The Benefits of Having Leverage

One thing we have to remember is that when people go out and start a business, they’re green. Of course, no beginner probably has everything that they need a lot of time because you don’t know what you need. I don’t judge when someone doesn’t have what they need when they start out because when I started, I was in the same boat. There may not be a mentor around to tell you how to take care of things and to make sure you have all you need. In this day and age, you may need some money. Maybe you got laid off from your job. We are living through a pandemic right now, so that could be one of the reasons that probably pushed you out of the door or gave you an opportunity to leave the job.

Now, you don’t know exactly what to do. One of the things that you may realize is that you don’t have any leverage, you don’t have anything to put you in a position of comfort and a position of strength. There are a lot of contributing factors to this. The number one factor in business is a lot of times new business owners don’t have leverage because of finances. Yes, you can start this business with no money. You might have started your business with $5, or $500. But the person who starts their business with $50,000 has a whole lot of leverage, a lot more than the person who started with five or $500. The second contributing factor is lack of experience, not lack of experience doing the actual service because some of you are probably great at the service you provide because maybe you’ve been doing it for 20 years.

The question is have you done it for yourself? Have you done it as a business? Sometimes, the cook at McDonald’s is the best employee there. They know everything about that particular store. They can probably tell you about the finances, but if you take him or her off of the grill and put them in that manager’s suit, it’s going to be a huge learning curve for them to figure out how to run the place. They haven’t been taught how to deal with employees, they haven’t been taught how to hire and fire, recruit, deal with budgets, and payroll. There will be a learning curve and it doesn’t matter how good they are at their job and how much they know about that position.

They probably can tell you everything about the space, but you still don’t have the leverage. If you switch them and place them in another position, you have to find a way to have leverage and get some training about running a business, no matter what kind of business it is. Learn how to actually run a company, and what it takes to run a company. Lastly, there are false expectations. This comes right off of not knowing how to run a business because when you’ve had that experience or you’ve been mentored or trained by someone who has extensive experience, they will not help you to manage your expectations. They will make you believe that just because you put in $20,000 to start a business, that doesn’t mean you’re going to see $20,000 in the next two weeks or two months.

That’s not realistic for most businesses. Can it happen? Yes, it can, but most of the time it won’t happen like that. Having these false expectations will put you in a very bad way. It will probably put you in a situation where you’ll let the business go. Like the people did back in The Gold Rush, you’ll stop digging right before you strike gold. It’s important to focus on those three things.

Now, let’s discuss how you go about focusing on those three things.

First and foremost:

1. Hustle while you work. Let’s say you have a nine-to-five job and you find yourself getting pissed off with your boss. Although you may be mad, if you weren’t kicked off your job, I would stay on the job. It’s okay to have a secret. I know we live in a social media world, and everything is out in the open, but it’s okay to say to yourself that you have a great idea for this amazing business, new product, or service. For the next 12 months, I’m going to have to work my ass off behind the scenes to see what this is about. That’s leverage. You’re killing all the birds with one stone. You’re not worrying about it. You’re putting some time in. You’re starting to learn how it works as a business.

At the same time, you don’t have the financial strain because your business is being started on the side. You are not just jumping out and throwing the baby out with the bathwater.

2. Make sure you save some money. This is a side hustle. Any profit that you do make, make sure you are retaining some of them. When you step out, you will have that 20, 30, 40, or $50,000 already in the bank when you leave. Now, you’re way more comfortable than the average person leaving their job. You can possibly have six months or a year’s worth of bills already saved. When you step out, that’s your leverage, which means you won’t be making thirsty moves to survive, as opposed to moving like somebody that’s trying to thrive. You’ll be very rare, and it’ll be great for you. You’ll take better risks and more calculated risks because of the understanding that you can pass up on things that might mess up your business because you are not doing it to make it a “measly buck.”

3. Dealing with expectations. After working on your business for a year, your expectations should change. I say a year because you need to have a situation where you see all seasons of the business. You know, some people can do six months, but I would rather you see all four quarters of the year and see what happens in the business. See what your up quarters were, see what your down quarters were, and be able to make decisions from that. You might say the first quarter was horrible, while your second quarter was okay. You might not want to jump off the job in the first quarter. You might need to stay in the first quarter on the job a little while longer, plug in some holes and make sure that you’re straight through that quarter. And if you see the quarter grow from last year, you’ll know you’re on the right path.

And then you might say, okay, second quarter, I’m going to do the same thing because the third and fourth quarter was everything for you. Then you may jump out during the third and fourth quarter or one of those quarters that you already know you’re going to be up to, and you’ll be able to do what you need to do. By the next time you come around, you won’t have any down quarters and it won’t put your business in jeopardy. Those are a few areas to put you in the best position that when you are jumping into your business, you’re jumping in with leverage. And the best thing about it is when you do jump, I’ll be right here in your business corner.