Small business growth depends on one very big principle: leverage. When you started your business, just having a business plan was enough, but now you find yourself working long and tiring hours. Leverage is a way to do more with less effort, but it takes knowledge and practice. Here is how you can leverage your business.

At the start of a small business, owners fill all kinds of roles in order to make sure the operation of the business is learned and performed the right way. But that means you are doing everything, and not growing the business. If this is where you are in your business, then you need to leverage your small business.

Small Business Growth - How to Use Leverage in Your BusinessSo, what is leverage? Well, it’s a principle that basically says “work once, get paid forever.” You basically do the work once; write it down into a system. By writing down and refining your system, you get better, more consistent results with more efficiency. There are four types of leverage: finance and money; marketing and sales; systems and equipment; and people.

Finance and money involves your ability to borrow money. Basically, since a bank will only lend money if they are sure you will be able to pay it back, you should only borrow money when you are sure you can pay it back and make money from the loan, or you can get a decent return on investment.

Marketing and sales involves methods to make money for your business. Just starting the small business and waiting for customers to show up doesn’t work well. Think about is like this: Leads x Conversion Rate = Customers x Average Number of Transactions x Average Sale Value = Turnover x Profit Margin = Profit. By measuring each step, you can focus and understand where you need to work the hardest and make the biggest changes.

Your system is the leveraging, and equipment makes a huge difference in productivity. So, what equipment do you need in order to better systemize your business? Not sure? Well, research it and then rent it. Renting it gives better money leverage, and also means you aren’t stuck with equipment that doesn’t help your business.

Your staff choices are probably some of the most important. Why? Well, they are replacing you in positions where you really don’t need to be, so choose wisely. Find people who will care as much about your business as you do. They are an investment that will make or break your business.

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