A leveraged business often refers to debt. Leverage, in its most simplistic terms, is the ability to trade a large position with a small amount of trading capital.
There are other, non-financial ways of leveraging your business. Some people liken a leveraged business to a production line. By breaking down the business into small sub-categories, you increase the efficiency. Or in other words, divide to multiply.
Another way of thinking of leverage, according to Brad Sugars, is ‘do the work once, get paid forever.’ An employee does the work once and gets paid once. A manager does the work once and gets paid long-term, but the owner of a leveraged business does the work once and gets paid forever.
What are some ways that you can leverage your business?
- Employees – hiring and training high-quality staff in your company’s vision and culture is a way of leveraging your business. It also gives you the ability to delegate work and create a business that can work without you.
- Repeat business – when clients come back, and then refer you to others, their acquisition cost lowers, but more importantly, the acquisition cost of the new client is zero. If your clients trust you and refer you to others, word of mouth improves, which reduces your marketing cost. It’s a snowball effect. Your best clients are also your best marketing tool.
- Test and measure – make sure your sales and marketing strategies are resulting in more business. If you’re paying for advertising, it should be yielding the results you want.
The idea of leveraging your business is that you already have the tools you need to succeed. When you leverage resources that you already have access to, they naturally multiply into new resources. It’s exponential.
You can leverage time, achievement, talent, and connections, all of which will be valuable in the long run. Remember- the idea is to create a successful business that can run without you!