📺 Stream EntrepreneurTV for Free 📺

Master the Concept of Leverage to Get What You Want in Business and Life Leverage has the unique ability to dramatically change the outcome of nearly any daily situation.

By Adam Callinan

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


Do you want to achieve more sales, close more deals and take more control in your life? Of course you do. You're in luck because there is an everyday word that has the unique ability to dramatically change the outcome of nearly any daily situation -- particularly those in business. If you can learn how to properly identify and control this concept, your life is sure to never be the same.

So, here's the word, the trick, the magic wand -- it's called leverage. Yep, leverage. Leverage comes in many different forms and plays a particularly important role in the financial world -- which is another article entirely so we're not going to cover it here. Instead, we'll look at leverage as applicable to our daily lives in business.

What is it?

Simply put, leverage is the advantage that exists when a person or entity has the upper hand. They may have achieved this position from a variety of means including a greater knowledge or experience base, exclusivity in a particular market, lower product pricing, better service options or even superior personal relationships -- with special emphasis on the word "personal."

Related: Solve Your Buyers' Problems by Changing Their Perspective

For example: Ever tried to get your kids to quiet down in a restaurant by handing them a video game? That's leverage. You have something that they want and the result of this transaction is that they act how you want them to. Your leverage is gone the second those batteries run out.

Understand where you sit.

It's critically important that you have a clear understanding as to where you do and do not have leverage. Assess your position to determine which party has the greater need or want and which provides more value in certain areas. If your opposing party is in need of something that only you possess, you can use leverage to push for better pricing.

If you don't have that exclusivity, you're likely missing the leverage required to achieve your elevated price -- unless you've created additional value that elevates your negotiating position, and therefore your leverage. Now, there are surely situations where that may not be so clear, but it's important that you constantly assess your position of leverage and adjust accordingly.

Here's a safe assumption: If you're unsure whether you have the leverage in a particular situation, you don't. It's always better to know that you lack leverage than to be unsure as to where you stand, as at least then you can make informed decisions as to your next best move.

Related: The Failing 'A' for Why Your Business Is Struggling

Find what they want or need.

If you don't have proper leverage in your given circumstance, go and find it. Start with understanding the motivations of the person you're working with and build additional value by solving their problems or exceeding their needs.

If you're selling a product, your value -- or what the consumer feels they are getting in exchange for the price -- acts just like leverage. The better the value, the more the consumers desire your product and, therefore, the more leverage you have. As your leverage increases, you are better able to affect a positive outcome that is to your advantage -- which in this example is likely additional revenue and increased margins.

Leverage is all about understanding what another party desires and figuring out what you need to fulfill it, then using your position to gain an outcome in your favor. It is important to note, however, that leverage can be used both for good and for bad. Bad leverage results in one person winning and the others losing -- typically a consequence of working with bad people -- whereas in good leverage situations, all parties can benefit from the outcome of the transaction or deal.

Most smart people tend to avoid doing business with those that overuse their leverage -- you know, the bad people. Instead, be a good person and use your leverage responsibly while creating win-win situations.

Related: 5 Quotes About Leverage to Help You Push Your Business Forward

Adam Callinan

Entrepreneur and Venture Investor

Adam Callinan is a founder at BottleKeeper, the fast-paced and sarcasm-infused solution to the warm beer and broken bottle epidemics that have plagued the world for centuries. Callinan is also a founding partner at Beachwood Ventures, a Los Angeles-based early-stage and non-traditional venture-capital firm at the intersection of technology and entertainment. As an entrepreneur, Callinan has spent over a decade building small businesses in and around technology, medical devices and consumer products, which most recently includes an exit in 2013. Callinan lives in Manhattan Beach with his wife Katie.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick


Franchising Is Not For Everyone. Explore These Lucrative Alternatives to Expand Your Business.

Not every business can be franchised, nor should it. While franchising can be the right growth vehicle for someone with an established brand and proven concept that's ripe for growth, there are other options available for business owners.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Passengers Are Now Entitled to a Full Cash Refund for Canceled Flights, 'Significant' Delays

The U.S. Department of Transportation announced new rules for commercial passengers on Wednesday.


Why Companies Should Prioritize Emotional Intelligence Training Alongside AI Implementation

Emotional intelligence is just as important as artificial intelligence, and we need it now more than ever.

Business News

Elon Musk Tells Investors Cheaper Tesla Electric Cars Should Arrive Ahead of Schedule

On an earnings call, Musk told shareholders that Tesla could start producing new, affordable electric cars earlier than expected.