Episode 78
E78: The Power of Leverage: Transforming Your Expertise into Scalable Revenue Streams
This week I’m sharing some amazing insights on turning your expertise into scalable income.
Here are some of the key takeaways:
- Assets are the Foundation: Before creating leveraged assets, it's crucial to own and control all the necessary rights. An audit of your assets ensures you're not at risk of legal issues and helps lay the foundation for the next steps.
- Leverage Increases Profitability: The application of leverage in business leads to not just increased revenue, but also increased profitability. This can be achieved by creating digital products, online offerings, systematizing services, and more.
- Cloning Yourself as Leverage: Developing systems that allow others to deliver your services, frees up time, enables consistent customer experiences, and promotes business growth without sacrificing quality. This can be done through products, employees, facilitators, and licensees.
I can't wait for you to tune in once the episode airs! Keep an eye out for it, and don't forget to stay updated with all the amazing content on Hourly to Exit.
Connect with Erin to learn how to use intellectual property to increase your income and impact. hourlytoexit.com/podcast.
Erin's LinkedIn Page: https://www.linkedin.com/in/erinaustin/
Hourly to Exit is Sponsored By:
This week’s episode of Hourly to Exit is sponsored by the NDA Navigator. Non-disclosure agreements (NDAs) are the bedrock of protecting your business's confidential information. However, facing a constant stream of NDAs can be overwhelming, especially when time and budget constraints prevent you from seeking full legal review. That's where the NDA Navigator comes to your rescue. Designed specifically for entrepreneurs, consultants, and business owners with corporate clients, the NDA Navigator is your guide to understanding, negotiating, and implementing NDAs. Empower yourself with legal insights and practical tools when you don’t have the time or funds to invest in a full legal review. Get 20% off by using the coupon code “H2E”. You can find it at www.protectyourexpertise.com.
Think Beyond IP YouTube Page: https://www.youtube.com/channel/UCVztXnDYnZ83oIb-EGX9IGA/videos
Music credit: Yes She Can by Tiny Music
A Team Dklutr production
Transcript
Today I'm talking about leverage, the third
Speaker:and final variable in the equation to turn
Speaker:your expertise into scalable revenue.
Speaker:In case you missed them last week, I talked
Speaker:about the first and the second variable,
Speaker:which is protection.
Speaker:And the week before that, I talked about the first
Speaker:variable, which is Audit.
Speaker:So to briefly recap, we start with an audit to
Speaker:make sure you understand what assets you currently
Speaker:own and control in your business right now.
Speaker:We want to know what assets we have and what
Speaker:rights we need because we don't want to build
Speaker:these new leveraged assets without owning
Speaker:all of the rights.
Speaker:Many of you ask me because you worry
Speaker:about, , can I use this other resource?
Speaker:Can I refer to this other expert?
Speaker:And we do, we do our, audit to make sure
Speaker:that we do own or control all the things
Speaker:we want to include in our leveraged assets.
Speaker:We don't want to be on the receiving
Speaker:end of a cease and desist letter because
Speaker:we're using materials that we do not own.
Speaker:At best, you wasted money and momentum,
Speaker:but at worst, you'll incur legal fees and
Speaker:maybe even permanently damage your reputation.
Speaker:Then the audit stage lays the foundation for the
Speaker:second step protection.
Speaker:You don't want to find out too late that you
Speaker:failed to put into place protections that prevent
Speaker:clients, subcontractors, and facilitators
Speaker:from using your materials without you.
Speaker:And that might be.
Speaker:By infringement, or by permission, because we've
Speaker:granted them the rights to use those, materials.
Speaker:So we talk about that in the protection episode.
Speaker:So, now we come to the 3rd and final
Speaker:leg, which is leverage the plain meaning of
Speaker:the word leverage is.
Speaker:The application of a lever levers are machines
Speaker:used to increase force.
Speaker:In other words, a lever multiplies the
Speaker:impact of our efforts In business terms,
Speaker:leverage means increasing profitability, not just
Speaker:increasing revenue.
Speaker:We have leverage in our businesses where we can
Speaker:increase revenue without also increasing costs,
Speaker:or we decrease costs without also decreasing
Speaker:revenue, preferably both.
Speaker:Typically, we think of leverage, we think
Speaker:about, digital products or online offerings,
Speaker:things like courses and books, subscriptions, you
Speaker:maybe even memberships, group coaching, and
Speaker:absolutely each of these provides leverage with
Speaker:one to many offers or one to several offers.
Speaker:We create the materials once or we provide
Speaker:our time once and we sell it to multiple.
Speaker:parties.
Speaker:So yes, and you can even have leveraged
Speaker:one on one services.
Speaker:So we can lower the cost of delivery of a one
Speaker:on one service by using standards and procedures
Speaker:by having framework, having models, having
Speaker:templates in place.
