Business as Usual: A family Model
So it's become increasingly clear the past few months that the economy is unstable. It was brought into stark clarity this morning when I woke up to news that Lehman Brothers has filed for Chapter 11. How can a company over 150 years old lose control? And it made me think of something I heard a while back about how families should be considered as a business. And in this increasingly volatile market, it seems even more true.
So; how can one treat a family as a business? Sound business practices are always a good foundation. Ethical integrity in what you do; Knowing the laws and obeying them; Find out what is important to you and create a core value system; Periodically discuss your ethical issues; Create a stable financial portfolio; Maintain open lines of communication; All of those seem like great ways to shore up a family unit during turbulent times.
Financially, it's a good idea as well. In business, it's always "us vs. them". What do we need to do to ensure that we survive even while they may not? A bit of that mindset might not be amiss in families. Sure, too much of that leads to elitism and aggression and lots of other unsavory things. But a tiny bit is enough to realize that the world likes to break up families.
So, for family finances, as with business, a budget is primary. Do an expense report and an income analysis; monthly, and yearly. Figure out exactly where the money is going and whether it should be allotted elsewhere. Businesses (except, I suppose, sole-proprietorship's) are partnerships. Financial decisions are not made by a single person. They are discussed, debated, and voted on for the health and well-being of the business. Families should not be sole-proprietorship's. Share the financial work; Have one person do the budgeting and one person pay the bills. Or have both people involved with both. But having one person always doing both can lead to resentment and contention.
It's also important to plan for the future. You never know when the market will collapse, or the family will go through a difficult time. Have an emergency savings; plan for retirement; create a disaster recovery plan. These are all good practices for business and families both.
Finally, and most importantly, invest back into the family. Successful businesses funnel some of their profits back into the business. Why shouldn't families do the same? Invest in quality time with family members; Understand that the family is more than the physical, and that there are human beings involved with emotions and opinions, each widely different than the next.
So, how can one run a family like a business? Simple: It's all in the mindset. It's about financial management skills, communication and planning skills, people management skills. It's about understanding your place in the world and knowing your worth. It's about loving the family so much that you'll do anything to see it survive.
Which, after all, is more than many businesses can say for themselves; especially Lehman Brothers who has yet to even address their poor employees. Not much of a family indeed.
So; how can one treat a family as a business? Sound business practices are always a good foundation. Ethical integrity in what you do; Knowing the laws and obeying them; Find out what is important to you and create a core value system; Periodically discuss your ethical issues; Create a stable financial portfolio; Maintain open lines of communication; All of those seem like great ways to shore up a family unit during turbulent times.
Financially, it's a good idea as well. In business, it's always "us vs. them". What do we need to do to ensure that we survive even while they may not? A bit of that mindset might not be amiss in families. Sure, too much of that leads to elitism and aggression and lots of other unsavory things. But a tiny bit is enough to realize that the world likes to break up families.
So, for family finances, as with business, a budget is primary. Do an expense report and an income analysis; monthly, and yearly. Figure out exactly where the money is going and whether it should be allotted elsewhere. Businesses (except, I suppose, sole-proprietorship's) are partnerships. Financial decisions are not made by a single person. They are discussed, debated, and voted on for the health and well-being of the business. Families should not be sole-proprietorship's. Share the financial work; Have one person do the budgeting and one person pay the bills. Or have both people involved with both. But having one person always doing both can lead to resentment and contention.
It's also important to plan for the future. You never know when the market will collapse, or the family will go through a difficult time. Have an emergency savings; plan for retirement; create a disaster recovery plan. These are all good practices for business and families both.
Finally, and most importantly, invest back into the family. Successful businesses funnel some of their profits back into the business. Why shouldn't families do the same? Invest in quality time with family members; Understand that the family is more than the physical, and that there are human beings involved with emotions and opinions, each widely different than the next.
So, how can one run a family like a business? Simple: It's all in the mindset. It's about financial management skills, communication and planning skills, people management skills. It's about understanding your place in the world and knowing your worth. It's about loving the family so much that you'll do anything to see it survive.
Which, after all, is more than many businesses can say for themselves; especially Lehman Brothers who has yet to even address their poor employees. Not much of a family indeed.
posted by Laura Francabandera at
9:14 AM
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