Rich dad's before, you quit your job 10, real life lessons, every, entrepreneur, should know about building a multi-million, dollar business by. Robert T Kiyosaki. Acknowledgments. Entrepreneurship. Is as much a spirit, as it is a calling, it's, a fire that burns, deep inside, a fire. That fuels, the leaders among us to defy the odds hold, fast to our dreams and invent. The future, before. You quit your job is a tribute, to entrepreneurs, around the world who refuse to back down from their dreams I, acknowledge. All those, who, have inspired me, to never lose my passion, to be a catalyst, of change to. Challenge the status quo and to stay. The course, thank. You Robert, T Kiyosaki. Introduction. What. Makes entrepreneurs. Different, one. Of the most frightening days of my life was, the day I quit my job and, officially. Became an entrepreneur on, that. Day I knew, there were no more steady paychecks, no, more health insurance, or retirement plans, no. More days off for, being sick or paid, vacations, on that. Day my, income, went to zero the. Terror of not having a steady paycheck was, one of the most frightening experiences, I had ever experienced. Worst. Of all I did, not know how long it would be before I, would have another steady paycheck it. Might be years, the. Moment I quit my job I knew, the real reason why many employees, do, not become, entrepreneurs, it. Is fear, of not having any money no. Guaranteed, income no. Steady, paycheck. Very. Few people can, operate, for long periods, of time without, money. Entrepreneurs. Are different, and one, of those differences, is the, ability to operate sanely, and intelligently. Without, money. On. That. Same day my, expenses. Went up as an. Entrepreneur, I had to rent an office a parking, stall and a warehouse, buy. A desk and a lamp rent, a phone and pay, for travel hotels. Taxis. Meals, copies. Pens, paper, staples. Stationery. Legal, tablets, postage, brochures. Products. And even, coffee for the office I also. Had, to hire a secretary an accountant. An attorney, a bookkeeper. A business. Insurance agent, and even. A janitorial, service. These. Were all expenses. My employer, had once paid for me I began. To realize how expensive, it had been to hire me as an employee I realized. That employees, cost far more than the number of dollars reflected, in their paychecks, so. Another. Difference between employees. And entrepreneurs. Is that, entrepreneurs, need to know how to spend money even, if they, have no money. The start of a new life. The. Day I officially, left the company I was in San Juan Puerto Rico, it. Was June, 1978. I was. In Puerto Rico because I was attending the Xerox corporation's, president's, club celebration. An event. Recognizing. The top achievers, in the company, people. Had come from all over the world to, be recognized. It. Was a great event a gala. I will always remember I could. Not believe how, much money Xerox, was spending, just, to recognize the top salespeople, in the company, but. Even though it was a celebration, I was, having a miserable time. Throughout. The three-day, event all I could, think about was, leaving the job the, steady paycheck and the, security, of the company I, realized. That, once the party in San Juan was over I was. Going to go on my own I was. Not going back to work at the Honolulu, branch office or the. Xerox Corporation. When. Leaving San Juan our plane, experienced. Some kind of emergency in. Preparing. To land at Miami the, pilot, had us all brace cradle. Our heads and prepare. For a possible crash, I was. Already feeling bad enough about, this being my first day as an entrepreneur, but, now I had, to prepare to die on top of it my. First day as an entrepreneur, was not off to a very good start. Obviously. The plane did not crash, and I, flew on to Chicago where, I was going to do a sales presentation, for my line of nylon surfer wallets I arrived. At the Chicago, Mercantile Mart, late, because, of the flight delays and the client, I was supposed to meet a buyer, from a large chain of department stores was, already gone, once. Again I thought, to myself this. Is not a good way to start my new career as an entrepreneur if, I don't make this sale there, will be no income, for the business no, paycheck for me and no, food on the table, since. I like to eat having. No food disturbed, me the most.
Some People born entrepreneurs. Our. People, born entrepreneurs, or are they trained to, be entrepreneurs. When. I asked, my rich dad his opinion, on this age-old question, he said. Asking. If people are born or trained to be entrepreneurs, is a question, that makes no sense it. Would be like asking if people are born employees. Or trained. To become employees. He. Went on to say people. Are trainable. They. Can be trained to be either employees. Or, entrepreneurs. The. Reason, there, are more employees than entrepreneurs. Is simply. Because our schools train, young people to become employees. That. Is why so many parents say to their child go. To school so. You can get a good job I have. Yet to hear any parents, say go to school so, you can become an entrepreneur. Employees. Are a new, phenomenon. The. Employee is a rather new phenomenon. During. The agrarian age most, people were entrepreneurs. Many. Were farmers, who worked the Kings lands, they. Did not receive a paycheck from the king in fact. It, was the other way around, the. Farmer, paid the king attacks for, the right to use the land those. Who were not farmers were trades people aka. Small. Business entrepreneurs. They. Were butchers, bakers, and candlestick. Makers their. Last names often reflected. Their business that. Is why today many. People are named Smith for, the village blacksmith, Baker. For, bakery owners and farmer. Because, their family's business, was farming. They. Were entrepreneurs, not, employees. Most. Children, were raised in entrepreneurial, families, followed, in their parents footsteps and also. Became entrepreneurs. Again. It, is just a matter of training, it. Was during the Industrial Age that, the demand for employees, grew in, response. The, government took, over the task of mass education and, adopted. The Prussian, system upon. Which most Western, school systems, in the world are modeled. When. You research the philosophy, behind Prussian. Education you. Will find that the stated purpose was to produce soldiers. And employees, people. Who would follow orders, and do, as they were told. Crushin system of education is. A great system, for mass-producing. Employees, it. Is a matter of training. Famous entrepreneurs. You. May also have noticed that, many of our most famous entrepreneurs. Did, not finish school. Some. Of those entrepreneurs, are Thomas, Edison founder. Of General Electric, Henry. Ford founder. Of Ford Motor Company, Bill. Gates founder. Of Microsoft. Richard. Branson founder. Of virgin, michael. Dell founder. Of dell computers, Steve. Jobs founder. Of Apple and Pixar, and Ted. Turner founder. Of CNN. Obviously. There, are other entrepreneurs. Who did well in school but, few are as famous as these. The transition, from employee to entrepreneur I, know. I was, not born a natural entrepreneur. I had. To be trained my. Rich Dad guided, me through a process, of starting. As an employee to eventually. Becoming, an entrepreneur. For. Me it was not an easy process, there. Was a lot I had to unlearn, before, I could begin to understand, the lessons, he was trying to teach me, it. Was difficult hearing. What my rich dad had, to say because. What he said was, exactly opposite, from the lessons my poor dad was trying to teach me, every. Time my rich dad talked, about entrepreneurship, he, was talking, about freedom. Every. Time my poor dad talked to me about going to school to get a job he, was talking about security. The. Clash of these two philosophies, going, on in my head was confusing, me. Finally. I asked, rich dad about the difference in philosophies. I asked. Aren't. Security. And freedom the same thing. Smiling. He replied. Security. And freedom are not the same in fact, they, are opposites. The. More security, you seek the. Less freedom you have the. People with the most security, are in jail that. Is why it is called maximum. Security. He. Went on to say if, you want freedom you, need to let go of security. Employees. Desire. Security. Entrepreneurs. Seek, freedom. So. The, is can. Anyone become, an entrepreneur my. Answer is yes, it, begins, with, a change, in philosophy it. Begins, with, a desire, for more freedom, than security. From, caterpillar, to butterfly. We. All know that, a caterpillar spins, a cocoon and, one, day emerges. As a butterfly. It. Is a change, so profound, it is known as a metamorphosis. One. Of the definitions, of metamorphosis, is a striking. Alteration. In character. This. Book is about, a similar, metamorphosis. This. Book is about the changes, a person, goes through when transitioning, from employee, to, entrepreneur. While. Many people dream of quitting their job and starting their own business, only. A few, actually. Do it why. Because. The transition, from employee to entrepreneur is. More, than changing, jobs it. Is a true, metamorphosis. Entrepreneur, books written, by non, entrepreneurs. Over. The years I have read many books about entrepreneurs, and entrepreneurship. I studied. The lives of entrepreneurs, such as Thomas Edison Bill, Gates Richard. Branson and Henry, Ford I also. Read books on different entrepreneurial.
