2 Key Investing Lessons from an Enterprising Businesswoman

Learning about businesses can teach us great lessons about investing. After all, when we invest Foolishly, we are buying businesses and not meaningless stock tickers.

Studying businesses

Every now and then, an interesting business article catches my eye.

One such article is a recent piece from the Me and My Money section of the Sunday Times. It talked about entrepreneur Azrina Tahar who founded Sufyaa, a clothing label for Muslim women.

Ms Azrina had built her business from the ground up, starting on Facebook before moving to a pushcart in Century Mall. The fashion label went on to open in Tanjong Katong Complex last year and has managed to achieve a million dollars in turnover.

There are a couple of business lessons from the piece which I feel are worth pointing out.

A unique collection of skills

“The former draughtsman of 12 years [Ms Azrina] had worked at the Housing Board, which sent her for Mandarin lessons, and then Surbana International Consultants. Now she employs the language to communicate with her manufacturer in China.”

– snippet from Me and My Money article

Ms Arzina managed to use her knowledge of Mandarin to her advantage. This has proved useful for her when communicating with Chinese manufacturers – who knows, the ease of communication may very well have resulted in lower production costs for her company.

In essence, she was able to bring together a fashion label for Muslim women clothing and lower manufacturing costs to create a compelling business proposition. This is done through her unique set of skills.

As we evaluate a business, we may want to determine how a business differentiates itself from its competition.

Take ComfortDelgro Corporation Ltd (SGX: C52) for instance. With the largest fleet of taxis in Singapore, Comfortdelgro may be able to hold its ground against new competition from the likes of Grabtaxi and Uber. ComfortDelgro has been one of the better performing components of the Straits Times Index (SGX: ^STI) over the past five years, having nearly doubled in price.

Knowing your battleground

“I’m in an old shopping centre, but this is where my niche market is. All my competitors are here, but this is the place where customers come. I studied my market and the backend operations.”

– snippet from Me and My Money article

Ms Azrina has setup her shop in an older mall, which does not sound exciting at first glance. However, she has a good reason for it. She feels that this allows her business to operate in its niche.

A similar scenario can be seen at Riverstone Holdings Ltd (SGX: AP4). The rubber glove provider tries hard to avoid commodity-like markets and operates mainly in niche markets where it can have the upper hand. Just like ComfortDelgro, Riverstone Holdings has been a solid out-performer in the stock market over the past few years.

Foolish summary

We can learn about investing from many different sources. If we are buying businesses and not tickers, we may benefit by learning from businesses that have succeeded. On finding potential investing opportunities, businesses that have unique attributes or businesses dominating a niche may be a good place to start digging into.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.