So many people ask this question, that I have no clue what to say without being impolite!
Many people ask me ‘My brother (wife, sister, father, uncle, in law,….) wants to do some new business and wants me to invest Rs. 20L in that business (20% of your liquid networth) ….what should I do?
or the more simple one ‘should i leave my job and start a business?’.
Frankly this is not a Business Question. This is a psychological Question.
Are you disciplined enough to be in office EVERY DAY at 9am and leave at 7pm like an employee does?
Do you realize that the top 5 DEMANDING customers is like having 5 bosses?
Do you have enough cash in the savings account (or liquid fund) to meet the next 5 years expenses – if things were to go wrong?
Will your spouse support you through this? what about other immediate family?
Now come to supporting your brother (wife……etc.) while they do business:
apart from the top 4 questions that YOU need to ask them, look for answers for the following questions:
1. does he/she have a track record of doing something disciplined? – academic, sports or professional.
2. Assuming that not a rupee comes back how will it impact your relationship with the others?
3. Will a full loss change your life style?
4. Will a full loss wipe you out completely?
5. Do you have any business analysing skills?
6. If the business does really well, what upside are you expecting? Interest payment or equity participation?
7. At the gut does this person inspire you to invest?
8. If he/she was not related to you would you consider investing?
9. If the person asking for money is an in-law, is your spouse enthsiastic about this investing (for you) about doing business (for the businessman)
10. Would you put all this down in writing – AND WHY NOT?
– ASK these questions to start with…later on there will be more….
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