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Are you considering quitting your job and starting that business idea you have had for years? Robert Kiyosaki's Before You Quit Your Job is a book with amazing insight into the 11 lessons necessary for you to successfully transition from employee to a big business entrepreneur. As you know, most businesses fail, but did you know that most businesses that fail, fail before there ever was a business? That means before you quit your job, you must know how to create a successful business before you have a company. Robert Kiyosaki presents the lessons required to do that.
I know you are just as busy as I am so I've organized the information into three sections; The outcome and actions to achieve it, A condensed Session by Session summary, and finally my full summary.
Outcome: Know the 11 real life lessons entrepreneurs must learn before you quit your job
List of Action Items
- Understand what makes entrepreneurs different than employees.
- Do the work to create a successful business on paper before there is a business.
- Be prepared to fail early in the business, learn, and keep going.
- Work to learn, even if you have to work for free.
- Make mistakes, develop both street smarts and school smarts, and learn quickly from those mistakes.
- Know why the process of obtaining the goal is far more important than the goal.
- Live the strongest personal and organizational mission in order to win.
- Repair weaknesses in your personal and professional B-I Triangle.
- Be a leader who finds the best people and forges them into a team that can do something that no other business can do.
- Understand the secret to keep good employees and customers; hire slow and fire fast.
- Be a winner who also knows when to quit and cut their losses while being faithful to the entrepreneur process.
Condensed Chapter by Chapter Summary
There are a lot of differences between entrepreneurs and employees. Before you quit your job and make the transition from employee to entrepreneur be sure to consider all the differences. Entrepreneurs must know how to spend money even when they have no money, overcome excuses, manage other people and their resources, focus on completion instead of perfection, be a generalist continuously learning a little about a lot, and desire freedom over security. The three pieces of a business deal are people, opportunity, and money; they rarely come together at the same time. An entrepreneur must overcome fear, grab one piece, and then begin to put the other two pieces together. ( Introduction: What Makes Entrepreneurs different? )
Employees look for a job after the business is built, an entrepreneur's work begins before there is a business. A poorly conceived business startup may be able to survive as long as the entrepreneur works hard enough to cover up the poor business design and keep it from falling. The problem is, if they stop working, the business breaks apart and sinks. There are four types of people who make up the world of business according to the cash-flow quadrant, employees looking for a safe secure job with benefits, self-employed who states if you want it done right do it yourself business owners, big business owners are always looking for good people and good business systems, and investors are looking for smart self-employed and big business owners to take care of their money and grow it. All entrepreneurs are playing the same game but on different levels of play such as the difference between, high school football, college football, and the NFL ( Rich Dad's Entrepreneurial Lesson #1: A
successful business is created before there is a business. What is the difference between an employee and an entrepreneur? ).
Failing early in business development is instrumental to success. Entrepreneurs have to learn quickly because they are creating something out of nothing. An entrepreneur must always be willing to fail and learn. Analysis paralysis is the dreaded disease that keeps businesses in the head of a wannabe entrepreneur. It is impossible to become an entrepreneur without starting a business. You will not be the person who will always look good, sound smart, and have all the right answers. If you turn losses and mistakes into lessons learned then you will be turning bad luck into good luck. ( Rich Dad's Entrepreneurial Lesson #2: How to turn bad luck into good luck. Dumb and dumber get rich and richer )
A job is something you get paid for but work is what prepares you for a job and you do not get paid for it. If you do not do your homework you will not become a high-paid professional like a medical doctor or lawyer. Entrepreneurs need to do different types of homework often working for free. Many businesses struggle because the founder may be good at one job but are unable to do all the jobs a business requires. The B-I Triangle covers all the basic jobs of a business; product, legal, systems, communications, and cash flow. If one or more of these elements are missing or done poorly the business will struggle and often will fail. ( Rich Dad's Entrepreneurial Lesson #3: Know the difference between your job and your work. Why work for free? )
The learning process requires that you make mistakes and learn from those mistakes. The faster you make those mistakes the faster to get through the process to the other side. Entrepreneurship is a world where everyone else gets paid first and you get paid last if you get paid at all. Once successful, your strengths will reveal your weaknesses. It is not enough to make sure all the components of the B-I Triangle are covered as a startup, you must also strengthen them as the business grows. Both streets smarts and schools smarts are important for a successful entrepreneur. In order to become a successful entrepreneur, you should master one of the five elements of the B-I Triangle; product, legal, systems, communications, cash flow. If you want to have the best team around you, you need to be the best at something as well. Before quitting your job, know that your most important job is to develop yourself; both street and school smarts ( Rich Dad's Entrepreneurial Lesson #4: Success
reveals your failures. Street smarts versus school smarts )
During the entrepreneur process, you will be given many more challenges and more lessons to learn. If you learn the lesson, you get to move on to your next process. Goals are important, but the process of obtaining the goal is far more important than the goal; because the process will determine who you will become in attaining your goals. If an entrepreneur can tell you about the product but have no financial projections it means they are really early in the process, they don't have a clue what they are doing or both. Your level of financial intelligence indicates your level of financial responsibility; how much you earn, and how you spend your money. Before you quit your job remember employees and advisors are not responsible for your bottom line; entrepreneurs are ( Rich Dad's Entrepreneurial Lesson #5: The process is more important than the goal. Money Talks ).
