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5 Lessons for Families from Small Businesses

If Your Household Were a Business, Would it Succeed? 5 Lessons for Families from Small Businesses

  • Kathryn Tuggle

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  • 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.