Download - Cash Flow Quadrants
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Rich Dad -- Poor Dads
Cash Flow Quadrants
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Rich Dads
Cash Flow Quadrant
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Rich DadsCash Flow Quadrant
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Rich Dads
Cash Flow Quadrant
You have ajob.Someone else is the boss.
Security before money.
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Mgmt vs Non-Mgmt Jobs
Mgmt/Exempt Considered aprofessional
At least 50% oftimeusing intellect, directing,creativity
Has discretion with
decisions Sets own work schedule
Receives a salary
No overtimepay
Non-Mgmt/Exempt Considered non-professional
Upto 100% doingroutine,non-thinkingtasks
Does only what is told todo
Has a pre-set schedule Punches a timeclock
Paid hourly
Receives overtimepay
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Rich Dads
Cash Flow Quadrant (modified)
You have a job.Someone else is the boss.
Security before money.
You own ajob. Loner/boss.Perfectionists. Small bus.
owners: Drs. Restaurateurs.
Independence before money.
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Rich DadsCash Flow Quadrant
You have a job.
Someone else is the boss.
Security before money.
You own a job. Loner/boss.
Perfectionists. Small bus.
owners: Drs. Restaurateurs.Independence before money.
You own a system others operate.Coordinator. Delegator. Franchiser.
Use other people's time and money.
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Rich DadsCash Flow Quadrant
You have a job.
Someone else is the boss.
Security before money.
You own a job. Loner/boss.
Perfectionists. Small bus.
Owners: Drs., restaurateurs.
Independence before money.
You own a system that others operate.
Coordinator. Delegator. Franchiser.
Use other people's time and money.
Your money works for you.Make money with money.
Others liabilities are your assets.
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Rich DadsCash Flow Quadrant
Job Security
Financial Security
Financial Freedom
Ultimate FinancialFreedom
Wealth
Side
Rat
Race
Side
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Rich DadsCash Flow Quadrant
Job Security
Financial Security
Financial Freedom
Ultimate FinancialFreedom
CreateCreate
Money
Spend
PayTaxes
EarnMoney
PayTaxes
Spend
Earn
Money
Spend
Pay
Taxes
No
Paychecks
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Sample Paths To FinancialFreedom
Wealth
Side
Rat
Race
Side
Start
EndorStart
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Sample Paths To FinancialFreedom
Wealth
Side
Rat
Race
Side
Start
End
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Sample Paths To Financial
Freedom
Wealth
Side
Rat
Race
Side
Start
End
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Rich Dads
Financial Mindset Comparison
Es and Ss Job Model
Job
Savings
Get Out of Debt
Personal Residence
Mutual FundsEquities/Stocks
401Ks, IRAs, SEPs
Bs and IsAssetModel
Businesses
Real Estate
PaperMunicipal Bonds
IPOs,PPOs,
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Niches and Perfect Customers
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The Market/Customer/Niche
Decide
Customers
Select
Media
Decide
MessageMake
Product/Brand
Whats my
favorite fish?Whats myNiche?Am Ipassionate?Do I haveexpertise?
Whichponds havemy favorite fish?FindBig,Addictedfish--high probabilityprospects.
Whatbaitaremy fish eating?
Find a CompetitiveAdvantage.
Start fishing.
Build
Database
Stock your
Private Pond
Test
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Types of Niches
Occupation: Small biz owners,garbagemen,police,executivechefs,x-raytechs,magicians,realtors.
Demographics: Gender, weight, disease,car-owned,type ofhouse,college attended,marital status,retired,memberships,crime levels,education,
renters,politics,religion,hospitals, drycleaners, lawfirms, small airports,pre-schools,pet stores,manufacturers.
Geographics: Neighborhoods, school/votingdistricts, suburb,city, states,resort areas,climate.
Psychographics: Passions,hobbies, dislikes. ThinkLove-Hate
Combinations ofthe above.
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Evaluating Possible Niche(s)
Does the niche address one or more of my passions,talents, values, and/or my destiny?
Can I easily and affordably contact my niche?
Can the niche afford the product or service?Does the niche already buy the product or service?
Do I have experience and credentials with the niche?
Does the niche have serious problems to be solved?
Is there excessive competition in the niche?Do I have a competitive advantage thats importantto the niche?
Is the niche large enough to make my desired profit?
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Niche Example for a Bible Biz
Church-Goers
Protestant
Asian
Korean Decent
RecentImmigrants
Christian
Media
Message
Product
FindPerfect
Customer
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Who Is YourPerfect Customer?
Perfect Customers are:
AffluentAddicts
with Big Mouths who Love You to Death!
