I found that it was OK to earn £8 per hour when you are 16, but the economics don’t work at my age. It’s OK to put one unit of effort in and get one unit out if you’re a worker, but it has to be much better if you have a team.
Understanding leverage is, in my view, one of the key drivers to business success.
When I was an accountant, one of my clients said to me: “Paul, being an accountant is a passport to mediocrity.”
I thought to myself: “What do you know?”
Then, he sold his business for £7.2 million. Aha, the penny dropped for me. It’s almost impossible to leverage yourself when you sell time. There must be a better way.
Many of my clients are leaders of growing businesses. I encourage them to consider this idea, because they can fall into the trap of being a worker for large periods of their day, which means they aren’t doing the things they should be. The trick is to focus on effectiveness, not efficiency. Most time management courses make people very efficient at being ineffective. Doing what’s in front of you as fast as possible, rather than considering whether it should be in front of you at all.
I don’t have employees or associates, so realise it’s harder to get leverage in my business. That doesn’t mean I can’t of course. Some options I have would include:
- Careful pricing linked to client selection
- Creating a product that I can sell many times (E.g. a book or an app.)
- Using our online platform to supplement face-to-face time
- Offering blended learning
Of course, if you are building a team of employees or associates then it’s much easier, but you may have to change some of your daily habits. Getting 10, 100 or even 1,000 units of output from one unit of input is the challenge. How are you leveraging yourself?