Step Three: Leverage

Leverage is a crucial part of an MLM system. 

Why and how does it work?

Leverage is all about resources – namely, the resources you have available to grow your business faster, and more effectively.

The two main resources you can leverage are time and money.

Let’s look at leveraging your time first.

One of the reasons people start Internet-based businesses is because they want to control their own schedule. The ultimate goal is to create a sizable income without having to work the same (or more) number of hours as you would work in a ‘regular’ job.

In essence, part of the allure of an Internet business is having more free time to spend on family, friends, hobbies, vacations, etc. However, in order to do this, you must make the most of the time spent on your business.

This means finding powerful ’shortcuts’ that return more in the way of results than they take from you in the time spent on executing them. As you’ve seen so far, one of these shortcuts lies in automating your business.

Automation saves you time because it cuts down on many of the repetitive tasks involved in running the business (lead generation, follow-up, etc).

Logic dictates that the more things you can automate, the more time you will free up. We will talk a bit more about this in Step Six.

Let’s move on for now to leveraging money.

What we’re really talking about here is leveraging a portion of your profits by re-investing them into the growth of your business.

Although it is tempting to go on a personal spending-spree when you first start making real money, you should keep this impulse in check. Set aside something for yourself, and set aside something for your business.

What you want to do is increase the amount of money you re-invest each time your profits increase.

For example:

Let’s say you make $300 net profit your first month (this is after paying expenses), and that you were able to do this on a budget of $75. Well, what if by doubling your budget, you could actually triple your results?

If your program is converting well, this is a very likely result. So, you double your budget to $150, and take this money from the previous month’s profits. You’re keeping $150 for yourself, while leveraging $150 back into the business.

Perhaps you decide to devote this extra money to your advertising budget. This allows you to drive more traffic to your site, and collect more leads.

These new leads end up generating a $900 profit.

Now, you could leverage $450 into advertising + a consultation with a professional copy writer who helps you improve your follow up e-mails.

This leads to an even better conversion rate, so you make more sales than before. Suddenly, your month’s profit jumps up to $2,500.

Do you see where this is heading?

Proper leverage of resources can help you not just double or triple your results, but multiply them by factors of 10 or more.

This is especially true when you devote a good portion of your time or money towards improving your conversion rate.

Why?

Let’s say you earn a $50 commission on one product, and you’ve got 5 out of every 100 of your leads converting to a sale (5% conversion rate). So, your gross profit on those 5 sales is $500.

You spent, say, $20 on traffic to get those leads, so your net profit is $480.

Now, imagine that you are able to increase, through some form of leverage, your conversion rate up to 25%. This is “only” a 20% improvement but you’re now earning $1,250 per 100 leads. …while still spending only $20 on traffic.

Now, your net profit is $1, 230

$1,230-$480 = $750….

$750/$480 = 1.56 x 100 =

156% jump in profits from a 20% improvement of conversion rate!

That’s definitely worth leverage some of your profits for, right?!

Now, imagine that you do this over and over until you’ve got $5,000 per month coming in on autopilot. Its a solid base of income generated with a minimum of time and effort.

You can now leverage this extra time and money to start promoting yet another program.

You take that program through the same process, leveraging your resources towards improving your results, and build that business up to, say, $8,000 per month on complete autopilot.

Now, you’re making $13,000 per month. This is a 60% jump in overall income. Its more than double what you were making before.

This is the true power of leverage!