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Cashflow Quadrant: Which One Are You In?

By 18th April 2019 December 20th, 2019 No Comments

In my last post, I talked about three of the books that helped mold my career. I think continuing education, and continuing to learn from others is such a crucial part to being a successful entrepreneur, so I wanted to share with you the final book that really impacted my career the most. As I was reading Robert Kiyosaki’s book, Rich Dad, Poor Dad, I decided to research him and found his other book.

The book was called The Cashflow Quadrant.

Have you heard of this book? Cashflow Quadrant actually changed a lot more for me than Rich Dad, Poor Dad did. This book doesn’t get nearly as much credit as it should. It breaks down everyone into four quadrants.

The four quadrants are:

  1. Employee
  2. Self-Employed
  3. Business Owner
  4. Investor.

Let’s quickly define these four:

You’ve got the employee, who has a job – this is what most people have. This person works, and they’re doing a job. They get paid by their employer to do that job. There’s nothing wrong with that.

This next part is where it gets a little fuzzy for a lot of gym owners. This quadrant is self-employed. It means you own a job. Yes, you own a job. This is where a lot of gym owners think, “Hey, I own a business. I’m a business owner”. But, really, they’re self-employed. What that means is they own their job. If they don’t go to work every day, if they don’t punch the clock and do the work, the business doesn’t operate. And that means you own a job, you’re self-employed. Again, nothing wrong with either of these cashflow quadrant. But it’s not where I want to be and not where a lot of our gym owners think they want to be.

The next quadrant is the business owner quadrant.

The biggest difference between this and the self-employed quadrant is that the business runs on systems and the systems have the job. The owner is the business owner. They do not have to show up every day in order for their business to operate. True business owners have employees who follow their systems, and that is how the business operates. The business owner oversees all of these systems. This is where I fall in. Does that make sense?

Now, the ultimate goal for some is an investor. This is where you let your money make its money by investing. That money that you’ve made has made, is making, making money. For instance, dividends and shareholders, stocks, bitcoin, etc., whatever it is you want. This is where I want to live eventually.

Why do you think gym owners just can’t get out the self-employed quadrant?

I truly think they just don’t know how to get out of it. You don’t know what you don’t know. Most gym owners would consider themselves business owners, right? By definition, this would be correct; however, in their own minds, they are a business owner. Do they own a business? Absolutely, but do they have to show up every day and execute a job in order to pay the bills? Yes. If they walk away, the business closes its doors and that’s the big difference between being self-employed, which is where they actually sit and being a business owner.

Most of our clients and the fitness business owners that I’ve worked with aspiring to have a true asset and a true business owner relationship with their business. But they’re stuck, it’s a job to them. They show up, they’re still on the training floor, they’re still doing the janitorial work, they’re still doing the balance sheets and then the interviews and the payroll, there are so many hats they wear.

Unfortunately, most gym owners are tied to their gym – a scenario we see all too often. They don’t know how to systematize, they don’t know how to automate, they don’t know what it’s going to take to bridge that gap between self-employed and being a business owner.

We want to fix this.

If you’re a gym owner and you’re reading this thinking, “Wait a minute, I thought I was a business owner” And all of a sudden I’m telling you, you’re actually self-employed and you own a job – if you’re looking to get out of that, our Private Client Coaching is probably the best fit for you.

Private Client Coaching is something we do for our clients that want to shift from the self-employed quadrant to the business owner quadrant but just don’t know how. The ones that want to create a life outside of the gym.

If you want to create a life outside of your gym, book a breakthrough call with us here: