If Your Household Were a Business, Would it Succeed? 5 Lessons for Families from Small Businesses
- Kathryn Tuggle
- Apr 13, 2015 7:30 AM EDT
NEW YORK (MainStreet) — Wouldn't it be nice if your household ran more like a successful business? If everyone knew their role, budgeted accordingly and prioritized time management and long-term goals, your life would probably be a lot easier. Here's a look at the five best lessons households can take away from successful small businesses.
1. Treat everyone with respect
If your child comes home from school after a bad day, put yourself in their shoes, says Jeremy Hallett, the CEO of Quotacy.
"For me, respect begins with empathy," he says. "When we practice respect, over time our kids will mimic that behavior, so when we have a hard day at the office or something happened that we weren't expecting, our kids will understand."
Members of a family — much like employees — will make mistakes and have bad days. The most important thing any manager (or parent) can do is not judge or overly criticize for those mistakes.
Hallett, who has 25 on staff, says he never refers to his employees as "employees."
"We are a team. We call ourselves a family," he says. "If you're constantly disrespecting your team, then pretty soon you aren't a team at all, and that's when things fall apart."
2. Define your core values and have a family mission statement.
Just as companies have a statement of purpose, a family should have a mission statement all members of the family understand and respect, Hallett says.
"Companies sit down and define the core values of their business all the time. Families have to do this too," he says. "You have to ask everyone, 'What are the things we care about as a family?' 'What defines us on this journey, and are we all on the same page?'"
The concept of the "organizational mission" is universal, says Jacob Engel, author of The Prosperous Leader: How Smart People Achieve Success. For businesses and for families, it can give clarity and purpose to everyone on the team.
"A mission statement can often be the first step in instilling values in kids," Engel says. "How do you show them there is a greater picture than just name-brand clothes or the latest fad? How do you tell them that there's more to life than just wanting the same things that every other friend has? Having a family mission can teach them that life doesn't begin and end with material things. It's one way you can instill values that are much longer-lasting."
3. Have cash on hand
For businesses, it's called liquidity, for households it's an emergency fund, Hallett says.
Every family should have a few months of income in a short-term savings account — enough to make sure that no disaster ever "blows everything up," he says.
"For a company, you need cash on hand because you don't know how much money is coming in every month, or you might need to buy inventory or office space," he says. "For families, what if you lose your job or run into an unexpected expense? Where will the money come from?"
Having an emergency fund protects your long-term strategy and goals, Hallett says.
"If your furnace or A/C goes out, it's not an option not to fix it," he says. "If your car breaks down, you can rely on your friend for a ride, but for low long? The emergency fund has got to be there to take care of the unexpected events that we all know will come."
4. Communicate and have family meetings.
Families should take time every night to talk with one another, Engel says.
"You need to find out what your family members are thinking and feeling, just like you need to know that from your employees," he says. "When you have regular meetings, you can talk about everything, even the mundane but essential questions like, 'Where are we going on vacation this year?' or 'Who is going to take out the garbage?'"
These meetings are a wonderful time to communicate to your children the basics of budgeting. While you don't have to go into too much detail on the hard financials – especially if your children are young — a basic lesson in how much money the family brings in and spends is always a good idea.
"You can talk about the money you have saved for vacation and extracurricular activities and ask your children to participate in making decisions," he says. "This can be as simple as saying, 'If we decide to spend money on A, then we won't have money to do B. What would you rather do?' In addition to teaching them how to budget, you're giving them responsibility, and that can be powerful."
5. Schedule everything
"Some people look at me like I'm heartless when I tell them I send calendar appointments to my family, but I don't care. It's what keeps us on track," says Jeanne Achille, chief executive of the PR firm The Devon Group.
Achille and her husband and two daughters find that scheduling time for family meetings, dinners and doctor appointments is the best way to ensure that nothing falls through the cracks.
"We have the appointments on our smartphones and then we have a master calendar in the kitchen for a backup," she says.
Having everyone's schedule coordinated allows the family to avoid fees and other costs incurred when bills aren't paid or warranties aren't renewed on time.
"You don't have to worry about late fees at the doctor or the salon when you have everything on your calendar," she says. "When you're late going somewhere, you end up taking a taxi instead of a train, missing deadlines, and it can be costly."
— Written by Kathryn Tuggle for MainStreet. Follow Kathryn on Twitter @KathrynTuggle