Business Today

Treat Your Investment as a Loan

     Print Edition: Sep 16, 2012

The best advice I got was from a fellow entrepreneur who said that one should treat investment in a company as if it were a loan from the company treasury. For BankBazaar, this meant that if we got an investment of Rs X crore in our company and invested it in a product line, then we had to be clear that we had to generate at least Rs X crore plus interest from the project, which returned eventually to the bank account.

The advice meant that one must take care to spend money only after creating a plan to make the money grow. Very often, people tend to get carried away forgetting the fact that investment is an obligation that must be accounted for and repaid in some form.

Try and ensure there is money trickling in at a certain percentage when compared to the funds spent from the investment. The returns coming in need not be huge in the initial stages, but should definitely have the potential to be incremental with time and well worth the invested funds. It is important to keep the focus on this aspect right from the start.

Otherwise, it can be all too easy to lose track of both funds and time without a methodical approach or plan in place.

 WORDS OF WISDOM: Personal accounts by 50 of India's corporate leaders
 Schauna ChauhanDhruv Shringi
 Deep Kalra
Sachin Bansal

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