Low Risk Alternative Investment Options for Small Businesses

This study explores low risk alternative investment options available for small businesses to maximize profits and sustain survival goals. The study focuses on art and gold coin investments as feasible options for small businesses. The researcher adopts a positivism philosophy and inductive approach to collect and analyze data from secondary sources. The study aims to find out the various low risk investment alternatives available to small businesses, assess their contributions to profit maximization objectives, and determine the most appropriate investment alternative strategy for small businesses.

LOW RISK ALTERNATIVE INVESTMENT OPTIONS AVAILBALE FOR BUSINESSES 1
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LOW RISK ALTERNATIVE INVESTMENT OPTIONS AVAILBALE FOR BUSINESSES 2
CHAPTER ONE
Introduction
This chapter covers the background, rationale, problem statement, aims and objectives,
research questions as well as purpose of the study.
Background of the study
Small businesses are generally defined as entities that employ a maximum of 50 individuals
to execute its day to day operations so as to achieve the set desirable goals. Majority of the
small businesses are formed from partnerships and mainly owned privately by sole
proprietors (Martyn & Peter 2010). These kind of business tend to dominate the business
execution of various economies across the globe since they are easy to set up, require less
start up capital and be easily operated by semi skilled and skilled individuals (Obudho 2013).
Web designing, small scale manufacturers, law firms, restaurants, saloons and convenience
stores are some of the small business ventures across the globe (Arnaud 2013 p.16). Most
significantly, small scale businesses often expand when the economy of a given nation
expands due to the fact that economic growth creates a huge number of investment
opportunities (Schwartz 2010). Small businesses always have an objective of achieving
highest possible returns from their undertaking as a way that enhances their survival in a
highly competitive business atmosphere. In the due course, they will always strive to
minimize the costs of production and operation by utilizing sources that offer cheaper factor
inputs so as to achieve the above objective (Erica 2016 p.15).
Additionally, investment acts as the backbone for achieving survival and
competitiveness goals of small scale businesses in a dynamic business atmosphere that is
mainly driven by rivalry for clients and market share. As such, entities that are strategic in
their investment decisions tend to flourish in their undertakings because they are able to

LOW RISK ALTERNATIVE INVESTMENT OPTIONS AVAILBALE FOR BUSINESSES 3
identify and utilize low risk investment options. Low risk investment options provide cheaper
options to which small scale business can devote their financial resources to expand their
undertakings and revenues (Healeas & Watson 2010 P.543). The above objective is attainable
because low risk investment options offer high prospects for small scale businesses to realize
desirable returns on investment as measured by the profits. Moreover, attained profits can
either be ploughed back into the business by creating more operation units or be used to
finance research activities for improving production processes (Randall 2016). Most
importantly, financial resources in form of money are pivotal tools that are used by entities to
facilitate their efforts to identifying and utilizing low risk investment options (Wardle &
Watts 2011 p.497). More so, financial resources specifically play a role of compensating
strategic planners, advisers or even labourers for their efforts offered during identification
and utilization of low risk investment options. Compensation may be in form of salaries,
wages, allowances and rewards that help to ensure that innovativeness is exhibited whilst
selecting low risk investment options (Dennis & Alexander 2016).
Alternative investments can be described as investments which are not related to
traditional investment options such as stock markets or bonds (Lewis 2009). They take an
alternative route of investing in commodities such as gold coins, stamps, art, wine, real estate.
There are umpteen alternatives that a business can invest in so as to meet the set business
goals and objectives over a specified period of time (Jay 2018). Most importantly, investors
must be willing to retain their investments for considerable time periods to reap maximum
benefit on their investments.
However, small scale businesses are always faced with a problem of insufficient
financial resources to facilitate their investments. As such, scarcity is a factor that limits small
scale businesses to undertake risky investments that would otherwise offer significantly high
returns (Mencimer 2014). In spite of shortages in financial resources, small scale businesses

