If you think about it, your household is just like a small business. You have bills to pay, people to manage, and income to generate. If you are not making enough money, get into too much debt, or find yourself into a financial mess, then you may want to start running your household just like a business.
Whether you are an entrepreneur, professional, or employee, you already have a good grasp of how businesses are ran. So think of your own household and consider these typical business functions and how you can apply them.
Sales & Marketing
As they say, sales is the life blood of business. Without it, no money will come in, and there is no business to speak of. It is the same for your household. In this case, you are the product that you are selling. Just like a successful business, you need to figure out the market and what you can offer. If you are not earning enough, maybe you are in the wrong profession or the wrong industry. Perhaps you are in the right place but your skills are not up to par. Whatever it is, invest in your knowledge and skills to be more competitive or find a better niche. Do whatever it takes to increase your household income.
Purchasing & Operations
Running your household is not easy. You have appliances to fix, groceries to buy, cars to maintain. Think about it, your household has a supply chain. You buy food and supplies for your household. You purchase appliances, furniture, computers, vehicles, and equipment. You pay for electricity, water, cable TV, landline, and Internet connection. If you run your household like a business, you will set up a budget for purchases and recurring expenses, come up with procedures for managing your inventory, and keep a schedule for maintenance.
Finance & Accounting
All businesses need an accounting system that helps owners track their numbers and make better decisions. It’s the same with your household. You need to set up and follow a budget and track your income and expenses. And it’s not just about budgeting. Household finance includes making smart decisions about borrowing money and allocating savings into more productive use, say by investing regularly or starting a new business.
HR & Training
You need people to run a business. Even for single proprietors, they need to outsource work to others to be more efficient and focus on what they do best. You need good people to run both a business and your household. After all, your household staff – yaya, helper, cook, driver – are your employees. You need to recruit, train, evaluate, motivate, and reward them well. Your children too are part of your household. Sure they are the equivalent of your COO (Child of Owner), but they should also be able to contribute to running your household by helping with the chores.
So how do you make it work? First, divide responsibilities based on skills. One spouse can do the budget while the other can take charge of investing. One can handle the groceries and utilities while the other can deal with cars and appliances. Second, set up a system. That is the only way to manage a business or household without going crazy. Make checklists, procedures, and schedules for everything – purchases, bills payment, repairs, etc. Third, hire the right people and keep them. Household staff can be a source of major stress, so if you do find good ones, though not perfect, train and reward them well. Fourth, boost your cash flow. Like in a business, cost cutting can only go far (plus it can be discouraging). So do what you can to make more money. More money means more time, better people, and more choices (but not necessarily more happiness).
Last, make everyone happy. Inevitably, you will miss a bill, run out of coffee, forget to have the car fixed, or make financial mistakes. But if you put your family first by spending a lot of quality time with them and enjoying plenty of laughs and good memories along the way, you may not always have a well-oiled and profitable household but you will always have a happy and loving family.
