Learn to Leverage

By leverage, I don’t mean as an accountant would define it. Rather, how can I make more money with less work; how can I generate more business with less work? That should win most people over! Let me first start with a story. When I was 12 years old, I took over a newspaper route from the news carrier before me, and the route was 32 customers. After two days transfer of the route from him to me, I quickly realized that the route could be much bigger but the previous carrier had “stopped selling”, but the market for growth was surely there. I convinced the company to give me 10 free papers a day to “prospect” for new subscribers. Fast forward a year and I now had 275 customers!

While that sounds great from a financial perspective, the reality is that I was living in the Philadelphia, Pennsylvania area, where winters are cold, wet, ice and snowy. I was going to school during the day, then homework, and by the time I got to delivering the papers it was night and conditions worse. I sure liked the money, but hated the work of delivering the papers. Solution? You had to be 12 years old to have a route, so I recruited five 11 year olds and divided the route amongst them. I paid them 50/50 what the company paid me, and I did the collecting. This was key, as I never agreed to split the tips, which is where the real money in the job was. As it turned out, they di 100% of the work and I got 70% of the money. That is LEVERAGE! I went on to win Newspaper Boy of the Year, and shortly thereafter negotiated with the Company to take 5 other news carriers out on caravan for 4 hours a session at $100 flat fee.

Now, if I had remained delivering the papers, I would have eventually quit as it was not fun. And the Company would have “lost”, as they were better served with me on the “sales side” rather than the “delivering side”.

Let’s translate that to you, whether you are a CEO, Sales Manager or Sales Professional. “If you don’t have an assistant, you are an assistant”. Let’s take the role of sales- there are things that should be done in sales, but not necessarily by the sales professional. We all must be vigilant and alert to working on high payoff activities. I recommend everyone figure out their hourly pay rate, and even commission only folks have one. Just keep track of the hours you work in a month and divide that into the money you made that month, and that’s your hourly rate. Let’s say you make $50 hour and could hire a part-time assistant for $10 hour. Let’s say we employ this assistant for 10 hours a week doing things like updating our contact management system, executing our designed touch system and handling miscellaneous mailings. If we then used those 10 hours to focus on “High Payoff Activities”, we would be “net ahead” $40 hour/$400 week/$20,000 year!! Now, there is an easy way to put an additional $20k in your jeans. And, if your hourly rate is higher, the payoff just gets better and better.

Another lesson learned in the newspaper boy story is the benefit of “Modeling the Masters”. If it made sense for the newspaper company to put five carriers on caravan with the Newspaper Boy of the Year, wouldn’t the same be true to team the less productive sales team members to ride shotgun and learn from those sales performers regularly earning President Club honors?

If the concept of Leverage can be identified at the early years of newspaper delivery, surely we can figure it out in our respective business roles. Again, “If you don’t have an assistant, you are an assistant”!