Building Businesses – Is It Truly The Path To Build Wealth?

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One of my favourite authors writing about money is Robert Kiosaki. In fact, the first book I ever read was Rich Dad, Poor Dad*. It really opened my eyes to what was possible in life when it came to money, and it sparked my interest in this topic.

A while later, I read another of his books, The Cash-Flow Quadrant* and I realised that building wealth involved needing to transform what I was doing with my money long term and how I was making money too.

Many people think is that they need to go self-employed to make money. This is partially true, but it is the way that you do it which holds the biggest key to success (and less stress!). 

I’m going to talk through what I have learnt from this book, and perhaps you’ll want to check it out and read it yourself too!

What is the Cash Flow Quadrant?

The quadrant separates 4 distinct areas of potential sources of income. E is for employed, S is for self-employed, B is for business owner and I is for investor.

Now what Mr Kiyosaki writes is how most of us are in the E section, and think that the only way to get ahead is to make more money, work harder, and it’ll all be ok.

The problem is, if we’re not careful, we lose sight of the fact that we are working so hard we miss out on seeing our families, friends, sleep and looking after our health.

And making more money in a job also doesn’t guarantee wealth. The individual on £500 a week spending £250 a week and investing the rest is more financially better off than the person earning £2000 a week and spending £1999 a week without investing at all.

He also separates the E and the S on one side from the B and the I on the other side. I’ll explain this more in a minute.

He says that we can all transition from one side to the other to bring in our income, but it is HARD to do and takes effort to get there, and often we can fall into traps along the way.

Why transition between sides?

The E and the S sides are limited by TIME. There are only so many working hours in the day, and there is only so much money that someone can make based on many factors – this is trading TIME for MONEY.

There is no time restriction on the B and the I side. If you use some of your money to invest and grow your net worth, EVENTUALLY your net worth will be able to start paying the bills and you have freed yourself from having to work (now you have choice!).

Likewise for the B – quadrant.

There are many articles and books out there that talk about running a business as a way to make significantly more money than being employed. And they aren’t wrong!

Take a look at this list of rich people in the UK. Not a single one of them attribute their fortune to working for someone else – they all run their own business in one form or another and they are living lifestyles that we can only dream of.

So if I want to be rich I have to run a business, right?

Hmm, yes and no. There is a caveat to this.

If you run your own business, you have to learn how to market yourself. You have to deal with customers, tech-problems and accounting, as well as doing the job that you set out to do.

When you’re employed, your employer does all that for you. As a locum GP, I don’t have to find a venue, employ admin staff, find patients or do anything related to running the business. I just turn up to the surgeries already established and run by someone else.

And thank goodness! I’m busy enough as it is without having to find my own patients too!

Conversely, running The Female Money Doctor Ltd has been an upward climb. I have needed to learn how to use social media, write content (like this!), shoot videos, as well as really hard stuff like deal with trolls and my own lack of self-confidence. Running a business pushes A LOT of buttons, and after nearly 3 years of running it, the business pays for its own running costs, but doesn’t pay me to do it – this is a labour of love people!!

And this is what happens.

Don’t Fall Into The Trap!

People start businesses looking at the rich and famous thinking that this is the key to building wealth, but it isn’t. It’s hard work FOR A LONG TIME before it actually starts making anything (if at all). And if you’re a sole-trader treating patients, cleaning windows or houses, or looking after people’s kids, you are limited by the time that you can spend in this role. You are also limited by the price that people are willing to pay, and the rules on how many hours you can work (in the case of doctors especially!).

Not to mention the risk of not having maternity pay, sick benefits or a pension automatically given to you!!

This is the trap that people fall into – they *think* that they are in the B-quadrant, but *actually* they are in the S-quadrant trading time for money.

So if running a business isn’t the full story, what now?

Running a business will work for you as long as it is leveraged in the right way.

Take this as an example:

A cleaner works for a cleaning company (E-quadrant).

A cleaner quits her job and sets up as a sole trader. She cleans several houses on her own, limited by time and price (S- quadrant).

The cleaner starts a cleaning company that employ other cleaners who want to work but don’t want the hassle of looking for new clients. For this service, she takes a small cut from each of them in order to be part of her company and tap into her list of people who need a cleaner. She can now can free up her time to work ON her business rather than IN her business as a cleaner. She is the one finding customers for the regular cleaners so they don’t have to. Yes her job role has changed, but now can you see that she has uncoupled herself from time, meaning her earning potential is as big as the number of cleaners who want to work with her (B-quadrant).

Imagine if this model was then sold to other people as a franchise – people now pay to take on her branding and expertise, and run the same type of company in a completely different area. Now she has income from her own company AND another one set up in a different part of the country entirely (still B-quadrant, but on steroids!).

The cleaner invests in property and stocks and shares and becomes financially independent. If she wanted to stop working on her cleaning company she could (I- quadrant).

Starting a business

I’ve just spoken about one business type – a cleaning company, but obviously there are all sorts of ideas. Leverage the time and knowledge of others is a FANTASTIC way to kickstart a business.

I have started working with Esther the Investor, and we recently launched a service in my facebook group to help people start running a business of their own educating others about money – I am so excited about this and really hope that others want to do the same too. I see this as a win-win situation – more people learn fabulous money skills, and more people can start their own business in a safe and supported way.

Here’s my interview with Esther talking us through the concept:


Final Thoughts

So now you know what the cash flow quadrant is, and I hope it has compelled you to go on and read the book! I’d be interested to know your thoughts, so why not come over to my free, private facebook group and let me know!

If you’re going to try anything new, make sure you do your research first and understand what it is you’re getting into first. And if you want to get in touch to find out how YOU can help to educate people about money too without having to start from scratch like I had to, drop me an email: [email protected] or message me on facebook/instagram.

I wish you every success!

Until next time,




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1 year ago

This is some really interesting advice – especially for those desperate to start a business but not confident enough to try! Thanks for sharing.

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