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How Ted Nicholas used leverage in his very first business
Hi Jesse,
Thanks for that inspiring post! It's a very important point.... I agree, as you go forward your leverage usually does get better, especially if you keep looking for new ways to apply it! It is unfortunate, though, that some get "stuck in a rut" and feel "trapped" by their businesses.... When this happens, it is precisely because they are NOT using leverage.... But they don't see it! It's not something that is usually taught (as far as I know).... Yet it is the key to "multiplying" the effects of your efforts. To me, that's one of the most wonderful things about business.... As you essentially pointed out, employees don't have much leeway to use leverage.... If you're given a job to do, you're usually stuck with it. You don't have many options.... But in business, it's different! Because you are "your own boss", you can get the task done however you see fit! That includes outsourcing it, or doing some kind of deal with someone, or however suits you best.... The possibilities are tremendous! Leverage can also be very important when you are just starting a business.... I just saw a video tape (the "Direct Mail Boot Camp") where Ted Nicholas spoke about how he started in business. He said he started his first business - a confectionary business - with $800 of his own money, and $96,000 in debt. "How did you get yourself $96,000 in debt?" many people asked him. Well, to buy the building for his manufacturing site and retail store, he did a deal with the owner. He said he'd paint and redecorate the property, to improve the quality of the premises. But that's not all.... The deal he proposed was this: if his business succeeded, he would pay what he owed for the property from the profits. If his business failed, the seller of the property would keep the premises, along with the improvements that he had made. The owner thought about it over the weekend, and figured he couldn't lose, so he agreed. To get the manufacturing equipment he needed, he went to a business that had some old equipment in their warehouse. He suggested a similar deal to buy their equipment.... If he succeeded, he'd pay them from his profits. If he failed, they would get their equipment back. They said "We can't do business like that, nobody does business like that," and they turned him down. But Ted Nicholas had no choice, since he had no capital, so he kept asking other companies who had the equipment he needed.... After being turned down several more times, finally someone agreed to his proposal. And that's how Ted Nicholas started his first business.... through leverage. This story is a GREAT example of leverage in action.... When you are aware of the power of leverage, lack of resources, time, etc. aren't enough to stop you! That's because you can figure out how to use leverage to get the resources, time, and anything else you could need! And it's win/win for everyone.... "The Art of Leverage" also has some other examples of people who have started their own businesses using leverage too.... It's a great concept to know. :) Thanks Jesse - it's a very important topic! - Dien Rice |
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