6 ways to use leverage in your business and make profit from it in Nigeria
Leverage can be said to be the ability to use something to maximum advantage. In life and also elsewhere, leverage has been the number one reason that many people get ahead. This is not because some people are better than others, but it is because some people actually get ahead to achieve their desired aims and objectives. Would you like to get everything you want to get without going through too much stress? How has your life and business been lately? Do you need the right set of strategies and concepts that can put you at a strategic advantage over your competitors? If the answer to the last question is yes (which it should be) then let me introduce you to something that if you use it, you will be able to transform your life and your life’s circumstances from what it is right now, to what it can be; provided you take a decision today to use the strategies and concepts that are presented and depicted here. The main pivot of our discussion will be leverage and how to use leverage for profit. This alone is the distinguishing factor that will change the final outcomes in your business and shall give you the results that you’re looking for and even more!
So, we present the concept of leverage and what it can do for you! In business as in life, there are different types of leverage. There are the different sorts and kinds of financial leverage, different kinds and different sorts of strategic leverage, technical leverage, human leverage, tactical leverage and so on and so forth. In summary, anything that can give you an advantage to get things done in record time is leverage. The following points below depict the various was that you can profit from leverage below:
- When you want to expand the business or enter something radical take a loan: While this may not sound like the perfect business idea of the century, taking debt when you have a healthy equity position based on positive cash flows is actually a good thing as it assists you as the business owner to be able to give the business the required lift when and where it is needed. There is a difference between good debt and bad debt. In the case of good debt, the purpose of the debt is fulfilled (for example, if the setting up of a new plant or expansion of a new product line is the purpose of taking up debt and the debt is being paid back from the positive cash flows of the business, then the debt is said to be good debt). However, when the purpose of the debt is not to grow the business or the debt is not paid for from the proceeds of from which the debt was taken in the first place, then such is said to be bad debt.
- Learn to use other forms of financial leverage: This can be simply summed up in one lexicon: other people’s money. And by money, it can take the form of other equities including but not limited to shares, debentures and so on and so forth. So, there you have it. You can indeed use other peoples’ money; but only in in ways and means that are prescribed by the extant laws of the land. For example, there is no law against private individuals lending to corporate organizations, provided that everything in terms of paperwork is performed and everything is in order, then such a transaction can take place! “How do I identify high net- worth people in the first place?” You may ask. Well that question brings us to one fact of life that we often ignore. “Birds of the same feather flock together” The rich always mingle with the rich and vice versa for the other side. If you want to meet people that have money, power and respect, then you must find the ways methods avenues and means through which such individuals interact. Events are usually a very good place to start from and when you get to such events, you must talk, walk, act and dress as the rich would. Talk about leveraging! Then you can now make your pitch, but let it happen naturally!!
- Learn to use time to your advantage and the advantage of your team: Proper and effective time management is one of the secrets of true achievers in any area of life. Be it in business, in politics or merely just in everyday activities, the true test of the effectiveness of an individual or business in achieving the set goals is often how best the time is utilized. Effective utilization of time allows for a stronger individual and stronger team. The use of clocks, watches and other time measurement devices is a sign of effective time management. Also, the use of scheduling both as individuals and as a corporate organization tells the kind of success that such and individual or an organization will achieve in the future. Creation of time for rest also shows the recognition by the individual, team and organization that there is a time for everything. Keeping things simple is often the best time saving and time enhancing strategy that can boost productivity. From simple meetings to simple reports, the aim of simplicity is the increase of productivity. Time is leverage!
- Leverage your knowledge: Often in the achievement of tasks; either as individuals, teams or organizations, knowledge is referred to as expert power and this power is used by those who possess it to either create peace or destruction as they see fit (remember the creation of the atomic bomb at the end of world war 2?) Knowledge within an organization can make a person rise within the ranks without due fear of corporate politics. This is because such kinds of knowledge are usually gained in the place of study. The sacrifice for the acquisition of true knowledge is something that most individuals are not willing to pay. The stepping out of an individual, team or organization’s comfort zone is often very difficult and it takes people of courage to step out of their comfort zones and do amazing things. This is the case in the acquisition and the use of knowledge as leverage. Use what you know to get what you want without hurting others of course. Make contributions to the team. Teach others what you know, so that you can hunger to know more! This is how knowledge can be used as leverage. Encourage others within your organization to know more than they do. This is personal and organizational growth.
- Use your talents and skills as leverage: The key difference between talents, skills and knowledge is application. Someone may not how to fly a plane, while another actually flies it, while another yet is a master who has been flying planes for decades. Do you now get the difference between the three? Knowing is not enough. You must get yourself, your associates and the whole organization to the point where you’re all doing and then you must get yourselves from the point of doing for doing sake to doing it as passion UNTIL it becomes second nature. This is the process that makes companies reluctant to fire those guys who have been so good at doing one or two things that the whole system seems to depend on them. Be on the lookout for people who are unique at one thing or the other within your organization. Give them space, let them grow. Let them fly. Watch them soar. This will give the organization the lift in terms of having the so called most valuable players making the organization or business to operate from the paradigm of competitive advantage instead of that of comparative advantage.
- Leverage your values: The oft quoted saying that says that: “If you stand for nothing you will fall for anything” has a distinct element of truth. In a fast paced marketplace such as we now have globally in the twenty first century today, individuals, units, teams, divisions and organizations should all shoulder the burden of transfer of values from time to time. This reinforcement strategy will ensure that all the works at the organization will indeed carry these values with them everywhere they go. These values have to become a living reality within the workers of the organization because if this does not occur, the major driving force for the average worker will be just to make ends meet; which anybody can obtain anywhere. The workers have to “buy” into the vision of the organization and its values before the general public will then follow in the process. This can be done through various forms; both active and subtle that create the organizational culture that makes the employees of such organizations the people that create the company. After all, a company is made up of people and people are the ones who make other people like themselves to buy into the products or services that the organization is selling!! Values before profits!!
Leverage has often been seen only from the financial perspective in business. But leverage is the key thing that separates winners from losers; victors from the vanquished and makes a corporate organization to be standing tall, long after the death of the founders. It is the use of leverage by such organizations that makes such organizations to become the force that they are; standing tall for generations to come. What about you and your organization? What are your unique leverage points? How do you intend to use them for your profit, benefit and growth? Feel free to share some answers to these questions that may provide insight for others!