The person or company with the strongest mission will always win. People work for three types of money; competitive, cooperative, and spiritual; whether they know it or not. Competition money is earned by the survival of the fittest. Cooperative money is made through teamwork. Spiritual money is about doing a job because deep down in your soul you know you are the one that is supposed to do it. Finding and developing your gift is very hard work and most people do not want to work that hard. It's not about the money, it's about the mission. One's true mission is about whom you serve, it's not about you. An organization's mission starts at the core, in the soul of the organization. Without integrity to the mission, the organization does not have a soul. A mission must be spoken through actions, not just words ( Rich Dad's Entrepreneurial Lesson #6:The best answers are found in your heart, not in your head. The three kinds of money ).
Small businesses remain small if there are too many weaknesses in their B-I Triangle. It is best not to try to jump from the employee level to big business because you will not have enough education or experience to sustain your success. However crashes during the attempt to build a big business are good, if you survive. Learning to ride a bicycle, the stress from falling down and getting up again and again rewires the brain to go from not knowing how to ride a bike to be able to ride a bike forever. Once you complete a process, you take the best with you and leave the rest. There is no clear signal when a process has come to its end, but when it has it can be the hardest thing in the world to stop and wait for the next process. If you want to stop a process but you actually can't, it could mean that the process is not done with you; Look for what else you need to learn. When you do stop a process, it is best to take some time and let the dust settle and the next process should become clear. The more people you serve, the more effective you become. It can be difficult to get yourself out of the way. Before you quit your job, remember that the scope of the mission determines the product. In order to build a business you have to be able to sell, build a real network, and attract, build, and motivate a great team ( Rich Dad's Entrepreneurial Lesson #7: The scope of the mission determines the product. How to go from small business to big business ).
A business leader's most important jobs are to clearly define the mission, goals, and vision of the company, find the best people and forge them into a team, strengthen the company on the inside, expand the company on the outside, improve the bottom line, invest in research and development, invest in the tangible assets, and be a good corporate citizen. Also, a leader must know the difference between a tactic and a strategy. A tactic is what you do and a strategy is a plan on how to get the tactic done. The 'single tactic and multiple strategy plan are one of the best methods to win in business. Always have a low-risk idea or strategy to fall back on whenever you start a business or invest in something; such has your strategies themselves generate income even if you do not accomplish the tactic. Design the business around a unique tactical advantage that no other business can do. The business and its strategies should continue to grow but the tactic should never change ( Rich Dad's Entrepreneurial Lesson #8: Design a business that can do something that no other business can do. What is the job of a business leader? )
Just as it is a good idea to fire bad employees, you must fire bad customers too. Customers who cost you and your team more time, energy, and money than they are worth, simply do not continue to do business with them. You will always have good customers, bad customers, and those in between. If you do not fire your bad customers, you good customers and good employees are likely to leave the business. Your success or failure as an entrepreneur depends a lot on your people skills. Learn to hire slow and fire fast. Margin is the difference between what it costs to produce your product and the proof you sell your product for. Margin pays for all the operating expenses, determines the price of your product. The price and margin determine your customer. To find good customers, you need to match the product and the price to fit the customer's needs, wants, and ego. There are three price points for any product; the lowest, highest, and middle priced. The worst price to be in the middle price. The second worst price to be is the lowest unless you are a brilliant business person who knows how to drop their prices, cut their margins, and get rich. Another pricing strategy instead of discounting down, bonus up. Add products to the mix and then increase the price of the package. Focus on keeping your best customers happy, not only will they buy more from you but they will tell their friends about you. The most important place you want to be first in is in your customer's minds ( Rich Dad's Entrepreneurial Lesson #9: Don't fight for the bargain basement. How to find good customers ).
