BCWE Business Review!

Take a few minutes and read the Vision Baptist Church blog to keep track of what happens at a church that was organized around one purpose. To get the gospel to the world in this generation. Then look at all the businesses that took the vision of one man and created a global presence. I have been to 4 of the six continents including some remote regions and found Coke to have made their way to evey one. Coke is a corporation made up of hundreds of thousands of employees all serving a specified role to accomplish the purpose of the company. Get a Coke in every house, hut and cave on the planet. They figured it out.

Now think about this. Those people are members in your church! You may have never thought about this but the people in your church design jet fighter control systems, build roads and buildings, manage sales in multiple states, market products around the world and manage companies to return value to shareholders. Why does the Holy Spirit lead people like this to your church and why should we be scouring the neighborhood for more? The answers are bigger than you may have imagined and if you are one of these people and you think its just to give money I am happy to say that its that and a whole lot more. We will be discussing this and more this week.

Add your comments before i post the answers.

It’s a real tough question Mark. You make a promise in a partnership that you have to consider. Cutting the cow in half kills both ends. What do you do with two people that are married lost and one gets saved. Divorce? I think the one sanctifies the other. Can you buy stock in a company wherein other lost people own stock? You partnered with a bank to buy your house, should you give them their money back? The other partner could face financial ruin if you come in one morning and say you have to get out because you are now a Christian. Imagine his response (as a lost person) to what it means to become a Chrisitian.

Great question Mark.

About the partner question- What about the verses that talk about not being unequally yoked with unbelievers? I have heard several preachers teach on how that also applies to business also. I understand about working for a lost person or with a lost person, or having them work for you, but having them as a partner is where I would think that would go into the yoking department. What do you think?

Mark Coffey

This week i met with two business associates to answer questions sent to us from the business men and women in Peru. In December, I lead a group of four businessmen down to Arequipa Peru to visit with Missionary Chris Gardner and tour the work there. While there, I met with a group of business people to discuss the Biblical principles of how businesses work. We agreed together that questions would be sent monthly from their meetings and that we would meet together and answer them. They will be posted on the Spanish business blog. Here they are in English.

Question #1 Is it possible to work in three jobs at once.

Our discussion on this prompted three questions in return. First the obvious, why would you want to or have to? The toll that business takes on the body, mind and sanity would lead me to find the one out of the three that you could really excel at and put your energy into that. To work that many jobs at once will soon require that you choose at which you are willing to fail. The demands of one or two will soon create an impossible situation for the fourth. Gary pointed out that the job with the most potential to provide for your needs should be worked and the other time used to study or train yourself for a career that will provide for you accordingly.

Question #2 How do I act when a believer thinks that my business is for his service and he does not want to pay that which is right.

Doing business with friends or other believers should be the easiest thing to do simply because friends should treat friends right and believers should, well, act like believers. Most times, however, it works the opposite way. Set your rules for buddies or believers so that you can explain up front your philosophy regarding “giving” them something at a reduced charge or no charge.

The buddy system can cause you tremendous bitterness because what you would have “given” seems to now be “taken” because your ability to do it out of the goodness of your heart is replaced by their expectation that you must do it. Be ready to ask them to be willing to pay a reduced price but one that is still very fair and very advantageous to them. Or, be willing to do it for them at no charge one time. The pain you fear in telling them the truth is far less than the pain you will feel by harboring the bitterness that comes from feeling like something was taken from you.

Finally, ask them what they would do in your shoes.

Question #3 I have recently opened a business and my expenses are more than my income. Should I borrow money to grow my business.

This is a profit and loss question seeking a balance sheet answer. Adding cash to a business that cannot overcome expenses with earnings is not the solution to the problem. The ability of the business to earn is reflected on the profit and loss statement. It measures the activities of the business and judges the validity of the management decisions with what is known as the bottom line. A positive bottom line means the business is healthy. A negative bottom line means changes must be made. Adding borrowed money can help with short term cash flow problems but does not solve the problem with the bottom line. Also, the ability of the business to pay back the debt is the chief consideration when borrowing money. Here are some questions for the business person facing this decision:

1. Did you make a business plan before you started and if so is what’s happening in the business consistent with the plan?
2. What would the money be used for?
3. How would you pay it back?
4. Do you know why the business is not profitable?

Question #4 If my partner is not a believer and does not want to know anything about God, what should I do to improve the business and my relationship with him?

