Most businesses expand, or operate business doing the OPM - others people money, Not their own money. They call this leveraging What are the methods/or application of this method?:
1. Bank loans;
2. IPO - partial sale of equity
3. Suppliers credit
4. Down payment
5. Accelerated payment from customers (offering discounts for cash payment)
So instead of making it appear that the company needs the money, the perception is changed by saying:
1. Bond sale
2 IPO
What they mean really is they are taking your money, in exchange for higher interest or dividends to finance their growth.
Expanding the business and obtaining finance thereto is not a black art or rocket science
It really needs boldness and courage to go on leverage. And have uncanny sense of the future that your product or service will sell, and that you can sustain the cash flow to repay the loan, pay the interest, or in the case of equity, to pay back dividends and or the principal (in case this is a private placement - not listed at the bourse)
Thus a smart businessman does not have to fork out all his savings to finance his business expansion. He leverages! He uses other people's money. Capital here means CAPITO. Using ones head to obtain more funds for the business.
Thus its a poor excuse that one can not start business because one lacks capital. There are many ways by which start up can take off. It takes imagination, hard work and persistence
