Valuation of the Potential of Small and Medium-Sized Businesses for Investment Purposes

Abstract

The current economy makes it relevant to invest not only in organized securities markets but also ‘directly’ in small and medium-sized businesses, as they represent quite promising objects of capital investment, and are highly likely to secure large incomes provided that certain "postulates" of investment activity are taken into account. The postulates are initially based on fundamental analysis of many factors of both the external and internal environment of the company; these factors, undoubtedly, affect both the current bottom line of the organization's activities and the prospects for further prosperity of the business entity. However, to determine these factors, in the sense of the basic "vector of movement" of the company, certain aspects of study of the organization as a business should be taken into consideration, potentially ensuring that a prospective investor can obtain considerable profits. In this regard, the article investigates the main aspects of operation of small and medium-sized businesses in the economic sphere, as well as the risks accompanying these operations. In addition, some factors having a significant impact on economic actors, both at macro and micro levels, are analyzed, which must be taken into account not only when carrying out the initial processes of "picking" investment objects, but also while owning a certain asset, in order to systematically check whether certain assets still possess investment relevance.