It’s a simple truth that those who surround themselves with the best people achieve the greatest success. You’ve heard the saying ‘two heads are better than one’? Well, many heads are many times better.
You yourself can’t possibly know and do everything that’s required to make your business a success. In terms of knowledge, you have to tap into other people’s expertise; in terms of actions and getting things done, you need to employ the right systems and processes.
The coaching clients I work with come to me because they want to learn how to move their business forward and make it more successful. Many feel they’re stuck in a rut: their business is ticking over, perhaps slowly growing but at the same pace, year after year.
Is that you? Are you happy with linear growth or would you prefer exponential growth, where your business expands increasingly quickly and you see greater and greater leaps in your profits? Of course you would!
In that case, you need to harness and utilise the power of leverage.
What is leverage?
‘Leverage’ is a general term for using something to maximum advantage in order to multiply gains. It’s a term you most commonly hear in the context of financial investment – borrowing and using other people’s money to generate profit for your business and returns for yourself. But that’s only one definition and leverage is SO much more than just borrowed money.
Although most business people understand the basic concept, the vast majority don’t really grasp the extent to which properly-employed leverage could accelerate their business success and therefore they fail to use it properly. As a result, their business growth is stunted – it may even be in decline.
Without the power of leverage, your rewards and achievements are limited by the amount of work or energy you yourself put into a task. And no matter how much you’re able to achieve, you’re going to have to keep putting in that same amount of time and expending that same amount of energy if you want to maintain those results.
But if you can learn to identify and control the concept of leverage to maximum effect, you’ll be astounded at the positive impact it has on your success. Leverage enables you to control a lot with just a little and to effect more change, much more rapidly. The more leverage you have, the faster your journey to achieving your goals will be.
In this article, I’m going to highlight the different ways in which you can utilise leverage in so many different parts of your business – and your wider life – to get much more done, with the same amount of your own time and effort, than would otherwise be possible.
“Give me a lever long enough and a place to stand, and I can move the Earth.” – Archimedes
This is the most fundamental, literal definition of leverage: using a lever and pivot to move an object. It’s been used practically for millennia, particularly in construction, because it’s a simple principle of physics that it’s much easier to move something heavy if you use a leaver to transfer and redistribute some of the weight. Applying that principle to business, you can use people, systems and technology as levers to move your object – your success goal – forward. And the more levers you employ effectively, the quicker and more easily you’ll reach your goal.
“Leverage is the reason some people become rich and others do not become rich.” – Robert Kiyosaki
Leverage equals scalability
To build and grow a business, it must be scalable. If your product or service relies entirely on your own personal expertise, time and effort, your success is limited by how much of those things you’re able to give. And, with the best will in the world, that’s unsustainable over time – you’ll burn yourself out for a relatively mediocre return.
But if you can use other people’s time and skills and put in place systems and processes to deliver the product or service without you having to work in the business yourself on a daily basis, you’ve cracked it. You can devote your time and energy to working on the business, developing new strategies, client relations, etc. and take time away from it to enjoy your family, travel, sports and hobbies. Utilised properly, leverage can deliver the balance that every entrepreneur strives to achieve.
To illustrate the concept, here’s a simple example of how a lawn-mowing business could be scaled up:
- You mow lawns for a living, charging £50 per lawn.
- At an average of 5 lawns a day, that’s a gross income of £250 a day, before expenses.
- This work that you do relies on you using 100% of your own efforts to make a living.
- Your maximum earning potential is £50 x the maximum number of lawns you could mow yourself in a day.
This linear income stream, where you trade your own time and effort for an income, is what most people do. So, if you don’t want to be ‘most people’, you’ve got to approach business differently. Now imagine:
- Your business still charges customers £50 per lawn.
- Rather than doing the mowing yourself, you spend your time marketing and finding customers.
- You employ contractors with their own equipment to do the mowing and pay them £40 per lawn, giving you a profit of £10 per lawn.
- If you grow your business so that it employs 20 contractors, each mowing 5 lawns a day (100 lawns), you’re now earning a gross income of £1,000 a day.
- Your maximum earning potential is now only limited by the number of lawns and available contractors in your area.
Using the power of leverage, you have increased your income to an extent that would have been impossible if you’d stuck with the linear approach – and you no longer have the expense of running and maintaining equipment.
I have leveraged the time and talents of other people for many years now, to grow my businesses. I know that my property investment portfolio, for example, would be less than 20% of the size it is today if I hadn’t used the power of leverage as its engine of growth. With the help of other people – letting agents, maintenance contractors, etc. – I am able to manage five times more properties than if I were trying to do everything myself. Yes, I’ve worked hard, but I couldn’t have achieved this level of success without using other people’s time, energy and expertise. Leverage has enabled me to build a much bigger and more profitable property business than would have otherwise been possible.