Philosophies, And what, makes some entrepreneurs, better than, others, in. Every book good, or bad I found, some priceless bit, of information or wisdom that, has helped me in my quest to, become a better entrepreneur. Looking. Back at the books I have read I noticed. That they fall into two basic, categories. Books. Written by entrepreneurs. And books, written by non entrepreneurs. Most. Of the books are written by non entrepreneurs. People. Who are professional, authors, journalists. Or college, professors. While. I have gotten something important, from every, book regardless. Of who wrote it I did. Find something missing, what. I found missing, was, that down in the gutter kicked, in the gut stabbed, in the back terrifying. Mistakes, and horror stories, that almost, every, entrepreneur, goes through. Most. Of the books paint, a picture of the entrepreneur, as a brilliant suave. Cool, business person, who handles, every challenge, with ease, the. Books about great entrepreneurs, often make, it sound like they were born entrepreneurs, and granted. Many of them were, just. As there are natural and gifted, athletes, there, are natural and gifted, entrepreneurs, and most. Books are written, about such, people. Books. On entrepreneurship, written, by college professors have, a different, flavor, college. Professors, tend, to boil the subject, to the bone leaving. Only the static facts, or findings, I, find. Reading such technically, correct books difficult, because, the reading is often boring, there. Is no meat left nothing, juicy, just. The bones. This book is different. This. Is a book about entrepreneurship, written. By an entrepreneur who, has experienced. The ups and downs the, successes, and failures of, the, real world. Today. The, Rich Dad Company is an international. Business with products, in 42, different languages, doing. Business in over, 55 countries. But. It all started, as a company, that my wife Kim and I started, in 1997. Our. Initial. Investment, was. $1,500. My. First book Rich, Dad Poor Dad has, been on the New York Times bestseller, list for over four and a half years, an accomplishment. Shared, by, only three, other books maybe. As you, listen to this book it will still be on the list. Smart I am at business which I am NOT I thought. It better to write a different, type of book on entrepreneurship. Rather. Than tell you how I brilliantly, sailed, over the tallest, peaks and made millions I thought. You might learn more from, how I dug many deep holes fell. Into them and then, had, to dig my way out. Rather. Than tell you about all my successes, I believe. You will learn more from my failures. Right about failures. Many. People do not become entrepreneurs, because they are afraid of failing, by. Writing about the things many people are afraid of I hope, to help you better decide if, becoming. An entrepreneur is for, you, my. Intent, is not to frighten you off my. Intent is to provide a little real-world, insight, of the ups and downs of the process, of becoming an, entrepreneur. Another. Reason for writing about failures, is that, humans, are designed to, learn by making mistakes. We. Learn to walk by first falling, down and then trying again, we. Learn to ride a bicycle by, falling off and then, try and again, if. We had never risked, falling, we, would go through life crawling, like caterpillars. The missing elements I have found in reading, many of the books about entrepreneurship. Especially. Those written by college, professors is, that. They do not go into the emotional, trials, and tribulations, an entrepreneur.
Goes Through, they. Do not discuss, what happens, to entrepreneurs, emotionally. When the business fails when. They run out of money when. They have to let employees go, and, when, their investors, and creditors, come. After them. How. Would most college, professors, know how, a failing, entrepreneur. Feels how. Would they know since. A steady paycheck, tenure. Always. Knowing the right answers and never, making mistakes, are highly. Prized in the academic, world, again. It's, all a matter of training. In. The, late 1980s. I was invited, to do a talk on entrepreneurship. At Columbia, University. Rather. Than talk about my successes, I talked. About my failures, and how much I learned from, my mistakes, the. Young audience asked. A lot of questions and, seemed, genuinely. Interested, in the ups and downs of becoming, an entrepreneur I, talked. About the fears we all faced when starting a business and how, I faced, those fears I shared. With them some, of the more stupid mistakes I made and how, those mistakes, later, became valuable lessons, I would never have learned if I had not made the mistakes, I, talked. About the pain of having to shut a business down and lay, people off because, of my incompetence, I also. Shared, with them how all my mistakes, eventually. Made me a better entrepreneur, very. Rich and most. Important. Financially. Free never. Needing, a job again, all. In all I thought, it was an objective, and realistic, talk on the process, of becoming, an, entrepreneur. A few. Weeks later I found, out that the faculty, member who had invited me to speak at the university was, called into her department heads office and reprimanded. His. Final words to her were we. Do not allow failures, to speak at Columbia. What, is an entrepreneur. Now that we have torn into college professors, it is time to give them some credit, one. Of the better definitions, of an entrepreneur, is from, Howard H Stevenson, a professor. At Harvard University. He. Says. Entrepreneurship. Is an approach to management, that we define, as follows, the. Pursuit, of opportunity without. Regard to resources, currently controlled. In. My, opinion this, is one of the most brilliant definitions. Of what, an entrepreneur is, it. Is bare-bones and, brilliant. Of excuses. Many. People, want to become entrepreneurs but. Always have some excuse, for why they do not quit their job, excuses. Such as I don't, have the money I can't. Quit my job because, I have kids to support I don't. Have any contacts, I'm. Not smart enough I don't. Have the time I'm too, busy I, can't. Find anyone who wants to help me it. Takes too long to, build a business I'm. Afraid. Building, a business is too, risky for me I don't. Like dealing with employees. I'm. Too. Old. The. Friend who gave me this article by professor Stevenson, said any, two-year-old. Is an, expert, at making excuses, the. Reason most people who want to become entrepreneurs remain. Employees, is that they have some excuse, that keeps them from quitting, their job and taking. That leap of faith for many. People the, power of their excuse, is more. Powerful, than, their dreams. Manures are different. Mr.. Stevenson, had many other barebone, gems in his article, especially. When he compared, promoters, entrepreneurs. To, trustees, employees. As he, labels them a, few. Of these gems, of comparison, are when, it comes to, strategic orientation. Promoter. Driven. By perception, of opportunity. Trustee. Driven. By control, of resources. In. Other words entrepreneurs. Are always, looking, for the opportunity without. Much regard to, whether they have resources. Employee. Type persons focus. On what resources they have or do not have which, is why so many people say how. Can I start my business I don't have the money an. Entrepreneur. Would say tie. Up the deal and then, we'll find the money, this. Difference, in mindsets, is a very, big difference between an employee, and an, entrepreneur. This. Is also why my poor dad often said I can't, afford it, being. An employee he, looked at his resources. Those. Of you who have read or listened to my other books know, that my Rich Dad forbade. His son and me to ever say, I can't, afford it. Instead. He, taught us to look at opportunities, and ask how. Can, I afford it, he. Was, an entrepreneur.
