Friday, April 08, 2011

Business Run Like a Family, Living as a Business (Part 2)

As was said in the previous post, if a family ran their lives more like a business they would realize just how much like a family a business is already run. In order to do this we must look at the situation from a financial aspect of the family. The reason being is that is what business is all about, finances. And whether we like it or not financial affairs consume a major part of the lives of people and the better people manage their financial affairs the better their lives are.

So, what is it that business practices that would benefit a family? The very first thing to understand is that every business that became successful starts out with a business plan. And that business plan contains a goal that it strives to meet in order to consider it self successful. And within that plan is a time limit to meet that goal. And each and every person who is a part of that business has but a single purpose, to do their part in achieving that goal and when this is realized then it can be said that teamwork is in play.

Another aspect of a good business plan is that it must be examined periodically to ascertain if the business is on track for meeting the goal as set. If there be a problem then a solution must be found so that it does remain on track for that goal to be achieved.

And this would be the first thing a couple should do once they have decided to marry, create a family plan for their lives together. This has to be a plan that each must strive to achieve in the knowledge that it will only be achieved as a team. It is this that gives real meaning to the idea of love for each and every member of that family will be working to achieve that goal not only for themselves but doing it to help every other member of that family achieve that goal also.

For if they do not each person of that relationship will create one for themselves in expectation that the other will support that plan and in time those plans will end up in conflict. A good example of this are celebrity relationships.

People who create a good family plan leaves more than just an inheritance for their children. They leave a legacy for the world as well as for their children for they have passed down something to be remembered for generations to come. When it is time to look back on a life each person can do so in satisfaction of what they have achieved as a family.

The most important tool of business is called a “budget”. Without a budget a business has no idea of how it is doing. It is the backbone of every good business. And no man should even attempt to start up a business without a good understanding of the use of this tool. He must understand that a budget is more than an expense sheet. From this budget both a profit/loss sheet and a balance sheet can be made.

This is also true with a family plan. A good understanding of the many uses of a budget is an integral part of a good family plan. It should be the determinant of every penny spent whether on a short term basis or on a long term basis. For it is only in the spending of money that a person has control over. And this be true of both, business as well as a family.

It is not how much a person earns that is the determinant of whether a man is rich or poor. It is how a man spends his earnings that will determine it. Every man will spend his earnings with the intent of accumulating assets or he will spend his earnings with the intent of accumulating liabilities. Whether or not a person has a good understanding of a budget will be a big factor in determining which of the two categories in which a person will find himself. This be true of both, the man who is the head of a business or the man who is the head of a family.

One basic understanding in regards to a budget is the fact that earnings is the subjective as well as the limited aspect of a budget. And expenses should be ascertained as determined by the limitations of those earnings. If a person does not realize this as well as abide by this simple principle the success of a business and the well being of a family is jeopardized and each member of both institutions will have to suffer the consequences.

One last thought before I finish. There are four basic institutions in every society, the family, business, institutions of charity and government. Each and every one of these institutions need a budget. Each of these institutions need leaders who understand what a budget is and its purpose if they are to run that institution in a manner that is beneficial to the welfare of the effected members of that society.

Of those four institutions only one is a monopoly. Of those four institution only one has an effect on each and every person in society. Can we, the people, afford for that one institution to fail which is inevitable if its leaders do not have a good understanding of the purpose of a budget? Can we afford to elect men who spend money accumulating liabilities rather than accumulating assets?



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