Entrepreneurship rule #2: Leverage
Leverage.
It’s a word I learned from Robert G. Allen
Basically, it means your ability to move a lot – or make a lot happen with little effort.
It’s crucial to understand how leverage works in business, and just how important it is.
Example:
If you have a mailing list of 5 people, then you have no leverage.
If you have a mailing list of 25,000 people, then you have leverage.
If you have a mailing list of 125,000 people, then you have MASSIVE leverage.
Here’s another example:
If you have a website that generates 5 hits a months, you have no leverage.
If you have a website that generates 25,000 hits a months, then you have leverage.
If you have a website that generates 125,000 hits a months, then you have MASSIVE leverage.
If those 125,000 people are targeted to what you sell and are ready to pay $$$, well - you know…
You see where I am going with this?
Now, obviously money is the best form of leverage, but I didn’t want to come out with that one first.
If you have $100,000 in cold hard cash lying around, you have some serious leverage. And its universal leverage – you can do just about anything with it. You can invest it immediately and see immediate returns from it. This is why they say the rich get richer. And it is why the rich who get richer do so at an exponential level.
But these are not the only types of leverage. You may not have a list of people you can take advantage of.
Instead you may have a Rolodex full of rain-makers who love you and are willing to help you out.
Or you may just have one person who has a lot of leverage that can help you out. If you have the ability to work with someone else who has leverage – then you ultimately have the same leverage. Here is an example. Suppose you have an uncle that has a storefront that gets about 3000 people a day. If he allows you to promote your product or service in that storefront for free – or for a significantly smaller commission than he would normally charge, then you are set!
Are you starting to see how all of this works?
Two things for you to think about:
- Think of all the types of leverage that there is out there in the business world, and how they can be applied.
- Think of ways that you can start to harness leverage so that when you need to apply it – you will have it.
One great business idea and the leverage to get the traction it needs to move - then that may be all you need to make it.
If you start now, maybe in a year or two it will be the difference between success and failure in your entrepreneurial endeavor.
Always be thinking about these two things.
The best forms of leverage may take a long time to build – so even if you don’t have a product or service, start building your leverage now.
This is why entrepreneurs network.
This is why people do joint ventures.
Start building your leverage now!
And remember – even if you don’t have a product, you always need to be building the brand of “You”!
Ciao,
- Scott