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Leveraged growth: Working smarter, not harder!

Updated on December 26, 2016

I've always felt that I don't have to be an originator - just a good duplicator.

- Max Cooper, owner of 47 Mc'donald's franchise.

In August of 1888, an Atlanta druggist by the name of Asa Candler paid 2,300$ in cash for the exclusive rights to a carbonated fountain drink called Coca-Cola.

Coca-Cola was an immediate success and by the turn of the century virtually every drug store in the south featured a soda fountain where a customer could sit down and sip a cold coke for 5 cents.

Then Candler made a monumental decision that would transform Coca-Cola from a small regional company into an international house hold name. Candler decided to bottle Coca-Cola, a unique form of leverage to save money and time.

Bottling! Just think for a moment about the power of this word. Before coke came in bottles, you had to go to the local soda fountain to order a coke. So coke sales could only grow as the number of soda fountain grew. Bottling changed all that, today anyone in the world can enjoy a refreshing drink of Coca-Cola in the convenience of their home, anytime of the day or night. All because of leverage.

What is leverage?

The root word of leverage- lever- comes from an old French word meaning "to make lighter". By wisely using certain levers or tools, difficult tasks can be performed in a lot less time with a lot less effort, thus making them "lighter". So, leverage increases productivity by maximising time, effort and money.

Leverage is used by almost everyone and most notably the corporates. Hiring employees is the most obvious way business owners leverage their time. If Henry Ford for example, had built the model T by himself, he could have pocketed 100% of the profits. But he knew he'd only be able to build a car or two each year working solo. So he leveraged his time and talents by teaching his employees to copycat his system. By doing this Ford built thousands of cars each year and became one of the richest men in history.

Leverage through Franchising!

The best example of leverage through franchising is of Mc'donald's franchise. Ray Kroc the owner of M'donald's didn't invent franchising but he sure perfected it. Kroc understood that the key to a successful franchise was duplication. So he went about setting up a fool proof system that spelled out every detail of a successful franchise. So, when someone bought a Mc'donald's franchise, all they had to do was connect the dots. It was a copycatter's dream come true!

However, not everything is duplicatable. The reason the actor Tom Cruise can command 20 million $ a picture is because he's the essence of a star. In hollywood's terms he's bankable. You can't franchise the product "Tom Cruise", because he's not duplicatable. The average person can't copy what Tom Cruise does and expects the same results.

However, some products and businessess are easily duplicatable like Pizza from domino's, Pizza hut etc. A franchise doesn't have to be a rocket scientist. But he does have to be a great copycatter of a proven system.

The alternate Franchise.

The only draw back of franchising is the start up cost. You need millions to start your business. Suppose the start up cost was very less, say less than 500$ and took advantage of the powerful form of growth- exponential growth through compounding. You would have the ultimate copycat systm to create wealth. So you get paid 1,000 times for the work you do once, instead getting paid once for the work you do 1,000 times.

This is the power of Network marketing!


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