The fact that you don't like your job is not a good or strong enough reason to become an entrepreneur. A winner must also know when to quit and cut their losses. Becoming an entrepreneur is a never-ending process of solving business problems, cutting losses, shutting businesses down, and changing directions. Before you quit your job, work to learn all five levels of the B-I Triangle as possible especially sales, be optimistic as well as brutally honest with yourself. know how to spend money so that it comes back, be willing to ask for help but not a crutch, find a mentor, surround yourself with fellow entrepreneurs who support you, and be faithful to the entrepreneur process ( Rich Dad's Entrepreneurial Lesson #10: Know when to quit. The Summary ).
Which of Rich Dad's lessons do you think you have mastered? Which lessons do you still need to improve on? Remember you do not need to wait for all lights to be green before you go. The goal of these lessons is to help you understand what it takes to be a successful entrepreneur. The most important understanding you should have is that there is no graduation day. You will be learning these lessons and more along your journey. For additional and more detailed information on Library Content Title continue reading below.
Introduction: What Makes Entrepreneurs different?
Despite the fear of not having any money, they can operate sanely and intelligently without money or a guaranteed paycheck. Entrepreneurs need to know how to spend money even when they have no money. People are trained to be employees or entrepreneurs; The reason there are more employees than entrepreneurs is that our schools train students to become employees. Entrepreneurship is about freedom, Employment is about security. The more security you seek the less freedom you have. This book is about the changes a person goes through transitioning from an employee to an entrepreneur including the down in the gutter, stabbed in the back, kicked in the gut, terrifying mistakes, and horror stories that almost every entrepreneur goes through. Humans are designed to learn by making mistakes. One of the better definitions of an entrepreneur is from college professor Howard H. Stevenson. professor at Harvard University; Entrepreneurship is an approach to management that we define as the following, the pursuit of opportunity with regard to resources currently controlled.
Many people want to become an entrepreneur but never do it because of excuses. The power of their excuses is more powerful than their dreams. Successful entrepreneurs are driven by the perception of opportunity and employees are driven by control. Rich dad forbade us from ever saying 'I can't afford it' Instead he taught us to say 'How can I afford it?'. Entrepreneurs keep their organization small and lean with multiple informal networks, employees want to build a hierarchy, chain of command, with them at the top. Employees consider a job title more important than money, but an entrepreneur wants to own the corporate ladder not climb it.
Entrepreneurs must have a different style of management because they must know how to use other people's resources effectively rather than the hierarchy management that puts them in direct control. Entrepreneurs are often managing other entrepreneurs who will not simply do as they are told. Management style is a matter of training.
Entrepreneurs overcome the dear of making mistakes and failing. That fear can be disguised by being a perfectionist. Don't wait until all lights are green before pulling out of the driveway.
There are three parts to putting a business deal together; Finding the right people, finding the right opportunity, and finding the money. Rarely do all three pieces come together at the same time. The most important job of an entrepreneur is to grab one piece and then begin to put the other two pieces together.
Anything worth doing is worth doing poorly. Microsoft Windows sells a not-so-perfect product knowing that it needs improvements and then makes better and better versions. Entrepreneurs start and continue to improve themselves, their businesses, and their products. Knowing when 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 but it has to work well enough to be accepted in the marketplace.
