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.