You’re about to learn about one of the most creative ways to raise funds for your business.
It’s called “OPM”.
And many of the world’s most successful companies love to use it.
Coca-Cola uses it.
ExxonMobil uses it.
And many other multinationals love to use OPM.
“OPM” means Other People’s Money.
While many entrepreneurs and small business owners struggle with funding and use their personal funds to grow the business, most big companies have mastered the art of using other people’s money to grow and expand their businesses.
And if they can do it, nothing stops you from doing it too.
In this article, you’re going to learn 6 common but creative ways to raise funds for your business by using OPM.
1) Customers (Upfront payments)
I have a client who runs a business in the solar energy space. He specialises in designing and installing solar solutions for residential homes and office spaces.
For most people in this industry, it’s a capital-intensive business. You will need funds to purchase and store inventory like solar panels, inverters, batteries, etc.
But guess what: my client owns minimal stock and doesn’t need to “tie down” funds in inventory.
Instead, he uses his customers’ money to fund the business.
Once an order is made, some clients pay 50%, 70%, or even 100% of the cost of the project upfront.
The upside of this funding strategy is that his business doesn’t have to buy stock and materials in advance, unless there is a real client who has already paid money.
Also, there is a risk that stock can be damaged or become outdated if it’s stored for long periods (especially if it’s a technology-based product).
This strategy would work well if you already have credibility with your customers, or if you run a business that provides customised products, or if it’s a service-based business like training, consulting, contracting, etc.
In my book, Jackpot, I explain several creative ways you can use other people’s money to run your business.
2) Suppliers (Accounts Payable)
This is one of the most creative ways to raise funds for a business by using OPM.
When I was in the oil industry, I noticed something really strange.
I worked for a contractor at the time that provided services to large oil multinationals like Chevron, Shell, and ExxonMobil.
Despite all the money these big companies have, they all had one thing in common:
They don’t pay their suppliers immediately.
Usually, it takes between 30 to 60 days (or more) before a supplier is paid for products or services they already delivered to these multinationals.
And this is all perfectly legal. In accounting, it’s called “Accounts Payable”.
It’s not just multinationals that do this. Almost every big company in the world doesn’t pay its suppliers immediately.
I also have small clients like retailers who run supermarket chains and use the same strategy.
In fact, most suppliers in the B2B (business-to-business) space are already used to this behaviour, and know they will not be paid immediately.
Interestingly, delaying payments can be good for the supplier’s business because they can make more sales when they sell on credit.
In the Funding Masterclass, you will learn several other creative ways you can use other people’s money to run and grow your business.
3) Banks (Business Loans)
Do you know how banks make money and why they’re so profitable?
Banks make money by taking funds from savers and depositors, and giving out those funds to people and businesses (borrowers) who pay the bank interest to use that money
In fact, banks are masters of using other people’s money to make money.
And if you understand the game, you can use this strategy to fund the growth and expansion of your business.
If you know how to access and use business loans, you will absolutely love them. And I have several clients who run their businesses exclusively on business loans.
But business loans can hurt your business if you don’t know how to use them.
In our Funding Masterclass, you will learn more about business loans, how to access them, what to look out for so you don’t get burned, and several other important tips.
4) Government (Grants and low-interest loans)
Every government wants to stay popular and win the next election.
But to do that, they need to create enough jobs, generate enough revenues, and grow the economy in a way that makes the people happy and want to vote for them again.
That’s why across the world, governments provide billions of dollars in business grants, low-interest business loans, waivers, rebates, and all sorts of direct and indirect financial assistance to entrepreneurs and business owners.
All that money is just sitting right there. It’s other people’s money you can use to grow your business.
Sometimes, the problem is many business owners don’t know how to access or maximise the use of government-sponsored funding opportunities.
In our Funding Masterclass, you will learn more about business grants and low-interest loans, how to access them, what to look out for so you don’t get burned, and several other important tips.
5) Investors (Equity, debt, and hybrids)
Every investor is looking for an opportunity to make money. That’s why they invest their personal funds and the funds contributed by their clients.
And this is exactly how investment models like angel investing, venture capital, private equity, private placements, and initial public offerings (IPOs) work.
If investors don’t give out (invest) their money, they won’t make more money.
That’s why investment funds constitute one of the biggest opportunities for funding for entrepreneurs and business owners to use other people’s money to support their business.
According to this PwC report, the total value of investments (assets under management) grew from US$84.9 trillion in 2016 to US$111.2 trillion by 2020, and is expected to grow to US$145.4 trillion by 2025.
But investors don’t just invest money in any business. There is a process.
You need to understand how investors think, what they’re looking for before they invest in a business, and how to make sure you’re getting a good deal so you don’t accept ‘bad’ money.
That’s why we created the ‘Africa Hot 100 Catalog’ of pre-vetted investor information that contains the names, profiles and contact information of 100 investment organisations that invest millions of dollars every year in businesses and projects across Africa.
You will also learn our Roadmap process for fundraising that has helped our clients raise over $5 million from a wide range of investor sources.
6) Philanthropy and Foundations (Grants and zero-interest loans)
There are hundreds of organisations around the world that are looking for social-impact businesses and projects to invest in.
These organisations are funded by foreign governments, international development groups, non-profits (NGOs), wealthy individuals and families, etc.
For example, the Bill and Melinda Gates Foundation and the Novo Nordisk Foundation are the biggest private foundations in the world with over $100 billion in assets.
And guess what: most of the funds you can get are grants that don’t have to be paid.
In total, over billions of $$$$ in funding are available annually for entrepreneurs, businesses, and projects that work in industries or fields of interest.
Inside the ‘Africa Hot 100 Catalog’, you will find pre-vetted information on over 24 public and private philanthropic organisations that give away millions of dollars in grants and zero-interest loans in Africa.
Raise Up to $1 Million for Your Business
Are you looking to raise between $10,000 and $1 million (or more) for your business, project or non-profit?
Have you been trying to raise money on your own without much success?
We can help you overcome this problem, so you can finally raise enough money to start, grow, or turn around that business.
Since 2015, members and alumni of our program have used creative strategies to raise over $5 million in grants, equity, and debt funding for different types of businesses and projects.
Are you ready to learn and apply the strategies we’re going to show you?
Get FREE access to our exclusive program and join other entrepreneurs who have successfully raised between $10,000 and $1 million for their businesses and projects.
See you inside. 🕥