LOW RISK ALTERNATIVE INVESTMENT OPTIONS AVAILBALE FOR BUSINESSES 4
basically rely on effective decision making and strategic planning as a way of achieving their
set business goals and objectives (Yeoman 2009). As a result, entities who management and
leadership structure does not exercise effective decision making and strategic planning may
not be able to identify and utilize low risk investment options. Moreover, low risk investment
options may involve shifts in business lines so as to fully utilize opportunities that enhance
their efforts to achieve desirable business outcomes (Clark 2012). Poor decision making
practices regarding investment is an element that increase financial loss risks which could
prove to be extensively detrimental to the liquidity of small scale entities (Kelly 2010 P.35).
Therefore, investing prudently and exploiting benefits from available resources is crucial,
particularly for small scale businesses.
Rationale for this study
The study will explore a number of investment alternatives that are available to small scale
businesses basing on the fact that they always aim to maximize their profits both in the short
run and long run. Management of these small entities often utilize their technical knowhow to
collaboratively or individually identify low risk investment options basing on the market
conditions. In spite of financial constraints, majority of small scale businesses have been able
to survive for longer periods of time in highly competitive business atmosphere. Such a factor
arouse the interest of the researcher to investigate how these entities have been able to utilize
their scarce resources to boost their survival with main focus on low risk investment options.
Therefore, the study will help to create an understanding on how small scale businesses have
identified and utilized investment options to sustain their survival goals through use of scarce
financial resources.
Problem Statement

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Small scale businesses have been able to identify and utilize cost minimizing approaches
such as cheaper factor inputs to meet their profit maximization objectives over significantly
long period of time. Such a factor has not only enhanced their survival, but also
competitiveness in the highly competitive business environment. However, shortages in
resources have always acted as a detrimental factor for majority of small scale entities in their
efforts to achieve desirable short and long term goals. As a result, small scale businesses have
been able to survive because they have been able to use their scarce available resources to
maximize their profits over a period of time. Evidentially, effective decision making and
strategic planning have been the most feasible approaches by business owners to identify low
risk investment options to enhance their profit maximization objectives.
Aims and Objectives
i. To find out the various low risk investment alternatives that are available to small
scale businesses
ii. To assess the contributions of low risk investment alternatives on the profit
maximization objectives of small scale businesses
iii. To find out the most appropriate investment alternative strategy for small scale
business given the choice of investing in gold coin or art.
Research Questions
i. What are the various low risk investment alternatives that are available to small scale
businesses?
ii. What are the contributions of low risk investment alternatives on the profit
maximization objectives of small scale businesses?
iii. What is the most appropriate investment alternative strategy for small scale business
given the choice of investing in gold coin or art?

LOW RISK ALTERNATIVE INVESTMENT OPTIONS AVAILBALE FOR BUSINESSES 6
Purpose of the study
The study will widen the knowledge about a number of low risk investment options to
small scale business and how these ventures can be used to fulfil profit maximization
objectives of these entities. Also, the study could act as a reference point for future
studies in the field of investments as a tool that facilitates long term survival and
competitiveness of small scale businesses.

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CHAPTER TWO
LITERATURE REVIEW
Introduction
This section of the study provides a review of literature on the low risk alternative investment
options that are available for small businesses as present by a multiple of scholars, authors
and researchers.
Low risk alternative investment options that are available for small businesses
a) Art Investment
Art is one of the common alternative investment options for small businesses given that their
returns on investment heavily depend on devotion of an investor to identify traits the raise
value of his products and services over time. Such objectives are only attainable when right
decisions are made by small scale investors basing on their limited and scarce resources
(Blog.maecenas.co 2019). As such, returns on art investments cannot be fluked by rather can
be achieved when investors opt to utilize their artistic knowledge to make investment
decisions. Most significantly, investors should have the capacity to learn the trade basing on
the market trends plus other forces relating to political, social and technological atmosphere
(Gokhan & Peter 2016 p.131). Just like the saying “making money is art and working is art
and good business is the best art,” art investment is an approach that can promote
diversification of small businesses. The above is attributed to the fact that art investment does
not necessarily depend on performance of an entity to succeed but rather relies on market
forces of demand and supply (Christophe 2016 p.49). Art value has the capability of

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increasing over a period of time which signifies its feasibility as an alternative investment
option that is available to small businesses
Although art investment is a feasible alternative, the pristine maintenance and secure
storage of the art is important as a condition of the artwork is an umpteen factor to assess its
selling price which may result into additional cost for investors (Joan 2009 p.209). Besides
the cost, investors who are interested in pursuing art investments must have considerable
knowledge and expertise regarding its value over time. Unlike, gold coins, the physical value
of art piece may have little market value which may not yield desirable returns to the investor
(Higgs & Worthington 2010 p.115). Most significantly, value of an art piece is dependent on
its interpretation within the realm of personal and socially defined symbolic values. Also,
other factors such as external market value of an art piece also plays a role in influencing
decisions of investors as far as devotion of financial resources is concerned (Chisti 2011
p.81).
b) Gold Coin Investment
Throughout modern era, governments have backed their currency with Gold commonly
termed as Gold standard which serves a role of controlling inflations within economies. Gold
is also inversely proportional to the fluctuations in the dollar and so it is the best inflation
hedge. There are many different forms of gold coins that yield significant returns can be
generated particularly during times of recession (Low & Faff 2015 p.9). Also, Gold and stock
market have a positive correlation which makes it a viable investment option for small
businesses (Prior 2013). More so, gold and silver tend to outperform all other assets in
periods of high inflation and low economic growth due to their lack of economic sensitivity
(Danny 2009). For example, an investor purchases a gold bullion coin at a premium of up to
10% than the content value of gold during high inflation and low economic growth times

