Homebiz

According to the Wikipedia dictionary, leverage is “A force compounded by means of a lever rotating around a pivot” and “By extension, any influence which is compounded or used to gain an advantage.” The latter part of that definition is the most relevant for internet businesses.

Leverage is frequently defined in either monetary or mechanical terms, but it has a much broader applicability, including the world of online businesses.

So how can we interpret the term “any influence” for our affiliate income businesses?

One of the best ways for an online business to gain the advantage of leverage is by re-using existing content. Most of the ebooks currently advertised on the internet reflect content that has been re-used, although some may have been originally written as ebooks, most began as a single blog post, or a response to a customer email, perhaps even some FAQs.

Within Finance, the benefit gained from leverage is commonly expressed as a ratio of some sort, for example, a debt-to-equity ratio. Such ratios are useful for accountants, but that is not the audience I’m addressing here.

How can we calculate the leverage advantage to be gained from re-using our existing content? Consider the following simplistic example (no rocket science here): Assume you could write a single document for one customer in ten hours and then sell it for $50.00. You have earned $50.00, but it took 10 hours of your time to get that much money; effectively, you would have earned about $5 per hour (less than the current minimum wage) for your labor but you would not have made any profit on that sale.

Assume, however, you take that same document (adapted to remove any proprietary info) and offer it as an ebook via the Web for $19.95, and that you eventually sell 100 copies of your published ebook. You have now earned $1995, less the $50 to create the primary document and take away another $5 to remove any customer/proprietary info, that would leave you now with a profit of $1940.00.

This example describes the leverage advantage, specifically the leverage obtained from re-using existing content.

Once we we’ve been introduced to the concept of leverage, we discover many different applications to our affiliate businesses. This article has addressed one of those ways. Further articles will discuss other ways that home businesses can gain the advantage of leverage.

If you like what you’ve just read, and would like to learn how to use leverage to help put your income on autopilot, get the Infinite Income Plan here.

If you enjoyed this post, make sure you subscribe to my RSS feed!