Mother’s Day is almost upon us, with blog posts, newspaper articles and TV spots highlighting all the sweet, sensitive and supportive things mothers do. Yes your mom IS all those wonderful things. But did you realize what else your mom has done for you? That she has taught by example how to successfully manage your small business’ financials?
No? Then hold onto those flowers (yes she’ll appreciate them), and discover another side to moms everywhere.
The top 5 finance lessons you learned from your mother.
Mom’s Finance Lesson #1 – The Grocery List
In my mind’s eye I can still see the carefully crafted, thoroughly researched shopping list my mom would bring to the grocery store. My sisters and I knew if we didn’t write our request on the list we wouldn’t get it. Of course the item might still be struck from the list, but woe unto the one who tries to request an item after arriving at the grocery store.
Sounds suspiciously like a budget doesn’t it? In my former life as a Chief Financial Officer I used essentially the same process in creating and managing the company’s budget. As a parent now myself I realize my mom was trying to avoid spur of the moment splurges and constant nagging. For any size business budgets keep us focused on our needs, dampening the urge to buy something just because it’s new and shiny.
Mom’s Finance Lesson #2 – Managing the Checkbook
When I was a kid (yes dirt had been invented by then, and the Model-T was old news), credit cards were not the norm. I’m sure they existed, but as an expensive, emergency only measure. That meant you had to have actual cash, or a positive balance in your checking account, to buy things or pay bills. Mom had to plan ahead and be sure there would be enough money to do the grocery shopping, pay the milkman, and buy new shoes for school.
Most small businesses, particularly start-ups, operate on a cash basis. In these economic times it can be difficult to obtain business credit. That means cash is king, and you need to be sure you have enough cash on hand when bills come due. Follow mom’s example in planning out your expenses versus expected revenue to keep your running smoothly.
Mom’s Finance Lesson #3 – Paying the Bills On Time, Every Time
Recently I heard someone quote Albert Einstein discussing the three ways you teach a child. The first is by example. The second is by example. The third is by example.
Not only did my mother tell me that bills must be paid, she did so. There were times my family would pass on extras to ensure that outstanding bills were met. This was not done grudgingly, but as a matter of course. If a person or company delivers a product or service then they deserved to be paid.
Nothing will kill your reputation faster than paying late, trying to get a bill reduced for an unjustified reason, or simply not paying. If a legitimate reason arises, contact the company immediately and work out a payment plan. It’s not just your credit at risk here. Who would want to refer business to a company that shirks their fiscal responsibilities? Not me!
Mom’s Finance Lesson #4 – Asking Why
“Mom I need these jeans.”
“Because they’re cool. All my friends have them.”
“What’s wrong with the jeans you have?”
“But mom I need THESE jeans.”
“No you don’t need them. You want them. The answer is no.”
Wanting isn’t needing. My mom always knew how to cut through the whitewashing and determine if I really needed something. Businesses could do well to have this same internal discussion before investing time, energy or money into an idea.
Mom’s Finance Lesson #5 – Resistance to the World’s Best Salesperson
Who’s harder to refuse, an acquaintance pitching the latest widget, or your adorable 3 year old whose bottom lip is quivering? Saying no repeatedly, for inexplicable reasons (to the 3 year old anyway) is a core part of a mother’s job description. This requires developing a thick skin combined with the ability to stick to what you know is best, even when those around you get upset. Be a mom to the “demands” of your business.
What other finance lessons did you learn from your mother? Sound off below, shout-out’s to your mom are encouraged (you’d be surprised how many are online these days).
Read more of Nicole Fende’s writing on pbSmart Essentials: Better Than Cloning: Automation That Grows Small Business Profit