Leverage In Business
One of the definitions of leverage is the “Ability to influence a system, or an environment, in a way that multiplies the outcome of one’s efforts without a corresponding increase in the consumption of resources.
In other words, leverage is an advantageous-condition of having a relatively small amount of cost yield compared to a relatively high level of returns. Thus, “doing a lot with a little.”
Remember also when we studied the order of levers at school in regard to the following-
1. The action of a lever.
2. The mechanical advantage or power gained by using a lever.
With regard to people at large such as the masses it could be defined as “the power or ability to act or to influence people, events, decisions, etc.; sway: Being the only industry in town gave the company considerable leverage in its union negotiations. “
In business and certainly real estate leverage is “ the use of a small initial investment, credit, or borrowed funds to gain a very high return in relation to one’s investment, to control a much larger investment, or to reduce one’s own liability for any loss.”
We all use leverage in business in different ways; on these social media forums we send out some message to a large number of people such as in direct marketing but we certainly do not get a 4% response as used to be allowed in that form of advertising or marketing.
We use YouTube, Blogs, Email advertising, Press Releases, social correspondence, forums, chat rooms, viral marketing, Google, now Google+, Twitter, FaceBook, LinkedIn and you name it. There must be hundreds of different ways we benefit from leverage- word of mouth must surely be one of the best ways.
Whether we do it consciously or otherwise, we need to know it is always a part of the life we live. Without doubt, if you know nothing about leverage your life will look different. The so-called unique selling or value propositions are nothing without leverage in business.
Cheers
Chris Borrett
If by chance, you have not encountered my previous posts outside this blog, one of my favourites is about “Relaxation, Stress and Sleep”. You have the luxury of reading it by clicking here.
Image Credit: FreeImages.com/Yan Moura