With a quadrant than one of my mentors propounded (Robert Kiyosaki), he talked about a quadrant where the Business owner that create system belong to.
Many small business owners believe they have a B business when what they really have is an S business. What’s the difference? The B-business owner owns a system, while the S-business owner owns a job. If an owner can leave a business for a year and come back to a stronger and more profitable operation, he or she is a B-business owner.
The advantages of business ownership do not come easily. B and I quadrant types face great risks and responsibilities. Not only their money and livelihoods but also other people’s are usually at stake. And starting or owning a business requires a strong mission, a good team, and leadership. The business owner/investor needs far more than good ideas; he or she also needs sales, accounting, and team-building skills, for the viability of the enterprise depends more on leadership and operating systems than on the product or service being sold. Those who master the art of solving business problems and creating business systems gain an advantage over investors who remain outside the enterprise. In the process of building a money-making business, insiders learn to better analyze the businesses of others—an important skill when it comes time to make additional investment decisions.
Types of businesses. There are several vehicles for owning or operating a business for income and profit. They differ in the amount of investment and sweat equity required.
· Franchising. When a corporation sells a franchise, it typically grants the buyer the exclusive right to sell its goods or services in a specified area. In exchange for a fee and usually a share of the profits, the company or franchisor provides the buyer or franchisee with its product or service, the use of its name, a business system, and sometimes training as well as advertising and marketing services. McDonald’s and KFC are examples of franchises. Franchises are tailor-made for people who don’t want to build a business from the ground up or who want hands-on training in all aspects of operating an enterprise before starting their own. The initial investment can be steep—leaders of the pack charge a million dollars or more for rights—but banks more readily fund franchises than small start-up businesses, because the former have proven track records.
· Network marketing. Also called direct-distribution systems, network marketing companies provide the investor or distributor with proven business systems. As with a franchise, the distributor buys the rights to distribute an existing product line but for a much lower fee, often around $200. Because network marketing relies on techniques such as personal demonstrations, Internet marketing, and sometimes direct mail or telemarketing rather than the usual retail sales outlets, overhead costs are much lower than in the retail trade. This saves the distributor large fees and the headaches of managing a storefront operation. In fact, distributors can Work From Home, using company software systems to process sales. The best network marketing companies offer not only quality products but also long-term educational programs that hone leadership, salesmanship and communication skills, helping gung-ho investors build a strong enough revenue base to generate passive income.
· Buying a business. Businesses are always coming on the market. For the investor who is financially literate, buying a pre-existing business that has positive cash flow, sound operating systems, and good name recognition can save the time and worry associated with starting a business from scratch.
· Starting a business. For those who have the drive and the start-up capital, or the connections to raise it, developing a business can be the ultimate investing experience. A business can take any number of forms offering different levels of investor/owner control and varying potential for gain. A sole proprietorship, for example, carries the highest risk and is seldom used by the professional investor. More than any other investment, starting a business requires an expert team of advisors.
