Rich Dad -- Poor Dad’s Cash Flow Quadrants. Two Beginning Thoughts Job Security = Financial Security = Financial Freedom “The Sooner You Imagine A World.

Rich Dad -- Poor Dad’sCash Flow Quadrants

Two Beginning Thoughts

Job Security = Financial Security = Financial Freedom

“The Sooner You Imagine A World Without Paychecks, the Wealthier You Will Become.”

Rich Dad’s Cash Flow Quadrant

Rich Dad’s Cash Flow Quadrant

Wor

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orks with M

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oves to Deal.

Rich Dad’s Cash Flow Quadrant

You have a job.Someone else is the boss.Security before money.

Mgm’t vs Non-Mgm’t Jobs

Mgm’t/Exempt Considered a

professional At least 50% of time

using intellect, directing, creativity

Has discretion with decisions

Sets own work schedule Receives a salary No overtime pay

Non-Mgm’t/Exempt Considered non-

professional Up to 100% doing routine,

non-thinking tasks Does only what is told to

do Has a pre-set schedule Punches a time clock Paid hourly Receives overtime pay

Rich Dad’s Cash Flow Quadrant (modified)

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.

Rich Dad’s Cash 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.

Rich Dad’s Cash 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.Other’s liabilities are your assets.

Rich Dad’s Cash Flow Quadrant

Job Security

Financial Security

Financial Freedom

Ultimate Financial Freedom

WealthSide

RatRaceSide

Rich Dad’s Cash Flow Quadrant

Job Security

Financial Security

Financial Freedom

Ultimate Financial Freedom

CreateCreateMoney

Spend

PayTaxes

EarnMoney

PayTaxes

Spend

EarnMoney

Spend

Pay Taxes

NoPaychecks

Sample Paths To Financial Freedom

WealthSide

RatRaceSide

Start

EndorStart

Sample Paths To Financial Freedom

WealthSide

RatRaceSide

Start

End

Sample Paths To Financial Freedom

WealthSide

RatRaceSide

Start

End

Rich Dad’sFinancial Mindset Comparison

E’s and S’s Job Model

Job

SavingsGet Out of Debt

Personal ResidenceMutual Funds

Equities/Stocks401Ks, IRAs, SEPs

B’s and I’s Asset Model

Businesses

Real Estate

PaperMunicipal Bonds

IPOs, PPOs,

Niches and Perfect Customers

The Market/Customer/Niche

DecideCustomers

DecideCustomers

SelectMedia

SelectMedia

DecideMessage

DecideMessage

MakeProduct/Brand

MakeProduct/Brand

What’s my favorite fish?What’s my Niche?Am I passionate?Do I have expertise?

Which ponds have my favorite fish?Find Big, Addicted fish--high probability prospects.

What bait aremy fish eating?Find a CompetitiveAdvantage.

Start fishing.

BuildDatabase

BuildDatabase

Stock yourPrivate Pond

TestTest

Niche DefinedBusiness Definition

A special, narrow area of demand for a product or service.

Personal DefinitionA situation or activity specially suited to a person's interests, abilities, or nature: found her niche in life.

Ecology DefinitionThe function or position of an organism or population within an ecological community. The particular area within a habitat occupied by an organism.

Types of NichesOccupation: Small biz owners, garbage men, police, executive chefs, x-ray techs, magicians, realtors.Demographics: Gender, weight, disease, car-owned, type of house, college attended, marital status, retired, memberships, crime levels, education, renters, politics, religion, hospitals, dry cleaners, law firms, small airports, pre-schools, pet stores, manufacturers.Geographics: Neighborhoods, school/voting districts, suburb, city, states, resort areas, climate. Psychographics: Passions, hobbies, dislikes. Think Love-HateCombinations of the above.

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 that’s important to the niche?Is the niche large enough to make my desired profit?

Niche Example for a Bible Biz

Church-Goers

Protestant

Asian

Korean Decent

Recent Immigrants

Christian

Media

Message

Product

Find Perfect

Customer

Who Is Your Perfect Customer?

Perfect Customers are:Affluent Addicts with Big Mouths who Love You to Death!

And, “You only deal with those Perfect Customers who want to deal with you.”

So, “Leave a trail where those Perfect Customers can find you.”

Crafting a Winning

Business Plan

Crafting a Winning

Business Plan

Rank in order of importance.