Leverage is reach, scale and impact at speed
That’s my own, personal definition of leverage and what I tell my clients. Leverage allows you to extend your business further and grow it bigger, much more quickly than you ever could without it.
There are five key levers of success:
1. Time leverage
Each of us only has 24 hours in a day, and if you’re getting a good 8 hours of sleep a night, plus an hour of daily exercise, that only leaves 15 hours in which to work on your business, while making sure you eat well, spend time with your friends and family and take a break. In short, there’s a very limited amount of time in which to get a lot done!
So, if you find yourself constantly wishing there were more hours in the working day, take a deep breath and recognise two things:
- You’re not alone, and/but
- You need to make a conscious change to the way you’re running your business.
Other People’s Time is one of the most precious resources in my business toolkit and it’s undoubtedly the best thing you can leverage in order to grow your own business. By delegating and outsourcing jobs, responsibility and tasks to the right people, you can increase productivity and profits exponentially.
Let’s be clear, leveraging other people doesn’t mean ‘using’ them; it means empowering them to take on tasks that suit their capabilities, leaving you free to focus on those tasks where you can add the most value to your business.
For example, in running a property portfolio, two important jobs are accurate bookkeeping and ensuring tenants are properly checked in. These are both jobs I could do myself, but a qualified bookkeeper and experienced property manager can do them more quickly and effectively, while my time is better spent looking for and negotiating new investments and mentoring clients. Instead of one person trying to do everything, with potentially average results, you have three people all playing to their strengths. Yes, there is obviously a cost implication but if everyone is doing their job properly, the business should see quick growth that not only covers the additional costs but generates greatly increased profits.
2. Connection leverage
You’ve probably heard the saying, ‘Your network equals your net worth’ and it’s true that making and maintaining the right connections is hugely important to your success.
- Enable you to jump ahead on the learning curve. If you’re networking with people who have already done what you’re trying to do, you can learn first-hand from them and avoid many costly mistakes.
- Let you know about opportunities before they become public knowledge.
- Provide introductions to the right people. For example, if you’re trying to set up a meeting with a target client, having a connection make a referral could save you hours of research and fruitless telephone calls.
- Share valuable information. You can’t be everywhere at once, but people in your circle can pass on knowledge, insights and recommendations they’ve gleaned from conferences, books and other events, etc.
- Save you money. For example, in networking with people in the property field, I’ve gained information and had advice on tax, legal and marketing matters that would have cost me thousands in professional consultations over the years.
- Be a source of further leverage. If you need to outsource or are looking to hire new people to help with your business, chances are someone in your network can either make a recommendation or even provide the service themselves.
- Offer direct business opportunities. Every now and then you’ll meet someone who’s looking for a service or venture that you can provide yourself, you’ll gel with them and the result will be a profitable business relationship.
Let’s be clear: I’m not suggesting for a minute that you ‘cosy up’ to someone simply in order to get something from them. If you take that approach, rather than attracting people, you’ll repel them; those worth knowing can sniff out insincerity and manipulation in seconds.
You need to have the opposite attitude and come from a place of generosity yourself. Invest in your network and look at how you can help other people: what opportunities can you offer, what information and expertise can you share? Give first and trust that you’ll receive later, because you tend to get back what you put out there.
“The successful networkers I know, the ones receiving tons of referrals and feeling truly happy about themselves, continually put the other person’s needs ahead of their own.” – Bob Burg
So, think about your current network of friends, acquaintances and professional contacts because each of them will in turn have friends, acquaintances and professional contacts that could have a positive impact on you and your business. It won’t happen overnight, but start asking questions and sharing ideas and information and you’ll be surprised at how quickly the valuable connections will begin to stack up.
3. Ideas, knowledge and experience leverage
The experience and knowledge of others is an essential resource. It’s a waste of your time and completely unnecessary – not to mention virtually impossible – to try to learn everything required to run your business. Why would you press on, through trial and error, when you can simply learn from other people’s mistakes and take advantage of their hard-earned expertise?
“Your workforce is your most valuable asset. The knowledge and skills they have represent the fuel that drives the engine of business, and you can leverage that knowledge.” – Harvey Mackay
There is a story about Henry Ford, the highly successful business entrepreneur, being interviewed by a reporter who was trying to pick holes in Ford’s intelligence. The reporter kept asking him technical questions and then heckled Ford about his lack of knowledge. In response, Ford called and asked one of his employees the question, then said to the reporter: “I don’t need to know all of the answers to run a successful company. I have hired people to answer these questions for me so I can concentrate on steering the ship.”
