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Thursday, 02.09.2012 |
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| Rich Dad's Before You Quit Your Job |
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Product Details
Notes
INTRODUCTION
most employees don't become entrepreneurs because they fear lack of money
entrepreneurs can operate sanely and intelligently without money
entrepreneurs need to know how to spend money, even if they have no money
school trains people to be employees, but you can train to be an entrepreneur
employees became prevalent during the Industrial Age with Prussian education
people who didn't finish school: Thomas Edison, Henry Ford,
Bill Gates, Richard Branson, Michael Dell, Steve Jobs, Ted Turner
change your philosophy to embrace freedom instead of security
entrepreneurship is the pursuit of opportunity without regard to current resources
know the expectations of the market and know when a product is good enough
don't wait forever until the product is perfect, release new versions over time
LESSON #1: A Successful Business Is Created Before There Is A Business
CHAPTER 1
90% of all new businesses fail within the first five years
99% of all new businesses fail within the first ten years
one mistake is spending too much time on non-income producing activities
it's important to design a good business model before building it
that means designing a business that can go on without the entrepreneur
losers quit when they fail, winners fail until they succeed
keep your day job while building a part-time business, work to learn not to earn
LESSON #2: Learn How To Turn Bad Luck Into Good Luck
CHAPTER 2
Thomas Edison failed over a thousand times before inventing the light bulb
a mistake is a signal to stop and pause and learn something new
when you make a mistake, don't pretend you didn't, or blame someone else
the right things to do as an employee are often wrong for the entrepreneur
avoid analysis paralysis, start the business to practice on it, don't keep waiting
the four basic emotions are joy, anger, fear and love
use each emotion for good rather than bad, channel bad luck into good luck
two aspects to mistakes: fear of the consequences, and fear of looking bad
LESSON #3: Know the Difference Between Your Job and Your Work
CHAPTER 3
athletes, musicians and doctors all work for free at first to learn their skills
there's a big difference between work and a job, work can be preparation
the B-I Triangle: Product, Legal, Systems, Communications, Cash Flow
surrounded by Team, Leadership, and with the base of Mission
when sales decline, sometimes you need to spend more to build the business
the number one reason for arguments in a marriage is money
Thomas Edison was actually the 23rd person to invent the light bulb
but he was great at self-promotion, sales, and bringing in venture capital
Edison also understood legal patents, and the electrical system
so he understood and used all the parts of the B-I Triangle to build GE
LESSON #4: Success Reveals Your Failures
CHAPTER 4
sometimes we win the most when we have nothing to lose
the hard part for most people is getting to nothing, most hang on to a little instead
the way to stop failing is to fail faster and learn from your mistakes
the number one skill of an entrepreneur is their ability to sell
four business schools: universities, family, corporate training, street smarts
you need an attorney for legal issues and an accountant to manage cash flow
at the same time, you need to run your business, not your lawyer or accountant
school smarts: A-Thinker (analytical/critical), T-Thinker (technical/expertise)
street smarts: C-Thinker (creative/flexible), P-Thinker (people/personal)
become an expert at one level of the B-I Triangle and build a team to do the rest
be careful not to ignore advice from your experts just because you don't like it
LESSON #5: The Process Is More Important than the Goal
CHAPTER 5
1974 to 1984 was his learning process, making mistakes and moving on
1984 to 1994 was his earning process, making money and building wealth
1994 to 2004 was his giving back process, serving others and growing
the process of pursuing your goal determines who you become along the way
as an entrepreneur, you can make back any money you lose
lottery winners often end up broke because they got lucky but didn't learn
Henry Ford said if he lost a billion dollars, he'd have it back in less than 5 years
every business needs either financial projections or financial statements
hire an accountant to review a proposed budget and do a cash flow analysis
this is a good exercise even before starting a business to learn about finance
an accountant can also suggest hidden costs that you might have forgotten
there are more business opportunities than there are great entrepreneurs
red flag: excessive salaries show that the entrepreneur thinks like an employee
red flag: saving money instead of spending it to make more money
red flag: being busy and working hard but not making profits
employees are used to just working hard and getting paid regardless of profits
try to spend at least half your time focusing on the future of your business
don't get caught up in the day-to-day operations so you lose the big picture
LESSON #6: The Best Answers Are Found in Your Heart, Not Your Head
CHAPTER 6
three types of money: competitive money, cooperative money, spiritual money
spiritual money is not just doing what you love, it's doing what needs to be done
it's when you see a need and you are the one that is supposed to fill it
