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Last Updated on June 30, 2021 by Tyler Clark
Ah Yes Leverage, The Holy Grail of all Businesses Right?
Perhaps. Realize leverage and you will be bestowed with its many personal and financial rewards. People tout the benefits of leverage all the time and so they should. Creating a leveraged business situation can offer you multiple increases in production, income and time. Ultimately, you may also achieve passive income and total freedom.
But there’s just one problem, you need to be a big time company and a whole pile of assets and employees to leverage first right?
Not to worry, if that line is upsetting or defeating in any way, I’ve got some really good news.
Yes, many of the above mentioned benefits of leverage occur well down the road for many businesses. These benefits occur when a business can hire a bigger sales team and expand. They occur when a company can hire managers to run the business. They occur when the business is doing so well that the owners can finally let go, sit back and just let the money roll in. Use leverage properly and you might even get to a point where you sell the business and make so much money that you don’t need to think about money, business and leverage ever again! But, can you use leverage at other times in the business cycle?
What I saw the Millionaires Do
I saw many of the millionaires use leverage effectively in their Businesses. It’s pretty crazy when you have a leveraged situation for work and you can take the afternoon off and enjoy a long lunch and just head home instead of going back to the office. Unlike a Dentist or a Doctor, you don’t have to perform every operation or see every patient to earn your big income. You get the big income and you get the long lunch. I saw the business owner work hard but I also saw that they could take breaks, get sick and go on vacations and still make money. This wasn’t the case for the Doctors and Lawyers I trained.
But here’s the good news, I also saw the millionaires using leverage at other times. In fact, I saw them using leverage all the time.
Use Leverage Throughout the Business Cycle
Though the millionaires routinely used leverage late in their business careers, they also used it a great deal at the beginning and during their business careers.
We all think we’re supposed to use leverage once we have all this stuff but if you look carefully at millionaires, you’ll notice that they’re using leverage constantly.
Robert Kiyosaki, author of the Rich Dad Poor Dad book series was talking about leverage when he outlined how to start a company by using investors to fund the company and hiring employees to do the work instead of doing everything yourself. The secret to leverage is to use it as soon and as much as you can.
The millionaires were using leverage carefully and they weren’t taking crazy risks or anything like that but they were definitely using leverage to get ahead quicker as soon as they could.
That’s how we need to think of leverage. We need to think of it as a tool we can use all the time. You know how to do this already. If you need to get somewhere quickly, you run, take a bicycle or car depending on your needs. This is leverage! You need to apply this concept across your life and especially in your business wherever and whenever possible.
Here are a few basic examples of leverage you can try.
You Leverage Your Investors
Get Investors. This is obvious but you still see people grinding along on pennies with a business just to save a dime. On the other hand, the person that gets investors now doesn’t have the burden of years of trying to make money just to fund the business before the business can actually start funding them.
It sounds silly to take a bank loan early on but if your business just requires money to grow or expand, it should be an easy sell to you and your bank. If not, you may need to rethink things but if leveraging the bank’s money will be of huge benefit, it may be something you have to consider.
Leverage Your Peers
Get help from your family, friends and volunteers. This doesn’t mean taking advantage of them, it means asking for help when you could use some. It can also mean getting input on your business. Other people will guaranteed come up with ideas for your business that you don’t think of-leverage someone else’s brain! Though this is such a simple idea, many people prefer to do everything themselves and this can put them in a very non-leveraged position. Try your best to at least ask for help when you could use it. You may be surprised at the results you get.
Leverage Your Idea
Though we love hanging on to our brilliant business ideas, we tend to forget that they’re time dependent. The sooner you start your idea, the more potential earning power it has for you. If you start the idea now and it proves to be a money maker, you stand to make more money with it versus starting it 5 years from now. You’re literally leveraging time and money potential by starting sooner rather than later.
Leverage Your Knowledge
If you can teach an employee to do something better, do it. Don’t hold back and feel they should figure it out themselves or worry that they’ll eventually become your competition if you show them too much. In most cases, it’s far better to show someone how to do something because it will benefit everyone right away.
We shouldn’t fear the one genius that will blow us all out of the water, the probability of this happening to you is just too low. Passing your knowledge along however offers a strong possibility of benefitting all parties involved.
Leverage Your Time
Time is one of the biggest things we’re trying to leverage because we have a finite amount of it. One way to leverage your time is to do an assessment of your daily life and business and see where you can automate. Automate everything you can in your life. Bank deposits, savings account transfers, scheduling, grocery pick up, the list is endless. Take a good look at your day and figure out where you can make changes to get more time.
Many of the millionaires I trained wasted very little time. If they had an idea, they gave it a try quickly. If they needed something new, they bought it. They were the opposite of analytical. This doesn’t mean they weren’t making good decisions or that they weren’t smart, it just meant that they made decisions fast. They were very reductive. “Is this good? Ok, good, buy it. Done.” Whether they were used to having to make a lot of decisions or not, they all had this characteristic. It was as if they knew they just had to do it right away.
Conclusion
Start looking for ways to use leverage all the time. Figure out ways you can leverage your money, peers, knowledge and your time. Be sure to return the favor to those that helped you along the way.
Leverage is definitely something worth using right now and for the rest of your life. Forget waiting until you have a massive business to take advantage of this great tool. The millionaires started and finished with leverage and it helped them succeed far sooner than many. They never pushed that giant boulder up the hill by themselves and nor should you.
Best of Wealth.
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