"Which Business Works Best?"

In reality, there are only a few choices. As Robert Kiyosaki states in his book, "Cash Flow Quadrant", there are only four real choices...be an employee, own a business in which you run the show, own a business system that gives you leverage so that you make additional income off of other people's efforts, or be an investor of your own money. Most people do not have the knowledge or the bank account to succeed in the last quadrant. So, we won't discuss that arena.

The majority of people in this world live and die in the first quadrant. They work for a paycheck and benefits. Nothing wrong with that if you are happy having someone else tell you how much you will make and when you can take a day off.

The second quadrant, owning your own business, has its benefits as well. I have been in this quadrant for many years, running a practice. As a physician I have the ability to make a very good living. However, if I am not in my office treating patients, I do not earn income that day. Here is a case in point.

A while back I had a terrible injury to my right hand. It made practicing very difficult, and affected my ability to make a living. I knew, at that point, that I needed a Plan B or a safety net. I wasn't going to give up my practice, because I love what I do. However, I knew that an injury could happen at any time. I had to protect my family.

This is where the third quadrant comes into play. In today's world there are so many business opportunities out there. Everyone is touting their business as the best. In reality, I am happy they do so. Why would someone be in a business unless they thought it WAS the best? But here is where fact meets fiction. There are very specific issues that MUST be addressed when considering a business that gives you leverage. As the days and weeks continue I will be highlighting these issues to help you understand the thought process that makes a leveraged business work and give you my recommendations for businesses for you to consider.

Let me give you an example of a leveraged position that has caused some of my friends hardship... Let's say you are a real estate broker. For this example let's NOT bring the lousy real estate market into the equation for this discussion. As a broker you hire other real estate agents. You train them intensely, giving them all the tricks of the trade that you have learned over the years. They do well for you. This is a leveraged position. You are making income off of THEIR efforts as well as your own. Suddenly, they decide to leave your office and open up their own real estate office down the street. Not only have you lost leverage on your agent, but you have actually trained your competition!

To benefit from a true leveraged position you must be able to earn a percentage of your "agents" income without the risk of their efforts negatively affecting you in the future. For the past decade, network marketing has been taught at the Harvard Business School as a viable business model that works. The trick is considering the various options that a particular company gives you. For example, what product or service are they offering. Is is a product or service that is not only in demand, but is used unconsciously by the masses? What is the track record of the company? Is it finanically stable? What are the credentials of the CEO? Has he had successful experiences in the same field as the business you are considering? Does the company pay ALL people in the business a fair fee for their work? What about the back end...is their residual payment schedule one in which you can actually achieve? We will discuss these issues and more in future posts. Until next time...