Buying Risk

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I recently read a post on the Frugal Dad blog entitled, “Borrowing Money is the Same as Buying Risk”. Though the blog is all about the journey of getting out of personal debt and living on less than you make, I believe the topic is just as true for business.

In his post, the Frugal Dad discusses choices for purchasing a used pickup truck that will cost $18,000. He can finance the purchase through his local credit union at 2.99%, draw the cash out of his emergency fund savings, or purchase a new pickup for $25,000 at 0.00% interest. He elaborates on each of those choices listing the pros and cons of each option. He goes on to say that what is missing from the mathematical calculations is risk. Borrowing money always involves risk (even at 0.00% interest)! Drawing down from emergency savings also involves risk. As he states in his post, “What if I got sick and had to live on long-term disability?”

Jesus spoke similarly in Luke 12:16-21 regarding the rich man who tore down his barns and built bigger ones to store all his grain. In verse 20, God said to him, ‘You fool! This very night your soul is required of you; and now who will own what you have prepared?’. (NASB) Though this parable is often associated with Jesus’ teaching about greed, it also presents the point that we do not know what tomorrow will bring. If the rich man (business man) was borrowing to fund the building of his bigger barns (warehouse, office building, delivery vehicle, copier machine, etc.), and his soul were required of him before it was paid for, who will own what he has prepared?

Drawing the cash out of your emergency fund to make the purchase may drop the level of cash reserve to an uncomfortable level, thus increasing the risk of not being able to weather a slow period or crisis. If you’ve ever stayed awake at night wondering how you’re going to pay your bills, that’s stress you just don’t want to go through again.

So what’s the best option? The Frugal Dad gets it right – Do Nothing! Wait. Save up cash above and beyond your minimum cash reserves and pay cash for your purchase. If you need a new truck or piece of equipment because your current one is beyond repair, find a used one (that will get you by) for a lot lower price, pay cash, and move up later. It’s best to keep saving until you have enough to pay cash without touching your necessary cash reserves. You’ll also be able to get a better deal.

Even if you don’t have savings and a situation arises, consider all options and the potential risk involved. Check out short-term leasing options, auctions, or bartering to name a few. Just as increasing risk is not good for your personal finances, it is also harmful for your business.

Decreasing risk by eliminating interest charges is essential for business prosperity. If you would like to know more about reducing risk in your business, or if you want to learn how a part-time, virtual CFO can help transform your business by using the Bible as our guide, email me at or call Kirk at 402-658-7340.

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Business Success in Today’s Economy


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Today’s economic environment is certainly not a favorable one. Many believe that we have some potentially catastrophic financial problems facing us. Consider what an increase in interest rates of a few percentage points would do.

The federal government is the catalyst behind most of our current debt. The U.S. Government currently owes in excess of $13 trillion (and growing by the minute). Most Americans today work until mid-May (adjusted for the Federal Budget Deficit) each year just to pay their taxes. In spite of taking in more than $2 trillion a year in tax receipts, the government is currently borrowing another $1+ trillion!

God’s Word is never wrong. The Lord gave His people two principles nearly 3,000 years ago. He promised that if the people who were called by His name would obey His statutes and commandments, “Then all the nations of the world will see that you are a people claimed by the LORD, and they will stand in awe of you. The LORD will give you prosperity in the land he swore to your ancestors to give you, blessing you with many children, numerous livestock, and abundant crops. The LORD will send rain at the proper time from his rich treasury in the heavens and will bless all the work you do. You will lend to many nations, but you will never need to borrow from them.” Deuteronomy 28:10-12 (NLT)

He also warned that if His statutes and commandments were ignored, the foreigner would become the lender and they would become debtors. That is exactly where our nation is today! More than $4 trillion of our total debt is now held by foreign lenders (in excess of 30% of our total debt).

The cycle can be reversed, but only if God’s people will turn to His way and be willing to be counted in His camp – without compromise. Each of us at every level must be willing to live by the statutes and commandments of our Lord to make a difference. The bottom line is not “Are we able to make a difference?” It is “Are we willing to make a difference?”

