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How To Leverage Your Small Business For Growth And Sustainability


The concept of “leverage” has the power to get you more time, better fitness, career, development, business success, financial freedom and relationship contentment. Leverage can help you save time and money, gain expertise and more.

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What Is Leverage?

The literal definition of leverage is using a lever to exert force on another object. To appreciate what leverage can accomplish, it is critical to understand the many different types of leverage in business and in life.

Financial leverage: Financial leverage essentially means using other people’s money to gain rewards. Businesses can employ monetary strategies like debt financing and investment to increase financial leverage. You will have more capital available, but will also increase your debt. Keep your financial leverage ratio low for greater stability.

Operating cost leverage: Operating cost leverage occurs when your operating expenses are fixed but your revenues or profits are growing. To measure your operating leverage, divide your fixed costs by your variable costs; high operating leverage means you lose more money overall when revenue decreases.

Time leverage: Time is the scarcest resource. Time leverage is therefore one of the most important kinds. It means using other people’s time to accomplish your tasks, essentially giving you more hours in the day. Delegating and using technology are two ways to increase your time leverage.

Personal leverage: Personal leverage, or relationship leverage, is vital to every area of your life. When you surround yourself with the right people and use those connections to get things done, you are using the power of leverage in the best possible way.

The whole point of leverage is that you are already equipped to succeed. When you leverage your existing resources, they expand and multiply to produce new resources.

Benefits Of Leverage

The main benefit of leverage is that you can do more with less, maximizing achievement in every area of your life.

Build Wealth: The power of leverage is that it boosts your returns on your financial investments so that you can build wealth in a sustainable way.

Grow Your Business: Leverage in the business allows you to save time and money, find new efficiencies, get new information and grow your business to new levels.

Increase Productivity: Leveraging your time, connections and more, helps you to be more efficient, boost productivity and achieve your goals faster.

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The following are assets you can leverage on for maximum achievement:

  • Time
  • Achievement
  • Connections
  • Education
  • Talents and skills

The Power Of Leverage In Business

A marketing expert Jay Abraham promotes “leverage marketing” as a foundational principle of business success. By optimizing your company, you are able to outperform yourself. Therefore, you must pay attention to the key drivers of exponential business growth and leverage your:

  1. Marketing: To optimize your marketing approach, look to your competitors, partners and team for inspiration.
  2. Business Plan: Your business map is one of the most powerful resources you can leverage. To leverage your business plan, be sure to include clear goals and anticipated challenges, and stay flexible so you can adapt to changes in real-time.
  3. Human Capital: Your business capital – human, intellectual and financial – is one of the most powerful drivers of business success. Invest wisely in your people, first and foremost – your staff, customers and wider industry network.
  4. Business Model: Your business model is your integrated approach to engaging your market.
  5. Products And Services: If your product or service needs adapting, do what needs to be done to make, keep and leverage raving fan customers.

Since the MSMEs may not be able to supply the whole resources needed by the organisation in fulfilling its operational mandate. It is, therefore, worth the while for any growth aspiring organisation to leverage the area of weakness to the expert operators in the sector while it deploys the whole force and energy on their strength area for a leap in productivity and performance.

But how does leverage work, and how can you make it work for you? From using financial leverage to make more money to transform your relationships, understanding the power of leverage is the first step in expanding your opportunities and overall fulfilment.

What To Do: Go For It!

Explore and leverage opportunities. You can also discuss this with your business development support consultant.

Featured Image Source: StartupGuys

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Funke Medun is a World Bank trained business development support (BDS) services consultant, a licensed HR practitioner, an international development consultant, a seasoned professional with several years’ experience in banking, consulting, human resources, training, executive coaching, and entrepreneurship development.

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