5 Ways to Use Leverage in Your Small Business to Scale Successfully
Have you been feeling like your business is stagnating, and yet you are busier than ever?
Successful entrepreneurs know that to grow their businesses, they must leverage every possible resource available. But what does this mean? To answer this question, we're going to look at 5 ways you can leverage your time and resources more effectively for the sake of scaling your business.
You don't have to be a big company to use leverage in your small business.
Leveraging is the idea of using a tool or strategy to gain more momentum, success, or big results. Leverage can also mean giving yourself more time by outsourcing work to someone else so you can focus on other priorities in the meantime.
If so, it might be time to start leveraging.
Learn why leveraging is essential, how it works, and what some common examples are. I'll share how to apply these concepts as an entrepreneur who wants success for their small business.
When you start your business, you are worried about getting things done, making your clients happy, and getting paid. As you continue on the journey of growing and scaling your service business, you notice you're getting so busy that your business is not growing as well as it once had.
This is normal. You have two choices of how to proceed.
- Continue your habits and attempt to hustle and grind your way to success. This initially works, but it ultimately works against you as you work harder, longer for less result. Staying on this path increased your stress level and, in the end, leaves you broke and tired. Or;
- You see this as a chance to change your habits and mindset around your role in the business. You can implement the strategies below to see things get easier, capacity to serve increase, growth is happening, and you've got more time to work on the business, not in it.
The 4 Levels of Leverage in Your Small Business
Let's start by taking a look at the four levels of leverage in a business:
To give this a bit of context. Let's look at the job of managing your daily to-do items.
Level 1 is that you keep everything in your brain. This is easy to accomplish when things are simple. Yet, as your business grows, the ball starts to get dropped, so you grab a simple tool.
Time, effort, and cost-benefit: Little to none.
Level 2 in this scenario is your notepad and pen; you create a simple tool by creating a to-do list. You still are an active participant in this area as you add things to the list, take things off the list and review it regularly. This works for a while until it doesn't.
(Note: You just as easily can use technology here. Basic versions of apps like Trello, Asana, Basecamp all would fall into this category.)
Time, effort, and cost-benefit: You'll likely feel better, but the benefits will be marginal because you still must be involved, or the tool ceases to function.
Level 3 is when you supercharge your tool. An example here would be to use a project management system to save everyday workflow tasks and dates in templates. This platform (I use ClickUp for this) would allow you to bring in the tasks, set the beginning date and then take care of the rest. This saves you time.
Another power tool in this area is automation, a way to apply technology to a process to happen without your direct input. Zapier or CRM automations help tremendously with this level.
Time, effort, and cost-benefit: While you'll likely pay more for the power tools over simple tools, you'll likely start to gain some efficiencies and a boost to productivity, leading to more revenue and an increase in capacity.
Level 4, you transfer the involvement of the tool to someone else. In our example, this could be an administrative assistant, virtual assistant, online business manager, or project manager.
Time, effort, and cost-benefit: You can notice significant gains and freedom in your day-to-day to take on more of a strategic and visionary role in your business. The one caveat is those benefits only occur if your role is to manage the results of your team member, not the actions. When you trade managing a power tool to managing the person – you've only switched out power tools and are stuck in level 3.
Interested more in hiring for the result versus hiring for the task?
Check out this episode of the Journey to 7 Figures Podcast with Clay Collins, founder of LeadPages. He discussed the top-down hiring process at 26:15 in the recording.
5 Areas You Can Leverage in Your Small Business
Some areas of your service business will be easier to apply leverage to than others. Here are five areas you can integrate into your leverage plans.
- Systems & Processes
- Efficiencies & Productivity
Leverage Example #1: Systems and Processes
Systems and processes are an easy place to start leveraging your small business.
Systems are the overriding umbrellas that cover a key segment of your business, such as marketing, sales, cash flow, operations, human resources. They are often a collection of processes.
Processes are the checklist, step-by-step instructions that create unity and reliability within the system.
For instance, a client intake call initiates your sales system. That initial gathering of information is often a process where certain bits of information are collected, and specific questions help with determining client fit and project scope.
You can start implementing systems and processes on day one, but more likely; it will be after you've had time to work out your best process for marketing, sales, and operations.
Even internal areas like strategic planning, hiring, and onboarding new team members can benefit from a defined process.
The idea is to create a simple process that anyone can follow.
The best processes are seen as living documents that can evolve and improve overtime. Keeping things simple encourages ease and adoption.
Leverage Example #2: Technology
Technology is a time and labor-saving strategy that can set repeatable parts of your business on auto-pilot.
One way you can use technology as leverage in your small business is to look for opportunities to automate repetitive but necessary tasks.
For instance, their operations specialist handled all inbound calls for one of my clients, post-sales call follow ups, and scheduling jobs for the team.
