The Leverage in Business

Amar Pandit , CFA , CFP

Amar Pandit

A respected entrepreneur with 25+ years of Experience, Amar Pandit is the Founder of several companies that are making a Happy difference in the lives of people. He is currently the Founder of Happyness Factory, a world-class online investment & goal-based financial planning platform through which he aims to help every Indian family save and invest wisely. He is very passionate about spreading financial literacy and is the author of 4 bestselling books (+ 2 more to release in 2020), 8 Sketch Books, Board Game and 700 + columns.

May 7, 2021 | 3 Minute Read

This is a key topic that again has an impact on your overall business model.

You are a service provider who is delivering a service to a prospective client who has Rs.10 Crore of Assets.

Who do you think has the Leverage here?

Think about it before you respond. This is not a trick question or a question that you have to get right.  

Most would say the Client would as he has Rs.10 Crore to invest. A Few would say “the Service Provider” because they want to get the question right. Another Few would genuinely say “the Service Provider”.

The right answer is “It Depends”. Yes, that is the right answer. 

It Depends on who really has the Leverage.

If the Service Provider is a Commoditized One, He has Zero Leverage or Power in the Process. Thus, the Prospect with Rs.10 Crore has the leverage. Some people take a lot of advantage of this and I am sure every firm has come across not one but multiple such people. It is not necessary for someone to have Rs.10 Crore to do this. This can be done even with Rs.1-2 Crore depending on who the service provider is.

If the Service Provider is a Real Professional with Real Expertise & Differentiation, then the Service Provider has the Leverage.

Imagine a world class Doctor, Lawyer or any other Professional.  People look forward to working with such Professionals. They do not mind getting on waitlists to meet the right professional sometimes waiting months. I have even seen people waiting for certain hair stylists or designers for weeks and months. 

These world class professionals have the power to choose their clients well. You can too. 

Having this edge and becoming world class in your craft is a strategy in itself.  Thus, Chase Excellence and Be the Best in what you do.