Leverage and It’s Power in Business
The definition of leverage in the financial world has two meanings. The first is the use of financial instruments or borrowed capital, such as margin to increase the potential return of an investment. The second meaning is the use of a company’s debt to finance a firm’s assets, or from a personal point of view, a mortgage.
In the second case, the use of other people’s money is being used to create and/or build a new asset. Turning this back to an individual in the business world, leverage is the use of other people’s efforts to create and/or build an asset. Instead of using other people’s money, leverage comes from other people’s efforts.
How Leverage Is Used in a Traditional Business
Every successful business will take advantage of leverage. After all, there are only 24 hours in a day and people can only work so many of these hours. In order for a business to be successful, there must be a proper balance of the workforce to work being done. As a business expands and the workload increases, the company must hire new employees. The additional employees allow the business to leverage its efforts to accomplish the tasks required to get the job done.
This is the traditional business model and this obviously works. The only problem with this is that leverage is being used to accomplish the company’s goals and not the individuals. So what type of business model allows an individual to benefit from the true power of leverage?
Leverage in the MLM Business Model
Way back in the 1940’s California Vitamins realized that they could sell and expand their customer base much faster by having a lot of sales personnel selling small amounts of their products, versus the traditional way of having a few sales personnel selling a lot of their products. This was the birth of the network marketing business model.
Today there are thousands of network marketing companies that give people the opportunity to harness the power of leverage for their own personal goals. If you are not familiar with how this works you have come to the right place.
Leverage in an MLM organization steams from the teamwork of the organization. As each individual works their respective businesses they generate volume which in turn will generate income through the companies compensation plan. The larger the organization the more volume that is generated, the more money an individual makes.
It is the cumulative effort of the entire team. In the traditional business model, as the workload expands the employee base grows larger. In the network marketing business model, as the team grows larger, their collective effort grows and the individual’s income increases accordingly.
Leverage the Power of a Team
John Paul Getty, American Billionaire said it best; “I would rather earn 1% of the efforts of 100 people, than 100% of my own efforts.” Think about that statement and you will understand that being involved in a business model that allows you to leverage the efforts of others to earn your money is a great place to be.
As you build a team of “like-minded” individuals, collectively your efforts are benefiting the entire team. For some, they would rather have 100% of their own efforts but do some simple math here and you will see the significance of leverage. 100% of 1 person is of course 1 person. Now instead of 100% of 1 person, make that 5% of 100 people and what do you get? You get the equivalent of 100% of 5 people! Not to mention the added benefit of not relying solely on one person for all your income.
If you solely rely on yourself for your income and something were to happen to you, who would generate the income your family needs? Yes, we have insurance for these circumstances, but you can now see that there is a way you can generate the income you want even if you are not physically working! That is leverage at its best. That is leverage within a network marketing opportunity.