Blog | Entrepreneurship

How to Become a Successful Business Owner

Today, primarily due to changes in technology, the risk in becoming a successful business owner is greatly reduced, and the opportunity to build your own or leverage an existing business system is available to virtually everyone. If you want to become a successful business owner, there's really no excuse not to start today.

play cashflow now

The importance of business systems and how to own them

Often, when people are trained to be employees or self-employed, E's and S's on the left side of the CASHFLOW® Quadrant, they find it hard to transition to the right side of the quadrant, to become a Business Owner (B) and Investor (I). It’s usually a lack of knowledge, not passion, that prohibits people from learning how to become a business owner.

But if you want to be truly wealthy and financially free, it's imperative that you move to the right side of the CASHFLOW Quadrant. The best way to do this is to move from an E or and S to a B. Where it previously required a lot of capital to begin a business, it’s no longer the 10- to 20-year investment of time and money needed to become a successful business owner.

To be financially free, you must move to the right side of the CASHFLOW Quadrant.

By building a business, you learn a business sense and how to build great systems. And owning a successful business is really owning a successful system and leveraging others to work in that system. That's the fundamental difference between and E or S and a B. When you start a business, you also learn what makes a business successful—and what makes it unsuccessful. These are key things you'll need to know to enter the fourth quadrant as a great investor.

Additionally, learning how to run a successful business will give you the cash flow and free time you need to invest well and weather the ups and downs of the market.

How to become a business owner

Want to know how to become a successful business owner? Here are four ways you can thrive in the B quadrant.

1. Buy a franchise

If you don't want to take the time to build your own business systems, you can buy a franchise. When you buy a franchise, you're buying into a proven operating system. The advantage of buying a franchise is that you can take the time you'd spend building your systems to focus on developing your team. And because banks like to make loans to businesses with good, proven systems, they'll often give a loan to a franchise but not to a start-up.

A word of caution: Don't buy a franchise if you want to do things your own way. You must be ready to do everything the way the franchisors tell you. You don't call the shots, but you do own the system. If you want to do your own thing, do it after you've mastered both building your own system and leading people.

2. Get involved in network marketing

Network marketing often gets a bad rap. Because it's a newer form of business system, many people look at it suspiciously and think of it as a scam. Initially, I felt this way too. But after dropping my prejudices and doing some research, I found many people who were sincerely and diligently building successful network-marketing businesses that made a positive impact on their financial futures and others'.

For a reasonable entry fee (often around a few hundred bucks), you can buy into an existing system and immediately begin building a business. And because of technology, this can be done almost entirely online and automated. Paperwork, order processing, distribution, accounting, and follow-up are almost entirely managed by the network-marketing software. This allows you to focus on building your business instead of worrying about the normal start-up headaches of a small business.

3. Start your own S-quadrant business

The B-I Triangle, pictured below, is symbolic of what it takes to build a successful business.

The B-I Triangle is what it takes to build a successful business.

You’ll notice the most important component is found at the base in the mission. The least important thing? The product.

Why is that? Well, it seems everyone nowadays is telling you to follow your passion. It reminds me of the saying, “If you do what you love, you’ll never work a day in your life.”

Though this sounds good in theory, it’s not the best advice if you want to become a successful business owner.

The problem with this advice is business owners didn’t become successful because they followed their passions. That might be what they tell you through social media, but more often than not, their business isn’t a success because the owner has an emotional attachment to their product or service.

Successful business owners struggled while learning how to become a successful business owner. They had to put in the time to understand how to manage and optimize systems. They learned, one way or another, how to attract people through modern marketing tactics to buy a product or service. They lived and breathed their target market pain points and discovered—or even invented—solutions to those problems. Successful business owners became so by implementing the proper accounting systems to manage their cash flow. They put money into asset and legal protection to they keep their business assets separate from their personal assets.

The key to becoming a successful business owner

All while building their systems, they also built a strong network of experienced leaders and loyal team members. These valuable groups of people shared and helped execute the business owner’s mission.