Committing to, and following God’s statutes and commandments without compromise is essential for business prosperity. If you would like to know more about using God’s Word as your business manual, email me at or call Kirk at 402-658-7340.

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A Radical Approach to Business Management


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That’s how Larry Burkett describes managing a business based on biblical principles. The Bible’s focus is more concerned with eternity than with profits where as most business schools focus on the bottom line.

In America the use of the Bible as a business text actually goes back hundreds of years. Business principles differed then too. Honesty, ethics, and moral values were taught in the classrooms of all major business schools. Professors placed strong emphasis on a company’s responsibility toward its employees, customers, and creditors. Prior to the twentieth century, business courses, and business schools themselves, were based on biblical principles. In reality, they were biblical schools that were training future business leaders.

What happened?

After the Civil War, the federal government assumed a stronger position in the private sector. After World War I, unions gained political power. Prior to the Great Depression, we had been an equity-funded nation. But that time caused a general lack of confidence in the stock market and after World War II, debt surpassed equity in business. Most companies found it cheaper and easier to borrow money than to raise it through equity funding. This debt funding has continued through today.

As Larry points out, the one principle that vividly stands out is that God’s people should be debt-free. Too much debt makes the business vulnerable to interest rate swings. According to one statistic, 60 percent of all American businesses are potentially unprofitable once the interest rates reach 15 percent. I have a feeling that threshold may have lowered since that study was completed. Our lack of fiscal discipline and our obsession with quick profits make U.S. Industry vulnerable.

God’s principles of business are not offered “cafeteria style.” In other words, you can’t simply pick and choose those you like and ignore those you don’t. God’s Word sets up a whole structure by which a business is to operate: a foundation. You can build a business without a sound foundation. But when the wind blows and waves come, it will collapse. God’s Word is the Rock upon which a business must be built. (1)

Do the biblical principles of business work? Yes, without question – over the long run. If you’re looking just for quick profits, don’t choose God’s way. However, if you desire long-term growth and stability, God’s way is the only way.

Business God’s way is essential for long-term growth and stability. If you would like to learn more about running your business God’s way, email me at or call Kirk at 402-658-7340.
(1) “Therefore whoever hears these sayings of Mine, and does them, I will liken him to a wise man who built his house on the rock: and the rain descended, the floods came, and the winds blew and beat on that house; and it did not fall, for it was founded on the rock.” Matthew 7:24-25 (NKJV)

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Invest in Employees


Are you investing in your employees?

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I’m not talking about how much you are paying them, although paying them properly is extremely important. I’m talking about investing time and resources into one of your most valuable assets. Investing in your employees may seem time consuming and expensive on the front end, but will pay dividends in productivity.

Here’s some ways you can make that investment:

  1. Tools. Investing in tools may involve purchasing the latest technology, whether it is a piece of manufacturing equipment or the latest computer technology. It may involve making sure your equipment is promptly and appropriately maintained.
  2. Training. Investments in training typically involve teaching your employee the latest techniques related to their position or the use of equipment to do their job. I believe that an investment in training should also involve improving the individual. This may take the form of a personal finance class (outside of work or at your facilities), a Bible study or daily devotional time. Employees of strong moral character and who possess financial peace are better, more loyal, long-term employees.
  3. Retirement. If you set aside funds for the purpose of retirement for your latter years, then an equivalent amount of money should be made available to those under your watch. In fact, most employees probably have a greater need for supplemental funds in their older years because they don’t have as much income-earning ability as their employers in their earlier years.
  4. Time. Spend time getting to know your employees. If you haven’t already, I encourage you to implement weekly reports from each employee. These reports should be turned in to their supervisor (the supervisors reports should flow up the ladder as well) and should provide an opportunity for the employee to share their highs and lows of the week (word related or not). Each of these reports should be read and followed up. This is a great way to find out if anything is affecting the employee’s work and life. Holding social gatherings, such as occasional pot-luck lunches or pizza parties, are also a great way to spend time getting to know your employees.