Management Structure. Promoter. Flat. With multiple, and formal networks. Trustee. Formalized. Hierarchy, with multiple, tiers. In. Other words an entrepreneur. Will keep the organization small. And lean using. Cooperative, relationships. With strategic partners to grow the business. Employees. Want to build a hierarchy, which means a chain of command with them at the top, this. Is their, concept, of building an empire an. Entrepreneur. Will grow the organization, horizontally. Which, means, outsourcing. Rather, than bringing the work in-house, an, employee. Wants, to grow the organization vertically. Which, means hiring. More employees. Formal. Organizational. Charts are very, important, to employees, climbing, the corporate ladder. In. This book you, will find out how the Rich Dad Company, stayed small yet. Grew big by, using strong strategic, partnerships, and major, publishers. Throughout, the world, we. Decided, to grow in this manner because, it cost us less time people. And money. We. Could grow faster, grow, bigger become. Very profitable, have, a global, presence and yet. Remain small. We. Used other people's money and resources, to grow the business, this. Book will, explain how. And why we, did it that way. To reward philosophy. Promoter. Value. Driven performance-based. Team-oriented. Trustee. Security. Driven resource. Based job. Promotion, oriented. In. Simple. Terms, employees. Want job security, with a strong company, a steady, paycheck and the, opportunity. For promotion a chance. To climb the corporate ladder. Many. Employees, consider. A promotion, and title more important, than money I know. My Poor Dad did he. Loved his title. Superintendent. Of public education even. Though he was not paid much. The. Entrepreneur, doesn't, want to climb the corporate ladder he. Or she wants to own the corporate. Ladder an, entrepreneur. Is not driven by a paycheck, but, by results, of the team, also. As Howard, Stevenson states many. Entrepreneurs start. A business because, they have very strong values, that are more important, than simply, job security, and a steady paycheck. For. Many entrepreneurs their. Values, are more important, than money they. Are passionate about their work their mission. And love. What, they do, many. Entrepreneurs will. Do their work even though there is no money. Rich. Dad said many. Employees, are passionate. About their work only, as long as there, is a paycheck. In. This book. We'll also learn, about the three different types of money competitive. Money cooperative. Money and spiritual. Money. One, competitive. Money is the type of money most people work for they. Compete for jobs promotions. Pay. Raises and against. Their business, competition. Two. Cooperative. Money is achieved, by networking, instead, of competing in, this. Book you, will find out how the rich dad company expanded. Rapidly with, very little money simply. By working, for, cooperative, money.
3. A, significant. Part of this book is dedicated, to the mission of a business the, values, while. We all know that, there are many entrepreneurs who. Are opportunists. Working. Only for competitive, money there. Are others who build a business on a strong, mission, working. For, spiritual, money the. Best, of all, money. Of management. There are two other points in the article that are refreshing, especially from. A college professor. Howard. Stevenson. Acknowledges, that many people say that entrepreneurs. Are not good, managers. Instead. Of agreeing with this commonly, accepted, point of view he, writes. The. Entrepreneur, is stereotyped. As egocentric. And idiosyncratic. And thus, unable to manage. However. Although, the, managerial, task, is substantially. Different for, the entrepreneur, the, management, skill is nonetheless essential. Right. On Howard, in other. Words, entrepreneurs. Manage. People differently. The. Next point explains. Why there are differences, in management, style between entrepreneurs. And employees. Know how to use, other people's. Resources. The other point Stevenson. Makes correlates, closely, with his definition, of an entrepreneur. The. Definition, is. Entrepreneurship. Is an approach to management, that, we define, as follows, the. Pursuit of opportunity without. Regard to resources, currently controlled. He. States, entrepreneurs. Learn, to use other people's. Resources well. This. Is what causes the difference in management, style. Employees. Want to hire people so they can manage them it. Puts them in direct control, over them, they. Will do as they are told or they. Are fired. This. Is why, employee, types, want, to build vertical, hierarchies, they. Want the Prussian, style of management they. Want people to jump when they say jump. Since. Entrepreneurs. Are not necessarily. Managing. Employees, they, need to manage people differently. Very. Simply put entrepreneurs. Need to know how to manage other, entrepreneurs. If, you. Say jump to an entrepreneur, he. Or she usually, responds. With some rude comment, or gesture, so. Entrepreneurs. Are not poor, managers, as many, people think they. Simply, have a very, different management, style because, they are managing, people they cannot tell what to do or fire. This. Difference, in management, style also explains, why employee, types, work, for competitive, money and entrepreneurs. Tend, to work for cooperative, money. Entrepreneurs, looking. For, employees. Some, of the more common, complaints, heard from new entrepreneurs. Are I can't. Find good employees or. Employees. Just, don't want to work or, all. Employees. Want is more, money. This. Is a problem, for a new entrepreneur, with the confused, management. Style. Management. Style is a matter of training, again. Compliments. To Howard Stevenson a college, professor for, getting to the bare-bones differences. Between, entrepreneur. And employee. Don't. Wait until all lights are green. Another. Reason many people are not as successful as they would like to be is fear. Often. The fear of making mistakes or the, fear of failing. There. Is another reason also, a fear, but, it appears a little differently, these.
