The Elements to Finding and Capitalizing on Opportunities

Companies, investors, and businesses are constantly looking to find new opportunities, or locate new possibilities for growth, profit, or expansion. The way a company decides to locate or search for new opportunities depends on the type of resources they have available to them, the type of processes or systems they decide to use, and the connections or relationships they’ve been able to build. Locating pockets of growth, markets poised to expand, or companies primed to rise, is a process that can take on many different shapes and sizes. There are lots of ways for investors, companies, and businesses to find new opportunities, and areas to invest in.

Here are a few of the elements that go into finding and locating new opportunities…

The Research

When a company, a business, or an investor is exploring a new industry or a new market, there is often a level of information or knowledge they need to learn or obtain before they can start to really explore a company, or really understand what’s going on. Within each industry, and each company, there are a variety of different forces weighing on its performance, affecting its growth, and impacting the future direction or the future path it’s going to take. Uncovering that information or researching for that information can be within a company’s quarterly earnings documents, within the news or reporting within a market, a certain market report, or within the earnings call or guidance from its senior-level management. The research element to an investment or a new opportunity is an important stage of finding a new opportunity because it’s where you uncover the knowledge or information about the current situation. You’re able to uncover why a certain company might need capital, why someone is choosing to sell a business or the driving factors behind a company or industry’s growth. Having good, and strong research can prove to be very valuable during the discovery of new investments and potential opportunities.

The Numbers

The numbers behind an investment, market, or opportunity can provide valuable insight and information as to how a company is performing, the state of their market, and the type of future you can expect. Through the numbers, you can determine if a company is growing, an industry is expanding, or if their market share is shrinking. You’re able to see how the company is performing, the types of the year over year growth, and understand its position within the marketplace. Understanding the way, a company is performing, the type of profits it’s generating, or the type of growth it’s experiencing are factors that influence the earnings potential and capability a company or investment has. The numbers behind a market can signal potential growth, or future expansion. Each company has an array of different numbers or metrics that display the way they performing, whether they’re beating or missing expectations, and the type of future forecast you can expect. Picking up on the numbers behind a company can display the type of factors that are affecting a company, the type of movements or changes in its performance, and the type of landscape it’s trying to navigate. The numbers behind any investment can be a valuable resource in understanding the current performance a company is experiencing, and the way its market is operating.

The Angle or Strategy

When choosing or selecting an investment or opportunity to pursue, there is often an angle associated with it. Whether it might be a certain market expanding over the coming months, the demand for a certain product to increase as more people become aware of it, or a new market a company plans to enter into, there is often a certain angle or idea behind an investment. The type of angle you believe in, or feel confident in, depends on the type of future you foresee. It’s a forward-looking prediction of the way the future might play out, with one company gaining more market share, increasing their revenue, or the expansion of a market.

The strategy behind a certain investment is a bit different in the angle from our perspective. With one being more focused on the market changes, movements, and directions, and the strategy primarily focused on the term of the investment, and the motivation behind each investment. Certain investments or opportunities may be longer-term ones, where you believe in a company, or industry to perform well over time. Or some will be shorter-term in nature, where you believe a company or investment will perform well in the coming months. The type of strategy you decide to utilize depends on the type of investment agenda you have, whether you’re trying to move in and out of investments, or you’re looking to create a portfolio for the longer term. Some people prefer to invest for the long term, giving a company time to develop and perform, while others are trying to invest more shorter-term in nature, trying to take advantage of market movements and changes. The type of strategy you decide to utilize depends on the type of investor you are, the type of agenda or objectives you have for a portfolio, and the type of future or outlook you believe in. There are lots of angles to take on investments, and the strategies you decide to utilize can vary with each investment, change by the day, and shift as news or events play out as well.

The Risk

One of the topics and areas we wanted to discuss before wrapping up this article is risk. Each opportunity or investment comes with a level or amount of risk. Whether an opportunity will prove to be lucrative or produce the results you’re looking for, depends on the type of factors at hand, the types of decisions a company or management team makes, and any events within the market. There is always the possibility that investment performs poorly or produces below expectations. Companies may not be able to execute on the vision or the plan they once believed to be true, or market forces might play against them. Or there isn’t as big of a market they expected there to be. There are lots of reasons why certain opportunities may not turn out the way you once believed they would, which is why it’s important to factor in the amount of risk or the level of risk with each opportunity. Whether the project or investment goes through some turmoil due to market factors, the production or development may slow or be held up for a reason, or the company isn’t able to deliver and compete against competitors as well as they believed, there are lots of risks that may be involved with an investment, and it’s important to consider them when you’re evaluating and looking for new opportunities as well.

Conclusion

Each opportunity comes with a variety of different factors, and elements that are important to consider. In the beginning, when you’re trying to uncover or learn more information about the investment opportunity, researching and digging for information is important to educate yourself about the opportunity, and to provide a basic baseline for what to expect. The numbers behind an opportunity, whether it be a certain market, a certain investment, or a certain company, provide valuable insight and information into the way the company is performing, the type of growth it’s experiencing, and a framework of the type of situation they’re in. A lot of what business analysts do is to try to better understand or grasp the way a company or investment is performing, whether it’s beating expectations or missing expectations. The type of angle you take on investment or opportunity plays hand in hand with the type of future you believe to be true, or the type of outlook you have on the investment or opportunity. The strategy you decide to utilize provides the framework for the investment you’re making, and the type of philosophy you’re looking to use. Each opportunity comes with a certain level of risk that things may not go as planned, or the results might not turn out the way you expected. It’s important to keep the downside in mind and weigh the factors affecting both the risk and reward of an opportunity. All in all, there are lots of elements and factors to each opportunity and the way each opportunity plays itself out.