The tyranny of one page report, analysis or recommendation.

Every generation needs a revolution - an entrepreneurial revolution

When this post was taking up MBA, he often encountered the tyranny of one page analysis//recommendation.  You do this after reading a 50 - 100 pages of case.  Its rather challenging:

     1.  You do not have much time to read well, much less comprehend the case;

     2.  You really have to dig deep into your brain to come up with a brilliant insight

     3.  You are trained to simplify your thinking, if not clarifying the issues.

     4.  You are trained to look at both the forest and the trees;

     5.  You are trained to "BLINK"   (reference to book by Malcolm Gladwell)

As you manage the business, you look up to your subordinates to be able to do this task.  Oftentimes, they clutter their thinking by coming up with more problems, and complicating issues.  

What rigorous training we had with our MBA

Financial analysis - likened to evaluation of suitor by a lady

Every generation needs a revolution - an entrepreneurial revolution

This post is reminded of the comparison made by a finance professor of financial analysis with a lady being wooed by many suitors.  The lady has to ask this question:

      1.  Does he have plenty of money (checking liquidity)

      2.  Is he stable (DE)

      3.  Does he have plenty of assets?

      4.  Is he indebted?

The professor I understand now heads an insurance company which sponsors many champion cyclists.

Using OPM to expand business

Every generation needs a revolution - an entrepreneurial revolution

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