Critical Steps To Online Success--What Is This "Leverage"

thing everyone is talking about?

We hear this all the time in business:

"It's not how hard you work, rather its how much leverage you create. In the end, leverage is what makes the difference. You can only do so much yourself."

But what exactly is "Leverage"?

It comes from the word "lever".

You put a wrench on a nut and the length of the handle multiplies your strength. Double the length of the handle by putting a length of pipe over it and you double the turning force at the nut.

It works the same in business!

Let's look at a car dealership service shop as an example:

These are just fictitious numbers (I guessed at them), but they'll serve to illustrate the point.

You take your car in and they charge you $125 an hour for 4 hours-your bill is $500 (plus taxes of course…let's not forget our benevolent government).

Say your mechanic gets paid $30 per hour plus benefits- maybe $45 total cost to the dealer. Then there's rent of the premises, construction of the shop bays, tools and equipment, leases and maintenance, cleaning, utilities, interest charges, insurance, back office support (accounting, management etc.) and lots more. I'll make a wild un-researched guess and say all of that (the cost to the owner of operating the shop) adds up to $55 per hour for each service bay. So the mechanic who actually fixed your car plus the cost of running the shop costs the owner (in this example) a total of $100 per hour.

You pay the shop $125 per hour and the owner gets to keep the balance-a net profit of $25 per hour.

If this is a very successful auto dealership they probably have 10 bays working 10 hours a day, 6 days a week. At a $25 per hour profit margin that works out to $780,000 per year for the dealer.

If the owner works in the business then she (or he) works one hour pushing paper and earns $250 per hour from the efforts of others-a 10 times multiplier on their efforts.

That's leverage in action.

In real life the owner is probably retired and living in the Caymans or Hawaii. The owner is lying in the sun and making $250 per hour (or maybe golfing) while we sweat to earn the money to get our car serviced.

So if you're smart, you work hard on creating leverage now, so you can lay back eventually in the place of your dreams.

That's the path of the true leader . . .

Keep on winning

Regards

Jim

SUMMARY

We hear this all the time in business: "It's not how hard you work, rather its how much leverage you create. In the end, leverage is what makes the difference. You can only do so much yourself." But what exactly is "Leverage"?

It comes from the word "lever". You put a wrench on a nut and the length of the handle multiplies your strength. Double the length of the handle by putting a length of pipe over it and you double the turning force at the nut.

Let's look at how that works in business…

KEYWORDS

leverage, work hard, employees, override, business expenses, freedom

PROFILE

Do you want to learn how you can get off to a quick start in Internet Marketing? Then read my fast start guide "3 Surefire Ways to Make Money Online".

Download it free here: http://homebasedbusinessontheweb.com/cap/

Jim Keayes is an expert Internet Marketer. He coaches internationally in how to build successful Home Based Businesses Online. You can visit his website at: http://homebasedbusinessontheweb.com/