We all like to think we’re independent and free to make our own decisions. But the truth is that we’re all subject to forces beyond our control. And some of the most powerful of those forces are other people and the business systems they build. Business leverage is a name for the concept of using other people’s systems to your advantage, to magnify your own efforts and create a bigger impact than you could make on your own.
When we think of leverage, we often think of it in financial terms. For example, we might use leverage to buy a house without putting much down, or to invest in the stock market without risking much money. But leverage can also be used for non-financial purposes. For example, a small business can leverage its resources by using technology to automate certain processes, allowing the owner to focus on higher-value activities.
Business is about leverage. The most successful entrepreneurs and executives are those who understand how to use leverage to their advantage. They find ways to use other people’s time, money, and expertise to build their businesses. The most successful businesses use leverage to their advantage.
We all use the word “leverage” in our daily lives. For example, when we want to lift something heavy, we use a lever to increase the amount of force we can exert. Similarly, when we want to increase our influence or impact in the world, we use leverage to magnify the effect of our actions. Businesses are no different — they use leverage to magnify their impact and achieve their goals.
In business, leverage has the same basic function as a lever: it magnifies our efforts and allows us to achieve our goals. For example, if you want to build a business but don’t have much money, you can use leverage to raise money from investors, which will magnify the impact of your initial investment. Similarly, if you have a good idea but don’t know how to build a business, you can use leverage to find a business partner, which will magnify the impact of your idea. The most successful entrepreneurs and executives use leverage to their advantage by finding ways to use other people’s time, money, and expertise to build their businesses.
The concept of leverage can be used to explain why small businesses often outperform larger ones. For example, if a small business can achieve the same results as a larger one using a fraction of the resources, the small business has used leverage to its advantage. In the same way, a small business can use a small amount of capital to achieve a much larger impact than the owner could achieve on her own. Similarly, a small business can use a small amount of capital to buy access to a large amount of expertise — once again, using leverage to magnify its impact.
Transformation! 