💡 “Back-to-Back Investments”: There is no such thing as a free lunch.

Some business opportunities look attractive at first glance.

No upfront investment.
Cash inflows match cash outflows and it seems like a free lunch – but is it?

Recently, we reviewed a proposal where a company would earn revenue from an asset that it doesn’t even own — the asset is leased, and the rental income is supposed to cover the lease expense. On paper, it sounds like a “zero-cost, zero-risk” setup.

But here’s the truth:

👉 It still uses your credit.
Even if you don’t pay upfront, the company must use its credit capacity to sign the lease. That credit could have been used for projects with much better returns.

👉 The return may be very low.
Once we break down the numbers, many of these “back-to-back” arrangements barely generate any real return. Sometimes the net benefit is so small that the opportunity cost isn’t worth it.

👉 Time is also an investment.
Even if cash outflow is technically zero, you still spend time analyzing, monitoring, and operating the arrangement. A low-yield project can take attention away from better opportunities.

The takeaway:

📌 Not all “no-investment” projects are actually good investments.
They still use your credit, your time, and your opportunity cost.

Before jumping into any deal that “pays for itself,” always run the numbers — and look beyond the surface.

#ORNA #BusinessValuation #BacktoBack #Investment