Speaker:These are all things that help us become more.
Speaker:Efficient in delivering the service and therefore
Speaker:decreasing the resources or the cost required to
Speaker:deliver that service.
Speaker:And remember that you and your time are the
Speaker:most expensive resources in your business.
Speaker:So anytime you're able to decrease your time
Speaker:in the deliverable while maintaining
Speaker:the price, you are increasing profitability.
Speaker:That's leverage.
Speaker:So what is the basis of every leveraged offer,
Speaker:whether it is digital online course, a book,
Speaker:or a leveraged one-on-one service assets that you
Speaker:own and control before you can legally offer any
Speaker:type of one-to-many or one-to-several product
Speaker:or service you must own or have the right
Speaker:to use those assets.
Speaker:Let's talk about assets.
Speaker:If you have followed me for a while, you know
Speaker:that I like to ask my audience, is there a
Speaker:Rembrandt in your attic?
Speaker:For our expertise based businesses,
Speaker:this question is the business equivalent of
Speaker:a treasure hunt where we look for unidentified
Speaker:and undervalued assets that are
Speaker:hiding in plain sight.
Speaker:Rembrandts are assets that are primed to
Speaker:provide leverage in your business.
Speaker:My favorite Rembrandts are assets that have
Speaker:been created for internal purposes only.
Speaker:So examine your business for these
Speaker:or similar assets.
Speaker:Framework, methodology, workbooks.
Speaker:SOPs, models, even an email list, employee
Speaker:training practices, market research
Speaker:reports, white papers, industry insights,
Speaker:resource libraries, databases, even your
Speaker:online community.
Speaker:Those Rembrandts that we just talked
Speaker:about, those are the effort or the input.
Speaker:Levers are tools and then leverage is the
Speaker:output leverage is the magnification
Speaker:of our efforts.
Speaker:So, Rembrandts, these are things we put in place.
Speaker:Upfront and we have those we incur those
Speaker:costs upfront and then we create that Rembrandt.
Speaker:So we put the effort up front to create models.
Speaker:We put the effort in up front to
Speaker:create as a piece.
Speaker:We put the effort in up front to, put together
Speaker:our database or to create our community
Speaker:and then we are able to reap benefits over
Speaker:time by using a lever.
Speaker:To increase the output from those inputs.
Speaker:Now, I don't think there's any such thing
Speaker:as purely passive income because you do need
Speaker:to put in the effort upfront to create
Speaker:those Rembrandts.
Speaker:They don't make themselves, but it's the
Speaker:application of leverage from that investment
Speaker:or effort that creates the conditions for
Speaker:residual low input recurring revenue.
Speaker:So those are the Rembrandts.
Speaker:levers, some of the levers to apply to
Speaker:your Rembrandts.
Speaker:You can then use your Rembrandts to delegate.
Speaker:Again, you're the most expensive resource in
Speaker:your business, so you can delegate tasks
Speaker:to less expensive resources, whether
Speaker:internally or with an employee or externally
Speaker:with a contractor, but you need to have some
Speaker:of those Rembrandts in place to do that.
Speaker:Systemization, when you have processes or
Speaker:systems, you create efficiencies, whether
Speaker:you're delivering yourself or again,
Speaker:delivering with one of those other, resources
Speaker:specialization when we are, Creating
Speaker:communities, creating thought leadership,
Speaker:developing insights, doing research.
Speaker:We become the specialist and those things make
Speaker:everything simpler.
Speaker:You get better, higher referrals
Speaker:and your expertise compounds over time.
Speaker:Access is another lever.
Speaker:you can sell subscriptions to those
Speaker:Rembrandts, access to your community, access
Speaker:to your, data, to your research, access
Speaker:to your insights.
Speaker:These all have values outside of your
Speaker:business that you can use as levers.
Speaker:And then last but not least licenses here,
Speaker:we create an asset with the intention of
Speaker:licensing to multiple.
Speaker:Licensees.
Speaker:So we talked about Rembrandts, which is
Speaker:our input levers, which is the tool and then
Speaker:leverage, which is our magnified output.
Speaker:in a services based business, I like to think
Speaker:of cloning yourself as the ultimate leverage
Speaker:by developing a system that allows others to
Speaker:deliver your services.
Speaker:You free up time to focus on other tasks, but
Speaker:still provide consistent customer experience and
Speaker:continue to grow without sacrificing quality.
Speaker:For example, let's a DEI training workshop.
Speaker:written exercises, video scenarios, and
Speaker:a trainer's manual.
Speaker:You have, of course, registered
Speaker:these in the U.
Speaker:S.
Speaker:Copyright Office.
Speaker:Your workshop is in high demand, more demand than
Speaker:you can satisfy alone.
Speaker:One of your clients could keep you fully
Speaker:occupied for a year you trained all of their
Speaker:employees yourself.