if you are truly committed to solving a problem, the universe supports you
the key thing is to have a powerful mission that drives your business
be dedicated to giving your gift, finding your natural talent and applying it
good is the enemy of great, if you're only good enough, you can't be great
many businesses fail because there are different people with different missions
you can make more money by serving more people, instead of just yourself
define both your business mission and your spiritual mission together
LESSON #7: The Scope of the Mission Determines the Product
CHAPTER 7
America in 2005 had 16 million businesses, 80% had 9 employees or less
85% of employment in the U.S. is in small businesses, which are 53% of the GDP
each month, about 150,000 new businesses are formed and 150,000 end
there are many people who know what to do but can't do what they know
Ilya Prigogine: "stress is the way intelligence grows"
people who succeed in the S quadrant just end up with more work
you can only directly reach a limited number of people with your limited time
Buckminster Fuller: "the more people you serve, the more effective you become"
building a great team is essential for moving from S quadrant to B quadrant
the Rich Dad Company was launched in April 1997, on Oprah in June 2000
1986 to 1994, they ran the Business School for Entrepreneurs, and for Investors
they became financially free in 1994 when Kim was 37 and Robert was 47
a successful business should solve a problem and fill a need
the product can be a manifestation of the mission, but the mission must be clear
LESSON #8: Design a Business That Can Do
Something That No Other Business Can Do
CHAPTER 8
eight most important jobs of a business leader:
1) clearly define the mission, goals, and vision of the company
2) find the best people and forge them into a team
3) strengthen the company on the inside
4) expand the company on the outside
5) improve the bottom line
6) invest in research and development
7) invest in tangible assets
8) be a good corporate citizen
the actual Cashflow board game was released in November 1996
the Rich Dad Poor Dad book was done on April 8, 1997, Robert's 50th b-day
original book was self-published, their own publishing company TechPress
tactic is what you do, strategy is the plan on how to get the tactic done
single tactic, multiple strategy, focus on one objective or tactic, but in many ways
the tactic is like your mission statement, tagline, or primary goal
many businesses focus on creating the best system, not the best product
come up with a low-risk idea or strategy to fall back on, something you know well
find a unique tactical advantage, basically a barrier to entry, your main strength
Forbes defines a big business as one with 5000 or more employees
the Rich Dad Company has about 15,000 people working through licensing
grow through strategic partners rather than more employees or office space
LESSON #9: Don't Fight for the Bargain Basement
CHAPTER 9
about 80% of customers are good, 5% are really bad, 15% are average
learn to fire bad customers just like you fire bad employees
otherwise your good customers and good employees will leave
in the same way, you must be able to fire bad advisors or bad partners
as your business grows, your advisors must grow with you or be replaced
strong people skills means knowing how to deal with both good and bad people
salespeople are very different in nature and personality than administrative staff
most of your problems in business will be people problems
all people have skills and talents but also problems and conflicts
learn to hire slow and fire fast, be careful hiring but don't hesitate to fire
a person can be a good employee but just in the wrong job or department
as a leader, you should help your employee become happy somewhere else
when there's a problem, confront it face to face, not behind someone's back
communication skills mean knowing not just what to say, but how to say it
fire your cheap customers, they just waste your time and cost you more
match your product and price to the customer's ego, wants, and needs
for small business entrepreneurs, every dollar spent must generate income
don't price in the middle, you don't have any market position then
if you're the lowest priced, you lose profit margins and have cheap customers
the ideal position is to be the highest priced, don't fight for bargain basement
a higher price can be perceived as more valuable
they sold over 350,000 Cashflow games at $200 each by February 2004
the key was marketing to reach the appropriate customers rather than masses
their target audience was willing to pay a lot, and they would play it more
it was positioned at education rather than just entertainment
so the comparisons were to college degrees rather than games like Monopoly
if you're the highest priced, you have to give something unique to customers
study the high priced cars, hotels, and other businesses to learn from them
don't try to be all things to all customers, create separate brands if necessary
instead of discounting down, bonus up, give them more for the same price
be careful of adding more products (line extension), instead find new customers
look for strategic partners who already sell to your target customers
prequalify your customers, don't just try to sell to everyone, find your niche
the five P's of marketing: Product, Person (customer), Price, Place, Position
LESSON #10: Know When to Quit
CHAPTER 10
keep your full-time job and start a part-time business to learn from it |
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