5 Small-Business Lessons from “It’s a Wonderful Life”

After watching Frank Capra’s It’s a Wonderful Life again this year, we realized that there are a few things all small-business owners can learn from the holiday classic. George Bailey’s running of Bailey Bros. Building & Loan teaches us at least five important lessons beyond the fact that we’ve really had a wonderful life.

1. Don’t hire unreliable relatives. Uncle Billy may be an iconic character, but his instability and comic forgetfulness make him a bad employee. Sure, he came with the business, but at some point Bailey should have taken away some of his financial responsibilities. Ultimately, Uncle Billy loses the company’s deposit despite a dozen pieces of string to remind him to get it to the bank on time.

Even if you want to support your relatives, you need to question and objectively decide whether they will help or hurt your business. Realize that even when a loved one is a good employee your relationship may be forever changed because of co-workers’ perceptions of preferential treatment — and even your relative’s expectations of it.

2. Make secure deposits and payments. Electronic transfers and automated tellers have greatly reduced the number of deposits and bill payments made inside banks and at other establishments. However, many small businesses still make cash deposits in person — hopefully not by anyone as absentminded as Uncle Billy (who inadvertently gives away the money to an unscrupulous banker).

Seek safer means of handling cash, or avoid it entirely. For example, merchants who use GoPayment can accept credit and debit cards that transfer funds directly into their bank accounts — and thus make fewer cash deposits.

3. Buy life insurance. In the film, Bailey offers banker Henry F. Potter his life-insurance policy as a means to secure a loan to save his company. He is rebuffed by Potter, who says, “You’re worth more dead than alive.”

As a small-business owner, you need to have a life-insurance policy. One’s own mortality isn’t a subject that many people like to confront, but it’s a reality when your death could mean financial hardship for your family.

4. Build positive relationships with your community. Bailey was called the “richest man in town” because he had strong ties to Bedford Falls, not the least of which were his many friends and people he’d helped to get ahead. These were the same people who, upon hearing that Bailey Bros. Building & Loan was going under because it lost $5,000, showed up at his house with the needed cash. Bailey started doing good deeds as a boy and continued building relationships throughout his life.

Being a positive force in your community makes people like and trust you, and it builds customer loyalty.

5. Champion the “little guy.” Bailey tells the movie’s villain, “Mr. Potter, this rabble you’re talking about … they do most of the working and paying and living and dying in this community.”

He’s right. Help other small-business owners when you can and they will likely repay the favor.

About Barbara E. Hernandez

Barbara E. Hernandez is an award-winning business journalist whose work has appeared in the New York Times, Washington Post, PC World and the San Francisco Chronicle. She currently writes about technology for NBC Bay Area's "Press:Here" blog. She would love it if you would follow her @bhern on Twitter.
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11 comments
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SUV Limo Service

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ReZamp
ReZamp

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Abracham
Abracham

Wonderful lifestyle solely depends on what products we are using. To make life more ultimate is it better that family member will get something from us, and for that it is better to take life insurance along with mechanical insurance for vehicles. http://topquote.ie/

 

 

lloydprogroup
lloydprogroup

One of our FAVORITE classic movies of all time. We watch it every year as a family. Excellent reminders about life insurance since its one of those things people don't like to talk about... until its too late.

 

As haphazard as uncle Billy is, YOU still got to love that character :)

planning
planning

I admit I have not been on this blog in a long time it was joy to find it again. It is this important topic and ignored by so many even professionals ! I thank you for leaving people more aware of these issues. Just great stuff per usual !

JosephMcGarry
JosephMcGarry

Good advice. Two things, though. First, the movie was made in 1946, so electronic deposits were not available.then. I agree that Uncle Billy should not have been the one to take the money over, but someone else needed to. Also, it is never a good idea to mix personal and business funds. In the scene with the run on the building & loan, George uses his personal money to pay off depositors. (This was before FDIC insurance.) While it bought him some time, it is usually not a good idea to do this. This is comingling, and could result in your business creditors being able to come after your personal assets. Don't do it.

Rick Noel of eBiz ROI, Inc. - Experienced Digital
Rick Noel of eBiz ROI, Inc. - Experienced Digital

Great post Barbara. It's a Wonderful Life is one of my favorite movies and one I reflect on often when contemplating difficult business decisions. Community involvement is a great way to network and build good will with you target market. This is especially true if you are a local business selling to a local market. People generally buy from other people and businesses they like.

Bajaj
Bajaj

Buying a life insurance should the the first thing a person should invest in.