When you work for a big corporation, buy into a franchise or join a network marketing venture, you’re following someone else’s mission. It’s predetermined what values you should hold if you want to work for them.M

That’s not the case when you start your own business. The mission, or your why, is the reason behind your business.

So while you need to be passionate about your mission, it’s not the reason people end up buying from you. People will buy your product or service because of what it will do for them.

This is why my rich dad always told me never to fall in love with your product. It’s the least important thing to be a successful business owner.

4. Solopreneur

There is a new business type that has emerged the last few years fueled by the power of the internet labeled the solopreneur.

The solopreneur has grown out of the spirit of an S quadrant, small-business owner. These business owners want to do it all themselves. They were probably the smartest kids in class who breezed through college.

However, a solopreneur isn’t happy with simply doing their own thing. The solopreneur has ambitions that rival those of a traditional big business owner. They don’t just want to service those in their neighborhood or town.

The solopreneur can grow as little or as large as they want to. Where a traditional S, sole-proprietor, owns the bakery around the corner or the small accounting firm across the street, they are limited by how much they can grow. A bakery can only bake so many loaves of bread, an accountant can only handle so many accounts. No matter how popular they are or big they get, they will always be limited by time.

How to become a solopreneur business owner

But a solopreneur is different. Solopreneurs can grow by leveraging services available through the internet that have surpassed the need for dozens, or even hundreds of employees. They aren’t constrained by time in the same way as a small-business owner.

For example, a solopreneur can manage the cash flow of an entire small-business venture with nothing more than a QuickBooks account. This software can easily replace the workload that formerly required an entire accounting department or outside firm.

Referencing the B-I Triangle again, excluding the outer foundational elements, almost everything can be leveraged at scale to aid the solopreneur. Cash flow, communications and systems can all be leveraged through the internet.

Even legal protection can be leveraged through services like LegalZoom. Where you previously needed to hire a lawyer, you can now complete a form and get your company legally established in a matter of minutes.

The product, which alone won’t make a solopreneur a successful business owner, doesn’t even require storage. For many successful solopreneur business owners, the product they sell is digital in nature. They don’t need anything but an idea, a computer, and an internet connection.

Want to become a business owner quickly? Get educated first

Regardless of whether you plan to stay a solopreneur or expand into the B quadrant, the quickest way to become a successful business owner is get a mentor.

My rich dad was my mentor. A mentor is someone who has already done what you want to do and is successful at doing it. My rich dad taught me about systems and how to be a leader of people, not a manager of people. Managers often see their subordinates as inferiors. Leaders must direct people who are often smarter than they are.

A traditional way to do this is to get your MBA from a prestigious school and then get a fast-track job that takes you up the corporate ladder. An MBA will teach you about the basics of accounting and how the financial numbers relate to your systems, but having an MBA doesn't mean you're competent to run a business. You'll need to spend 10 to 15 years in a company to learn all the different aspects of business. Then, you should plan on leaving to start your own company. Working for a successful major corporation is like being paid by your mentor.

Start today

Today, primarily due to changes in technology, how to become a successful business owner is greatly reduced by technology. The opportunity to build your own or leverage an existing business system is available to virtually everyone. If you want to start your own business, there's really no excuse not to start today.

Franchises and network marketing solutions took away the hard part of developing your own systems. You acquire the rights to a proven system, and then your only job is to develop your people.

One practical thing you can do today is start learning about business and systems from a mentor and a coach. I had a great mentor and coach when I was building my business, and you need one too. Rich Dad provides both mentoring and coaching for those who want to succeed in business.

Original publish date: August 13, 2013

Recent Posts

The Rate Rise Era and the Dragon

The Rate Rise Era and the Dragon

As we enter a Bear market, we must understand the Dragon.

Read the full post
8 Advantages That Make Women Great Investors

8 Advantages That Make Women Great Investors

When it comes to the profession of investing, some people might automatically assume that it falls under the male’s domain.

Read the full post
7 Reasons to Use Create Cash Flow With the Stock Market
Paper Assets

7 Reasons to Use Create Cash Flow With the Stock Market

Here at Rich Dad, we focus on understand the difference between cash flow and capital gains. Why?

Read the full post