In EntreLeadership training, Dave Ramsey recommends creating a “Team Building” account. Larry Burkett refers to this account as a Benevolence account. A portion of the company’s monthly profits would be allocated and set aside for building and strengthening your team. This Team Building account would be used to invest in your employees by helping out when your team member has financial trouble, an illness, or a death in the family. Imagine how your employee would feel if you had the funds set aside to purchase round-trip airfare for them to return home for a love-one’s funeral.

Investing in your employees is essential for business prosperity. If you would like to know more about developing a Team Building account and investing in your employees, or if you want to learn how a part-time, virtual CFO can help transform your business by using the Bible as our guide, email me at or call Kirk at 402-658-7340.

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Be a Good Steward


In our capitalist society, it is inevitable that money will flow in mass quantities toward what we value. For a moment, consider the highest paid people in our country. Are actors and athletes really the most important people in our society? What does this say about where our hearts are today?

In Luke 16: 1-12, Jesus asks the listener to identify with the shrewd manager while our Heavenly Father is depicted by the rich man. I believe the importance of the analogy is that the manager owns none of the resources in question: the rich man owned it all and had placed it under the manager’s care. The manager had betrayed his position of trust by “wasting” the rich man’s possessions and, in verse 2, was called upon to “

give an account of his management.” The manager reacted by using his lame duck position to create some goodwill for himself using the rich man’s accounts receivable. Biblical scholars disagree as to whether the manager’s acts of discontinuing the accounts represented simple dishonesty or making amends for past overcharges or perhaps reversing greedy interest charges.

It is clear from verse 8 that the acts were “dishonest.” So why did the rich man commend these unscrupulous acts? I believe the answer lies in verse 9 where Jesus explains God’s economy and His expectations of our stewardship of His resources. Jesus told the listeners to “use worldly wealth to gain friends for yourselves, so that when it is gone, you will be welcomed into eternal dwellings.” We will be called to give an account of our stewardship when we stand before our Heavenly Father. That is the day when our worldly wealth will be gone. When John D. Rockefeller’s accountant was asked how much Rockefeller had left behind when he died, he answered, “All of it.” And so it will be with us.

John D. Rockefeller 1885

God wants us to use the assets He has entrusted to us to invest in the kingdom of God and in others. Wasting His resources on our own temporal pursuits will not pass without an audit. Further, we read in verse 11 that if we are untrustworthy in trivial matters such as money, how can God bless us with “true riches” which are spiritual. I encourage you to find out what your Heavenly Master requires of you regarding the stewardship of His earthly resources and be faithful to His call. For only then can God trust you with the treasure that is His presence.

Some questions to meditate on:

  • How are God’s resources being wasted today (in the world and in your business)?
  • What has God called you to do with the assets (personal and business) He has entrusted to your care?

Being a good steward is essential for business prosperity. If you would like to discuss more about being a good steward with your business, or how a part-time, virtual CFO can help transform your business using the Bible as our guide, email me at or call Kirk at 402-658-7340.

God created it all: In the beginning God created the heavens and the earth. Genesis 1:1 (NKJV)

God owns it all: The earth is the LORD’S, and all it contains, The world, and those who dwell in it. Psalms 24:1 (NASB)

We are trustees of what He give us: Now, a person who is put in charge as a manager must be faithful. 1 Corinthians 4:2 (NLT)

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Internal Reports

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As your business grows, it will inherently become more complex. It will eventually outgrow your capacity to be involved in every single detail of the business. There are just too many customers, employees, products, projects, vendors, and suppliers to be involved with.

As you become more removed from the details, you may feel a loss of control and may likely struggle to know how your business’ cash flow and profitability are really performing. You have to rely on reports with lots of numbers and data to understand how your company has done and make the best decisions possible for future success. (1)

The transition from a startup to a booming company is often difficult for founders and entrepreneurs. You have to re-train your intuition to process reports and data rather than talking to your employees and customers and reviewing the bills from your vendors and suppliers. While you should still engage in getting information from these qualitative sources, quantitative data will become more and more important to you as your company grows. Generally, quantitative data measurements should cover both the past and future on a daily, weekly, monthly, quarterly, and annual basis.

Daily Reports

Find one to three measurable pieces of information that can be reported daily. The items included on the daily report need to adequately allow your management team to answer this simple question: “Did we win or lose today?” Examples include gross profit per day, daily units sold, billable hours worked, backlog, among others. In addition to reporting actual performance on a couple of critical ratios, thriving companies need to know what tomorrow will look like. Measuring performance is not the reason to be in business, but it is critical to running your business effectively.

Weekly Reports

Develop a weekly report that highlights between 12 to 20 data points, with at least one or two coming from each of the critical areas of your business: marketing, sales, operations, finance, etc. These might include number of leads, leads converted to sales, revenue, revenue per employee, number of employees, percentage of receivables past due, working capital, current ratio, and more.

Besides knowing how the business did last week, this report should also project the company’s performance on these key numbers for the week to come. Also look at an updated cash flow projection (at least 6 weeks into the future) each week so your company can adequately plan for and adjust to cash flow shortages and excesses.

Monthly and Quarterly Reports

It is also important to have monthly and quarterly financial and operational reports, which include monthly financial statements. The monthly financial statements should include comparisons to prior years and months in the business as well as to industry averages and benchmarks (if available). It’s also important to review key trends over the past 13 months. Performance relative to your company’s plans and budgets, as well as projections for the next month and year, should also be included and analyzed. It is prudent to pay particular attention to validating and invalidating assumptions, and then improving them from month to month. Similar reports need to be reviewed on a quarterly basis, but are typically more summarized and should include lots of charts and graphs for quick review and presentations.

Annual Reports

You should revisit your five-year financial model and plan on a yearly basis. This includes a careful assessment of all of the assumptions that went into the model and updating those assumptions based on the actual performance of your company. Many business owners/managers fight this activity because they feel it is too hard to project five years into the future. While it is certainly difficult (and I have yet to see anyone that has projected their business performance perfectly for five future years) the exercise always yields helpful information to build a more competitive and sustainable business.

Developing appropriate and timely periodic reports and procedures is essential for business prosperity. If you want know more about establishing processes for all of these critical past and future reports, or if you want to learn how a part-time, virtual CFO can help transform your business using the Bible as our guide, email me at or call Kirk at 402-658-7340.

(1) Be diligent to know the state of your flocks, And attend to your herds. Proverbs 27:23 (NKJV)

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Use Performance Metrics to Drive Change

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A Performance Measure is a metric of an important activity, which is quantifiable, measurable, and meaningful. You use it as a yardstick that objectively measures achievement toward a specific business objective.

Performance metrics can cover a wide range. For example:

  • Financial Metrics
  • Operational Metrics
    • Inventory turn rate
    • Scrap percentage
  • Customer Focused Metrics
    • Average number of daily customers
    • Number of website hits
  • Process Related Metrics
    • Number of backorders
    • On-time delivery percentage

The purposes of using performance metrics are basically to help decision-makers know what is going on in their specialty quickly and accurately and to help accounting do more situational analysis with trending and less variance reporting. I am a big believer in trend analysis for your business.

A good performance metric is more than just something that you can easily track or one your accounting system automatically provides. Metrics that measure what is important need to meet the following criteria:

  • Focuses attention on a critical activity
  • Is measurable
  • Is monitored regularly
  • Provides frequent and timely feedback or insight
  • Includes a mix of financial and operational measurements
  • Is simple to understand, yet has the pulse on what is occurring on an hourly or daily basis

Sadly, people have a short attention span. In addition, brain researchers tell us that we can only hold three or four data points in our brain before we run out of bandwidth. In a nutshell, the goal of using performance measures for providing timely and quality feedback to others is to give report users simple data points that are meaningful and that they can remember. When they remember them and the metrics are meaningful, this greatly increases the likelihood that managers will pay attention to that metric.

Performance measures should:

  • Support the strategy by highlighting goals
  • Express measures for critical drivers
  • Express performance targets
  • Reduce confusion day-to-day

Performance metrics are both simple and complex. The simplicity is that the metric measures one activity or event. The complexity occurs when you put two or more simple metrics together and they create an index or benchmark. The components of performance metrics include:

  • The input(s)
  • The output(s)
  • A method of measuring
  • A degree of measurement – quality or quantity based
  • An assessment of the measure – as expected or unexpected

Proverbs 27:23 (NKJV) states “Be diligent to know the state of your flocks, and attend to your herds.” Properly designed and timely communicated metrics are essential for business prosperity and are a great way to reinforce behavioral change to make it permanent. If you would like more information about developing and using performance metrics to boost your prosperity or if you would like to learn how a part-time, virtual CFO can help transform your business using the Bible as our guide, email me at or call Kirk at 402-658-7340.

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Improve Your Communication – Strengthen Your Business


Transactional Model of Communication
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Winning businesses and organizations have a culture of communication. What is the culture of your business or organization? Communication has been referred to as the map to the party. When everyone has a copy and the directions make sense, everyone shows up at the party and it’s a blast. Here’s a few tips for improving your culture of communication:

  • When in doubt, over-share and over-communicate.
  • A culture of secrets and missed opportunities, followed by fear, develops when communication is low.
  • The team is not a team without a shared goal and vision.
  • Develop a mission statement, not only for the business, but for each position as well.

A mission statement for each position is really the job description. Here’s a few tips for preparing the job descriptions:

  • The best way to develop job descriptions is to have Key Results Areas (KRAs).
  • The new team member hired for a new position should re-write their KRA to assist in communicating the understanding of the duties and expectations.
  • The KRA lists areas on which results are expected, measured, and reported. It is estimated that 90% of businesses do not do this.
  • The KRA answers the question, “What does winning look like?”

Communication Tips

  • Weekly reports that outline what was done this week toward the KRA (these should be turned in at a set time each week).
    • This incremental measurement motivates the team member because there is accountability to the KRA.
    • The written accountability is as much for the report writer as the report reader.
    • The weekly reports must be read and reacted to – even a small comment.
    • Structure is not important, information is.
  • Avoid email and voicemail as tone and body language are not present and can be misread.
  • A “hard copy” memo is needed when communication is important and a copy may have to be retrieved for clarification.
  • Set static, scheduled meetings because the crisis of the day will keep vital communication from happening.
  • Group prayer is vital – not only are we sharing a spiritual experience, but we are also communicating with the only one who can solve it anyway.

Effective communication is essential for business prosperity. If you would like more information about tangible ways to improve the culture of communication in your business, of if you would like to learn how a part-time, virtual CFO can help transform your business using the Bible as our guide, email me at or call Kirk at 402-658-7340.

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Communication is the Lifeblood


According to a survey of business owners and corporate CEOs, ineffective communication is the number-one problem in business. Steven K. Scott, in his book The Richest Man Who Ever Lived, calls communication “The Key That Opens Any Door”. Solomon, who is also known as the wisest man who ever lived, had much to say about communication. He knew that what we say, and how we say it, can have a life-changing impact on others. Here’s some of what Solomon knew:

  • Your communication can extinguish anger or escalate it. Proverbs 15:1 (NCV) A gentle answer will calm a person’s anger, but an unkind answer will cause more anger.
  • Your communication can wound others or heal them. Proverbs 12:18 (NLT) Some people make cutting remarks, but the words of the wise bring healing.
  • Your communication can infuse life into a person’s spirit. Proverbs 15:4a (KJV) A wholesome tongue is a tree of life.
  • Your communication can save a life or take a life. Proverbs 18:21 (NKJV) Death and life are in the power of the tongue, And those who love it will eat its fruit.
  • Your communication can bring delight to others. Proverbs 25:11 (NCV) The right word spoken at the right time is as beautiful as gold apples in a silver bowl.

