On today’s episode of Franchise Secrets, I’m talking to a personal idol of mine: Robert Kiyosaki. Robert’s #1 best-selling Finance book “Rich Dad, Poor Dad,” changed my way of thinking, and my life as an entrepreneur. He joins us today to discuss how to shift our thinking and train ourselves as entrepreneurs through franchise experience. He brings with him a wealth of knowledge and ideas—and as always, great stories.
After returning from the Vietnam war as a decorated airman, Robert watched his highly educated father lose his job, buy a franchise, and fail the business in a short amount of time. In comparing his own father’s experience with the path of his best friend’s successful father, Robert crafted “Rich Dad, Poor Dad” to prove how traditional education is not always the key in reaching personal and professional monetary goals. So, if your PhD can’t help you, what can? Practice, practice, practice.
But how can you gain experience in a way that doesn’t leave you broke? Well in today’s episode, Robert and I discuss how owning a franchise is a great way to start gaining experience, how to adapt to run that franchise, and which ones to go after when you can’t go after McDonald’s.
(05:58-9:49) Running a franchise location teaches you the ins and outs of owning a business.
(10:38-19:32) Prioritize your financial statement—and a financial team!
(20:08-22:17) A PhD doesn’t make you a smart businessman. So, what does?
(22:33-27:25) How to learn smart business practices every day.
(27:27-29:47) The sooner you start, the smarter you’ll become.
(29:47-38:53) Be a student first, an entrepreneur second.
Know Your Business
One of key aspects Robert stresses is that you need to have flexible thinking when franchising. When his father rented the cheapest space he could find for a financially solid ice cream franchise, he managed to kill the business before it could start. Robert points out that his father failed to realize that he wasn’t entering an ice-cream selling business, but rather a real estate one. He highlights a great point: when you are franchising, you must let go of your preconceived ideas of that business and accept it for what it really is. As with my experience with salon studios in Orange County, I needed to understand that the salon wasn’t about hair-cutting: it was about property management. Sometimes a business presents itself as X, when in reality its Y. As Robert and I discuss in today’s episode, your job as an entrepreneur is to understand what that Y is. Being able to adjust your mindset when presented with new information is what makes many franchise owners so successful.
Show Me your Books
As Robert states in this episode, “Every time I talk to a small business owner, I say, ‘Who does your books?’” Robert reiterates several times the importance of financial statements and I couldn’t agree more. An entrepreneur cannot be a successful one without the proper financial team—accountants, bankers, and attorneys. You can’t excel in business if you or your team lack financial literacy—after all, it’s about the financials. Your untrained husband or aunt who keeps the books might be cheap in the short term, but your business will suffer in the long term.
Student first, Entrepreneur second
Robert firmly believes in education—through experience, not through school. A degree is worthless if you have no idea how to function as a business owner in the real world. To learn, you need real world experience. Entering the franchising world is a great way to learn, and you must learn every day. The soon you start, the smarter you will become. The more intelligent your business mind becomes, the more money you will make. If you just want money and not the skillset to amass it, Robert suggests marrying someone rich. As he says, “It’s the training—not the money—that makes you rich.”