How to Invest in Emerging Markets: Full Guide For 2021

Emerging Market

Talking about emerging markets, they are new business opportunities surfacing in developing countries like Africa. The question now is: How do you invest in the emerging markets? This is the question that this article is on a mission to provide a clear and direct answer to.

Are you aware of the fact that plethora numbers of investors all the way from Europe, America, and Asia are all plying their way towards the Africa countries? Do you by chance know what an emerging market means? Do you need tips on how to successfully invest in emerging markets? Whatever your problem is as regards the emerging markets, take a breath, sip your coffee, cross your leg, and read on.

Particularly, one of the few existing ways a business owner can position himself and his business for an increase in sales and recurring profit is to take time and invest wisely in the emerging markets.

Even, some of these investors advance their business sojourn beyond the border of Africa to parts of South America, all in a bid to position their prospective businesses for the future profiting. The bottom line here is that the benefits that come with emerging markets can never be overemphasized and as such, it is indeed a lucrative business venture for wise investors.

Also, since emerging markets entails business opportunities that are ready for exploration in developing countries which African continent is no doubt the major destination for the seasoned investors who are seeking to invest greatly into the emerging markets, why don’t you join the moving train by planting a seed in the emerging markets, too?

In addition, while there exist emerging markets in countries beyond the African continent; countries like China and Brazil are also considered to be part of the emerging markets this is so because of the incessant growth in their economy. Hence, as an entrepreneur who is on the verge of making profits, investing in emerging markets is definitely the real deal.

Without mincing words and further delay, below are sure tips to guide you on how to successfully invest in emerging markets

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  1. Conduct Feasibility Studies

While it is an established fact that before capitalizing on any form of business as an entrepreneur, the way and manner in which such business is being run and operate should be determined first. And the only way this can be determined is through the market survey or feasibility study. So if you really want to invest in the emerging markets the first thing you are expected to do is to carry out the feasibility studies of the prospective country, place, and the markets you are going to invest in.

Hence, as a prospective investor seeking to invest largely in the emerging markets and ready to conduct market feasibility studies, I endeavor to form a team of professionals who are willing and ready to work together with other consultants in various emerging countries that caught your attention.

However, be informed that working together with various professional business consultants during the market survey or feasibility studies in each of the host countries should never be an option, but rather, it should be a must if you really want to maximize enough profits on the investments.

This is so because these countries are alien to you, you will hardly know much about the emerging businesses and it will be difficult for you to know the custom of the markets. But with the help and guidance of professional business consultants, the task will be easier and you will always be at the right place at the right time.

  1. Write Your Business Plan

Also, the importance of a business plan before investing or kick-starting any form of business in the entrepreneurial world can never be jest with. In fact, a business plan is to business what blood is to human beings. It is very important if the business is to succeed in any future problems or if it is to solve any unexpected challenges.

So, having made up your mind on which country to invest in and the moment you are done with the market survey and feasibility studies of the emerging markets in the country you have chosen to invest in, the next cause of action for you to invest wisely in the emerging markets is to write an efficient and well-detailed business plan.

The most important things your business plan needs to cover are the issue of fundraising, the desired country to explore, the industry to invest in, the probable challenges you might face, how you will handle the unforeseen circumstances, your goals, mission and vision of the business among others.

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In addition, your emerging markets business plan should also house the various strategies possible to mitigate any forms of business risks involve or that can be involved in the emerging market. Plus, the business plan should be able to devise the means which you are going to use in generating all the needed investment capital.

In line with the above, it is advisable you engage the service of an expert or professional business consultants in writing the business plan for it to be well detailed and effective, remember, you are planning on investing in another country where you know little or nothing about their business and market customs. So if your business plan is to pass the reality check of the country or countries you intend to investing in, let an expert draft it on your behalf.

Most importantly, be conscious of the fact that a particular business model that works perfectly in Brazil will likely suffer in African countries. It will take only a professional business consultant who is an expert in the field to know which one is okay and which one will work perfectly in Africa. That is why it is not encouraging for you to draft your business plan yourself or without extensive research on the perfect business model.

