A Hobby vs. Business

Dear Reader,

I believe everyone should have something in their life they’re passionate about. And it’s wonderful when you can get paid well for doing what you’re passionate about. Unfortunately, that doesn’t always happen. So how do you know if you should turn your passion into a business?

The key is to remember that a successful business’s first priority is to bring value to its customers. The needs of the owner are secondary. A good business is a win-win situation: If the customer’s needs and wants are being met, the owner makes money. If not, then the business fails.

So when considering the question of whether or not to turn your passion into a business, ask yourself these questions:

  • Can I leverage what I am passionate about to bring value to others?
  • How much will others pay for this value I am providing?
  • Are the margins strong enough to provide the financial profits I desire?
  • Who is the business really for? Am I willing to make customer value my first priority, or is this really about me doing what I love?

In theory, turning your hobby into a business makes a lot of sense. You love your hobby, and presumably, have a lot of knowledge about it. Those two things should make for a successful business, right?

Not always.

If you’re thinking about turning your hobby into a business, the B-I Triangle is a handy tool to help you see the bigger picture of deciding if something should remain your hobby or could flourish as a business.

Using the B-I Triangle To Build A Successful Business Around Your Passion

The B-I Triangle as a whole represents a strong system of systems, supported by a team with a leader, all working towards a common mission.

If any of the management functions of the B-I Triangle’s five internal levels (cash flow, communications, systems, legal, and product) are weak, the company will be weak. If you are personally having financial difficulty, or not having the excess cash flow you desire, you can often find the weak spots by analyzing each level. Once you identify your weakness, you may then want to consider turning it into your strength or hiring someone else with that strength.

If any of the five levels in the B-I Triangle are weak and the management is not prepared to strengthen them, it is best to walk away from the investment.

B-I Triangle

In 1974, I decided I was going to learn to build a business following the model of the B-I Triangle. Rich dad warned me, “Learning to build a business according to this model is high-risk. Many people attempt it, but few accomplish it. But if you do learn to build a business this way, your earning potential is unlimited.”

As he often said, “There are many people with great ideas but few people with great fortunes. The B-I Triangle has the power to turn ordinary ideas into great fortunes. The B-I Triangle is the guide to taking an idea and creating an asset.” It represents the knowledge required to be successful on the B and I side of the CASHFLOW® Quadrant.

I still recall experiencing the highest of highs and the lowest of lows as I learned to build a solid business. I remember some of the old advertising copy I wrote that never sold anything. I remember some of the brochures I wrote where no one could tell what I was trying to sell. And I remember struggling to learn to raise capital and spend my investors’ money wisely in the hopes of building a powerful business.

I also remember going back to my investors and telling them that I had lost their money. I am forever grateful for the investors who understood and told me to come back when I had another venture for them to invest in.

However, through it all, each mistake was a priceless learning experience as well as a character-building lesson. As rich dad said, the risk at the start was very high. Yet, as I stuck it out and continued to learn, the rewards truly were unlimited.

In 1974, I was very weak at every level of the B-I Triangle. I think I was weakest in cash-flow management and communications management. Today, although I am still not a master of any one sector of the triangle, I would say that I am the strongest in cash-flow management and communications management. And because I can create synergies among all levels of the B-I Triangle, my companies succeed.

The point I’m making here is that, even though I was not strong at the start, I continued with my learning process. For anyone who wants to acquire great success and wealth in this manner, I encourage you to start, practice, make mistakes, correct, learn, and improve.

The B-I Triangle Is A Powerful Force To Accomplish This 

As rich dad said, “It gives shape to your ideas. It is the knowledge of the B-I Triangle that allows a person to create an asset that buys other assets.”

Rich dad taught me that once you become good at taking an idea and building a B-I Triangle business around it, people will flock to you to invest in your idea. He said, “Then, it will be true for you that it doesn’t take money to make money. Instead of spending your life working for money, you will get better at creating assets that make more and more money—your money will work for you.”

Rich dad was about 40 years old, and I was amazed at how he could run several different companies, all in different industries. For example, he had a restaurant business, a fast-food business, a convenience-store chain, a trucking company, a real estate construction business, and a property management business. I knew he was following his plan to have his businesses buy his true investments, which for him was real estate, but it was amazing how many businesses he could run all at the same time. When I asked him how he could start, own, and manage so many businesses, his response was to draw the B-I Triangle.

So apply the B-I Triangle to your passion. Exploit your ability to collaborate and lead a team. Allow yourself to see the world as abundant and to embrace sharing and partnership. Understand that the more you exchange and partner, the more successful everyone becomes.


Robert Kiyosaki

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

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Robert Kiyosaki

Robert Kiyosaki, author of bestseller Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur, successful investor, real estate mogul, and motivational speaker, all while running the Rich Dad Company.

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