Street Smarts versus school smarts. An entrepreneur cannot afford to know all the answers, success requires that their cup is always empty and they know who to call to get the right answers. Entrepreneurs need to be generalists, knowing a little about a lot; they must always be learning. This means there is no graduation day for a proactive entrepreneur.
The transition from employee to entrepreneur 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, the ability to manage people and resources they do not control, a focus on team value rather than pay or promotion, and the courage to be responsible for the entire business.
The start of the learning process of anything challenging is always the hardest, but for entrepreneurs, there is a pot of gold at the end of the rainbow. Not every day will be a good one but if you stick with the learning process, your world will change and possibly the lives of thousands of others.
The main reason the old-age advice of 'Go to school so you can find a good secure job with high pay' does work is that there are no more high-paying jobs. With the internet and automation, many employees will have less work to find and are competing with thousands of people around the world who are willing to work for less.
One last difference between employees and entrepreneurs is that a CEO generally works for some other kind of pay and usually has the lowest salary.
Are you an entrepreneur? Before you quit your job consider all these differences. The biggest difference is found in the differences between the desire for security and the desire for freedom. A successful entrepreneur knows that only freedom can cure fear, security simply throws a blanket over it.
Rich Dad's Entrepreneurial Lesson #1: A successful business is created before there is a business. What is the difference between an employee and an entrepreneur?
A successful business is started with the right mindset. Employees look for a job after the business is built, an entrepreneur's work begins before there is a business. Statistics show that 99% of all startup businesses fail within ten years because they don't train to be entrepreneurs rather they build a job that they own. Starting a business is like jumping out of an airplane without a parachute. In mid-air, the entrepreneur begins building the parachute and hopes it opens before hitting the ground. If the entrepreneur hits the ground before the parachute is built, they have to climb back into the plane and try again.
Most entrepreneurs with sudden success don't even see the cracks in the dam and are accelerating failures without knowing it. Too much success can also kill a business. A poorly conceived business startup may be able to survive as long as the entrepreneur works hard enough to cover up the poor business design and keep it from falling. The problem is, if they stop working, the business breaks apart and sinks. Many of the problems their business face today began yesterday, long before the was a business.
If hearing what is required of entrepreneurs is intriguing or challenging you, then being an entrepreneur may be for you. The job of an entrepreneur, which begins before there is a business or employees, 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. Losers quit when they fail. Winners fail until they succeed.
There are four types of people who make up the world of business according to the cash-flow quadrant, employees looking for a safe secure job with benefits, self-employed who states if you want it done right do it yourself business owners, big business owners are always looking for good people and good business systems, and investors are looking for smart self-employed and big business owners to take care of their money and grow it.
Many entrepreneurs are not business owners, but self-employed entrepreneurs who own a job, not a business. Their income stops if they stop working. Most big business entrepreneurs started off as self-employed entrepreneurs but they built the business in such a way that it could grow into a big business. Professionals and tradespeople build a business around themselves making themselves the asset and not the business. Why work hard and build nothing? Mom and pop operations, or family businesses, suffer from nepotism; They put their family in front of the business.
Franchises are in theory, a turnkey operation that comes with a track record from other franchises, mentoring, and better financing opportunities. However, franchisees have little to no room for flexibility and spend a lot of money upfront. Network marketing and direct sales is a fast-growing business model and provide real-world business training but it is also controversial. Beware of legal thieves who are entrepreneurs that steal from other entrepreneurs because they could take your business. Creative entrepreneurs win by creating and implementing a new value. While it is the riskiest type of entrepreneur it should be preferred to a competitive entrepreneur.
A private company is generally owned by a few owners and ownership interests are not available to the public at large. Publicly traded companies seels shares of the business through licensed security dealers. A public company is actually two different companies serving two different customers; the real customers and shareholders. A public company serves two bosses-The board of directors and the government securities agency. The accounting and reporting standards are much more strict.
Don't let being an entrepreneur go to your head because anyone can be an entrepreneur. All entrepreneurs are playing the same game but on different levels of play such as the difference between, high school football, college football, and the NFL. The most important job of an entrepreneur is to design the business before there is a business. Most entrepreneurs focus on the product or opportunity instead of designing the business. You might also want to find a mentor who has been an entrepreneur. It is recommended that you keep your daytime job while you start a part-time business not for the money, but for the experience.
Rich Dad's Entrepreneurial Lesson #2: How to turn bad luck into good luck. Dumb and dumber get rich and richer
Failing early in business development is instrumental to success. Although you won't make much money, if you learn from your failures the richer you will eventually become. There are two primary reasons entrepreneurs fail, either they are so afraid of failing that they never start or the business stops growing and dies because the entrepreneur is afraid to take more risks. An entrepreneur needs to risk failing before the business can begin growing, Another difference between an employee and an entrepreneur is that employees are fired if they make too many mistakes. You shouldn't take any risk that comes along, the better you fail the more you will gain the ability to take calculated risks. Entrepreneurs have to learn quickly because they are creating something out of nothing. Losing money is a part of the entrepreneurial learning process. So every time you make a mistake stop and take the opportunity to learn something new. If you pretend you didn't make a mistake, deny you made a mistake, or blame someone else you may never succeed.
High-speed racing on a track can be a scary experience for the everyday driver, but you are taught to burn out the fear. Your instincts may be to go slow as you learn but only by going faster can you learn the lessons. It is similar to the process an employee goes through to become an entrepreneur. In the real world, when a car begins to skid, most people step on the brakes; in high-speed driving school, you are taught to step on the throttle. Similarly doing something right in the employee world could be the exact wrong thing to do In the entrepreneurial world. An entrepreneur must always be willing to fail and learn.
Analysis paralysis is the dreaded disease that keeps businesses in the head of a wannabe entrepreneur. It is impossible to become an entrepreneur without starting a business. The high-performance driving course did not focus on doing things right rather it focused on making driving mistakes at higher and higher speeds; strengthening the ability to correct mistakes made at high speeds.
The dumber Jim Carey is on screen the richer he becomes, the same is true for entrepreneurship. You will not be the person who will always look good, sound smart, and have all the right answers. Just don't quit because it is part of the process. If you turn losses and mistakes into lessons learned then you will be turning bad luck into good luck. There are many human emotions but the power of the basic emotions of joy, anger, fear, and love can be used for good or bad; it's your choice.
Rich Dad's Entrepreneurial Lesson #3: Know the difference between your job and your work. Why work for free?
If you want to be successful in life you need to know the difference between work and a job. A job is something you get paid for but work is what prepares you for a job and you do not get paid for it. If you do not do your homework you will not become a high-paid professional like a medical doctor or lawyer. Entrepreneurs need to do different types of homework such as working for free. Entrepreneurs who quit their jobs before doing their homework often fail or struggle financially. Only employees expect to get paid for anything they do.
In many poor parts of town there is lots of work, but no jobs. People are trained to look for jobs even if there is lots of work to do. On the other hand, entrepreneurs know that the jobs will come if the work is done. Many people expect job training to be free. Even if it is free, too many people have such a poor attitude toward education that they never gain the skills people will pay more money for. Medical doctors, professional athletes, and famous musicians spend a lot of money and time before they ever get paid. Doing your homework applies to more than just money; many people are unhealthy because they do not work out.
Many businesses struggle because the founder may be good at one job but are unable to do all the jobs a business requires. The B-I Triangle covers all the basic jobs of a business; product, legal, systems, communications, and cash flow. If one or more of these elements are missing or done poorly the business will struggle and often will fail. Before an entrepreneur quits a job, they should make sure all the jobs of a business are covered. The five jobs are an overly simplified list but it's a simple checklist to help identify problems. Most wannabe entrepreneurs give up once they realize the product is just the tip of the iceberg and they have to get trained for the other levels. If you cannot sell, you cannot be an entrepreneur. The only way to grow a big business is to legally protect your assets and control a network or system. It is important for an entrepreneur to do their homework in each of the components of the B-I Triangle before they quit their job; remember a business succeeds or fails before there is a business.
