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Business Owner and Cash Flow Quadrant: How to create passive income? [Part 4.]

Cash Flow QuadrantThe article discusses the owner of the business – one of four categories of the Cash Flow Quadrant, which includes only a fraction of the employed population and individual advantages and disadvantages of this category.

What is the difference between a self-employed entrepreneur and Owner of the business? 

Both types of people are entrepreneurs, but each of them belongs to a different category of the Cash Flow Quadrant.

The difference between self-employed and owner of the business is in their way of thinking and how each one looks at their business.

Although both types of entrepreneurs start their business from scratch:

  • The Business Owner bases its business so that he can own a system over time, which provides service / creates products and brings income back to business owner.
  • Self-employed entrepreneur is the system itself, which necessarily ties him hands so he can not leave his business in the self-employed quadrant of the cash flow for a longer period of time.

Real Business Owner owns a system, which allows him to leave his business for several months or even a year and when he would be back the business is equally or more profitable than was when the owner left…

Would You rather watched a video instead of reading? Here it is…

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Business owners think differently…

Business owners think differently from most people…

Business owners often look for three things through which they can achieve more than they could alone:

  • Functional and proven system,
  • distribution network, through which they can gain leverage their time, energy and ultimately money
  • and the smartest people they can find and who will help them expand their business.

Business owners do not want to do everything themselves – such as self-employed.

On the contrary, they want to find and hire smarter people than they are alone, in order to help them grow their business faster.

Cash Flow Quadrant business owner

 

What you need to become a successful business owner?

Business owner who wants to be successful need:

  • to learn to think differently from the 95% of the population – the best way is from people who are also business owners and are able to pass on their experience personally or through the books…
  • to create systems and describe processes that must take place in a company in order to be able provide products and services and get profits.

System BI Triangle…

bi-triangle-colorRegarding the systems and processes of a successful business, Robert Kiyosaki, popularizer of the Cash Flow Quadrant scheme, in this regard talks about the so-called BI Triangle, which should fill every one who wants to be a successful as a owner of a business system.

It is a triangle, which shows all the necessary components of the business, and when you tie them all together, you’ll have success.

When you assemble the BI Triangle, then you will also be able to:

  • leave the left side of the cash flow quadrant and move toward the right side,
  • create wealth and achieve financial freedom,
  • as well as to have enough time for a private life, travel and hobbies.

BI Triangle is the system which the owner of the company can form even several years.

The system consists of:

  • Mission – a successful company needs a clear spiritual and business mission and must meet the needs of the society and deliver value to others. Without the mission success never come.
  • Team – Business is a team sport. In the team of successful entrepreneurs should be employees at different levels, as well as accountants, lawyers, brokers, financial advisors, insurance agents, bankers and of course other businessmen.

If the smartest man in your team is you, than whole team is doing poorly, because your success stands or falls with you alone!

  • Leadership – Every team needs leader with vision that sets the direction and pace of personal example to its fulfillment. Where is the leader with no vision, the people perish there, as well as business.
  • Cash flows – Ability to create and manage cash flow, understand numbers and based on numbers make better decisions is a necessary part of the business owner day and the basic premise is financial literacy and common sense.
  • Communications – The better we are skilled & equiped in communication and the more people we can communicate with and understand their needs, the stronger cash flows we have. What is important is communication inside and outside of the company.
  • Systems – Systems in various areas of product development, production and inventory systems, through order processing, billing and claims administration, systems of services for the customer…

In the business there is indeed a lot of systems, and I would prefer to recommend you to use already prepared, functional and proven systems without neccesity to learning through own trial and errors.

  • Legal – Lawyer helps protect intellectual property and ensure the correctness of the contracts and create and protect our most valuable assets – ideas.
  • Product – Product is not the most important element for success in business as many people think – in fact it is just the tip of the iceberg that is the least important. If you have correctly set the previous systems, a product that is “just right” will still be selling well…

The product reflects the company’s mission – is the result that we offer our customers.

This may not be revolutionary in any way – just when it is functional. Without an effective system even the best product is useless.

Example: Most of us do a better hamburger than McDonald’s, but few of us build a better business system than McDonald’s has. In fact, it does not matter what you sell, what is decisive is how you selling it…

When you have the system that is well set…

Once is the BI Triangle system properly assembled (and it may need several years to do so), it can operate without the direct and active participation of the owner of the system or only with his minimal participation, because there are other people (employees, co-partners) who use these systems and its outputs, work with them and produce results.

