A business plan for the family

Ww have got past Milton Friedman’s “the social responsibility of business is to increase its profit” and today many are pursuing the triple-bottom-line “3BL” approach — profit, people and planet.

Striking the balance in 3BL is a subjective issue. Each business has different objectives. Listed companies place emphasis on profit. But a subsistence business would be more interested in people.

Some say a family is a business. That’s an easy analysis for a yuppie family in the pursuit of wealth. But most have different priorities. For many, it is as basic as keeping the family fed and sheltered.

Whether we are talking businesses or families, the common thread is one concept, “sustainable development”. In its simplest form, “How will we survive?”The business sector has billions in resources to pursue sustainable development. But when it comes to families, there is little grasp. Many still rely on the profit element of 3BL, expecting the breadwinners to provide.

But over the past 50 years the expectations placed on breadwinners have run out of proportion. Gone are the days when Dad provided a house, food and education. Today we add technology, increased energy bills, medical costs and rampant consumerism to the fray.

Families may have been financially sustainable when breadwinners spent 15 years in retirement and left an estate. Now kids inherit their broke parents.

Stealth taxes (VAT, sin tax, fuel and electricity levies) have emerged. Today, a family can pay more in stealth taxes than personal tax. Some R380-billion (43%) of the R898-billion budgeted tax collection for 2013/14 is stealth taxes.

Unsustainable development is where breadwinners work and pay tax but their money is whittled away by stealth taxes and unnecessary expenditure. Sustainable development is the family with a business plan that contains expenditure. Sustainable development is not just a catchy phrase. It is an integral part of the education of every South African that should start in primary school.

Originally published in the Sunday Times: Money & Careers Tax Talk column.

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