As well as leveraging the knowledge and experience of others by paying them to work for your business in a beneficial way, you can also follow the lead of successful people by tapping into their expertise through books, articles and talks. Robert Kiyosaki said: “If you want to go somewhere, it is best to find someone who has already been there.” So it’s worth investing some time in researching the knowledge of those who have achieved the kind of success you’re aiming for.
Be aware that simply educating yourself or having more knowledge about something isn’t in itself a point of leverage. It only becomes an advantage to you once you actively employ what you know and apply it practically to your goals.
4. Technology leverage
We’re very fortunate these days to have so much technology available to us that can streamline our businesses. It doesn’t matter what sector you’re in, there are programs and online systems that can capture and analyse data, manage stock, facilitate communication with customers and clients and make labour cost savings – among other things!
If you don’t currently take advantage of technology and use it to help systemise and manage key aspects of your business, you’re making life very hard for yourself. Not only will you undoubtedly be wasting time and resources, but you’re giving your competitors a free advantage over you. And why would you do that?!
“Attempting to succeed without embracing the tools immediately available for your success is no less absurd than trying to row a boat by drawing only your hands through the water or trying to unscrew a screw using nothing more than your fingernail.” – Richie Norton
Leveraging technology can help you minimise operational costs and maximise revenues, allowing you to grow your business by leaps and bounds. According to research by American Express, IT accounts for 19% of business expenditure, so it’s certainly something you should be investing in. Properly employed, it can:
- Improve decision making. According to a report by the International Data Group, if a company’s data is not accurate or easily accessible, business outcomes and response rates suffer. It found that companies with effective data grow 35% faster year-on-year. Using technology to properly track your performance and supply you with up-to-date, accurate data, means you’ll be able to make better business decisions.
- Help generate higher returns. By simplifying your business processes and moving manual tasks online – particularly the simpler and more time-consuming ones – you and your team will have more time to focus on the important growth and revenue-generating areas of the business.
- Increase productivity. By employing technology to reduce the cost, time and complexity of routine tasks, your staff can achieve more, more easily, in less time. And with cloud systems and smart devices allowing staff to work remotely and flexibly, you get a happier, more productive team. A study conducted by a professor at Stanford University found that staff who were allowed to work flexibly from home increased their productivity by 13%. They also reported higher work satisfaction and took less sick leave than their office-bound counterparts.
5. Systems leverage
If you want to get things right in your business, you’ve got to leverage the power of systems. I’ve yet to come across a field or profession where systems don’t help – they’ve certainly helped me and my teams achieve a consistent level of excellence for a number of years. Systems ensure a business applies its principles and knowledge consistently and correctly across all its internal and external operations, instilling discipline and order in what could otherwise be a chaotic environment.
I come across entrepreneurs with good ideas all the time. But the ones that end up successfully executing their ideas are the ones that recognize the power and simplicity of systems and know how to implement them.
When you put the right systems in place, you’ll benefit from:
- Consistent quality
- A scalable business
- Reduced costs
- Increased profitability
- Improved focus and clarity for yourself
- Improved performance and morale within your team
- Better problem solving
- More control
- A saleable business – possibly with franchise potential
- Freedom from having to work in the business.
Read more in my article, “Why every business owner needs to systemize”.
Applying these five forms of leverage will give you a tremendous edge towards turbocharging your pursuit of success.
You are your own greatest asset, so while you’re maximising other people’s time, skills and knowledge, don’t forget to dedicate some time to getting the most out of yourself. That means not only developing your business knowledge and acumen but also taking the best possible care of your physical and mental health.
If you really want to take yourself and your business to the next level, make sure you properly leverage yourself by:
- Developing and growing your Mindset. The mindset of a person is the main distinction between those who succeed and those who don’t. A key driver of success is a growth mindset, where you truly believe that you’re in control of your own ability and can learn and improve through effort and hard work. If you can adopt this, you’ll arm yourself with the grit, drive and confidence to go all the way to the top. I know from my own experience how much power can come from changing your mindset alone.
- Improving your Body and physical state. When you take regular exercise, eat well and get the right amount of sleep, the incredible engine that is your body bursts into life. You’ll have more energy, be able to think more clearly, be more even-tempered and will feel happier and more positive.
- Learning how to take Action to execute on your goals. Gaining knowledge is the first step to making positive changes in your business but if you don’t then do something with the skills and knowledge you’ve acquired, you’ll go nowhere fast. Real changes can only be made once you actually take action. You can read all the self-help books and take all the courses you like but make sure you then take massive action to put the knowledge you gain into practice.