Rich Dad's Entrepreneurial Lesson #4: Success reveals your failures. Street smarts versus school smarts
You are often more willing to take risks when you have nothing to lose. The hard part for most people is getting to 'nothing'. Most people would rather hang on to a little than let go and get to nothing. Entrepreneurs must be willing to fail faster. If you don't fail faster, you will fail anyway. The learning process requires that you make mistakes and learn from those mistakes. The faster you make those mistakes the faster to get through the process to the other side. Rich dad explained that there are four types of business schools; Traditional business schools, family business schools, corporate business schools, and business schools of the street. Each school has its strengths and weakness but after graduation day all entrepreneurs must be willing to work for free. It is a world where everyone else gets paid first and you get paid last if you get paid at all. Once successful, your strengths will reveal your weaknesses. It is not enough to make sure all the components of the B-I Triangle are covered as a startup, you must also strengthen them as the business grows. Strong communications can be blown out through a single weak legal point. Rebuilding a business is the ultimate business school. While painful, annoying, and disappointing it may be to keep rebuilding a business, it will give you the ability to capitalize on opportunities and the security to know if you lost everything; you know you can rebuild.
Both streets smarts and schools smarts are important for a successful entrepreneur. More important, an entrepreneur needs team smarts; the ability to find the best combination of people required by the task at hand. Not consulting, listening to, or adding to the team an accountant and attorney on your business team is a costly basic mistake. School smarts include A-Thinkers who are critical thinkers who have analytical skills and T-Thinkers who are experts with technical skills. Street smarts include C-Thinkers who are creative and have flexible logic and P-Thinkers who have people skills and good leadership. All four types of thinkers are important for a business.
In order to become a successful entrepreneur, you should master one of the five elements of the B-I Triangle; product, legal, systems, communications, cash flow. If you want to have the best team around you, you need to be the best at something as well. You could probably operate a small S-quadrant business by being smart and good at all five elements but your risk burning out. Before quitting your job, know that your most important job is to develop yourself. If you dedicate yourself to becoming a great entrepreneur, you will find it easier to find great people to be members of your team. If you can put together a great team, you will find it easier to be successful wherever you are. Just remember it is important to have both street and school smarts.
Rich Dad's Entrepreneurial Lesson #5: The process is more important than the goal. Money Talks
For many people, work and home are where they hide from the harsh realities of a competitive world. Others seek more than just security and money. They seek a different world, a different way of living. During the entrepreneur process, you will be given many more challenges and more lessons to learn. If you learn the lesson, you get to move on to your next process. You will have ups and downs, during the ups you will get a glimpse of your future if you don't quit. Goals are important, but the process of obtaining the goal is far more important than the goal; because the process will determine who you will become in attaining your goals. As former lottery winners can attest, money itself does not make you rich because it does not improve your financial intelligence. If an entrepreneur loses everything, they should be able to get it all back and more during the rebuilding process. Taking on the challenge of high expenses is an important job of an entrepreneur. If an entrepreneur can tell you about the product but have no financial projections it means they are really early in the process, they don't have a clue what they are doing or both. Financial results do not often follow the plan but the process of writing down the financial plan in detail helps you build a strong business before there is a business. The school of the street will help it take shape and balance the plan with school and street smarts. Your financial plan should always include an attorney to protect your assets and an accountant to help you actualize the numbers.
There are no bad investments, only bad investors. Your level of financial intelligence indicates your level of financial responsibility; how much you earn, and how you spend your money. When looking at the numbers, actual or forecast, the following should be red flags; the entrepreneur takes too high of a salary too soon, too many bad expenses or the business does not make money, Red flags are an opportunity to heed the warning and learn. Before you quit your job remember employees and advisors are not responsible for your bottom line; entrepreneurs are.
Rich Dad's Entrepreneurial Lesson #6:The best answers are found in your heart, not in your head. The three kinds of money
The person or company with the strongest mission will always win. There are three types of incomes; ordinary, portfolio, and passive. The IRS taxes these three incomes at different rates. However, people work for three types of money; competitive, cooperative, and spiritual. We learn early in life to compete for grades, sports, love interest, jobs, raises promotions, recognition, customers, market share, and employees. Competition money is earned by the survival of the fittest. Cooperative money is made through teamwork. Spiritual money is made by doing God's work, work that God wants to be done. It's work being done in response to a higher calling. Most people just work and money is just a means to an end. Spiritual money is about doing a job because deep down in your soul you know you are the one that is supposed to do it.
