79% of all people running an online business don’t have a clue what an asset is!
Okay, I just made that stat up, but I so much wanted to follow at least one of Brian’s writing tips [#5]…I’m guessing that it may just be true though.
So in honor of Rich Dad Wednesdays let take a look at an online business, with Rich Dad’s philosophies in mind.
Most people who are trying to create an online business are trying to make the switch from the left side of the Cashflow Quadrant [employee, self-employed] to the right side [business owner, investor]…which is the promised land of passive income: your bank account filling up on its own, while you get snubbed by sexy girls on some exotic beach.
To boil about a hundred books, tapes, games and videos into a single thought, this shift is accomplished by accumulating assets rather than accumulating liabilities. Rich Dad’s definition of an asset is something that puts money in your pocket.
Is a website an asset?
The traditional view would probably say yes…but I don’t think it really is.
But a website can put money in your pocket, no?
Not without traffic.
On the web the primary asset is traffic.
As I see it there are only two primary business functions on the web.
- Controlling traffic
- Monetizing traffic
To get back to Rich Dad, an online business needs two assets: a way to control traffic and things to sell or ways to extract money from that traffic.
This blog and my newsletter are my attempts at creating the controlling traffic side of the equation. The products I create and recommend are the other part of the formula.
They are both directly correlated to your success. Increase either or both and the value of your company will increase.
Starting at the bottom of the Internet food chain, so you don’t have to.