When the system is well designed, is only minimally affected by the market situation:

  • when the market fails, the system is negatively affected by little,
  • when the market thrives the system prospers many times more.

When you have such a system in your hand, you can achieve both – financial and time independence, and it gives you absolute freedom – one that 95% of people in the world will never know.

When you create a functional and stable system, you can for a few months to go to the other side of the globe and you will know that month after month you will receive as much money as you should – or better yet, you’ll receive a lot more.

Business owner has advantages as soon as the system is set up correctly:

  • you are your own boss,
  • You can achieve much more success because you are not restricted itself, with your own knowledge, skills, energy and time
  • You can create a highly prized asset that you can pass on to your children,
  • Possibility of scalability – you are able to hire more staff, creating greater demand and handle more orders and thus have greater profit and use it on your other investments to create passive income
  • If your system is really well set up, you can describe your own system and resell right to it as licence and have other additional profit – partly from the sale of licensed system itself, as well as from the actual monthly sales of the establishment – and therefore fully passive income … [So how does KFC, McDonalds, Costa coffee, Remax Real Estate and many more others…]

Disadvantages such as Business Owner:

  • Almost always a big initial investment and there is no guarantee it will ever come back – especially if you do not know what you do and do not use the already-proven system…
  • Compilation of the system by trial and errors – you would almost always testing what would work and what wouldn´t – especially if you do not use any existing system, such as. Franchising,
  • Time-consuming – than is the system set up properly so that it can actually work and produce exceptional results, it may take several years,
  • Employees – from the salary, legal affairs, paying taxes, to equipment – all topics require special handling
  • Even when you buy a proven franchise system in addition to the financial investment is required time you need to invest.

How not to have to build all the systems?

I thought about it, and I realized that I really don´t want to be a classical type of business owner – I would not want to own production company, neither the restaurant nor the classic shop or something like that…

It’s too complicated for me, hoping to achieve a break even and from the purchase of franchising model of business I have been always discouraged by lack of capital investment and my unwillingness to go into debt…

So I went the other way. Along the way, where:

  • most systems I do not have to deal with, because I use those that are already established,
  • as well as I can use the experience of someone who has gone through the path in front of me,
  • I don´t have to have the staff or expensive equipment,
  • and I have the possibility to expand my business worldwide,
  • without having to deal with the legal specifications of each country,
  • with the option to generate both passive and inheritable income, but also multiply my own personal time,
  • and I can benefit from many tax benefits,
  • plus it even does not require high capital investment …

If you’ve ever wondered how to get on the right side of the Cash Flow Quadrant, then I can pass these systems to you and teach you how to work with them… [Click Here]

Following articles…

If you are interested in topic of Cash Flow Quadrant more, then read each sequel to deeply analyze its various categories:

In conclusion on the subject Business Owner and Cash Flow Quadrant …

I believe that to become the owner of the business is actually very worthwhile goal in life, which is worth to be filled, if you have this desire.

On the other hand, start a business without having an experience, or even a system that you could duplicate and model can be very frustrating and sometimes dangerous.

Constantly look for ways to improve your thinking and become a better entrepreneur – look for people who are entrepreneurs, read books, listen to the audios, get into the business environment.

If you already have your business, then take some part of your working week aside and start to create your business systems to help you replace your daily work, time, energy, knowledge, skills and ultimately helps you increase your profits without limitation.

Well designed systems generate higher profit that:

  • you can reinvest in your business so that it became a passive income
  • You can invest in other business or for example real estate in to shares, funds that will generate you passive income.

 

If I can assist you in this area, please contact me.

I wish you a great day and look forward to our personal meeting.

PS: Do you want to have more money, freedom and peace in your life and before others do?

I discovered a way a person can get passive income “to live a life without borders” by building a business from home, and I have a system for doing it that is so simple, that anyone who has a dream and wants to fulfill it, can handle it. This does not require selling and the best part is that it does not take much time either – around 30 minutes of concentrated effort / day.

Do you want to know more about it? Contact me…

 

Is this article helpful? If so, let me know…

  • Share the article on social networks with your friends…
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  • Share your thoughts below in the discussion.
  • Click on the “Thank You” below in this article…

 

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Robert is an entrepreneur, a writer, a coach and visionary mentor who´s life mission is to help people achieve business, financial and life goals through coaching, mentoring and network marketing. Robert has written several ebooks - the very last one is: Magic words of the Masters of life... (avalaible in czech language only). Do you want to know more? Click here...
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