  1. Generate Your Capital

Do you have the necessary investments capital on you? If no, how do you plan to get the needed capital to invest in the emerging markets? Do you plan to source it from a friend or family member? Well, generating business capital to pursue your mission in the emerging markets is an important task.

Since investing in emerging markets requires intensive capital and you can’t generate the needed fund, you would have to pitch business investors or people of like minds so as to raise enough capital for your proposed business. Without a substantial amount of money, investing in emerging markets can never be real, so it is up to you!

Plus, it is very crucial you know that apart from the money you will be needed to obtain all the necessary documents and business licenses from the government of the host country, you will have to bring in expatriates and this requires money, too. That is to say, paying the expatriates for their services may be quite expensive and it depends on which country you are going to invest in.

In addition, you don’t expect the money you will be paying for the tax to be of the same amount as that of your own country, most countries tax the foreign investors higher than the indigenous investors and as such, it is very pertinent that you raise more than enough capital investment if you truly want to invest successfully in the emerging markets.

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  1. Conduct Risks Analysis

It comes without saying that every new startup is basically the pool of risk. Research shows that only 5% of new investments successfully pass through the hurdles and tussles of business failure. And as amazing as investing in emerging markets may seem, it is also open to risk, most especially, if the market did not go as expected.

So in other to be at the safer side, another important thing to do while investing in emerging markets is to embark on risk analysis. This can be best done by scheming out all the possible challenges that may show up along the line and at the same time provide them with the possible or available solutions.

The bitter truth is that the potential risks involve in investing in an emerging market is so high and this is because of the changes in the political power of most country’s economic policies. Hence, it usually affects foreign investors in one way or the other. So consider the market volatility of the emerging businesses before investing in it.

While as an investor in emerging markets, your chance to make an enormous profit and huge turn over upon your investments in the host country(s) within a short period of time is very high, but still, chances are that you may be losing a larger part of your capital investment because of the great risk involved within that same period of time, too, if you fail to properly analyze your chances of surviving the hurdles before investing.

Moreover, findings show that the emerging market’s growth rate is not even; that is to say, the political risk is somehow greater since small changes in political status may slide the economic policy which might turn odd against or to the advantage of the foreign investors – it is just unpredictable.

In essence, there is no doubt about to volatility of the emerging markets, I bet you will agree with me. So among things that you are expected to do if you actually want to invest successfully in emerging businesses is to carry out a well and thorough risk analysis prior to injecting your money into the market. Invest wisely into the emerging markets and don’t be tempted by the enormous profits you are going to rake home, there is a heavy tendency that your fingers might get burnt – and it hurts, a lot!

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  1. Choose a Country and the market to Capitalize on.

Now, you are close to investing successfully in the emerging markets having conducted a well-deserved and thorough feasibility studies/market survey and having taken care of the market risk analysis. Then, up next that you are required to do in your sojourn in investing in emerging markets is to choose a particular country and a specific industry you will be pitching your investment scheme.

Take, for instance, if you decided to invest in one of the African countries, let say the Benin Republic, investing in the oil and gas sector wouldn’t be a bad idea. And you may as well want to consider the telecommunication or power sector in Nigeria, too, and trust me, it might turn out to be a jackpot for you.

More often than not, foreign investors see Africa’s economic landscape – most especially that of Nigeria – as manure and they like injecting money in markets like the oil and gas sector, the telecommunications industry, the energy/power sector and some other core industries like that.

So if you will like to invest in the emerging markets in Nigeria, your chances of making a lot of profit are very high because of its population, and the chain of leadership in the country has also proven to be stable over the years. At least, it has a favorable economic policy that is advantageous to foreign investors.

CONCLUSION

By and large, investing in the emerging markets is never a task meant for small or wannabe investors and as such, if you are planning on invest in the emerging markets as a first-timer, it is advisable that before you cross your country’s border in search of greener pastures in emerging markets, try to firstly exhibit your investment skills and knowledge in your own country.

If you are passionate about investing in emerging markets, you should be able to take the risk. Your ability to take risk will definitely take you to the promised land. Don’t forget that you have an equal chance to successfully turning over your investment capital within few months in the emerging market and at the same time losing a great chunk of it because of the risks involved. Please, invest wisely!

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