People can maintain their professional careers in order to supplement their primary incomes through Direct Selling opportunities. Direct Selling is a business model that allows many to work from home with low-overhead and little needed capital to start.
However, sometimes, because of the convenience Direct Selling offers; it indirectly can sabotage the mindset of a new direct seller.
Direct Selling is a BUSINESS and thus needs to be treated as such. Many people who come into direct selling are often raised and influenced by their parents, educational systems and experiences to be just employees, therefore, they shape their thinking, habits, activities and recreation around a 2-week behavior model.
Cashfow Quadrant
While I don’t agree with everything Robert Kiyosaki writes, I did like his book, Cashflow Quadrant for explaining a business mindset in a simple, clear and applicable model. His basic premise is there are two directions cash goes: Assets and Liabilities and there are 2 ways of creating money: Active and Passive.
Active Income is generated through personal activity from two primary mindsets: Employee (Performance-Driven) and Self-Employed (Skill-driven). Both of mindsets require time and ability to perform, if either of these are reduced so is the income.
Passive Income shifts the mindset from you to systematic thinking hence removing you as the primary influence in the revenue formula… instead your money works at making money. Passive income, according to Kiyosaki can be generated through Investing (Markets & Real Estate) and through a Business System (Franchises and Direct Selling).
Many people operate in the Active income mindsets and need to learn how to think differently in order to maximize their Passive income venues.
Direct Selling offers people an opportunity to start off as an ‘employee’ of their opportunity with a coach/upline (acting as a boss) telling them what to do… As experience is gained, you move to a self-employed position where you can perform most functions without need of a coach (upline) ‘supervising’ you… now it is about your skill. As you start getting better results, you move to developing a system that allows you to worker smarter, not harder. You will likely have some form of a team that you have developed who have adopted your methodologies & philosophies towards your opportunity. Finally, you moved from ‘being the machine’ to ‘building a machine’… this can free up your time while providing you income without because you do not have to be as involved with day-to-day operations but can focus on investing your skills into developing leaders.
The mindset new direct sellers begin with is paramount to their long-term success. I can tell a big difference between someone who is paid hourly, vs someone paid commission to the person who is writing checks for their employees. Each mindset makes decisions differently based on their mindsets.
The individual mindset also impacts cashflow decisions both short-term and long-term. Managing money, personal and business can make or break any business. Rob has a powerful story of a friend Samuel and his financial decisions.
Lisa McLellan says:
THanks for explaining the differences between active and passive income. I don’t know much about this stuff at all. My husband once read the book “Rich Dad Poor Dad.” I’ll have to tell him about this one.
Lisa McLellan
Babysitting Services, Nanny Services, and Nanny agencies
19th May 2010 at 3:17 pm
Sonya Lenzo says:
Interesting to look at your business that way!Have meant to read that book but havent done it yet..need to put it on my to do list.
sonya lenzo
http://www.yourchanceforromance.com
19th May 2010 at 4:33 pm
Jennifer Battaglino says:
It’s good to get a clear definition of income and how we can earn it. Would an example of direct selling be something like Amway from back in the 80′s? How has it evolved since then?
Jen B
The Harwood Group – Tinnitus, Chronic Illness, Fears, and Anxiety
19th May 2010 at 10:08 pm
Christian Singles Dating Expert says:
Hi Mark,
Oh thank you for mentioning “Cash Flow Quadrant.” Indeed, for the person who is an employee, this is a hugely new concept and both you and Kiyosaki make it clear.
Happy Dating and Relationships,
April Braswell
Christian Dating Expert and Coach
19th May 2010 at 10:24 pm
Michael D Walker says:
Cashflow Quadrant is my favorite of all of Kiyosaki’s books.
Glad to see you recommending it here
Michael
The Success Secrets
19th May 2010 at 6:19 am
Tim Van Milligan says:
You’re right. It is definately about mindset. It is a lot different being the boss than being the employee. Employees want help from someone when things go bad. When you’re the boss, there is no one to help you and you have to train the employee how to fix it themself. It sucks up a lot of your time. As you advise, you have to build the machine. If you think your employees are going to build it for you, you’re dreaming or smoking some funny weed.
Tim Van Milligan, helping you Make Money Online, God’s Way!
19th May 2010 at 10:08 am
Peggy Larson says:
Interesting post here. I think I should pick up the Cashflow Quadrant book. Sounds like I could learn a lot much like I do here reading your blog advice. Thanks!
Peggy Larson
Quilting – Colors and Fun!
19th May 2010 at 3:54 pm
Mike Norris says:
I have the Cashflow Quadrant book and it is very good. Yes it is easy to tell the difference between the hourly employee and the guy or gal getting paid for what they bring in.
Mike
http://www.ColumbiaSafetyProducts.com
19th May 2010 at 9:10 pm
Trisha Chambers says:
I can also tell a big difference between someone who is paid hourly, vs someone paid commission to the person who is writing checks for their employees. I’ve done all 3~
19th May 2010 at 10:05 pm
Eileen O'Neill says:
I’ve read all Kiyosaki’s books and learned a lot, especially from the one you mentioned, “Cash Flow Quadrant”.
The mindset is essential. But if you are an employee with an Entrepreneur mindset there could be some fraction. What do you think? Any advice on keeping the mindsets apart while being employeed and then running one’s own business?
Eileen
http://www.EnjoyBeingOnline.com
19th May 2010 at 5:02 am
Dale Bell says:
I agree I do not like all of the material but Roberts game Cashflow is a fun way of learnig what is in the books.
19th May 2010 at 12:31 pm
Shane says:
I’m going to have to pull out my copy of Cash Flow Quadrant and read it again, it’s been a long time.
Shane
Resources for the Independent Film Maker
19th May 2010 at 8:27 am
bryan says:
Mark, I agree I like some things Robert says, but some are a little over the top. The cash quadrants is one that I have always likes and thought were important.
19th May 2010 at 10:32 pm
Scott Sylvan Bell says:
How funny my dad has this game. It is a good way to learn about finances as well as having some fun.
Scott Sylvan Bell
Now go implement!
19th May 2010 at 11:14 pm
Alfred Meyer says:
Direct Selling offers people an opportunity to start off as an ‘employee’ of their opportunity with a coach/upline (acting as a boss) telling them what to do… As experience is gained, you move to a self-employed position where you can perform most functions without need of a coach (upline) ‘supervising’ you… now it is about your skill. As you start getting better results, you move to developing a system that allows you to worker smarter, not harder. You will likely have some form of a team that you have developed who have adopted your methodologies & philosophies towards your opportunity. Finally, you moved from ‘being the machine’ to ‘building a machine’… this can free up your time while providing you income without because you do not have to be as involved with day-to-day operations but can focus on investing your skills into developing leaders.
+1
19th May 2010 at 12:12 pm
Vintageguitar says:
Great post.I learn a lot just by reading this post.Thanks.
19th May 2010 at 7:32 am
Shawn says:
I completely agree Mark home business is still… business. That is where a firm understanding of boundaries come into play in interpersonal relationships. Anytime you put undue stress on a relationship it is going to push the other party into a defensive posture. Even if you don’t see it first the separation is there waiting to come back on you…
19th May 2010 at 10:43 pm