Saturday, February 28, 2009

Trading – Capital Investments and Family Borrowings

Previously, this blog mentioned Pooled Capital which is major in developing our 15 sundry shops on January 2005 to more than 800 shops today. Besides Pooled Capital, my family applies two other methodologies in order to acquire capital: (1) Capital Investments and (2) Family Borrowings. One thing for sure, we will never allow anyone to go to the banks for business loans. This is traditionally a no-no and we intend to keep it that way.

Capital Investments is a method where an individual with enough money is encouraged to run business. I am included in this category. I invest but having other people to manage the shops. In some cases, a shop is set up through partnerships. In some cases too, individuals who have the money are forced to have own shops. Usually, these are highly educated people with money who hesitate to run own businesses. Ironically, they are in the corporate sectors holding high positions. They can talk marketing, human capital development or corporate management and all but in reality, they have no guts running own businesses. So we have no choice but to force them to do what they are preaching. Of course they hire people to manage their shops while they keep being the corporate guys.

Family Borrowings is a method applied by individuals with not much money but ambitious enough to run own businesses. Usually they are young, inexperience and not from the ‘rich enough families’. What we do is to gather enough family members who are willing to give the loans collectively. The trick is when you give loans for someone to run own shop, you will be respected for life and keep the clan intact as one.

I think for the first year, all shops are established through these methodologies - pooled capital, capital investments and family borrowings. However, the growth turned parabolic in year 2006 through two other trading methodologies hopefully to be mentioned in future entries.


Elitism Exposed: Part 1 – Ancient Civilizations ... Ancient Egypt

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