Cashflow Quadrant

I was reading Cashflow Quadrant and I thought a lot of clothing companies could benefit from this information. The cash flow Quadrant has 4 sections. The left side is an Employee and Self-employed and the right side is a Business owner and Investor. So many clothing companies with me included are actually just self employed and not true businesses.

The following is an excerpt from the book

“Can you personally make a better hamburger then McDonald’s?”

So far 100% of the people I have talked with have talked with about their new idea have said “yes”. They can all prepare, cook, and serve a better quality hamburger then McDonald’s.

At this point , I ask them the next question: “Can you personally build a better business system than McDonald’s?

Some people see the difference immediately, and some do not. And I would say the difference is whether the person is fixated on the left side of the Quadrant, which is focused on the idea of the better burger, or on the right side of the quadrant, which is focused on the system of business.

I do my best to explain that there are a lot of entreprenuers out there offering far superior products or services than are offered by the mega-rich multinational corporations, just as there are billions of people who can make a better burger than McDonald’s But only McDonald’s has the system that has served billions of burgers.

-Robert Kiyosaki “Cashflow Quadrant”

This quote really opened my eyes that the product isn’t the only thing to worry about and I need to focus on creating a strong system for my clothing company to succeed. It’s not all about the product and the sooner you understand that and work on all the other areas of your business the sooner you will succeed.

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  • BryanOmega

    Nice write up Jon and “Cashflow Quadrant” is an excellent read.

  • Mike

    Interesting diagram. He's spot-on about McDonald's business model.

  • ama kulard

    Thanks Jon , this is something that I need to consider. :)

  • Jeremy Carter

    Yeah, I have to agree. Making a remarkable product gives you a foundation to start on (see Purple Cow by Seth Godin), and I think your product must always be improving, but Kiyosaki makes a great point. Your lasting value increases exponentially with the stability of your system.

  • Javaboi

    This my friend is what I have based my whole February 2011 launch on. I have been to Roberts seminars and speak directly with his Marketing geniuses on occasion. The B-I Triangle is where businesses either fail or succeed. He keeps it extremely real, and doesn't sugar coat anything. My plans of having a business that runs itself are already in the works. I honestly feel like a business is to compliment your life not complicate it. There would be a lot more successful businesses in this industry if they followed his model. Product is the last thing one should be concerned with when it comes to entrepreneurial endeavors.
    -Javaboi Fresh

  • Shawn

    Wow! Well said Jon! I've read Robert's books as well and i completely agree with his statements. Being an aspiring clothing entrepreneur myself I've found that the business side of things is really where most t-shirt designers seem weakest. Setting up a system of automation sounds simple, but being designers, we are constantly critiquing and micro managing because we want to ensure our stuff comes out good! T-shirt designer upstarts need to understand the industry as a whole, but must be ready to delegate control to others in order to focus on the important aspects such as new ideas and new business. I think in this t-shirt industry, finding your niche, your ideal target, is the most important part. Then you design your ass off for them!

  • jonkruse

    Yeah even though I hire a lot of people to do work for me in the end you still need to give your input to and make sure everything comes out right. I've pushed a few designers to do great work for me instead of mediocre.

  • Maxine

    I agree, the product is really important but it's also about reliability and making your company recognizable. You always know you can find a McDonalds and you know what you can get there. Not saying you should make your product as generic as a mediocre fast-food hamburger, but people are more likely to be open to out-of-the-ordinary designs if they already have a relationship with the clothing company.

  • jonkruse

    I'm not sure what your commenting on Maxine. This article is not about the product being really important but developing a system for your business to succeed. Godin has a book called Purple Cow which is about the importance of the product but what your selling is just a small part of the equation.

    I can make a better burger then McDonalds but I can't build a better business system then them… at least not yet.

  • Saïd

    I started reading Robert Kiyosaki's books this past summer and have been intrigued by well-established business concepts I never would've guessed applied to art + design. Check out the listings of his other programs

  • DW

    man… you are really on your shit. Systems! That's what it is all about. is $$$.

  • Bee Juiceey

    I like this article a lot!

  • Pingback: 10 articles every clothing entrepreneur should read | How to Start a Clothing Line - t-shirt business, clothing company()

  • Garner Harriet

    Great article! A system is absolutely the solution; especially as we adapt to this new economy and invest our precious time in profitable efforts rather than trading it for wages or salaries. A system does not stop working due to ill or vacations or other personnel absences.