The recent Rich Dad bankruptcy is big news. And home business owners can learn a lot from this small hiccup from best-selling author Robert Kiyosaki.
The big news in the world of earning money this week is that Robert Kiyosaki, the “Rich Dad,” filed for bankruptcy. While I enjoyed the book Rich Dad Poor Dad, and I learned some interesting things (particularly getting away from the idea of a primary residence as an “investment”), I’m not a huge fan of Kiyosaki.
However, he does offer interesting insights, and he’s always entertaining. Plus, the bankruptcy of one of his companies, Rich Global, LLC, provides some very useful lessons for the home business owner:
1. Keep Your Business Assets Separate from Your Personal Assets
One of the best lessons from the Rich Dad bankruptcy is that you need to keep your home business assets separate from your personal assets. And it’s not just about a separate bank account for your home business. An actual business entity, that is completely separate from your business assets, is a good idea if you want to protect yourself.
Let’s be real: Robert Kiyosaki isn’t filing for bankruptcy. His personal wealth is estimated in the tens of millions of dollars. Rich Global, LLC is filing for bankruptcy protection. Rich Global was sued for fees owed to a promoter. The judgment was almost $24 million. Now, the promoter will only get a portion of the judgment, since Rich Global’s assets were fairly small in comparison to the rest of Kiyosaki’s empire.
A separate business can mean that your personal assets are better protected from things that your business does. It really can help to take the steps necessary to turn your home business into a “real” business from a legal standpoint.
2. Build a Loyal Following that will Stick with You
Kiyosaki has built a rabid following. Those who are devoted to him and his teachings are devoted. As Luke points out over at Consumerism Commentary, the loyal Kiyosaki fans aren’t going anywhere. Look for ways to build a loyal following with your home business. All of us experience setbacks, and the same is true in your home business. However, if you have taken the time to build a loyal following, it doesn’t matter. Your fans will stick with you even when times get tough.
Decide whom your home business is likely to serve, and learn what they like. Kiyosaki’s fans like his no-nonsense persona, as well as his lack of political correctness. Figure out what your fan base is likely to be, and then make sure you relate to them. Make the effort to connect to your customers, and they will remain loyal to you.
3. Prepare to Move Forward after a Setback
Most home business owners aren’t going to have 10 businesses (plus or minus) to fall back on. However, it is possible to prepare to move forward after a setback. Even though the Rich Dad bankruptcy story line might make some things more difficult for Kiyosaki, he is prepared to move forward. In fact, he can probably turn this whole thing around. This isn’t a setback; it’s a brilliant business move that limits the amount the plaintiff in the lawsuit will also get, and it keeps his other business and personal assets safe.
Look at how you can prepare yourself to move forward. This means investing in yourself, developing skills, acquiring knowledge, and shoring up your finances so that you are better prepared to weather various financial storms. Really think about how you can prepare yourself and your business, and look for positive lessons to learn from your difficulties.
Can you think of other lessons that can be learned from the Rich Dad bankruptcy?