Beginnings

Planning

Ends

Evaluation--Reaction

Mid

dle

sE

xecu

tio

n/Im

ple

men

tati

on

“In theory, if everyone takes the same approach.If everyone follows the same course, uses the same tools, and plays by the same rules. Then,in theory, everyone should end up with the same results. (But they don’t.)

“Um, guess execution is a pretty important part of the game.”

What Makes Us Special?-- IBM Commercial(Aired in the 2006 Masters Golf Tournament)

Execution

The Essential Functions of the Business Plan

A ‘roadmap” that guides the company by charting 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 our assumptions about the business idea.

Helps us make the “Go/No Go” decision.

Helps us manage risk: Makes us quantify our the situation. See how much we can gain/lose. Helps us formulate contingency plans. Provides standards to measure performance against.

Helps us describe our ideas to others – Lenders, investors, and family.

“If You Fail to Plan, You Plan to Fail.”

Key Elements of a Business Plan

Executive Summary

Mission Statement

Company History

Business and Industry Profile

Business Strategy

Description of Products/Services

Key Elements of a Business Plan

Marketing StrategyCompetitor AnalysisDescription of Management TeamPlan of OperationForecasted Financial StatementsLoan or Investment Proposal

(continued)(continued)

Tips for Preparinga Business Plan

Remember: No one can create your plan for you.

Your plan must prove that the business will make money (not necessarily immediately, but eventually).

Remember, you’re telling a story with words and numbers. Make it interesting.

Potential lenders want to see financial projections (and the assumptions behind them), but they are more interested in the strategies for reaching those projections.

Tips on Preparinga Business Plan

Identify your target market, and offer evidence that customers are hungry for your product/service. Empathize your “Competitive Advantage.” Show how you plan to set your business apart from competitors; don't fall into the "me too" trap. Always include cash flow projections, not just words. Tell the truth – always.

(Continued))

Tips on Preparinga Business Plan

Keep your plan “crisp” – between 25 and 50 pagesInclude a table of contents to allow readers to navigate your plan easily.Looks counts as much as content.Make sure your plan has an attractive cover. Rid your plan of all spelling and grammatical errors. Make your plan visually appealing.

Prepare a dynamic/confident plan presentation that can be done in as little as 20 minutes. (10 minutes for our end-of-class presentations.)

(Continued))

The Perfect BusinessThe Perfect Business

MarketNeed Competency

Passion

The Perfect Business

Created by Alan Weiss

The ideal businessis where these linesconverge.

More on the Perfect BusinessEasy to get into: You already have the experience and capital and there’s not much red tape.Easy to get out of: No long term legal, financial, ethical commitments. Your rights are liquid.Meaningful and fun: “Success comes from playing hard, not working hard.” – Bill CohenSupports your lifestyle choices: Your work is compatible with your desired lifestyle.Forgiving: There’s a fairly large margin of error. A few mistakes won’t kill you. There’s room to evolve.

More on the Perfect Business (con’t.)

Protected from competition: You have a little “monopoly.” You efforts/rights are protected by strong brand, contracts, patents, secret formulas, etc.Limited financial exposure: Someone else carries the major financial risks with little or no recourse to you. You’re protecting your future.Fast results: You can quickly determine success or failure.A cookie cutter: You can multiply/leverage your efforts/rewards by bringing in others who’ll do it for you or with you.A cash-out value: You can create and maintain salable value for when you must exit the business. It’s an investment.

Prof. White’s Perfect Business

“Only start/buy/invest in businesses that work harder for you than you work for them.”

Content Component:

Revenue Component Added:

1 2

3

45a5b

Key: P-Provider; W-Website; C-Customer; A-Advertiser

Key: P-Provider; W-Website; C-Customer

An Autonomous Web Business Model

Sample Autonomous Web Models

Content-BasedDating Expert.com/Yes No Maybe.comNewsvine.comFundable.org

Product-BasedCafé Press.comZazzle.com

Mid-Term PresentationTopics and Order

Who’s MyCustomer?

Who’s MyCustomer?

What’s MyProduct?

What’s MyProduct?

What’s MyCompetitiveAdvantage?

What’s MyCompetitiveAdvantage?

What’s MyBusiness

Model?

What’s MyBusiness

Model?My Niche?Passion? Talent? Values? Destiny?

Cover the following:

Mid-Term PresentationNotes

5 minutes maximumRehearse

PowerPoint including the following:Slide for each topicBusiness Model ChartVisuals of the product, location, customers,

etc., if available.Only one presenter