LOW RISK ALTERNATIVE INVESTMENT OPTIONS AVAILBALE FOR BUSINESSES 9
(Gerzog 2012). They usually weigh an ounce and the value of these coins can be easily
determined. The pristine condition of the coin must be preserved so as to avoid reductions to
its value (Phillip 2018). Gold price acts a base price as some may sell five to ten times the
price of gold. Investors should buy the coins from reputable dealers (Will 2012). More so, the
value of a coin is determined basing on its value of metallic components, silver gold or alloy
content and its aesthetic appeal which reflect its current market valuation (William & Luc
2011 p.224).
Gold coins do not provide taxable profit until they are sold. In such a case, these coins
do not incur any management fees when an investor retains them. More so, coins attract a
lucrative market on an international scale due to the fact that investments can be moved
overseas without restrictions and the portfolio can be liquidated at the will of investors.
Furthermore, gold is considered to be an ultimate stable investment as it does not depreciate
and has an inverse relation with stocks. When stocks fall, gold value rises. Although Gold
coins do not generate interest returns, they are protected against inflation which makes them
to be considered as a feasible investment option.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
This section of the proposal describes the research philosophy, research design, data
collection and ethical considerations that were prioritized by the researcher.
Research Philosophy

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The researcher will adopt a positivism philosophy so as to describe approaches that were used
to collect, analyze and interpret data on the problem under study. The above philosophy will
be selected by the researcher because it makes it possible to formulate descriptions about the
reality in an objective manner without disrupting the problem under study. Data for the study
will be gathered through utilization of secondary sources so as to deliver meaningful
interpretations regarding the problem under study. Most significantly, collection of data from
secondary sources will be essential in availing the study with significantly huge volumes of
data in the shortest possible time. The above merit can be attributed to the fact that secondary
sources are readily available and can easily be accessible which will fasten data collection
processes. Descriptive statistics will be utilized to quantitatively analyze collected data so as
to facilitate inferences, interpretations as well as reliable conclusions. On the other hand,
textual analysis will be employed by the researched to qualitatively analyze the collected data
so as to deliver meaningful and reliable interpretations and conclusions. Basing on the data
analyses, interpretations and conclusions, the researcher will be able to make
recommendations regarding low risk alternative investment options that are available to small
business. Most importantly, a positivism philosophy was preferred to other philosophies like
interpretivism and realism by the researcher because it offers objective judgments and
conclusions about the problem under study.
Research Design
The researcher will inductively conduct this explanatory research study. Growth investing
focuses on investment in companies with long term growth plans, while the latter focuses on
investing in companies which are undervalued in comparison to their profits and cash flows.
Some investors employ other strategies such as momentum and contrarian investing. The
former being investors purchasing whatever is of high value and selling the low value assets
and the latter involves investors buying during downturn and selling when markets pick up.

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The above explanation is a justification by the researcher to adopt an inductive approach at
the expense of deductive approach. On the other hand, an exploratory approach was also
selected for the study because it was fit to fulfil the stated aims and objectives of the study.
The aim to investigate and clarify alternative methods of investment was attributed to the fact
that small businesses are gaining more popularity across the world due to their significant
contributions to the economy. As such, the researcher will focus on insights about low risk
alternative investment options so as to derive reliable explanations on findings about small
businesses investment portfolios. More so, the researcher will adoptive a creative strategy to
fulfil the objective of finding out the alternative investment opportunities that present a safer
and profitable option for investors who wish to diversify their portfolio. Creative strategy will
help the researcher to comprehensively find out information regarding investment strategies
of small businesses that enable them to achieve profit maximization objectives. Through
creative strategy that researcher will be able to will define the objectives, timeframes,
proposed outcomes and tolerance of potential risks by investors. Majority of investment
strategies that are deployed by investors are focused on growth and value that are used as
measure standards for return on investment. As a result, the researcher will utilize all
secondary sources that offer information about small scale investors since they are the main
subjects of interest for this study. Furthermore, the researcher will make use of both
qualitative and quantitative design. These will be employed to identify and classify the traits
of alternative investments in art and gold coins. Qualitative techniques will be used to collect,
analyse and summarise actions taken by organisations. Analytical research will also be
adopted to explain why or how alternative investments are occurring. An important aspect of
the analytical investigation will be to identify the variables to the research, such as
knowledge an investor relating to alternative investment options.
Data collection

