What can families learn from businesses?

I’ve often thought to myself, why don’t we run our family/personal lives more like a business? We have income like a business, expenses like a business, and a family is run by a group of people just like a business. Surely some of the practices that businesses implement to make it manageable would be useful at home, right?

I think it’s obvious that a family does not operate like a typical business. However, I’ve thought a lot about the aspects of family life that could benefit from business-like practices and compiled some of those thoughts into this post. I’m sure there are many other areas that I haven’t thought about yet, but maybe there will be something here you hadn’t thought about before. These ideas aren’t completely thought through and some will be better than others. I plan to go into more detail in later posts as I think each of them through in more detail.

Budgeting

This is something that a lot of families already do on a regular basis. Some people budget with simple spreadsheets, some with massive and complicated spreadsheets, and others use commercial software to manage a budget. I’m a believer that every family should have a budget; it doesn’t matter if you’re pinching pennies to buy food or if you’re buying a new Lamborghini for every day of the week, you should have a plan for your money.

Expense Tracking

The flip side of budgeting is expense tracking. Once you have the budget nailed down, you must keep track of your expenses in order to know how well you’re keeping to the budget. Businesses will often have an approval process for expenses over a certain amount to make sure they can be reviewed ahead of time to ensure they do not harm budget compliance and are smart purchasing decisions. A rigid process for approvals isn’t necessarily important, but the concept should be used to make decisions.

Forecasting

Every business must plan for the future. What do we think our sales will be for the next six months? Do we have any major purchases coming this year? Are we going to have to hire a new employee? And so on. To avoid last minute surprises families should do the same. You can’t plan for everything, but you often know things like: “I need new tires in a couple of months”, “we need to remodel the kitchen” or “the kids need school supplies next month.”

These things should be captured and planned for financially as soon as possible.

Shared Knowledge

In a business you typically do not want any one person to have information locked in their head without someone else having the same information. In a business this can be a problem due to employee turnover,  vacation time, sickness or even death.

A family can experience similar issues. If a husband is in the military and deployed overseas, the husband can’t have account numbers and passwords locked in his head that his wife may need. And although it’s not fun to talk about, in the event of an unexpected death in the family, there’s no way to get that information.

However, if the family kept all of this kind of information in a secure wiki of some sort instead of locked in their heads, this wouldn’t be an issue. Sure, you aren’t going to type up everything you know, but maybe you’ll be able to get the critically important stuff on “paper”.

Reporting and Analysis

What good does entering data do if you never see it again? A business must report on their data and analyze their reports to make improvements in business processes over time. Families should do the same. It’s not just enough to have a report; you have to look at them and use them to make decisions about your future for them to do you any good.

Document Management

This is a major one for me personally. Businesses generate a lot of documents – invoices, purchase orders, blueprints, proposals, contracts, etc – and must have a system in place to store these documents in a way that they are easily retrieved. This used to be accomplished with rooms full of filing cabinets, but in the modern age, document management systems can store everything in digital filing cabinets that require just as much room as the computer where they are stored.

Although we won’t personally generate as many documents as most businesses, families have to deal with receipts, tax documents, insurance cards,  birth certificates, various letters and all kinds of random documents. It may not take a room full of filing cabinets, but storing and organizing all of these documents can be a hassle without the right system.

I’ve often needed a document that’s in the office at home when I’m not at home. For example, have you ever gone to the DMV and needed an electric or water bill to verify your address? If your documents were stored in a digital document management system they could be accessed via a smart phone or table from anywhere in the world.

Project Management System

Many businesses use a project management system to manage the many different activities going on within the company. A project management system can help a business track what things have to happen for a project to get completed, what has already happened, who’s working on what, how much longer it will take, and what problems have been encountered.

I don’t know about you, but at our house, we have a lot of projects: the screens need replaced on our windows, the trim needs fixed in several rooms, we need to remodel our master bathroom one of these days, and much more. There are so many things that need done I can’t keep track of them all. Why don’t we have a system that lets us keep track of how much we need to do, what resources we will need to accomplish it, and how much progress we’ve made?

You don’t need a project management system for doing the dishes or putting air in the tires, but for some of those bigger things, wouldn’t it be helpful?

Inventory

I live in Joplin, MO which was recently devastated by an EF-5 tornado that passed through the middle of our city.

Aerial view of Joplin, MO after the tornado.

My wife, son, in-laws, and nephew were all huddled in the middle of our house with me 3 blocks from absolute destruction while the tornado ripped up our roofing, blew down our fence,  and thew a pile of debris all over our house and yard. Fortunately we were all safe, and all of the damage was easily fixable. However, one of my coworkers – Josh and his wife Anna – was not so lucky. Josh and Anna were on vacation when I called to let them know their house was completely gone. They lost everything but what they had in their bags and a few things that were salvageable from the rubble. For insurance purposes they had to list everything that was lost in the tornado in order to get money to replace their belongings. It took them weeks upon weeks and they still didn’t get everything listed.

What if they had already made a list – a living list – that they kept up to date as the bought, sold, or gave away items?

Customer Relationship Management

I’ll let Wikipedia do the background on this one.

Customer relationship management (CRM) is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments. Measuring and valuing customer relationships is critical to implementing this strategy.

Wikipedia

FRIENDS (TV Show)

You may be wondering where I’m going with this one because “families don’t have customers!” However, people do know other people — well, most of us do anyways. Maybe you want to send a small Christmas gift to many of your acquaintances this year and you need to keep track of what you’re going to send and to whom you’re going to send it. Maybe you’re hosting a Superbowl party and are going to invite several other families. How many people are coming? How many kids are there going to be? How old are the kids? How much food will I need? What is Bob’s youngest son’s name again?

 

Can you think of any other things to add to my list? I’d love to hear your thoughts.

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One thought on “What can families learn from businesses?

  1. I liked this a lot. I do most of this already, but I’m working to get it all off of paper and onto something digital. What site do you suggest that is safe enough to store all my info? The only idea I had was to store all important docs in safety deposit boxes at the bank and ”backup” all of them by taking pictures and storing them on my computer and portable harddrive, but if a tornado, fire, flood, and robbery break out I could still loose all the docs and backups. Unlikely, but it would happen to me. I also think it is important to have a Will and leave passwords and copies of keys for everything to the beneficiary. Something I also do is list where I visit often (shop, martial arts, friends homes…etc) not a need for most people, but since Shannon is often gone, if I were to go missing he wouldn’t always know where to find me. He knows I go shopping, but he doesn’t know if I go to Miami, Vinita or Grove. Those things are more for ”just in case”. IF something terrible was to happen, I don’t want it to be any harder then it has to be on the ones back home. So I’ve written down as much info as possible for them so they don’t have to do so much work. I’ve also written down every web site we have. Since we drive the same truck, if one of us dies then we probably both die, and someone needs to be able to get in and deactivate our accounts. What was the website you said logs into all websites with just one password? I need that.

    Like

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