Are you a business owner or are you self-employed?

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Have you had a chance to read the Cashflow Quadrant by Robert Kiyosaki? It’s a sequel to his well-known book, Rich Dad Poor Dad, a book that advocates the importance of financial literacy.

In this book, Robert explains how successful business owners and investors spend their time. In the explanation below you will find that you will fall into one of the categories. The book is really profound and well worth the read but for the sake of this article, I will explain key parts of the quadrant as it relates to medical providers.


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The most common scenario among medical providers – E/S

The left-sided quadrants of the graphic represent “E” for employee and “S” for self-employed. In these categories income is generated actively, meaning you get paid proportional to the time you worked. 

Employees and those who are self-employed rely greatly on their jobs. Self-employment is the category most healthcare practitioners fall into. Although technically they often “own a business,” they usually find themselves working harder and more hours than their employees.

They don’t have a boss but they do have patients that expect a lot from them. Sometimes those patients pay, sometimes they don’t. The headaches and menial tasks of the practice often seem to come full circle and become the leaderships problem anyways.


The most desired scenario among medical providers – B/I

Most people aspire to be on the right side in either the “B” Business owner or “I” Investor quadrants where income is generated passively. According to Robert, a business owner has built a scalable business model. Meaning there are systems in place that allow the business to be self-sustaining and not rely on constant input and attention by the owner.

The healthcare providers that we partner with who want to make the jump to the “B” business owner quadrant, are usually stuck in one of two places. Sometimes they have no profitable solution for patients who want to pay but can’t pay all at once. This results in the practice being unable to capture 100% of the patients that walk in the door.

Secondly, the practice revenue is completely dependent on how much work the practitioner has accomplished in the last month or two. If the provider leaves for vacation the practice feels it, demanding the provider’s constant participation and labor. Either scenario is a hurdle for the business owner to scale. What does scaling generally look like in medicine?  Hiring additional practitioners, opening more locations and collecting more patient responsibility.

“B” quadrant business owners can take a month off, play different roles within their company or chase another passion if they desire. These are all things that often seem out of reach for providers that are in the employee or self-employed quadrants. The good news is generating passive income and creating a scalable business model is not far out of reach with HFD.

See what other medical providers have to say about the topic of passive income.

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