Many businesses get started and partnerships formed when both men are not believers. One becomes a believer and starts attending church. He finds out that believers are not to be yoked together with unbelievers. He then wonders if he should stay with the lost partner who he gets along with just fine. Can he be right with God and continue in the partnership. The answer is yes, he should continue as long as the other partner and he can work together. The lost partner will have the chance first hand to see how you should do business as a Christian. If to exercise your faith causes constant turmoil, you should consider dissolving the partnership. Here are some thoughts.

1. Become and example to him. Try to influence him (you already have influence) to become a Christian.
2. If you were prone to unethical behavior in the past he will likely dub you a hypocrite for the change in your life. That is ok, show him the power of real change.
3. You should work forward from where you were at. In Luke 3:10-13, the soldiers and tax collectors came to John after they had heard the gospel and accepted Christ and asked what they should do now? Quit their jobs? John advised the soldiers to judge and act righteously because they have power over the people. To the tax collectors he said to collect the tax but do not extort the people because of your power. John advocated working forward from where you were at. In otherwords, be a Christ-like soldier, tax collecter and busines partner.

Hang on to that partner. You could become the witness that leads him to Christ.

We will post more questions and answers as we meet.

Have a comment? john@bcwe.net

This week in the business review i will discuss the idea of a corporation. A corporation is a legal entity, instituted to conduct business, that exists apart from the individuals that make it up. A church is a called out assembly of baptized believers organized to carry out the great commission. While still made up of individuals, a church also has its own individual identity, much like a corporation. Check out Matthew chapter 16 and stay tuned to the BCWE Business Review.

The Sunday Business Seminar will be looking at forms of business entities and how they work. Even if you aren’t planning on starting your own business, just knowing how the company you work for is set up and what motivates them is invaluable. Knowing what your boss wants is the secret to moving up in your career. This week - Sole Proprietorships and Partnerships. Plus, how partnerships go bad. Joshua chapter 9.

Next week. Corporations, Limited Liability Companies, and the church.

Company Legal Structure – Part 1: (How companies are set up) The keys to both success and failure are forged early in the life of any company. They start with the selection of a partner or partners and the formation of the company. There is a certain excitement that accompanies any new idea or venture. It is the emotional kick that comes from thinking of how great an organization this venture will be.

Forms of Business Entities

1. Sole Proprietorship: The business and the individual are one. There is no separation.
a. There are no partners. The person does business in their own name.
b. Debts or profits of the business are debts or profits of the owner.
c. There is no separate layer of taxes, but the owner pays the business tax as if it was his personal income.
d. The owner can chose a trade name or use his own name. Frequently you will see these as “DBAs” or doing business as.
e. The advantages of a SP form of business is the flexibility and ease of operation for the owner. Simplified tax reporting and business administration.
f. The disadvantages of this type of business entity are the ability to raise capital, (only one guarantor and financial situation). All of the liability rests on the SP. Ecclesiastes 4:8-12 is a good lesson on the disadvantages of working alone. The SP must consider things like the cost of insurance and future growth.
2. Partnership: A business where two or more people form a relationship in which they agree to share the profits and risks of a particular business.
a. Partnerships are born out of the combinations of resources, ideas or opportunities to pursue a business enterprise for mutual gain.
b. The partnership itself can become an entity and partners can be either general or limited. A general partner shares all the risks and rewards based on his ownership percentage whereas a limited partner gives up a portion of his profits for a reduction in risk.
c. For a small to medium sized business, a partnership is a good format for a company as opposed to a corporation because there is no separate layer of corporate taxes.
d. Choosing a partner: choosing the right partner is literally more important than choosing the right business.
i. Do you have the same goals and values.
ii. Do you share an equal risk profile.
iii. Do you have complimentary or competing skills and personalities.
iv. Can you plan both the start up and the possible dissolution (wrap up) of the company calmly and in detail.
v. Is the choice logical or emotional?

A Bad Partnership Only Gets Worse: More heartache and business failure comes from a bad choice of partners than a failed business plan. Israel found this out with their league (partnership) with the Gibeonites.