One of the keys to attracting the invisible magical forces that comes with spiritual money is to be dedicated to giving your gift; your talent. Finding and developing your gift is very hard work and most people do not want to work that hard. For others good is good enough however good is the enemy of great. To be great requires you to dedicate your life to be great. It's not about the money, it's about the mission. One's true mission is about whom you serve, it's not about you. A mission will evolve but it shouldn't change too drastically. It is usually a combination of love and anger. Before you quit your job, remember there are three kinds of money and one type is not better than another; they all have their place in business. If you are becoming an entrepreneur then your first mission should be mastering the B-I Triangle. An organization's mission starts at the core, in the soul of the organization. Without integrity to the mission, the organization does not have a soul. A mission must be spoken through actions, not just words.
Rich Dad's Entrepreneurial Lesson #7: The scope of the mission determines the product. How to go from small business to big business
Small businesses remain small if there are too many weaknesses in their B-I Triangle. It is best not to try to jump from the employee level to big business because you will not have enough education or experience to sustain your success. However crashes during the attempt to build a big business are good, if you survive. The process will give you a glimpse of your future but you must be faithful to the process. Breakthrough learning is a type of learning that is powerful enough to cause a transformation. Learning to ride a bicycle, the stress from falling down and getting up again and again rewires the brain to go from not knowing how to ride a bike to be able to ride a bike forever. Stress is the way intelligence grows. Once you complete a process, you take the best with you and leave the rest. With the desire to learn and the right teacher, you could learn a piece of six-month course information in one day. There is no clear signal when a process has come to its end, but when it has it can be the hardest thing in the world to stop and wait for the next process. If you want to stop a process but you actually can't, it could mean that the process is not done with you; Look for what else you need to learn. When you do stop a process, it is best to take some time and let the dust settle and the next process should become clear.
The more people you serve, the more effective you become. One of the biggest differences between a self-employed business and a big business is the number of customers they can handle. If you want to be rich, simply serve more people. Most of the problems with being self-employed begin with the word 'self'. In many cases, the self-employed person is responsible for everything. It can be difficult to get yourself out of the way. Before you quit your job, remember that the scope of the mission determines the product. The reason so many fail in business is they attempt to leap from the employee quadrant to the big business quadrant. In order to build a business, you have to be able to sell, build a real network, and attract, build, and motivate a great team.
Rich Dad's Entrepreneurial Lesson #8: Design a business that can do something that no other business can do. What is the job of a business leader?
A business leader's most important jobs are to clearly define the mission, goals, and vision of the company, find the best people and forge them into a team, strengthen the company on the inside, expand the company on the outside, improve the bottom line, invest in research and development, invest in the tangible assets, and be a good corporate citizen. If a leader cannot perform those jobs then you need to change leaders or the company will probably disappear. Having a mission is a vitally important place to start but if an entrepreneur only has a mission then they will never have a business. Know the difference between a tactic and a strategy. A tactic is what you do and a strategy is a plan on how to get the tactic done. The military knows the importance of using a single tactic, multiple-strategy plan of warfare to win. A military leader must focus on one objective or tactic and everything else is a strategy on how to get that one tactic done. That methodology works in business as well. For example, Domino's Pizza started is one tactic 'pizza in 30 minutes or less' which they completed through multiple strategic plans. Walmart's single tactic 'the lowest price for good products' wins every day over other companies who compete in the product category of the B-I Triangle.
Always have a low-risk idea or strategy to fall back on whenever you start a business or invest in something; such has your strategies themselves generate income even if you do not accomplish the tactic. Simply put, a low-risk idea is something you know you can do. Design the business around a unique tactical advantage that no other business can do. This could be a product that is protected by a patient, or a method of delivery unavailable to any other suppliers, etc. The business will grow and well as the strategy.