And, You only deal withthosePerfect
Customers who wantto deal withyou.So, Leave a trail wherethosePerfectCustomers can find you.
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Crafting aWinning
Business Plan
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Rank in order of
importance.
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In theory, ifeveryonetakes the same approach.
Ifeveryone follows the samecourse, uses the
sametools, and plays bythe samerules. Then,
in theory,everyone should end up withthe
sameresults. (But they dont.)
Um,guess execution is a pretty importantpart of
thegame.
What Makes Us Special?
-- IBM Commercial(Aired in the 2006Masters Golf Tournament)
Execution
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The Essential Functionsof the Business Plan
A roadmapthatguides thecompany bycharting its future
course and defining its strategy for following it.
Makes us think (in writing) before we act.Balcony View
Makes us list and test ourassumptions aboutthe businessidea.
Helps us makethe Go/No Go decision.
Helps us managerisk:
Makes us quantify ourthe situation. Seehow much wecan gain/lose.
Helps us formulatecontingencyplans.
Provides standards to measureperformance against.
Helps us describe our ideas to others Lenders, investors,
and family.
If You Fail to Plan, You Plan to Fail.
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KeyElements of a Business Plan
Executive Summary
Mission Statement
CompanyHistory
Business and IndustryProfile
Business StrategyDescription ofProducts/Services
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KeyElements of a Business Plan
Marketing Strategy
CompetitorAnalysis
Description ofManagementTeam
Plan of Operation
Forecasted FinancialStatements
Loan or InvestmentProposal
(continued)(continued)
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Tips for Preparing
a Business Plan
Remember:No onecan createyourplan foryou.
Yourplan mustprovethatthe business will make
money (not necessarily immediately, buteventually).
Remember,youretelling a story with words and
numbers.Make it interesting.
Potential lenders wantto see financial projections(and the assumptions behind them), butthey are
more interested in thestrategies forreaching
thoseprojections.
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Tips on Preparing
a Business Plan
Identifyyourtargetmarket, and offerevidencethatcustomers arehungry foryourproduct/service.
EmpathizeyourCompetitive Advantage.Show how you plan to setyourbusinessapart fromcompetitors; don't fall into the
"metoo" trap.Always includecash flow projections, not justwords.
Tell thetruth always.
(Continued))
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Tips on Preparing
a Business Plan
Keepyourplan crisp between 25 and 50 pages
Include a table ofcontents to allow readers tonavigateyourplan easily.
Looks counts as much as content.
Make sure yourplan has an attractivecover.
Rid yourplan of all spelling and grammatical
errors. Makeyourplan visually appealing.
Prepare a dynamic/confidentplan presentation thatcan be done in as little as 20 minutes.(10 minutes
forourend-of-class presentations.)
(Continued))
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The Perfect Business
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MarketNeed Competency
Passion
The Perfect Business
Created by Alan Weiss
The ideal business
is where these lines
converge.
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More on the Perfect BusinessEasyto get into: You alreadyhavetheexperience and capital and theres notmuchred tape.
Easyto get out of: No longterm legal,
financial,ethical commitments. Yourrightsare liquid.
Meaningful and fun: Success comes fromplayinghard, not workinghard. Bill Cohen
Supports your lifestylechoices: Yourwork iscompatible withyourdesired lifestyle.
Forgiving: Theres a fairly largemargin oferror. A few mistakes wontkill you. Theresroomto evolve.
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More on the Perfect Business(cont.)
Protected fromcompetition: You have a littlemonopoly. You efforts/rights areprotected by strongbrand,contracts,patents, secret formulas,etc.
Limited financial exposure: Someoneelsecarries the
majorfinancial risks with little orno recourseto you.Youreprotectingyour future.
Fastresults: You can quickly determine success orfailure.
A cookiecutter: You can multiply/leverageyourefforts/rewards by bringing in others wholl do it foryou orwithyou.
A cash-out value: You can create and maintain salablvalue forwhen you mustexitthe business. Its an
investment.
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Prof. Whites Perfect Business
Only start/buy/invest in businesses
that work harder for you than you work for them.
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Sample Autonomous Web Models
Content-Based
DatingExpert.com/
Yes No Maybe.com Newsvine.com
Fundable.org
Product-Based Caf Press.com
Zazzle.com
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Mid-Term PresentationTopics and Order
Whos My
Customer?
Whats My
Product?
Whats My
Competitive
Advantage?
Whats My
Business
Model?MyNiche?Passion? Talent?
Values? Destiny?
Cover the following:
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Mid-Term Presentation
Notes
5 minutes maximum
Rehearse
PowerPoint includingthe following: Slide foreachtopic
Business Model Chart
Visuals oftheproduct, location,customers,etc., if available.
Only onepresenter