People Disguise, their fears by, being perfectionists. They. Are waiting for all the stars to line up before starting. Their business they. Want all the lights to be green before. They will pull out of the driveway. When. It comes to entrepreneurship, many. Of these people are still stuck in the driveway with, their engine idling. Of a business deal. One. Of the best entrepreneurs I have ever known is a friend and business partner of mine I have. Formed several, companies with him three. That went public and have made us millions, of dollars, he. Believes that there are three parts to putting a business deal together. One. Finding. The right people, -, finding. The right opportunity. 3, finding. The money. He. Explained, rarely. Do all 3 pieces come together at the same time. Sometimes. You have the people but, you do not have the deal or the money, sometimes. You have the money but no deal or people, he. Also said, the, most important, job of an entrepreneur, is to grab one piece and then, begin to put the other two pieces together, that. May take a week or, it may take years, but. If you have one piece at. Least you've, gotten started. In. Other words an entrepreneur. Does not care if two, out of three lights are read in fact. An entrepreneur. Does not care if all three lights are red red. Lights do, not prevent, an entrepreneur, from, being an entrepreneur. Anything. Worth doing is, worth doing poorly. Have. You ever noticed that software. Such, as Microsoft Windows. Comes, in different versions, that means. They have improved their product, and now, want you to buy the better version, in. Other words the, first product, they sold you was, not perfect. They. May have sold it to you knowing, that it had flaws and bugs and needed, to be improved. Many. People, failed, to get to market because they are constantly, perfecting. Their product, like. The person who was waiting for all the lights to be green some. Entrepreneurs, never, get to market because they are looking for or working. On perfecting. Their product, or writing. The perfect business plan, my. Rich Dad often said anything. Worth doing is, worth doing poorly. Henry. Ford said thank. God for my customers, they, buy my products, before they are perfected. In. Other words, entrepreneurs. Start, and continue, to improve themselves their. Businesses, and their, products. Many. People, will not start unless everything, is perfect, that. Is why many of them never, start. Knowing. To introduce a product into, the marketplace is as much an art as it is a science you, may, not want to wait for a product to be perfect, it, may never be perfect, it, just has to be good enough it. Merely has to work well enough to, be accepted in the marketplace. However. If the, product is so flawed, that it doesn't work for its intended purpose or otherwise. Does not meet marketplace, expectations. Or causes. Problems, it, can be very difficult to, reestablish, credibility. And a reputation, for quality. One. Of the marks of a successful, entrepreneur is, being, able to assess the expectations.
Of The marketplace, and know, when to stop developing, and start, marketing, if. The product is put on the market a little prematurely, then, the entrepreneur, can simply improve it and take, steps to maintain goodwill. In the marketplace, on the. Other hand delay. In introducing, a product can mean opportunities. Irretrievably. Lost a, window. Of opportunity missed. For. Those of you who remember the early versions, of Windows you'll. Recall how frequently, your computer crashed, there. Were some who said that Windows was so full of bugs that it should have come with a can of insecticide. If. An automobile, broke down as frequently. As Windows did it would not have been acceptable, in the marketplace, in fact. The, automobile, would have been a lemon, and the manufacturer. Would, have been forced to replace it, windows. However notwithstanding. The bugs and the flaws was, phenomenally. Successful. Why. Was that it. Filled, a need in the marketplace and was not out of line with marketplace, expectations. Microsoft. Recognized, a window of opportunity and, started, marketing if, Microsoft, had. Waited for Windows to be perfect, it still, would, not be in the marketplace. Street. Smarts versus, school smarts. In. Martial. Arts there, is a saying that goes a cup, that is full is useless. Only. When a cup is empty is it, useful, this. Is true for, the entrepreneur. We. Have all heard people say, oh I, know all about that. Those. Are words coming, from a person whose cup is full, those. Are the words coming, from a person who believes he, or she knows all the answers an. Entrepreneur. Cannot afford to know all the answers. Entrepreneurs. Know, that they can never know all the answers, they. Know their, success, requires, that, their cup is always. Empty. To. Be successful, as employees, people, need to know the right answers if. They, do not know the right answers they may be fired or not promoted. Entrepreneurs. Do, not need to know all the answers all. They need to know is who, to call, that. Is what advisors, are all about. Employees. Are often, trained to be specialists.
Simply. Said a specialist. Is someone who knows a lot about a little his. Or her cup must, be full. Entrepreneurs. Need, to be generalists, simply. Said a generalist. Is someone, who knows a little about a lot his. Or her cup is empty. People. Go to school to, become specialists. People. Go to school to, become an accountant, attorney. Secretary. Nurse, doctor. Engineer or. Computer. Programmer. These. Are people who know a lot about a little the. More specialized, people are the, more money they make or at. Least they hope they make. What. Makes an entrepreneur, different, his entrepreneurs. Must know a little about accounting, the, law engineering, systems. Business, systems, insurance. Product. Design finance. Investing. People. Sales. Marketing. Public, speaking raising, capital and dealing. With different, people trained, in different specialties. True. Entrepreneurs, know, there is so much to know and so, much they do not know that they cannot afford the luxury of specialization. That is. Why their cup must, always be empty they. Must always be, learning. One day this. Means the, entrepreneur, must be a very proactive, learner. Once. I crossed the line from, employee to entrepreneur my. Real education, began I was. Soon reading every, book on business I could get my hands, on reading. Financial, newspapers, and attending. Seminars. I knew, I did not know all the answers I knew. I had to learn a lot and learn, it fast, today. Nothing, has changed I know, that, my education, as an entrepreneur, will, never have a graduation, day I will. Always be, learning in, other words when, I am not working I am reading, or studying and then, applying, what I learn to, the business. Over. The years this constant, study and then, application. To the business has been one of my most important, habits, for success, as, I. Said I was not a natural entrepreneur. As some of my friends were but. As in the race between the turtle and the hare I slowly. But surely caught. Up with and passed, some, of my friends whose cups became full when, they achieved, success, a, true. Entrepreneur has. No graduation. Day. Specialized. Cash flow quadrant the, second, book in the Rich Dad series, the. E stands. For employee, the. S stands. For self-employed. Small, business or specialist. The. B stands. For big business, owner the, I stands. For investor. One. Of the reasons so, many entrepreneurs, are in the S quadrant, rather, than the B quadrant, is that, they are overly, specialized. For. Example, medical, doctors, in private, practice are technically. Entrepreneurs. But may find it hard to migrate, from the S quadrant, to the B quadrant, because, their training, is too, specialized. Their. Cup is full. For. A person to move from s to B he. Or she will need more generalized, training, and must, always have an empty, cup. Here's. A side note on the cashflow quadrant, one. Of the reasons, why Rich Dad recommended, I become an entrepreneur in, the B and AI quadrants, is that, the tax laws are most favorable in, those quadrants, the. Tax laws are not as favorable for employees, or self-employed. People the, e and s quadrants, the tax. Code offers greater incentives, or loopholes. For people, who either hire, a lot of people in the B quadrant, or invest. In projects, the government, wants growth in, investments. Such as low income housing, in summary. Taxes. Are different, in different quadrants. This, book will go into the differences, in each quadrant and how, an entrepreneur, can migrate from one quadrant, to another, especially. From, the S quadrant, to the B quadrant. A list of differences. Before. Quitting, their jobs people, need to decide if they want to make the transition, from employee to entrepreneur. The. Transition, or, metamorphosis. Requires. A change, to some of the following, traits, a. Mindset. Of freedom instead, of security.
The. Ability, to operate without money, the. Ability to, operate without security. A, focus. On opportunity. Rather, than resources. Different. Management styles, to, manage different people. The. Ability to manage people and resources, they do not control, a. Focus. On team and value, rather, than pay or promotion, an. Active. Learner no. Graduation. Day. Generalized. Education, rather, than specialized. The. Courage to be responsible. For the entire business. You may notice that farmers, possibly. Our earliest, entrepreneurs. Have, had to develop most, of these traits in order, to survive as farmers, most. Had, to plant in the spring in order, to harvest in the fall, most. Had, to pray that the weather was in their favor and that, pests, diseases. And insects. Left, enough for their family to live on through a long hard, winter. Rich. Dad said if. You have the mindset and toughness of a farmer, you, will be a great entrepreneur. Out of gold at the end of the rainbow. While. This book starts, off describing, the process, of becoming an entrepreneur as, a painful and time-consuming process, I also. Want, to let you know that, there is a pot of gold at, the end of the rainbow as, with. Any learning process, even. Learning to walk or ride a bicycle the. Start, of the process is, always the hardest. You. May recall that my first official day as an entrepreneur, was, not a good day but. If you stick with the learning process, your, world, will change just. As your world changed, when you finally learned to walk or ride a bike. The. Same is true with, entrepreneurship. For. Me the, pot of gold at, the end of the rainbow has been greater than my wildest, dreams, the. Process, of becoming, an entrepreneur has, made me far richer than, I could have become as an employee. Also. I have, become somewhat, famous and recognized. Throughout the world I doubt. If I would have become famous as an employee. Most. Important, our products, have reached people throughout the world and in some ways have, helped, to make their lives a little better. The. Best part of learning to be an entrepreneur is being, able to serve more and, more people being. Able to serve more people has, been my primary reason, for becoming. An entrepreneur. Lassa fee of an entrepreneur. Becoming. An entrepreneur began.
With A change of philosophy. The. Day in Puerto Rico that I left the Xerox Corporation, my. Philosophy, shifted, from, the philosophy, of my poor dad to, the philosophy, of my rich dad the. Shift looked, like this. From. A desire for security to. A desire, for freedom from. A desire, for a steady paycheck to. The, desire for great, wealth, from. Seeing, value independence. To, seeing. Value in independence. To. Make, my own rules rather. Than obey someone. Else's rules, from. A desire, to give orders rather, than, take orders a. Willingness. To be fully responsible. Rather, than say it's, not my job to. Determine. The culture of a company rather. Than try to fit into some other company's, culture. To. Make a difference, in this world rather, than complain, about the problems, of the world to. Find, a problem and turn, it into a business opportunity. To. Choose, to, be an entrepreneur, rather. Than, an employee. New super. Entrepreneurs. In. 1989. The, world went through perhaps the biggest change in history, in. 1989. The, Berlin Wall came down and the, internet went, up in. 1989. The, Cold War ended and globalization. Started. To take off the. World went from walls to web from. Division, to integration. In. His best-selling book the, world is flat thomas. Friedman stated, that when the wall came down and the web went up the, world went to one superpower, the. United States, global. Supermarkets. And super. Individuals. My. Prediction, is there, will soon be new, super. Entrepreneurs. Whose, wealth will dwarf the wealth of today's mega, rich entrepreneurs in, the. 1980s, Bill, Gates and Michael, Dell were the hot young billionaire, entrepreneurs, then. Sergey. Brin and Larry Page, founders. Of Google and Mark. Zuckerberg of Facebook. Became. The hot new billionaire, entrepreneurs. My. Prediction, is the next, super, entrepreneurs. Will, not be from the United States, why. Once. Again the, answer is that walls have, turned into webs. In. 99. Six the telecom, Reform Act and money from Wall Street gave. Rise to such companies, as Global, Crossing a bankrupt. Company that did one important. Task it. Linked, the world with, fiber optics. Once. This fiber-optic, network was in place brain. Power from countries, such as India, did, not need to emigrate, to Silicon, Valley to find work, the. Brain power of India, could, now work from home for much, lower wages. Due. To the power of fiber optic cables and the Internet my, prediction, is that the next Bill Gates or Sergey. Brin will, come from outside the United, States possibly. From India China, Singapore. Ireland. New, Zealand or, Eastern. Europe. Brain. Power innovation. Technology. And access. To the world's, supermarkets. Will, create the next teenage, multi billionaire or, trillionaire. Entrepreneur. Today many. Americans are, panicked, at the idea. That our high paying jobs are being outsourced, shipped. Not, only to India but all over the world, today. Even. Tasks, performed, by accountants, lawyers. Stockbrokers. And travel. Agents can be performed, somewhere, else in the world for, a lower price. No, more high-paying jobs. So. What, does this do to the industrial, age advice go. To school so, you can find a good secure, job with high pay or, work. Hard, and climb, the corporate ladder, in. My opinion, this, old Industrial, Age advice is toast. Many. Employees, will, have less work to find much.
