To invest or not to invest

 

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Photo by Fabian Blank on Unsplash

 

One of my connections on LinkedIn raised a suggestion that rather than converting a disused factory into a worship centre, it would be more ‘strategic’ for the Gospel and helpful to people for Christian entrepreneurs to acquire the production facility, commit resources to it and keep it afloat. Below is a dissenting opinion on that idea.


The decision to invest in a line of business or revive a dying enterprise is an economic one. This is not to say that such decision has no bearing on the welfare of people. Far from it. Every profitable business venture that is launched or expanded benefits people – real, flesh-and-blood humans. This arises from the benefit conferred by the product or service itself, the salaries or wages that are paid to employees, as well as the ancillary opportunities that the presence of the business makes possible. For instance, think of the stationery suppliers, mechanics, facility management companies, etc., who get to have an additional customer or get to sell more to the same customer. And we should not forget that even the government benefits from the extra tax revenue.

With this said, it is important to remember that every investor or aspiring business owner would (or should) ask essential questions about a proposed business idea. These include the following:

    1. Is my product needed in the particular market I intend to serve?
    2. Do I or those who will work with me have the competence or expertise to adequately provide the value claimed?
    3. Will current market conditions allow me to break even and earn a profit?
    4. What is the projected cash flow from the venture?

These and many more questions would need to be answered before resources should be committed to a business. And in the case of an existing factory or production outfit, an investor, if he is prudent, would need to verify the same. The parable of the talents in Luke 19:11-27 illustrate that stewardship of financial resources is important to God.

Recently, the selected participants under the Tony Elumelu Entrepreneurship Programme (TEEP) for 2018 were announced. This is a yearly initiative of the Tony Elumelu Foundation to mentor and assist budding entrepreneurs from Africa. Of the 150,000 applicants, only 1,250 made the cut. Why? Available funds are limited, so only the most viable business ideas can be accommodated. Some ideas are poorly thought out, some are unrealistic, while some might simply be unhelpful in solving real problems in Africa.

The same is true of every business idea, establishment or operation. It might have been spurred by the intention to do good to society or with the certainty that the operation, like every business, will benefit real people through salaries, sale opportunities, etc. However, for the initiative to remain operable as a business, it needs to meet the above criteria. Otherwise, the idea, while good, fails to thrive in the marketplace.

It is not enough to start a business or revive a dying one as a Gospel initiative or mission strategy. It takes more than charity, or a Gospel-driven desire to help people, to commit resources to a new business idea or resuscitate a dying business. We must ask vital economic and financial questions. While the Christian worldview affirms the legitimacy of business, it still requires that financial resources be wisely invested.

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