Leverage is defined as the action of a lever or the mechanical advantage gained by it in a specific situation. According to Kevin Eikenberry, “When we use a lever, we use specific, correct actions to create great results. That is what we all want to do with our time – find the activities that will create greater results – personal, professional, business, financial, or others in our lives. Considering the returns (leverage) you will get on this investment, it will be time well spent.”
Leveraging our assets, especially our time, must become an exponential process rather than the familiar linear method of exchanging our time for income. We must learn to think differently, adopting a new paradigm. Leverage is truly the key to wealth-building. Leverage is what gives the successful entrepreneur his competitive edge in the marketplace.
A couple of good examples of high income, but still “caught in a linear model trap” are many doctors and lawyers. They lack leverage. Their income is in a 1:1 direct proportion to their productive time. We must learn to use our precious time carefully and enact systems to generate revenue for us consistently and in ratios of 2:1, 3:1 and so on, whether we are currently working or not. This is leverage at work. The systems we set into motion will work on our behalf 24/7/365.
A 1:1 linear relationship, where time spent working equals income, begs a simple question: What will he do when he runs out of workday? There are always just twenty-four hours in each day, approximately ten of which are available for productive sales work. This linear thinking mode is always going to provide a dead-end to earnings potential. We will simply run out of productive selling time.
An entrepreneur must utilize an exponential approach, a new mindset, whereas he develops and utilizes pre-developed systems for building income. These systems may be web sites, blogs, fax-on-demand services, social media, memberships, speaking engagements and so on. I favor a “multiple streams of income approach” popularized by Mark Victor Hansen.
Revenues can be generated by the successful, simultaneous implementation of numerous systems providing these streams. For example, an engineering firm with this expanded paradigm may derive revenue from services rendered, sub-contracted work, construction, testing services, consulting, teaching, writing and publishing technical articles. This strategy reinforces the thinking that while one stream may be down, the others are up. Regardless, the streams will total far more than any individual, non-leveraged source of income would.
The key component to this entire thought process is clarity, and the acceptance of a new mindset by the entrepreneur, separating himself from the traditional 1:1 linear mode previously utilized. When we employ an exponential strategy, we open the floodgates of opportunity with limitless income potential. There is often far less stress and a great deal more enjoyment derived as well. This is how busy entrepreneurs can enjoy a lifestyle envied by others, and have the time to enjoy it as well.