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Nature of data
The study will utilize secondary sources such as internet, textbooks, journals, newsletters and
magazines to collect all the necessary data for the study with a goal of achieving the study
objectives. As a result, only secondary data will be used for this study as opposed to primary
data. Secondary data will be preferred by the researcher because it is easily accessible unlike
primary data that could involve a lot of travelling costs and yet it may not be easily
accessible. Therefore, secondary data was prioritized by the researcher as a time saving
technique to ensure that the study is completed as planned.
Negotiation approaches to access study data from institution or individuals
The researcher will prioritize conformity to all legal regulations whilst collecting data for the
study. Such approaches will help to ensure that the study does not violate any interests of the
society as a whole. In addition, the researcher will not engage in plagiarism or copying
research that was made by other scholars as an approach for respecting intellectual property
rights. Given that the study will use secondary sources for data collection, the researcher will
be cautious patent and copy rights to ensure that data is accessed with prior knowledge of the
authors. Therefore, the researcher will fully deliver his acknowledge to all internet sources
that may need conformity to use of say cookies policy so as to gain permission to collect the
data for the study.
Sampling strategy
No sampling strategy shall be used by the researcher due to the fact that the study is
explanatory and will make use of secondary sources for data collection purposes. In this
regard, there will be no need for the researcher to select any sample for the study.
Data Analysis

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Collected data will be quantitatively and qualitatively analyzed by the researcher so as to
deliver meaningful interpretations and conclusions about the study. Quantitative analysis will
basically involve use of descriptive statistics such as mean, median, mode, standard deviation
among others to formulate wide understandings about the study. Most significantly, outputs
in form of tables and charts will be used by the researcher to quantitatively analyze collected
data. The above outputs are easy to interpret implying that quantitative analysis will ensure
that collected data is reliably analyzed and interpreted by the researcher. Also, information
that will be displayed by the above visuals will be aided by compilation of statistical
information over the past decade. The above technique will help to find out the best return on
investment, inflation rates and other information relating to alternative investments. On the
other hand, qualitative analysis approach will be utilized by the researcher to create a wide
understanding about the study from the collected data. The above kind of analysis will
basically be applied on textual data that may not necessarily contain figures as opposed to
quantitative data. As a result, the researcher will use a textual analysis technique to
qualitatively analyze the data so as to deliver meaningful and reliable interpretations and
conclusions
Ethical Considerations
The research will comply with ACCA’s code of Ethics and Data protection Act 1998 so as to
avoid violation of the generally acceptable practices for conducting research studies. Given
that the study will be focused on use of secondary sources, the researcher will be cautious and
respect any kind of ethical considerations and code of practices. More so, secondary sources
are good for exercising ethical practices as it reduces the use of sensitive data that would be
collected directly from respondents in primary research. Therefore, the following ethical
considerations will be made before starting data collection for this study that will make use of
secondary sources. Firstly, consent of the study subject will be reasonably presumed by the

LOW RISK ALTERNATIVE INVESTMENT OPTIONS AVAILBALE FOR BUSINESSES 14
researcher particularly regarding access to information on internet sources regarding small
businesses. Also, objectivity will exhibited in form avoiding bias during data interpretation,
analysis and making the research design. The above approach will ensure that data
management and processing procedures are effectively handled without affecting interests of
any third parties. In addition, carefulness will be exhibited through critical reviewing of the
collected data due to the fact that the study will make use of secondary data. Furthermore, the
researcher will ensure that use of the data does not result in any damage or distress by
critically analyzing and presenting the data about the study. In addition, all the study
information and data will be carefully referenced to avoid any intentional plagiarism of the
work done by other authors or experts. In case original participants are to be used to gather
the secondary data from various secondary sources, then they will not be re-identifiable in
any way by the outcome of re-analysis and violation of confidentiality. Also, data collected
will be securely stored and will remain the property of the researcher and will not be shared
in any way. If any further foreseeable ethical issues arise, they will be resolved with
reasonable judgment.

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