Grow Your Business Fast with Leverage
Do you know how to Grow Your Business Fast with Leverage? When you hear the word leverage, you might think of cruise ships and tall bridges. But in business, leverage is a strategy for conquering challenges with minimal investment to produce outsized gains. In other words, leveraging your resources will make you more efficient and competitive.
It's not just an academic concept, though. Companies like Tesla Motors and Google are prominent examples of measuring success through business metrics. They've learned what works and what doesn't work in the marketplace, and they're capitalizing on the ideas that have the most significant potential to expand the scope of their businesses. But getting started with laying the groundwork for this kind of thinking can be intimidating.
You'll need to begin with a strong sense of what you're trying to accomplish and how leveraging your resources will create growth opportunities. Once you get a clear understanding of the end goal, here are ten ways to leverage your resources—along with examples of companies that have done it successfully:
Use partners to access new markets.
One way to quickly expand your reach is through strategic partnerships and coalitions. It can involve building your business with people you know and trust or working with average Joes who are in a position to leverage their resources to help you grow.
For example, Google uses its suite of services for things like advertising (AdSense) and operating Android (Android). The benefit is that it amplifies their credibility as a search engine, increasing their ability to make deals with advertisers.
Apple is another example of a company that had adopted this approach, especially when it entered the music industry. They famously partnered with rock bands like Metallica and the Beatles. Their creative process allowed them to make an album on their terms—and it delivered outstanding results!
Leverage your suppliers as partners.
Like working with allies, building strategic relationships with your suppliers helps you access new markets. Doing so will give you access to goods and services like no one else has.
For example, Nintendo partnered with Sony, a major video game consoles and technology manufacturer, to produce their Nintendo Entertainment System in their early days. They quickly made the product they needed while working closely with a partner who could ramp up production at a moment's notice. It is still true today—Nintendo exclusively works with Sony for their hardware needs.
Give away content as bait for your product (or service).
A simple sales technique is often overlooked: giving away your content for free instead of selling it. Why? Because they've already hooked you with the free content, they can give you something more valuable in exchange for your payment.
As an example, look at Amazon.com and YouTube. Amazon sells eBooks and digital downloads—but it also gives away free content to lure visitors in (in the form of short stories and excerpts). Then they encourage their customers to purchase the entire book once they've caught their interest.
YouTube is another great example: They promote their premium channel subscriptions under free content. But once you purchase the subscription, you get access to the premium channel and its benefits.
Get more out of less.
Leverage can give your business a competitive edge, but it doesn't just apply to customer acquisition. It can also help you cut costs and save money in other areas. Consider investing in new technologies and equipment that will help improve efficiency or use your resources in ways you hadn't considered before—like using a delivery service!
For example, Uber uses an app to connect potential riders with their drivers—and they've leveraged technology (like the driver's smartphone) to make their service possible. In a sense, Uber is both a customer and supplier of its services.
Contact your customers in ways they'll appreciate.
Leveraging your resources implies that you're willing to do whatever it takes to get what you want—even using unconventional channels to get results. The Internet has proven that conventional marketing strategies don't work anymore, especially when trying to reach a younger demographic (where many of the Internet's most successful companies are aiming). Instead, companies like Amazon and Uber are leveraging social media technologies and traditional marketing strategies like advertising to increase brand awareness and generate initial interest in their products.
For example, Amazon uses social media to incentivize people to post product reviews. By giving customers a chance to win prizes through its Vine program, Amazon increases its online visibility and encourages customers to leave positive reviews. And by communicating directly with customers—including using contact forms on their website and email—Amazon can address any questions or concerns their customers might have in real-time.
Collaborate with your suppliers.
It's a classic business move: offering more value to your customers by working together with other companies on projects that can save everyone money and produce a win-win situation.
An example of a company that's doing this effectively is Red Bull. They're one of the largest energy drink companies globally, and they use their partnership with their suppliers to extend the experience of their brand. If you buy a Red Bull at your local grocery store, there are often impulse purchases like hats for sale on your way out. They used their partnership to get people excited about the brand—and it worked!
Reward your customers for referring friends.
The most direct method for leveraging resources is using them as currency to build relationships with your customers. It can be done by offering an incentive like a cash reward or discount when they refer friends (or promote your business online).
As an example, look at Dropbox. They've used referral bonuses to incentivize their customers to refer and promote Dropbox more effectively to increase the number of people using their service. It is an important thing to consider when you're thinking about whether your company should have a referral program or not. For some companies, like Dropbox, this may be enough incentive to make it worthwhile—but it's also important to consider how you'd feel if you were referred by a customer who never gave you a second thought.
Tap your employees as resources.
People are the most significant resource you can leverage, and when you're able to harness their talents and strengths fully, it can make all the difference in your business's success. Take a careful look at your employee roster—are they a well-rounded team? Can they work as a unit to overcome challenges? Do they have enough experience to help your company succeed in the years to come?
