Scaling Business - Leverage

In a recent article I wrote, 'The Ingredients to Scale Up Business' one of the key ingredients is the ability to have a highly leveraged business. To put leverage into context within the business let me first give you my definition.

To divide to multiple, ever more with ever less.

So what does that actually mean in business? So essentially in business we need to divide something up to then multiply the outcome. To look at this in really simplistic terms you need to focus on areas of your business where you do the work once and then get paid forever. Once you start to look at your business and look for the leverage opportunities you'll find opportunities. This is a significant shift from where most businesses are, do the work once and get paid once.

Probably the most well known example of leverage in play is Apple versus Microsoft in the early days. So when Apple computers first came out they made the computer and sold it and then had an ongoing liability to then keep the software up to date. Really not very cost effective or leveraged. On the other hand Microsoft made a piece of software for computers. They created the software program once and then sold it forever. Remember Windows 95! Interestingly they then updated it every few years, 98, 2000 and onward.

Do the work once get paid forever!

Interestingly Apple learnt their lesson on the return of Steve Jobs from Pixar. Whilst at Pixar Steve learnt leverage. What did they do really well? Make animated movies. Make the movie once and then sell it forever, and the merchandise, the experience, the clothing, the DVD ... you get the idea. Today Pixar are probably selling it 50 different ways. Now just look at what Disney have now done to leverage the purchase of Pixar. How many ways do they now sell 'Toy Story' or 'Frozen'?

Now taking a look at your business where are the leverage opportunities to scale your business? There are four areas where you should start to unlock the leverage in your business.

• System and Technology. The key in systematisation is simply this, 'Systems run your business, people run the systems, leaving you to lead your people. Today this focus combined with technology can result in huge systematisation and massive leverage. Think about Client Relationship Management (CRM), Inventory Control, Business Management Systems (BMI), Business Intelligence and many more.
• People and Education. In the first instance one of the key areas of leverage in any business is it's team. Think for a moment. As a business owner you buy other peoples time, now the key ingredient here is buying the right peoples time. In addition is having the right culture. Combine the right people with the right culture and you end up with massive productivity. Interestingly this can seem to be really challenging. Developing a highly engaged team is truly key to scaling your business through leverage.
• Delivery. Now when you look at what you need to have a seamless process of providing your clients and customers what they expect. One simple way to remind yourself of where you need to focus is IF-OT-AS. What that stands for is; In Full, On Time, As Specified. Now this will likely link into both systems and your people. Get it right and you create significant leverage. You blow the expectations of your clients out of the water, guess what, that will result in a life time client and an advocate. Advocacy means they will market for you.
• Test and Measuring. maintain leverage is obviously key, and so it should be no surprise that as you develop the strategies and the tactics for leverage you absolutely need to test what's working and what's not and measure the results. Essentially have robust Key Performance Indicators (KPI) in place will ensure you have an agile and responsive, if not preemptive business focus.

In order to truly scale your business leverage needs to become a core focus of what you do and how you do it. This focus will really tune you into the long term benefits from scaling your business. It will help you to develop the strategic approach to taking your business to the next level. One point to note here is the fact this will be a long game. It's not an overnight miracle growth solution for your business.

What's holding you back from scaling your business?

My name's Steve Gaskell, I'm the Challenge Coach, and I hope that what I've shared with you today has maybe offered you some insight and given you a moments reflection on where you can take your business. Right now if you'd like to know what the value of your business is and its potential then take the Value Builder Questionnaire. I'll look forward to catching up next time.

Now there’s a challenging thought. 

The following articles should also be read to complement scaling business the opportunity:

• The Ingredients to Scale Up Business.
• Scaling Business Scalability
• Scaling Business Opportunity
• Scaling Business Marketability