Through the course of the work, the employee transferred information between 3 different systems. The volume of calls was large enough that the employee could spend 10% of the week just transferring information.
Using Zapier, we identified a way to automate the information transfer and created a template that worked for all the systems – making information flow smoother while increasing employee productivity.
Automation is a way to take simple tasks that keep getting missed off the to-do list and into the done column.
Look for opportunities to bring technology to the table when you're not quite ready to hire a team member or notice that the ball is getting dropped, or things just aren't working as well as they should.
Leverage Example #3: Money
It is easy to think that leveraging money is a big business game, but it is very viable for small service businesses.
Consider the concept of leveraging other people's money, one of the most established examples of leverage.
You leverage other people's money when someone invests in your business or use credit options to invest in growth initiatives.
Platforms like Kickstarter, Patreon, and GoFundMe all facilitate crowdfunding by micro-investors who buy into the purpose and mission of the business, for some level of reward, or often just out of a good will.
You also can employ this strategy when you receive funds from clients before you've delivered a service, especially in pay in full situations.
While you may not be seeing that level of sales, there still is the 'time value of money' that you can leverage when your clients pay in full. These more significant cash infusions can be used to increase cash reserves, pay down debt, pay ahead expense to get more favorable terms, and make investments into your business.
One of Amazon's core business models is that they can leverage buyer's money for 28 days before paying suppliers. To give this a bit of context, Amazon reported $125.6 Billion in revenue in the fourth quarter of 2020.
Imagine the interest earned in just one day.
Only 12% of businesses have what it takes to scale their business profitably and sustainably.
Do You Have What it Takes?
Leverage Example #4: People
Scaling a service business is dependent on the efforts of others. In fact, in this article, we talk about the 5 types of people you can leverage in your business for tremendous success.
When it comes to leveraging the efforts of others, your relationship with the 'work' of your business must transform. Every successful business owner has figured this out, and it is the transformation you can bring into your business starting today.
That critical transformation is to go from the one who gets all the work done to be the one who ensures the work gets done.
The transformation requires you to go from worker to business owner and from business owner to entrepreneur. Other paths, solutions, and relationships can come into your business, making it easier to gain new clients and new opportunities.
Leverage Example #5: Efficiencies and Productivity
The four leverage strategies we've spoken of so far are all ways that increase efficiencies and productivity in a business when you successfully implement them in your business.
Yet finding the opportunities to increase efficiencies and productivity across the business is a strategy in itself.
The challenge that service businesses face is when you serve your clients in a highly individualized manner creating unique solutions, it is (seemingly) challenging to achieve economies of scale.
Yet, one of the key strategies you must master on your journey of scalability is the dance between getting work done and getting more done with the resources you have.
Look for areas in your business where you are dropping the ball, where roadblocks, hurdles, and bottlenecks are happening in the organization. Often these are areas that can be simplified and improved.
There are also some strategies that you as the leader can utilize to motivate and inspire productivity in subtle ways, especially with your team. Two of the most straightforward tactics you can employ with your team are engagement and tension.
Engagement is a motivator that activates the internal engines of your team. When these engines are activated, your team's energy acts as an amplifier to their efforts, boosting productivity.
Additionally, tension can create the same result. Healthy tension can be created through healthy competition, deadlines, goals, and targets. Tension can also be created in more subtle ways, such as timers, scorecards, and counters.
In both methods, we call attention to the result that is desired.
I always think back to the book, The E-Myth that illustrates the implementation of these tactics.
In one story, the owner installs a large brass bell in the middle of the office for the sales team to ring when a sale is made. This uses both engagement (let's see who will ring the bell first) and tension (I really want to ring the bell).
Where are the areas that you can employ engagement and tension to boost efficiencies and engagement in your business?
Scaling a service business is not as simple as just thinking of ways to make more money.
These five examples help you start brainstorming about how to scale your own business with less effort. Are you considering scaling your business? See if you have what it take by taking the Scaling Rich Personality Quiz today.
Leslie Hassler is a popular author and speaker who spends much of her time coaching business owners on how to run their growing businesses by their rules. Delivering high-touch, personalized service, Leslie works with her clients as a partner, not just a consultant (who would pop in, tell you what to do, then leave).
Leslie teaches her clients a structured way to decide what to do first, second, next -- and never – in their businesses, so that they can learn to do it for themselves.
Leslie lives in Dallas with her husband and two kids, so she knows it’s not just about growing the business – it’s about getting the business ship shape so it grows and you can be home in time for dinner.
Leslie speaks on topics such as business leadership, prioritizing the business owner’s To Do list, and how to create and implement a strategic plan for growth.
If you’d like to have Leslie come speak to your group or organization, or present at your event, inquire here.