Rich Dad's Entrepreneurial Lesson #9: Don't fight for the bargain basement. How to find good customers
Just as it is a good idea to fire bad employees, you must fire bad customers too. Customers who cost you and your team more time, energy, and money than they are worth, simply do not continue to do business with them. You will always have good customers, bad customers, and those in between. If you do not fire your bad customers, you good customers and good employees are likely to leave the business. The same is true for bad advisors including accountants or attorneys who do a poor job. These professionals need to grow with the business, if they do not then they will not be effective for the size of a bigger business. If you as the entrepreneur do not grow with the business then you must fire yourself or the business will suffer. Your success or failure as an entrepreneur depends a lot on your people skills. You need to be flexible enough to work with different types of people with different skills, ambitions, dreams, behavior, and experiences. A business is one big ball of friction. It is a melting pot of egos that is always boiling. A business is a blending of different people, temperaments, talents, education, ages, sexes, and races. All people have skills and talents and are also pains in the ass. If their pain-in-the-ass factor exceeds their skills and talents, it is time for them to go or to move them to another part of the business. Learn to hire slow and fire fast. Too many managers allow people too many chances and end up firing them well have the damage has been caused.
Recognize the two types of communicators; one type will come to talk to you face to face and the other will gossip, talk badly about you, spread rumors, or complain to everyone else but never to your face. Becoming a better entrepreneur requires you to focus on improving your communication skills. Another job of an entrepreneur is to protect your company to your employees from cheap customers-the customers who want more than they pay for or want something for nothing. Cheap has nothing to do with money and is also different from a person who wants a bargain.
In business, two very important terms are margin and cash flow. Margin is the difference between what it costs to produce your product and the proof you sell your product for. Margin pays for all the operating expenses, determines the price of your product. The price and margin determine your customer. To find good customers, you need to match the product and the price to fit the customer's needs, wants, and ego. In many cases, the customer's ego is far more important than wants and needs. The challenge of the entrepreneur is to know how to price their product to fit their customer and fit the company. Sales = Income; so many people have low incomes is that they are poor at selling. There are three price points for any product; the lowest, highest, and middle priced. The worst price to be in the middle price. Nobody knows who you are. The trouble with being the lowest-priced product is that someone is always trying to beat you. To win the lowest-price competition, you have to make less and less money and deal with cheap customers. The bargain-basement attracts cheap customers. It takes a brilliant business person to drop their prices, cut their margins, and get rich. Another pricing strategy instead of discounting down, bonus up. Add products to the mix and then increase the price of the package. Focus on keeping your best customers happy, not only will they buy more from you but they will tell their friends about you. The most important place you want to be first in is in your customer's minds.
Rich Dad's Entrepreneurial Lesson #10: Know when to quit. The Summary
The fact that you don't like your job is not a good or strong enough reason to become an entrepreneur. A winner must also know when to quit and cut their losses. A quitter is someone who quits simply because things have gotten tough. If you want something bad enough, chances are you won't quit. Becoming an entrepreneur is a never-ending process of solving business problems, cutting losses, shutting businesses down, and changing directions. Before you quit your job, check that your attitude is ready for the entrepreneurial challenges, work to learn all five levels of the B-I Triangle as possible, get as much experience in sales as you can, be optimistic as well as brutally honest with yourself. know how to spend money so that it comes back, start a business to practice on, be willing to ask for help but not a crutch, find a mentor, surround yourself with fellow entrepreneurs who support you, and be faithful to the entrepreneur process. If you are going to have a big goal, you need a strong mission to push you through the process. With a strong mission, anything is attainable.
Do you have a million-dollar idea? Are you afraid of failing? Are you fed up with making other people rich? Are you sick of taking orders from your boss? Are you tired of working hard and not getting ahead? Are you ready to go out on your own? Then it is time to take Rich Dad's lesson and continue learning through the entrepreneurial journey. This book summary should give you a jump-start to becoming a successful entrepreneur. Remember, you cannot be an entrepreneur without starting a business. Start today!
Works Cited
Citation / Title
- Robert Kiyosaki. "Rich Dad's Before You Quit Your Job: 10 Real-Life Lessons Every Entrepreneur Should Know About Building a Multi-million-Dollar Business"