Less Since. The person competing, for their job lives thousands, of miles away. Most. Of us know that wages, have not gone up, for many workers, how. Can their wages go up when, someone else is willing, to work for so much less. One. Big difference between an entrepreneur, and an employee is that, an entrepreneur, is, excited, about the changes, that the shift from wall to web, is bringing. Many. Employees, are terrified. Of the changes. One last, difference. The. Last difference, I will mention is the, difference in pay between employees. And entrepreneurs. Some. Of the most famous CEOs, like, Steve Jobs and Warren Buffett have, the lowest salaries. Could. It be because CEOs. Who are employees. Work, for a paycheck and, CEOs. Who are entrepreneurs. Work. For some other kind of pay. Are you, an entrepreneur. As. You. Can tell there, are differences, between employees. And entrepreneurs. The purpose, of this book is, to go deeper, into those differences, so you can decide before. You quit your job if being. An entrepreneur, is the path for you. In conclusion, in my. Opinion, the biggest difference, between an entrepreneur, and an employee is, found, in the differences, between the desire for security, and the, desire for freedom. My. Rich Dad said, if you, become a successful, entrepreneur you. Will come to know a freedom, very, few people will ever know, it. Is not simply, a matter of having a lot of money or free time it, is freedom from, the fear of fear, itself. Freedom. From the fear of fear, I asked. Nodding. He, continued, when. You look under the covers of the word security, you. Find fear hiding there this. Is the reason most people say, get. A good education, it's. Not out of the love of study or scholarship, it, is out of fear, the. Fear you won't get a good job or be able to earn money, look. At how a teacher motivates, students, in school it, is motivation. By fear, they. Say if, you don't study you, will fail, they. Use the fear of failing to motivate, students, to study. Graduates, and gets a job once, again the motivation. Is fear. Employers. Say verbally. Or non-verbally if, you, don't do your job you'll, be fired, the. Employee works, harder, out of fear the, fear of not putting food on the table or not, having money to make the mortgage payments. The. Reason, people crave security, is fear. The. Problem, with security is that, it does not cure fear it, simply, throws a blanket, over the fear but the fear is always, there, like, the boogeyman, chuckling, under the bed. Being. In high school at the time I could, really relate to the idea of studying, out of fear in. School, I only study, because I am afraid of failing, I do, not study because I want to learn I am, so afraid of failing that, I study subjects, I know I, will never use. Nodding. Rich Dad said, studying. For security, is not, the same as studying. For your freedom. People. Who study for freedom studied. Different subjects, than, people who study for security. Why. Don't they offer a choice of study in school I asked, I don't. Know said, Rich Dad the. Problem, with studying for security, is that, the fear is always there and if. The fear is always there, then, you rarely, feel secure, so, you, buy more insurance and think, of ways to protect yourself you. Always quietly. Worry even. If you pretend, you're successful, and have nothing to worry about. The. Worst thing about living, a life of security, is that, you often lead two lives the. Life you live and the, unlived, life you, know you could, be living, those. Are some of the problems, with studying, for security, the. Biggest problem, of all is that the fear is still, there so. Becoming, an entrepreneur means. You will not have any fear I asked. Of course, not smiled, rich dad, Only. Fools believe. They have no fear, fear. Is always present. Anyone. Who says he or she doesn't have fear is out, of touch with reality what. I said is, freedom. From the fear of fear, in. Other words you, don't have to be afraid of fear, you, don't have to be a prisoner, of fear, fear. Will, not define, your world as it, does most people's worlds, instead. Of fearing fear you, will learn to confront fear and use, it to your advantage. Instead. Of quitting because, your business is out of money because. You are afraid of not being able to pay your bills being. A true entrepreneur, will, give you the courage to go forward to think, clearly to study, to, read to. Talk to new people to. Come up with new ideas and, new actions. The. Desire for freedom can, give you the courage to operate, for years, without needing, a secure job or a steady, paycheck. That. Is the kind of freedom I am talking about it. Is the freedom from, the fear of fear. We. All have fear the, difference is whether, fear causes us to seek security, or to. Seek freedom an, employee. Will seek security, an entrepreneur. Will, seek freedom, so.
If, Security, is the result of fear what. Is the driving force behind freedom. I asked. Courage. Smiled. Bridge dad the. Word courage, comes. From the French word liqueur. The. Heart, he. Paused for a moment and then, finished, the conversation, by saying your. Answer, for choosing to be an entrepreneur or, an, employee, is found, in your heart. Freedom, is more, important, than life. One. Of my favorite, movies of all times is the, classic, Easy Rider, starring. Peter Fonda Dennis. Hopper and Jack, Nicholson in one. Of the scenes just before, Jack Nicholson, is killed he, talks with Dennis Hopper about. Freedom I believe. It is appropriate, to end this, introduction, with those lines because. It is why I chose, to be an entrepreneur. I chose. To be an entrepreneur to be free for. Me freedom. Is more important, than life itself, in. This scene the three of them are camped in a swamp after being, teased threatened. And run, out of town by, a bunch of good old boys. Dennis Hopper they're. Scared man, Jack. Nicholson oh they're. Not scared of you they're, scared, of what you represent. Dennis Hopper all, we, represent, to them is somebody, who needs a haircut. Jack. Nicholson oh no. What. You represent, to them is freedom. Dennis Hopper, what. Hell is wrong with freedom, man that's, what it's all about. Jack. Nicholson, oh yeah. That's, right that's, what it's all about all right but. Talking about it and being, it that's, two different things I mean. It's, real hard to be free when you're bought and sold in the marketplace, of course. Don't, ever tell anybody that they're not free because, they're going to get real busy killing, and maiming to prove to you that they are oh yeah. They're, going to talk to you and talk to you and talk to you about individual, freedom, but. When they see a free individual, it's, going to scare them. Dennis. Hopper well. It, don't make them run scared. Jack. Nicholson, no. It. Makes them dangerous. Right. After this scene the, three of them are ambushed, and beaten by the same good old boys. Nicholson's. Character dies. And Fonda. And Hopper ride on eventually. To be killed not. By the same good ol boys but, by other good old boys who share the same philosophy. While. The movie has different messages for different people for. Me the, movie was about the courage, it takes to be free the. Freedom to be yourself. Regardless. Of whether you are an entrepreneur or, an, employee. The. Rest of this, book is dedicated. To, your, freedom. Rich, dad's entrepreneurial. Lesson number one. Successful, business is created. Before, there, is a business. Chapter. 1 what. Is the difference, between an. Employee, and an entrepreneur. Starting. With, the right mindset. When. I was growing up my poor, dad often said go. To school and get, good grades so you can find a good job with, good benefits. He. Was encouraging, me to become, an employee. My. Rich Dad often said learn. To build your own business and hire, good people he. Was encouraging, me to become an entrepreneur. One. Day I asked. My rich dad what the difference was between an, employee, and an entrepreneur, his. Reply, was. Employees. Look, for a job after the business is built an. Entrepreneurs. Work begins, before there is a business. Percent, failure rate. Show that, 90%, of all new businesses, fail within, the first five years. Statistics. Also show that 90%. Of, the, 10% that survived the first five years fail. Before. Their tenth anniversary. In. Other words, approximately. 99%. Of all startup, businesses, fail, within ten years, why. While. The reasons are many the, following, are some of the more critical ones. Our schools. Trained students, to be employees, who look for jobs rather. Than trained entrepreneurs. Who, create jobs and businesses. The. Skills to be a good employee are not, the same skills, required, to, be a good entrepreneur. Many. Entrepreneurs, fail, to build a business instead. They, work hard building, a job that, they own they. Become self-employed, rather. Than business owners. Many. Entrepreneurs work. Longer hours and are paid less per hour than their employees, hence. Many. Quit out of exhaustion. Many new entrepreneurs. Start, without enough real life experience. And without. Enough, capital. Many. Entrepreneurs, have, a great product or service but don't have the business skills to, build a successful business around. That product, or service. Building. The parachute. My, Rich Dad said, starting. A business is like jumping out of an airplane without, a, parachute in. Midair. The, entrepreneur, begins, building a parachute, and hopes, it opens, before hitting, the ground.
He. Also said, if the, entrepreneur hits, the ground before the, parachute, is built it, is very tough to climb, back into the plane and try again for. Those of you familiar with the Rich Dad books you, know that, I have jumped out of the plane many times and failed to build the parachute, the, good. News is that I hit the ground and bounced. This. Book will, share with you some of my jumps Falls, and bounces. Many. Of my failures, and successes. Were small ones so, the bounce was not that painful that. Is until. I started, my nylon, and velcro wallet, business, I will. Go into further detail throughout. The book because, I made many mistakes and learned, from them along the way, the. Success, of that business was sky-high and so. Was the fall it. Took me over a year to, recover from that powerful, bounce, the. Good news is that, it was the best business, experience, of my life I learned. A lot about business and about, myself through. The process, of rebuilding. In the dam, one. Of the reasons I fell so hard in the nylon surfer, wallet business was, that I did not pay attention to. The little things, there. Is some truth to the age-old statement. The, bigger they are the, harder they, fall, my. Little surfer wallet business grew so fast that, the business, was a lot bigger than the capabilities. Of the three entrepreneurs who, created, the business. Instead. Of creating, a business we, had created dr., Frankenstein's. Monster, and did, not realize, it in. Other words our sudden. Success, was accelerating. Our failures, the. Real problem, was, that we did not know we were failing, we. Thought we were successful, we. Thought we, were rich we. Thought we, were geniuses. Even. Though we consulted, expert, advisors, like patent, attorneys, we, did not listen to them as, three. Successful, entrepreneurs. In our late 20s and early 30s, we, took our minds, off the business and partied, into the night, we. Actually thought. We had built a business we. Actually thought, we were entrepreneurs, we. Actually, believed, our own story, of success, we. Started bragging, champagne. Started, to flow it. Was not long before we, each had fast sports, cars and were, dating even faster, women, success. And money, had blinded, us we. Could not see the cracks forming, in the wall of the dam. Finally. The, dam broke the. House of cards started, tumbling down around us our, parachute. Did. Not open. Too much success. The. Point in sharing, my entrepreneurial. Stupidity. Is that, many people think that it is the lack of success that, kills a business in many. Cases, that is true, the. Failure, of my surfer wallet business was, a valuable, experience because. I found out early, in my career as, an entrepreneur that too, much success can also kill. A business. The. Point I am making is that a poorly conceived, business, can fail whether it is initially, successful or, not. Hard. Work covers. Up poor design a. Poorly. Conceived, business, startup may be able to survive as long as the entrepreneur works. Hard and holds. The business together with, sheer determination. In. Other words hard. Work can, cover up a poorly designed business. And keep, it from failing. The. World is filled with millions, of small business entrepreneurs, who, are able to keep their leaky business afloat with hard work sheer. Willpower duct. Tape and baling, wire the. Problem, is if they, stop working the. Business breaks, apart and sinks. All. Over, the world, entrepreneurs. Kiss their families, goodbye and head, off to their own businesses, their, pieces of the rock many. Of them go, to work thinking, that working harder, and longer will, solve their business problems. Problems. Such as not enough sales unhappy. Employees. Incompetent. Advisors, not. Enough cash flow to grow the business. Increases. In suppliers, prices. Rising. Insurance premiums, increases. In landlords, rent changing. Government regulations, government. Inspectors. Increasing. Taxes, back, taxes, unhappy. Customers, non, paying customers, and not, enough time in the day to name, a few. Many. Entrepreneurs do. Not realize, that many, of the problems, their businesses, faced today began. Yesterday. Long. Before there, was a business. One. Of the primary reasons for the high failure rate of small businesses, is sheer. Exhaustion. It's. Tough to make money and keep going when so much of your time is tied, up in activities, that do not make you any money or, that, cost you money without offsetting. Income, if. You, are thinking about starting, your own business before. You, quit your job you might want to talk to some entrepreneurs.
About, How much time they spend on non, income, producing activities, to, run their business and how, they handle this challenge. As a friend of mine once said I'm, so busy taking care of my business that, I don't have time to, make any money. Hours and hardwork, guarantee. Success a. Friend. Of mine quit his high-paying job with a large bank in Honolulu, and opened. A tiny, lunch shop in the industrial, part of town, he. Had always wanted to be his own boss and do, his own thing as, a. Loan officer for, the bank he, saw that the richest customers, of the bank were, entrepreneurs, and, he. Wanted a piece of the action so. He quit his job and, went, for his dream. Every. Morning he and his mom would get up at 4 o'clock to, begin preparing for, the lunch crowd the. Two of them worked very hard scrimping. And cutting, corners in order to serve great-tasting lunches, with, generous, portions, at low prices. For. Years I would stop by have. Lunch and find, out how they were doing they. Seemed very happy, enjoying. Their customers, and their work, someday. Will expand, said my friend someday. We'll hire people to do the hard work for us the. Problem, was that some day, never, came his. Mom passed away the. Business closed and my, friend took a job as manager of a fast food franchise, restaurant, he. Returned, to being an employee, the. Last time I saw him he said the, pay isn't great but at least the hours are better in his. Case his parachute, did not open he. Hit the ground before, he built a business. Now. I can hear some of you saying at least he went for it or it. Was just bad luck if his, mom had lived they, might have expanded, and gone on to make a lot of money or, how. Can you criticize such, good hardworking people and I. Agree with these sentiments my, intent is not to criticize them, although. Not related, to them I loved, the two of them dearly, I knew. They were happy, yet, it pained me to see them work so hard and not, get ahead day.
