"to take it up a notch" can mean two closely-related things: (1) to use slightly more effort to achieve a result. Example: "I study Russian twice a week on my own. I think I'll take it up a notch (= I think I'll use a little more effort), and start studying it three times a week." (2) to actually succeed in bringing something to a slightly higher level. Example: "By increasing my weekly studying from two days to three, I was able to take (or: bring) my Russian up a notch." Your sentence, "Let's take it up a notch" could mean either of the two things. It could mean, "Let's increase our effort", or it could mean, "Let's take (bring) (something) up to a higher level." You can also "take (something) down a notch", which means the opposite of what we've been talking about: (1) to lessen efforts. Example: "Ralph could be a great car salesman, but he puts too much pressure on potential customers. He ought to take it down a notch." (= He ought to use less pressure, effort.) (2) to actually lower the level of something in some way. Example: "James thought he was the smartest person in college, but when he failed the exam, that took (brought) him down a notch" ( = it reduced his stature, and perhaps made him look worse in the eyes of others.

To "take it up a notch" means to take it to the next level. For example in sport to "take it up a notch" would mean to improve your performance slightly more than before. If you were to take your language learning 'up a notch' it would mean to improve your current ability.