BYU-Hawaii's current entrepreneur in residence used a financial author's "cash flow quadrant" model to suggest ways School of Business students might pursue their own careers.
In the September 19 entrepreneurship lecture in the McKay Auditorium, Elder Jim Sheffield, a service missionary who is president of a family-owned real estate development company in Colorado, drew from Hawaii-born financial author Robert T. Kiyosaki's Cash Flow Quadrant and added a student state to reflect the following paths to a successful career: employee, self-employed, business owner and investor.
Speaking of his own student days at BYU, Sheffield recalled he wasn't sure what career path he should take, but an aptitude test showed he would be good at accounting. Indeed, he went on to earn an MBA and was a CPA with one of the big firms. "That was kind of my entrepreneurial beginning," he said.
"I ended up in real estate. Guess how many classes I had in real estate? Zero, but I was sure happy that I went on and got more education [which] helps you have more options, opportunity and flexibility. Getting as much education as you can, and then utilizing it, can help you in your career."
Being an employee, he continued, "means basically you work for others. My degree at the university allowed me to get a good-paying job," even though he and his wife, Lynda — who is also a service missionary on campus, struggled like many newly marrieds.
"Are entrepreneurs made or born? Some say they're born," he said, admitting he early-on found he had "a little bit of an entrepreneurial spirit [that] just kind of happened."
Sheffield soon left accounting and became a real estate salesman. "A lot of people said I was throwing away my college education." For example, he added, "you don't need a degree to sell real estate, just a license — and not even that in a lot of countries. A real estate salesman is self-employed...but no one tells you what you're worth. It's up to you. You're it."
After three years of selling real estate, Sheffield started a real estate brokerage with about 20 salesmen, but the venture "didn't go very well." He then borrowed $30,000 to invest in an irrigation project, which failed. "Don't invest in something you don't have control of," he advised.
He explained that under Kiyosaki's quadrant theory, "you can stay in one, or move back and forth; but some may limit you. When you're an investor, that means you're using others to help you in leveraging your knowledge and assets. Along the way opportunities come to you to invest."
Sheffield eventually asked his father-in-law if he would partner with him in a real estate-construction firm. "I'm still a partner in this business of designing and building homes in the Denver, Colorado, area," he said, explaining Sheffield Homes develops some projects from scratch and buys lots for others.
"Our company has probably built over 1,500 units. We merchandise model homes to the hilt...to make them look nice," he continued, "and we spend a lot of time in market research. I did a lot of research before we built our first project to find out what was the best product. Those of you thinking of starting your own business, you've got to do research."
"Our edge was niche marketing and niche location. We couldn't compete with the big guys, but we found competitive niches. We only do homes where we can maintain our profit margin," he said, noting that's roughly 10% of sales before taxes. "You need to know your numbers."
"Our business is very complicated. When I started it, I had no idea how complicated it would be. It takes a lot of money and effort to make a profit."
"But," he continued, "a business owner can also leverage his time, talent and resources. This is a quadrant that allows you a chance to maximize your opportunity to help others and serve." For example, Sheffield pointed out he has been able to go to his kids' sporting events, serve as a mission president (in Jackson, Mississippi), serve here at BYU-Hawaii "and still get a check twice a month."
Asked if he'd ever been partners with another member of the Church, Sheffield shared the wisdom of his own mission president, Stephen L. Covey, who told him partners need two things: "They need to have integrity, which most members of the Church have, but also have competence. You've got to have both."
"You need to do your homework. Check their backgrounds. Check their track record," he said, comparing partners to a marriage. "You need to have trust."
Sheffield added he has had several opportunities to exit his business, but has chosen instead to allow another generation to get involved: "We have family members to come in and grow the business. Gradually, we're stepping out."