Big companies like Walmart are good examples of businesses leveraging their employees well. They've been known to provide cross-training opportunities for career progression and staff development that helps them grow personally. It makes their employees feel valued, which is essential when trying to motivate people who can make or break your team.
Find other groups to build relationships with.
Plenty of companies leverages their partnerships with other businesses and organizations to build mutually beneficial relationships and improve their bottom line. It can be something as simple as a genuine relationship like the partnership between Nike and Apple for its Apple Watch, or something more complex like a cross-promotion deal you strike up with another company as a way to get them to promote your product or service more effectively than you could on your own.
Red Bull is another excellent example, as they've been able to build relationships with other companies and organizations through their partnership initiatives. They've forged a partnership with the Red Bull Air Force Division 1 (the world's premier aerobatic team), which helped create buzz for their brand and allowed Nike to market its newest product.
Share your resources and expertise.
Sharing your resources or expertise means that you're willing to help others solve problems or gain new skills to help your organization succeed. Sharing can be so powerful that some companies like HubSpot and Salesforce have developed entire departments to share their knowledge with other professionals. It can be a huge benefit when you want to go beyond the limitations of your current resources and reach across your company to create synergy.
These are just ten examples of how businesses are leveraging their resources effectively. If you're thinking about increasing the value of your company's resources—whether by improving customer satisfaction or attracting new customers—now is the time to think about how you can do it.
How can leverage benefit your business?
There is one thing about finance that every entrepreneur knows. Financial leverage allows you to multiply your money multiple times over.
If you are considering expanding your business, what would be the one most powerful tool that could help increase your profits and decrease your risk? The answer is leverage — debt — and its truth is even more staggering.
Leverage has a range of other benefits:
You can make your business future-proof.
There are many businesses where the business becomes obsolete or is reduced to almost zero with time. Taking a real estate example, a building may remain relevant for its utility. Still, after that, another property developer might have a better idea of what the market needs. The shops in the building then become obsolete and vacant. But if it is highly leveraged and you have taken loans from banks, you are more likely to pay off your debt. This way, you can recoup at least part of your investment in this property by selling it as an asset in your books.
Investments can be turned into a business.
When you have money in the bank or some other savings, the short-term interest rates offered may not be that rewarding. In that case, it may make sense to leverage this money and convert it into a business. Some investments are riskier than others, and you should choose a company that fits your risk appetite and has enough potential to earn you profits. But still, you can use financial leverage to convert your savings into an earning machine for yourself.
You can do more with less.
Let's say that we started a pizza delivery service, and the next month, our sales are meager – like only 5% more than last month, but our costs of raw materials have gone up by 10%. If we cannot cover our expenses, we have a severe problem. If we had taken a loan from the bank and bought a bike from it, then at least we could have covered the cost of our raw material and, this way, kept our business going.
Unleashing your creativity
We all know the difference between the billionaire Bill Gates and the average Joe working in some call center is? The answer is quite simple Gates was more creative than most other people out there. And if you are planning to expand your business and make it one of the best in its field, you need to be a little more creative than the competition. What is financial leverage? Financial leverage results when a company acquires debt and pursues higher returns with that capital by investing it in ways that often result in greater risk. It can be gratifying, but only if your skills and judgment are up to the task.
Leverage can help you diversify.
Every business has its inherent risk, and that is why people diversify – to spread their risks across different sectors so that if one sector fails, others can support and save the day. You, too, can use debt to spread your risk by investing in different kinds of businesses or even property.
It increases your negotiating power.
If you have a lot of debt, then every time you negotiate with someone over something, they know how vulnerable you are. A leveraged business also gives you more power in negotiations because you have more money as a bargaining chip. It also makes it easier for you to borrow more money because of your business's leverage.
With leverage, you can make better decisions.
If you are like most other entrepreneurs, the first thing that comes to mind is how to get more customers and how to be successful in business. But those are not the only two things you need to focus on. Pricing decisions, company expansion, and strategic alliances are also important. But when you have a lot of debt, it can be challenging to make the right decisions. So leverage is one giant question mark hanging over your head that can make more decisions for you.
It can become a habit.
The last benefit of leverage is that you get used to it. Once you have worked with a leveraged business, you might get addicted to it because of the feeling that you are running a more powerful machine than your competitors have. But even if you don't want to borrow more money or expand further, being in this habit can be very beneficial for your future businesses.
Do you feel like you are struggling with putting "strategy" and "business growth concepts" in place that make a difference? Doing it all is overwhelming! Let’s have a honest discussion about your business and see if the Power of 10 can help you. Click “HERE” to have a great conversation with our team today.
Written and Published By The Strategic Advisor Board Team
C. 2017-2021 Strategic Advisor Board / M&C All Rights Reserved
www.strategicadvisorboard.com / info@strategicadvisorboard.com
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