Do you know what leverage is?
Most people understand a little bit about what it is, but probably most people do not understand the full power of it.
The business dictionary definition of leverage is:
The ability to influence a system, or an environment, in a way that multiplies the outcome of one’s efforts without a corresponding increase in the consumption of resources. In other words, leverage is the advantageous condition of having a relatively small amount of cost yield a relatively high level of returns.
Basically it is when the output from your efforts is not relative to the input, but instead it is far more.
One of my mentors Sheri McConnell says that most of us create a job for ourselves, instead of creating an income. If I start a window cleaning business that is dependant on me cleaning more windows to earn more income, then I have not created an income, I have created a job. The only way I can increase my earnings is to increase my hours worked. And if I’m sick? Then no money comes in.
If you really want to know how to create a better income and standard of living, then understanding the leverage you have is one of the first steps. If I were the window cleaner, I would work only until I had saved enough money to employ someone to clean windows for me. Sure, my profits wouldn’t be as big initially, but I would have control of the most important asset I can leverage – my time.
If I am not working eight hours per day cleaning windows, I can use maybe one or two hours of that time to manage the window cleaners who work for me, and use the rest of the time to start another business, or develop an info product to sell on the internet teaching others how to clean windows, or start window cleaning businesses. Catch my drift?
Problem is we’re so scared of letting go of the control, that we lose sight of the bigger picture. We’re not willing to sacrifice short term financial gain for long term financial freedom. We’re not taught to look past what is happening right now, to leverage our time better in the future.
Take a look at your current business, business idea or business dream and consider how you could leverage it so that you are still fulfilling your passion, but that you haven’t created a job for yourself. Dream big and look outside the box for inspiration.
Don’t be satisfied with mediocrity.