrepreneurs. In this assignment, I will try to discuss the procedures that entrepreneurs must follow while making investment decisions (Amit, 1990)

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What is an Investment?

The asset that is purchased with the hope that it will generate extra income or give profit in the future is known as investment. In economic term, we can define investment as; it is the purchase of good or items that are not purchased for consuming today but that are used to create wealth that gives profit in the future. In finance term investment can be defined as the monetary asset that is purchased with the idea that it will provide income or profit in the future or can be appreciated or can be sold at a higher price. While keeping this concept of investment in mind entrepreneur usually invests in a particular project. The basic aim for which an entrepreneur invests in a particular venture is; to earn profit. In investment analysis, the most important task is; to collect the appropriate data, but if one does not have the appropriate data than the evaluation and analysis would obviously be misleading. The procedures evaluating or selecting an appropriate is given below. Why to Invest?

Before discussing that how entrepreneur should choose an investment it is necessary that one should be familiar with the fact that why we make ...