IF EVER THERE WAS a concept you absolutely have to understand in order to succeed in business, it is the power of leverage. In fact, I would see less than one in 20 – or one in 30 – business owners who actually do grasp it, and even less who use it well.
So, why learn this? In truth, before I understood this I worked 16-hour days, traveled too much and, for two years running spent more than 200 nights a year in hotels… for work that is, not pleasure. Now, I work maybe two or three hours a day, have four months a year on vacation and run a company with almost 1000 offices in 39 countries…
The concept of leverage is all about achieving ever more with ever less. It’s about getting your people to achieve more with less effort, getting your advertising to return more sales with fewer dollars. It’s about getting better results with less and less effort, time after time.
So, how do you do it? Well, first you need to think in terms of the formula for leverage: divide to multiply. It is truly important to grasp this view of business thinking.
Think about divide to multiply in terms of day-to-day life, say, a tree cutting. You take a cutting from one plant, but don’t end up with half a tree, you end up with two trees. In terms of business, franchising is the easiest way to describe divide to multiply, but there are hundreds more ways to apply it.
Leverage is your key to business success, and my definition of this is… Do the work once and get paid forever.
And the exact opposite of that is: Do the work once and get paid once. I aim every day to do work that will pay me forever, or at the very least, for several years to come. Here’s an example: I have written 14 books, I write the book once and I get paid on it for the rest of my life. So, here are the five areas of business you want to use leverage, everyday…
• Leverage through people – Train your people once and have them work for you long-term. Too many business owners try to save a dollar by doing it themselves.
• Leverage through systems – If the only person who knows the system for doing a task in your business is you, then you have to do it. Write it down, photograph it, record it, make a video of how to do it and then, you have a basic system so anyone can do it. Systems are key to leverage in business. Save Yourself Time Energy and Money is what SYSTEM stands for…
• Leverage through marketing – An advertisement or a write-up in a magazine about you and your company is achieving far more with far less. Imagine if you had to see every one of those people one at a time? With marketing you need to understand how to test and measure, but put simply, you can reach far more new customers far more profitably than doing it one at a time. And, once you’ve found a marketing strategy that works, you can just keep running it forever…
• Leverage through finance – This is one area where people usually successfully leverage. You use other people’s money to gain leverage in your purchases. If you can use other people’s money, why use your own? An example about investments makes this so easy to understand. You buy an investment property, you leverage other people’s money, but more importantly, you only have to work once when buying it, it then pays you for the rest of time with both rental income and capital growth.
• Leverage through customers – This is the one I really want you to focus on for a moment. Do the work once (get a customer once) and get paid forever (keep them as your client for life). If your business is set up right you will keep customers coming back again and again. Profit in business is built on past customers. As you build a company, new customers are essential (just ask any company where revenues have remained stable about how their profits keep declining), but it’s the repeat business that builds in profit. It’s like filling a bathtub – no use putting in more and more water if you don’t plug the holes. Leverage is crucial to your long-term wealth in business and life. Whenever you as the owner do a task, ask yourself, “Am I being paid once for this task, or forever?”
Use leverage… see, I only wrote this article once, and tens of thousands of people have read it just like you.