I have been reading the book The Power of Broke by Daymond John and it is a great book; especially for entrepreneurs who are very financially conscious of not having a lot of money. There are a lot of people out there that use the acronym OPM and say that it stands for "other peoples money." There's a lot of talk around making investments using OPM in order to limit your own financial risks. The thought being that when you make your money, you can just pay off the money that you borrowed and keep up the strategy that you were using. It makes sense to me. Especially when you think of the old adage "it takes money to make money."
For instance, if you invest $500 into something and you make 10% returns, that would be less than you would make back if you invested $5,000 or $50,000 in the same strategy and made back a 10% return. Yes, you could work your way up over time to investing $50,000 from a $500 starting point, but it would take way more time to do that. If you're not willing to invest in yourself, why would someone else (an investor, a bank, etc) be willing to invest in you?
One of the things I learned from Daymond John is that OPM doesn't have to stand for "other peoples money." So, let's break this down further.
Alternative definitions of OPM:
Other Peoples Manufacturing.
You can create a home office or even a home workshop to put together your product by hand or you can find a small (at first) manufacturer to make your prototype or product look more professional. More uniform in it's quality. You don't have to break the bank for something like this. What if you found a few people that live near you, that you could pay for their assistance with manufacturing your product? You could manage their work and be freed up to focus on your strengths.
Other Peoples Man-power.
Let's say you have $1,000 set aside for an advertising budget. You have some different options on how to spend this money. You can go buy a bunch of marketing materials and do the advertising yourself; spending your time doing things that you are unsure of. Alternatively, you could hire a person or small team to spearhead your advertising after you give them input on what you are looking to do. This second method frees up your time to do whatever you are best at.
Other Peoples Mind-power.
Whether you're brainstorming ideas with entrepreneurial peers or getting feedback from customers to improve your product or process. Maybe you're beta testing your product with a limited number of customers before doing a full-scale launch to the masses. Either way, you don't have to rely solely on your own mind-power when working through problems, coming up with creative ideas or features, etc. You never know when someone else will make a comment that will ignite your thought process and creativity so take full advantage of the minds of others.
Other Peoples Mistakes.
The ability to learn from other peoples mistakes is absolutely invaluable. Some people are very open when telling you what they did, what went right, what went wrong, mistakes to avoid. However, not everyone is like that. If you have a mentor who has done what you are trying to do, then that's excellent. Ask them probing questions to get to the core of what you really want (and need) to know. If you don't have anyone directly to ask, there is no shortage of books by various experts; you just have to find the right books. Alternatively, don't rule out getting advice from a peer group who has been where you are. A lot of times they can even be more helpful than someone older because it's likely their experiences are more recent and they might be able to give you more up-to-date information on navigating difficult terrain.
All of these translations of the common acronym OPM can further your progress to a successful entrepreneurial venture. So, be sure to remember this simple lesson whenever you think of OPM and the alternative meanings that it could stand for.