Speaker:you'd have no time left over for other
Speaker:initiatives or for business development.
Speaker:That's where clones come in.
Speaker:I like to talk about four types of clones
Speaker:that we can use to create leverage products,
Speaker:employees, facilitators, and of course, licensees.
Speaker:First products, books, courses, software,
Speaker:and other DIY products are a great way to
Speaker:diversify your revenue.
Speaker:Depending on the desired result, the
Speaker:customer may be able to get 100 percent of
Speaker:the needs met with a product, but that is not
Speaker:required for creating a valuable product.
Speaker:Helping the customer advance toward their
Speaker:goal with your expert advice is also valuable.
Speaker:Also, you'll be able to reach a larger audience
Speaker:of customers who might not be able to afford
Speaker:your in person services, increasing your impact
Speaker:and your brand awareness.
Speaker:Employees, as founders, we are the most expensive
Speaker:resource in our business.
Speaker:A common method of cloning ourselves is
Speaker:to use employees by hiring and training
Speaker:individuals who can deliver your workshop.
Speaker:You can free up your time for higher
Speaker:level activities.
Speaker:In addition to using less expensive resource
Speaker:to deliver the service, employees reduce Risk.
Speaker:If you're the only one delivering services,
Speaker:what happens if you're ill or you hit a
Speaker:wall with burnout?
Speaker:Very few entrepreneurs have a plan for such
Speaker:contingencies, which can devastate the business.
Speaker:However, having employees deliver services
Speaker:independently of you.
Speaker:Can be very difficult if your clients are
Speaker:only buying your time and not buying your
Speaker:expertise, which you have, systematized or
Speaker:product ties put into another package that can
Speaker:be delivered without you.
Speaker:Facilitators.
Speaker:Outsourcing is a great way to expand your
Speaker:business without taking on responsibility
Speaker:of hiring and training employees.
Speaker:Utilizing a facilitator or other subcontractor to
Speaker:deliver your trainings is an especially effective
Speaker:cloning technique.
Speaker:When you have large corporate clients
Speaker:who want several cohorts to receive
Speaker:your training, you can serve the business.
Speaker:That might otherwise dominate your time
Speaker:while still being able to focus on other
Speaker:parts of your business.
Speaker:You protect your intellectual property
Speaker:by entering into written agreements
Speaker:with all facilitators that details the limits
Speaker:of their use of your materials, ensures
Speaker:that modifications or improvements will
Speaker:be owned by you and prevents them from
Speaker:poaching your clients.
Speaker:This covered more in the last episode
Speaker:about protection.
Speaker:Last but not least licensees.
Speaker:So we do this through licensing.
Speaker:Licensing gives another party
Speaker:permission to use your intellectual property
Speaker:in exchange for a fee.
Speaker:There are 2 types of licensees.
Speaker:I'd like to talk about clients, your
Speaker:current clients.
Speaker:potential clients and other service providers.
Speaker:You turn clients into licensees by training
Speaker:their in house personnel to deliver your training.
Speaker:That's also called the train the trainer model.
Speaker:You turn other service providers into licensees
Speaker:by licensing your IP to them so they
Speaker:can provide your.
Speaker:training to their own clients.
Speaker:And again, that would be a license in
Speaker:exchange for a fee.
Speaker:Now I've heard from many of you that
Speaker:you're concerned about your training being
Speaker:reused by a client without you, more
Speaker:importantly, or being stolen by competitors.
Speaker:With a license agreement, you put in place the
Speaker:structure to make sure that you're paid for all
Speaker:uses of your training.
Speaker:And it provides remedies for unauthorized use.
Speaker:We've talked about several different
Speaker:leverage strategies and to the surprise
Speaker:of absolutely no one at the core of all
Speaker:of those strategies is the development.
Speaker:Ownership and protection of assets.
Speaker:If we want to create scalable, leverageable
Speaker:revenue streams in our business, we
Speaker:must own assets.
Speaker:And the reward for our investment in creating
Speaker:and protecting our assets, and it is an
Speaker:investment, is that we have that lever that
Speaker:we can use to make our business more profitable
Speaker:and more enjoyable.
Speaker:This might be through IP based offerings
Speaker:such as licensing or trainings, or it might
Speaker:be through systemization or productization of
Speaker:our one on one services.
Speaker:What I love to do and what I look forward to
Speaker:working with you with is helping you look at the
Speaker:assets in your business.
Speaker:Making sure that you're owning them, controlling
Speaker:them and protecting them, measure them up with your
Speaker:goals and your market, and finding out the
Speaker:best way to maximize the value of your expertise.
Speaker:I hope you've enjoyed this series.
Speaker:Make sure you check out the last two
Speaker:episodes as well.
Speaker:If you haven't already, and remember,
Speaker:ladies, IP is fuel.
