Three Steps for Creating Leverage in Your Business
"Work smarter not harder."
This dreadfully overused phrase is meant to address the apparent lack of time, money and resources we experience in our work and personal lives. But how do we translate these words into something actionable? Here are three methods I have used in my business to accomplish this:
1. Focus on what matters. Over the years, I have studied numerous organizations and have found that only about 30 percent of the typical day is spent on activities that directly create value. For example, sales representatives devote on average only one-third of their day with prospects. The remainder is allocated to administration, travel, meetings, and other less valuable activities. The same is true for almost every other “knowledge worker” in an organization.
To get more done, focus on the critical tasks while eliminating, delegating, outsourcing, or automating less important activities. I have seen many individuals go from 30 percent to 50 or 60 percent with little effort using this method.
While working at a major computer manufacturer many years ago, I was able to cut my 80-hour a week workload to less than 20 hours simply by using this strategy. It took only a weekend of analysis and implementation. This allowed me to focus my energies on activities that really matter, while helping others find time saving strategies.
2. Leverage sales channels. The ultimate goal is to maximize results with the least amount of effort. You can accomplish this through leverage: generating disproportionately large returns with a minimal investment.
Let's look at selling again. Traditionally, to sell more, you identify prospects, create sales collateral, develop marketing materials, and then directly solicit potential buyers. This is a linear strategy. If you make a sale, it is one sale.
To create exponential growth, consider working with businesses that already have the relationships you want to build. One partnership with the right distribution channel can lead to hundreds or thousands of sales, without any extra effort on your part.
As a public speaker, I partner with bureaus and agencies. They promote me to their vast networks of clients. In exchange, I give them a percentage of my speaking fee. This allows me to focus on what I do best: write books, craft my speeches, and develop new intellectual property.
This is akin to using Groupon or LivingSocial. They bring you paying customers and you give them a slice of the action. Internet marketers have long used their affiliate marketing programs as a way of getting hundreds or thousands of virtual sales people. There are equivalents to this in most industries.
3. Leverage partners in all key processes. The leverage concept can go way beyond sales. This is where you get the real multiplier effect.
All businesses, regardless of industry have four key processes: develop products and services, generate demand (sales, marketing, and customer service), fulfill demand (manufacturing, shipping, delivery of services), and plan and manage the enterprise (technology, human resources, finance, strategy). Determine appropriate partners for each of these processes.
Many of my partners are more traditional in nature. I hire them for their unique strengths that I do not personally possess. Or I use them to outsource those areas that do not create direct and unique value for my clients. For example, I work with Web developers, an accountant, branding companies, book printers, distribution/logistics companies, etc.
But none of these activities actually give me leverage. I am simply outsourcing an activity that I could do but choose not to.
Therefore, I also partner with individuals and businesses that develop or deliver, as well as distribute. A training company has licensed my content and has created a workshop that they deliver and support. They spent their time and money to build the course, train the trainers, and deliver to their clients. This gives me maximum leverage. Every sale puts money in my pocket without my having to spend any extra time.
How can you create leverage for your business?
If you are a restaurant, can you license your recipes and brand to a catering company that will do all of the work while you get a fixed fee or a percentage of their business? Can you franchise your business in a way that will not distract you from your important work? Can technology help you create a product with leverage that can scale—by creating a membership site or online distribution channel?
Get creative. Look for partners that will develop, deliver and have a vast distribution network. When their success depends on your success, you will have found a good partner with exceptional leverage for growing your business.
Yes, these three strategies require you to “share the wealth” with others. But when you focus on what matters most and leverage partners for everything else, you will exponentially grow the top line of your business, with very little effort or investment. This is the ultimate key to success.
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