Business Secrets: Leverage Through Leadership
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Business Secrets: Leverage Through Leadership

One of the numerous use of leverage is through delegation of tasks and proper leadership. This article explain how to do this.

Many business literatures record the so called secrets of becoming rich, but among the hundreds of them that I’ve read, one term stands out as the most widely used; leverage. Multilevel companies, sales and marketing teams, real estate brokers, and many other business people use it, but what does it really mean?

To understand the numerous meanings of the term leverage, you must first go back to its meaning you learned back in grade school. Leverage is the mechanical advantage of using a lever. This advantage has thousands of applications in mechanical technology, but its basic functions is to lift a heavy object with using a lever by applying less than the amount of force you would normally exert if you were to lift the same object without a lever. The essence of leverage is efficiency of the force applied.

How is it applied in business?

The term is used in various ways in business, but the principle behind the way it is used is always related to its original meaning. In this article, we will focus on the use of leverage as used by MLM companies and lone individuals who manage large scale businesses. For them, leverage is working smart through delegation of tasks and proper leadership.

Let’s say you are an e-bay store owner as an example. If you do all the tasks of looking for merchandise, quality checking, taking good photographs, listing for auctions, answering bidder’s questions, packaging and shipping, and answering complaints alone, you’ll gain more wrinkles from the stress than sales. So how do you apply leverage? By adding more people and leading the team. Let’s say you do your business from you backyard and can’t afford to hire employees. To apply what you learned from this article, you asked two of your most trusted friends to help you out. You split the tasks according to your preferences and expertise, you split the capital, and you split the commissions. The “splitting the commissions” may not sound so great but it is a compromise for better productivity.

If the product is in demand and the process of the business goes smoothly, the amount of auctioned items and sales will naturally increase, and the customer service will be better. Having partners also mean more heads to brainstorm on problems that will arise and you will gain mastery of the tasks you were assigned to do because you only focus on few tasks. This will lead to more satisfied customers and more positive feedbacks which, in e-bay, mean higher chances of future sales. As the sales goes higher, you and your partners can hire skilled employees to do specific and menial tasks and you and you and your partners will have more time in planning and expanding your business.

In this definition of the term leverage, your energy, time and skills is multiplied by the number of people that will join or the number of employees that will be hired. Keep in mind that the number of people is insignificant if the there is no one to lead them to a common goal, which in our example, is to increase the sales. When there is sufficient number of workforce, all you need to do is to lead and focus on growth of your business. This is the initial force that you apply and delegation of tasks and leading the team will leverage that force to the level of productivity that you may never reach when you do things alone.

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