1. The Israelites are being successful in their conquest of Canaan. The people from Gibeon fear that the success of Israel will be their destruction.
a. Joshua 9:1-3: They heard about the destruction of Jericho and Ai.
2. The Gibeonites create a plan to deceive. Joshua 9:4-5.
a. The plan was that they would have to convince Israel that they were not Canaanites (with whom Israel was at war) but men from a far country that could and should be trusted.
b. The made themselves appear to be (key word “appear”) something other than they were.
3. The Gibeonites asked to share the security and success of Israel without bringing anything to the deal.
a. Joshua 9:6-13 They had the same goal, which was to preserve and inhabit the land, but not the same values. They were more than willing to lie to get a seat at the table.
b. They did not share the risk because the partnership they offered was as servants, not as those that would go to battle. They opted for security.
c. Joshua 9:14-15 Israel acted hastily and emotionally with people they did not know, and did not consult God nor even check references on these prospective partners.
d. They let them know that they had little to offer. Israel took of it anyway and made the league.
4. Their secret was revealed in only three days.
a. Joshua 9:16 They found out that they had been fooled in a very short time. They had not discussed prior to meeting, how they would dissolve the partnership for bad faith.
5. The partnership now had to be honored against the original goals of Israel.
a. Joshua 9:17-27 As they were scouting out the next battles, they came upon the city of Gibeon and realized they had been fooled.
b. Israel now had a partner that would hinder their original goal. Joshua 24:9 It would now be impossible for Israel to fully execute the will of God in Israel.
6. The league was broken by King Saul, II Samuel 21:1-9 but not without consequences.
a. Saul ignored the league and killed certain of the Gibeonites. The penalty for this was seven of his own sons.
b. Consider the overall high cost of this hasty partnership.

Basic Ways to Earn: Understanding the way we earn money is crucial to planning for life’s financial needs as well as our ability to give and our lifestyle choices. The basics of earning fall into four categories.

Employee,
Self Employed Person
Business man
Investor

The Cash Flow Quadrant:

1. Employee: Draws income from hours worked for another person. A person who supplies physical (brute force) or expertise to a business enterprise in exchange for pay. The pay could be salary, commission, straight hourly or some combination of these.
a. Contract: A specified work contract for a period of time and under a set of conditions.
b. At-will: This is the way the majority of employment is done. Where both the employer and the employee have the right of immediate termination.
2. Self employed: This is the person that owns his own business and is the key provider of income. He draws income from a trade or service.
a. The work is limited to what he can do and oversee.
b. The computation of hours worked no longer become important unless the business involves professional services or consultation.
c. Usually the initial hourly rate goes down in the transition from “E” to “S”.
3. Business enterprise: In economics, business is the social science of managing people to organize and maintain collective productivity toward accomplishing particular creative and productive goals, usually to generate profit. He makes money from those that work for him and in place of him.
a. The “busy-ness” of others is what a business uses to make money. Actually the definition for business is the managing of people to organize and maintain productivity toward accomplishing some creative or productive goal, with the intent to make a profit.
b. Business owners make money two ways.
i. Profits
ii. Growth of the asset value.
c. Businesses lose money in too many ways to list. It is good practice to re-invest in the business in the good times in order to provide a cushion for the bad times.
4. Investor: This is a person who makes money based on the investment of his capital without being involved physically.
a. The investor lets his money make other money for him.
The power to earn is given to us by God: Deuteronomy 8:1-20

1. There are basic principles of earning:
a. Living: These verses are very non-discriminatory when it comes to who actually got to become wealthy. It was basically everyone. Its not really that hard to follow these simple instructions.
b. Multiplying: Multiplication enables possession.
c. Possessing: It was given to them to possess by God. The only barrier for them was their own lack of obedience to follow the principles.
d. The power to get wealth is give to us by God. Deuteronomy 8:18
2. Earning is cyclical:
a. The good times build the wealth while the lean times build the wealth builder. Lean times for the “E” category may be a lay off or getting fired or having to quit on principle.
b. Both must grow together. You must grow with your wealth and become as wise about its distribution as its accumulation
c. God preserves us while He grows us. Their clothes did not wear out even through a forty year trip through the wilderness.
d. The bad times draw us closer to God so that He can humble us, prove us and to find out what is in our hearts. This is an important time.
3. Success in earning makes us forget how it happened.
a. Their biggest problem (which is meant to illustrate ours) was not that they were not skilled but that they would forget God, and His commandments after He multiplied their wealth. Deuteronomy 8:17
i. Forgetting his commandments and statutes causes us to make critical mistakes.
1. We forget to give God the glory for what He blessed us with.
2. We forget our promises made in difficult times.
3. We forget to give back to Him a portion of all that He has blessed us with.
4. We build ourselves up in what God gave to us freely. Deuteronomy 8:14
b. God has a plan for us, our business and our careers. He desires to establish His covenant throughout all generations.