Business leverage is a great way to build wealth especially if you don’t have the time, money, knowledge, or resources yourself.
The best part about leverage is that you can use it no matter who you are.
Business Leverage Video Training:
You ever hear that saying that the rich keep getting richer?
Well, there’s a reason why that’s happening.
In today’s article, we’re going to break down different forms of business leverage that you can use to grow your financial position.
So we talk about wealth inequality in this brand quite a bit.
This is one of the ways where people of all economic backgrounds can start using the tools of the rich to grow their own business, and their own pocketbooks as well.
Let’s get started…
Business Leverage Tip #1: Other People’s Time (OPT)
The first form of leverage we’re going to talk about is Other People’s Time (OPT).
This is the best friend of anybody who wants to make a higher income throughout their lives.
So let’s talk about how you can actually use this no matter who you are.
Let’s say you do 100 activities throughout a normal work week.
5 or 6 of those are going to be the high ROI types of activities that really move the needle forward.
These are the things that generate almost all the income for you.
They create the most impact in your life.
Then there are middle-level impact activities.
And finally low-dollar activities that can be a complete waste of time.
Here’s an example of how you can apply this approach:
Let’s say you have an ice cream shop.
- You’re making the ice cream
- Marketing the ice cream
- Mopping the floors
- Talking with customers
- Handling vendors
You’ve got all these different responsibilities.
You’ve followed our time management strategies approach to figure out that making coupons for the local newspaper brings in $5,000 more per week.
But oftentimes, you’re so busy with all these other activities that you’re not able to do that on a daily or weekly basis.
Well, guess what?
That’s your true north right here.
And this is the model you want to be using.
When it comes to OPT, you want to re-optimize your time.
You can focus on that $5,000 activity.
Because that’s what moves the lever the most.
And then you can afford to pay people to do all that other stuff.
You Can Use Business Leverage In Your Personal Life
For example, let’s say you know how to change the oil in your car.
But you know, an oil change costs $50.
Unless you’re a mechanic, a professional is going to be faster and more skilled at it than you are.
So if it takes a mechanic an hour, you pay him $50.
It might take you 5 hours where you get sweaty and dirty, your clothes get ruined, you’re tired and stressed.
Well guess what? You completely ate up a day just to save $50.
If a day is 9 hours and the activity is valued at $50.
That’s as if you paid yourself $5.55 per hour.
How are you supposed to follow the path of the wealthy by doing that?
Don’t put your time and energy into something that doesn’t pay very much.
Even in my personal life. I’m hiring experts. I’m getting people who are better at it than me.
So I can free up my energy to focus on the most important high-level activities in my life: The income generating activities.
OPT – A wonderful form of business leverage.
Business Leverage Tool#2: Other People’s Money (OPM)
This next 1 is the most famous form of business leverage.
It’s also the most misunderstood and scares a lot of people.
But it doesn’t have to be scary. As matter of fact, it’s a wonderful tool.
It’s one of the easiest tools to use, especially if you know what you’re doing.
With OPM, you or your company borrows money in order to grow your business or income.
Let’s say that you take out a loan.
I’ll give you an example in my personal life.
I’ve had a lot of success over the years in my business.
I just bought a brand new car.
Now, I could have paid cash for this car.
But I chose to do something very interesting.
I chose to take out a loan instead.
Now, why would I do that when I could pay cash?
Why would I pay the interest rate on that?
Well, the reason why is because I got a loan at 1.9%.
And as an entrepreneur and investor I have access to different kinds of deal flow.
I have dozens of different ways to get a higher return than 1.9%.
So for me, this is a no brainer.
- They’re giving me money at 1.9%
- I can make money at 8%, 10%, 12%, or even higher
Of course I’m going to slowly pay off this loan.
That large chunk of money is making a larger return for me elsewhere.
It ends up costing less to borrow money for the car.
How To Use OPM In Your Business
It’s the same thing with when you’re hiring and building out your business.
Let’s say you need to make some new hires in the sales department.
You know that if you had a new salesperson that it’s going to generate another $200,000 per year in income for your business.
But it’s going to cost you $70,000 to hire that person.
And right now you don’t have the cash flow to get that person going.
Well this is where borrowing to help fund hiring is helpful using OPM.
So let’s break this down.
You take out a $70,000 business loan at 10%.
Now, we already said that you’re paying this salesperson $70,000, and it’s going to lead to $200,000.
That’s like a 250% return when you’re borrowing money at 10%.
That’s a great way to leverage other people’s money to grow your business.
And again, the rich are using this all the time.
They’re constantly borrowing money at a lower interest rate and then building an asset that creates a higher ROI.
So OPM, other people’s money, wonderful form of leverage.
