Understanding Leverage

I’m going to provide two examples of leverage. For these examples, I will use a 2000 member network marketing organization. That is, 2000 individuals who are not only customers with a company but have chosen to build a part-time or full-time business by marketing a certain product or service.

OPM: Other People’s Money

Here is an advantage that allows for faster growth in a network marketing structure, which traditional marketing (for your everyday businesses) doesn’t allow. The use of other people’s money for advertising and business growth.

Suppose you have a network of 2000 associates as mentioned. Each of them commits to a weekly advertising budget of only $50 to grow their own customer and distributor base. You are also spending only $50 per week from your pocket. But what happens here? Because you capitalize off of the expenditures from 2000 associates, your advertising budget is actually $2000 x 50 = $100,000 per week (plus your own $50). That’s a lot of money promoting your business.

Disclaimer: The only downfall is that many who build a network marketing business are new to business entirely and know next to nothing about the “investment principle” and the need to fuel their business growth through marketing dollars. Many never do make the $50 weekly (as an example) investment. Of course, these are the same individuals who never achieve any worthwhile profits with their businesses.

OPT: Other People’s Time

A small business owner constantly fights the challenge of needing employees but not having the finances to afford their wages. That’s why they often pay as little as they can get away with. Even 4 employees at 40 hours per week can be very costly for a small business owner.

Let’s take a look at an alternative means for leveraging off of the time investment of others.

In a network of 2000 associates, each one commits to just 1 hour per day of work. You also work just 1 hour per day. But with 2000 man-hours going into your organization, you are actually investing 2000 * 7 = 14,000 hours per week in your business.

Are you beginning to see why some can talk of earning $50,000+ per month while most North Americans are still trying to figure out how to earn that per year? Are you also starting to get a glimpse at how changing what you are doing (or at least adding to it) and using this concept of leverage can very realistically allow you to turn an annual income into a monthly income? At bare minimum, these concepts can create an extra $1000-$4000 per month for any employee… while also allowing for the tax advantages that come with being an independent contractor (ie: business owner) as a network marketer.

Let me add this on regarding the above example. A typical employee works 40 hours per week, 50 weeks per year. That’s 2000 hours of work per year. If you tried to accomplish the above mentioned level of productivity on your own (no employees, no associates), it would take you 7 years of full time work to create what I could create in one week with 2000 associates (and working only 1 hour per day for that 1 week). Contrast your 7 years of full time hard work and effort vs. my 7 days of 1 hour per day work.