You may be able to expand your company by acquiring a related business in another geographic area or a business which supplies products to your company.  The first is called horizontal expansion and the latter is called vertical expansion by the pundits "in the know." .If you want to buy another business and yet find that you don't have sufficient cash, consider an LBO.  

 Headlines in the media to the contrary, most leveraged buyouts or LBO's are not the megabuck deals led by the financial wizards. It's only from the abuses of a few high profile deal makers that the term LBO took on a bad connotation in the early 1990's.  In fact for many years prior to the widespread use of the term LBO, entrepreneurs regularly used leverage (debt) to purchase privately-held businesses.  

 Most of this leverage was obtained from banks and finance companies by pledging the assets of the company being acquired as collateral.  It may be expensive borrowing, but the savvy entrepreneur can reasonably expect to borrow up to 80% of the real estate value, plus 75% of the equipment value, plus 80% of current receivables, and 50% of the inventory value.  With a small equity investment, seller financing and LBO financing, many companies grew to be rather large ones using an acquisition strategy with LBO financing.  

 Soon after the LBO scandals of the early 1990's, about the most one could borrow from these sources is 50% of the purchase price regardless of the value of the underlying assets or the cash flow of the target business.  Accordingly, many entrepreneurs gave up on using a leveraged  acquisition strategy to grow their company.  But, things are much better now.  Bank regulators seem to have eased up and asset-based lenders are again competing for business.  SBA guaranteed loans are also back in vogue for smaller size deals..  

 Perhaps the brightest light is the increasing number of organized investment firms who are now aggressively looking for LBO opportunities.  Although it varies from firm to firm, they typically look to provide a combination of debt and equity to support capable entrepreneurs with an acquisition strategy that includes several acquisitions.  Although these are not the financial wizards involved in the high profile deals, they are typically solid financial people who depend upon the entrepreneur and his management team to run the businesses in which they invest.  

 Since many of the decision makers in these firms came out of either the venture capital community or investment banking, the first step in making contact is to prepare a business plan which describes your existing business, industry, management team, strategy, and a few potential acquisition targets.  Then seek introductions to the decision makers in the investment firms to present your management and your plan.  

 If you have a prospective "first deal" in mind it should be presented in the plan.  Without a deal to say yes or no to, the investment firm can only give you comfort or a turndown as to whether or not they might want to invest with you.  But in some cases this is preferable to negotiating an acquisition and then scrambling around trying to raise the financing required to close.  This seed planting and cultivation process may seem time consuming and costly, but without it you may not have anything to harvest.