Tip #3: Other People’s Expertise (OPE)
OPE stands for other people’s education.
Another way of putting it other people’s expertise.
You’re simply purchasing the expertise of other people and having them train you.
And then using that newfound knowledge to build your income or build your business to a higher level.
So let’s break this down.
Let’s say that you purchase a book and it’s $10.
And through this book, you gather some new skills.
As a result of these new skills, you’re able to make a greater impact at your job.
Well, guess what? If you’re an employee, you’re now more valuable to your employer.
And inevitably, that’s going to lead to a raise.
You give more value to your company and they’re going to reward you.
And if not, you’re going to be even more valuable in the marketplace.
So let’s do some simple math.
Let’s say this new skillset leads to $10,000 more per year in your job.
You spent $10 in order to get $10,000 more per year.
The ROI on that is insane.
Your Education Never Ends
I love reading and I’m constantly buying new books.
Even if I don’t get through all of them, I just need 1 tip or 1 tool to help me in terms of my business growth.
As an investor, that’ll take me to that next level up.
The return on investment is crazy.
Now let’s take this a step further.
You know, books are obviously very cheap.
Okay, but what happens if you pay a consultant $500 an hour?
The average American makes about $25 an hour.
So it feels kind of risky to pay somebody who’s an expert $500 an hour.
But again, let’s look at the math.
Let’s say that you work with that consultant and they help you gather some new skills.
You just made yourself more valuable to your employer or your business.
$10,000 per year in return with an initial $500 – $1,000 investment.
Again, leverage of other people’s expertise.
I’m constantly hiring coaches and consultants.
Because I know that I’m going to be able to make that money back tenfold from the new information I have.
Especially from the time I’m saving by learning from an expert, right?
- Books
- Hiring consultants
- Purchasing courses
- Self-education
- Other people’s expertise
All of these are a killer form of business leverage.
Education does not stop when you leave school.
You want to constantly self-educate yourself.
So if you want to be wealthier, use that form of leverage as well in your life.
#4 Other People’s Networks (OPN)
I actually didn’t figure out this next form of business leverage until about 5 or 6 years ago.
I was incorporating a lot of these other leverage tools but leaving this one out set me back around $4 or $5 million.
This is something called other people’s networks.
Okay, so let’s talk about how this is actually implemented and how it’s used.
Alright, there are actually groups of people out there:
- Events
- Masterminds
- Conferences
- Seminars
Tons of bright minds come together.
The speakers are great, but you also want to pay attention to the people in the audience.
As an internet business owner, I thought I could just hang out by myself, my team, and my laptop.
I didn’t need to interact with all kinds of different people.
But when I ran into problems with my business or needed to make a hire, there was some pain there.
I would go slower than I wanted to because I didn’t really know who the players are in the industry.
A lot of times great hires or contacts come from referrals.
But I didn’t have a large enough network of people.
So I started going to seminars to build those relationships.
Over time your network grows a hundredfold.
You get to the point where you can post on LinkedIn and you have 100 different highly qualified people who are there to solve this problem for you.
Money loves speed, right?
This quick solving of problems comes from having a large network.
Go to the Chamber of Commerce.
Find high level entrepreneurs through online groups.
And that’s the network effect you’re going for. So leverage through networks and make those contacts.
This is another form of business leverage that the rich are using all the time.
#5: Other People’s Code (OPC)
There are always things that you need done in your business.
We talked about other people’s time.
But in this case, you’re going to use software or automation to do the work for you while you do other things.
- People need rest
- They need time off from work
- Humans don’t always work nights and weekends
But software can work for you 24 hours a day.
It never has a bad day, it never complains, it doesn’t get drunk at the bar the night before and have a low productive day.
If you set it up properly with a good software solution, it’s going to do the work for you.
Often times they work faster than an employee or contractor would.
In my own life I use a software called funnel scripts.
Although I am a better copywriter than this computer algorithm…
It helps me get started with writing good copy faster.
If it takes me 10 hours to write the first version of copy myself…
This program actually broke it down to 2-3 hours.
And allows me to get other people who are less good at copywriting to optimize through funnel scripts.
Are there any places in your business or personal life where you can use software to leverage and save you time?
A lot of times it’s significantly less expensive than hiring an employee.
Why The Rich Get Richer
Alright, there we have it.
5 interesting ways of using business leverage in your life.
Even 1 of them by itself is really going to make a big impact in your life.
But when you stack them all on top of each other, it’s massively exponential in terms of your growth as a business owner, your money, and your time freedom.
It’s really amazing what happens.
Thank you so much for reading to the end.
If you enjoyed this content you can find more free videos on the Strategy Samurai YouTube channel.
And if you’re interested, check out another article on how building a marketing team can be a great way to use OPT in your business.