After, Day. I only relate this story to make the same point the. Business began to fail before, there was a business, it. Was poorly conceived, before he, quit his job. Is being an entrepreneur, for you if. This, story about working long hours or failing. If unsuccessful, and possibly, failing, if successful, or. Jumping. Out of a plane without a parachute and, bouncing, frightens, you then. Being an entrepreneur, may, not be for you but. If, the stories intrigued you or challenged, you then. Continue listening. After. Finishing this book at least, you will have a better idea of what entrepreneurs. Need to know to, succeed you, will. Also have a better understanding. Of how to create design. And build, a business that, grows with or without you and possibly. Makes you rich beyond, your wildest, dreams, after. All if, you are going to jump out of a plane without a parachute you. Might as well win big if you are going to win it all. Job of an entrepreneur, an. Entrepreneurs. Most important, job begins, before there, is a business, or employees. The. Job of an entrepreneur, is to design a business, that can grow, employ. Many people add value. To its customers, be. A responsible. Corporate citizen, bring. Prosperity to, all those who work on the business be. Charitable, and. Eventually. No longer need the, entrepreneur. Before. There is a business a successful. Entrepreneur is, designing, this type of business in his or her mind's. Eye. According. To my Rich Dad this. Is the job of a true entrepreneur. Failure. Leads to, success. After, one of my demoralizing. Business failures, I went, to rich dad and asked, so, what, did I do wrong I thought. I designed it well, obviously. You, didn't rich, dad said with a smirk. How. Many times do I have to do this I'm the, biggest failure, I know. Rich. Dad said, losers. Quit when they fail, winners. Fail until, they succeed. Shuffling. The papers at his desk for a moment he then looked up at me and said the. World is filled with one of the entrepreneurs, they. Sit behind desks, have, important-sounding, titles. Like vice president, branch, manager or, supervisor, and, some. Even, take home a decent paycheck. These. One of the entrepreneurs, dream. Of someday starting, their own business, empire, maybe. Someday some, of them will yet. I believe most, will, never make the leap, most. Will have some excuse, some, rationalization. Such as when. The kids are grown or I'll. Go back to school first or when. I have enough money saved. They never jump from the plane I said, finishing. His thoughts, Rich. Dad nodded. Kind of entrepreneur, do you want to be. To explain that the world is filled with different types of entrepreneurs, there. Are entrepreneurs who, are big and small rich. And poor honest. And crooked. For-profit. And not-for-profit. Saint. And sinner, small-town, and international. Successful. And failing. He. Said the, word entrepreneur, is a big word and it, means different things to, different people. Flow quadrant. In the introduction, the, cashflow quadrant explains. That, there are four different types of people who, make up the world of business, they. Are often different, people technically. Emotionally. And mentally. E. Stands. For employee, s. Stands. For self-employed, or small. Business owner, B. Stands, for big business, owner I. Stands. For investor. For. Example, employees. Will always say the same words whether, they are the president, of the company or the janitor an employee. Always says I'm looking. For a safe secure job, with benefits, the. Operative, words are safe and secure. In. Other words the, emotion, of fear often, keeps them boxed, in that quadrant if. They want to change quadrants, not, only are their skills and technical things to learn but in many cases, they also have, emotional. Challenges, to overcome a. Person. In the S quadrant, may say if, you want it done right do, it yourself, in. Many, cases, this, person's, challenge, is learning, to trust other people, to do a better job than, he or she can, this. Lack, of trust often. Keeps them small since, it's hard to grow a business without eventually. Trusting, other people if. Escuadrón, people, do grow they. Often grow as a partnership, which, in many cases is a group, of s's binding. Together to, do the same job. B, Quadrant people are always, looking for good people and good business, systems, they. Do not necessarily want, to do the work themselves, they. Want to build a business to, do the work at. Ruby, quadrant, entrepreneur, can, grow his or her business all over the world an S. Quadrant, entrepreneur, is often. Restricted, to a small area an area. He, or she can, personally, control, of course. There. Are always exceptions I. Quadrant. People investors. Are, looking for smart, asses or B's to, take care of their money and grow, it, rich. Dad trained his son and me to first build, a successful S, quadrant, business that had the capability, of expanding. Into a successful, B quadrant, business, that. Is what this book is about. What kind of business do you want to build, as. Part of my entrepreneurial. Training with Rich Dad he, encouraged, his son and me to go out and study, as many different types of business systems as we could he.
Said How, can you be an entrepreneur, designing. A business if, you do not know about the different types of businesses, and entrepreneurs. Self-employed. Entrepreneurs. Rich. Dad was adamant, in explaining. That many entrepreneurs are, not business, owners but, self-employed. Entrepreneurs, who, own a job not, a business, he. Said you. Were probably self-employed. If your name is the name of the business if, your income stops, if you stop working if, clients. Come to see you or your employees. Call, you if there is a problem. You. May also be self-employed, if, you are the smartest most, talented, or the, best educated, person, in your business. He. Had nothing against self-employed. Entrepreneurs, he. Simply wanted us to know the difference between entrepreneurs, who, own businesses, and those, who own jobs. Consultants. Musicians. Actors. Cleaning. People restaurant. Owners small, shop owners and most, small business people fall, into the S quadrant, and own, jobs, instead, of businesses. The main point rich dad was making about the difference between a self-employed. Entrepreneur, and a, big business entrepreneur, is that, many self-employed. Businesses, have a tough time growing into. A big business in other. Words they, have a real challenge, going, from the S quadrant, to, the B quadrant. Why. Again. The, answer is that the business was poorly designed before, there was a business. It. Was doomed before, it even started. Rich. Dad himself started. Out as a self-employed. Entrepreneur. In the S quadrant, yet. In his mind he. Was designing. A very large business, run. By people much, smarter and more, capable. Before. He started his business he. Designed, his S quadrant, business to be able to grow into the, B quadrant. And, trades, people he. Also wanted, us to know that many professional, people such as doctors, lawyers, accountants. Architects. Plumbers. And electricians. Start. A self-employed, style, of business based, on a profession. Or a technical, trade. Many. Of these professions, and trades require, government, licenses, to operate. Also. Included, in this category, our professional. Salespeople many. Of whom are licensed. Independent consultants. Such, as real estate insurance. And securities salespeople. Many. Of these types of people are technically. Self-employed. Entrepreneurs. Aka. Independent. Contractors. The. Problem, with this type of business, is that, there is not really a business to sell because, there really isn't a business outside, of the individual, owner in many. Cases, there really isn't an asset, the. Business, owner is the, asset, if.
He Or she does sell he, or she will not typically, get the higher multiples. A true, B quadrant, business can command. In. Addition, he, or she may have to agree to stay on for the successful continuation. Of the business, in. Essence they, go from being the owner to. The buyer's employee. In. My rich dad's mind it made no sense to work hard and not build an asset, this. Is why he advised his son and me against, ever wanting, to become employees. He. Said why. Work hard and build nothing, later. In this book we will go into some ways this, type of entrepreneur, can create a business, asset and asked. It they can build and maybe, sell someday. Hop operations. A very. Large category of entrepreneurs, is often, referred to as mom-and-pop. Businesses, this. Type of business gets, its name because many, small businesses. Are family. Businesses as an. Example my mom's mother, owned a little convenience, store that the family, took turns working in, the. Challenge, for growth in a mom-and-pop operation. Is nepotism. Many. People put their children in charge of the business even, though their children, may be incompetent, because, blood. Is thicker than water. Often. The, children don't share the passion for the business that their parents, had or they. Don't have the entrepreneurial, drive to, lead the business. Franchises, a, franchise. Such, as McDonald's is, in theory a turnkey, operation. The. Entrepreneur, sells, our ready-made business, to a person who does not want to go through the creative, and development. Phase of starting. A business, it's. Like being an instant, entrepreneur. One. Advantage to some franchises is, that banks are more inclined, to lend money to someone who wants to buy a franchise than. To a person, who wants to start a business from, scratch. The. Banks are more comfortable with the successful track record of similar, franchises. And the. Bank's value, the mentoring programs, that most franchises. Have to, assist the, new entrepreneur. One. Of the biggest problems, with big name franchises. Is that, they are generally more expensive to, get into and have little flexibility. For a budding entrepreneur. Franchises. Are the, type of businesses, that typically, face legal issues and often. End up in court these. Fights are some of the most vicious fights, in the business world. Reportedly. One, of the main reasons, for fighting. Is that people who buy a franchise business, do, not want to run it the way the franchisor, the, person who created the business wants, them to run it also. If the, franchisee does not do well fi
2020-05-11