Solomon’s keys to communication seem like common sense at first glance, but I believe they are anything but common today.

  • Speak in such a way that you make others want to listen. Proverbs 15:2 (NKJV) The tongue of the wise uses knowledge rightly, But the mouth of fools pours forth foolishness.
  • Learn to speak persuasively. Proverbs 16:23 (NASB) The heart of the wise instructs his mouth And adds persuasiveness to his lips.
  • Listen before speaking. Proverbs 18:13 (NCV) Anyone who answers without listening is foolish and confused.
  • Be slow to speak and guard your words carefully. Proverbs 29:20 (NASB) Do you see a man who is hasty in his words? There is more hope for a fool than for him.
  • Never tear others down – rather, build them up. Proverbs 12:18
  • Stop while you’re ahead. Proverbs 10:19 (NLT) Too much talk leads to sin. Be sensible and keep your mouth shut.
  • Share genuine wisdom. Proverbs 10:31a (NASB) The mouth of the righteous flows with wisdom.
  • Always speak truthfully. Proverbs 10:18 (NKJV) Whoever hides hatred has lying lips, And whoever spreads slander is a fool.

Solomon promises three additional benefits for those that become effective and persuasive communicators.

  • Material (business) success. Proverbs 10:21a (KJV) The lips of the righteous feed many.
  • Joy and fulfillment. Proverbs 15:23 (NKJV) A man has joy by the answer of his mouth, And a word spoken in due season, how good it is!
  • Friendship. Proverbs 22:11 (NCV) Whoever loves pure thoughts and kind words will have even the king as a friend.

Effective communication is essential for business prosperity. If you would like more information about tangible ways to improve the communication in your business, or if you would like to learn how a part-time, virtual CFO can help transform your business using the Bible as our guide, email me at or call Kirk at 402-658-7340.

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Be Accountable

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Perhaps nothing in our society is more needed for those in positions of authority than accountability. Too often those with authority are able (and willing) to surround themselves with people who support their decisions without question.

Even David, the king that God Himself chose, drifted off course when he listened to his generals, who told him he was too valuable to be risking his life in battle. Take a look at II Samuel 12: 1-14. David believed the accolades of his generals and ended up sending Uriah the Hittite to his death in battle in order to fulfill his lustful desires for Uriah’s beautiful wife, Bathsheba. Somehow, David pushed these grievous sins far from his consciousness. The Scripture gives us no indication that David was struggling with guilt.

In God’s faithfulness to David, He sends Nathan the prophet to the king in order to bring his hidden deeds into the light. Nathan tells a tale that captures the imagination and the emotions of the king and a righteous indignation comes over David. Nathan then sets the hook by declaring in verse seven, “You are the man!” This great king of Israel immediately admits his sin and repents before Nathan and God. David humbled himself before one of his subjects who had no apparent political power or status to give weight to his words; the king understood that he had heard the Word of the Lord spoken by Nathan.

David learned early in life that God speaks to us through those wise people of God around us. David had no doubt heard God’s wisdom spoken through Jesse his father, his older brothers, Samuel the prophet, his dear friend Jonathan, his wife Abigail, Joab his general and his court advisors which included his own sons. David was a wise man who knew that one of the secrets to being a successful leader was to draw upon the strengths and the knowledge of those around him. David admitted that he was a sinner in need of mercy. (1) With sin comes blindness and God’s ways are hidden. David needed God’s faithfulness through Nathan to humble him and reveal his blindness.

Many business people think they are accountable because they operate with a board of directors or hold regular staff meetings. Unfortunately, most boards, under the direction of a strong leader, are simply rubber stamps. So what is the answer? Here are some suggestions:

  • Your spouse. A valid argument can be made that often the wife doesn’t know anything about the business. The solution is to start sharing the major decisions so that she will be familiar with the business when the need arises. (2)
  • An accountability group. This should be an impartial group of Christian advisers. (3)
  • An expert. This is someone who has done it lately, not someone who has an opinion.
  • Your clergy or one of your elders.
  • If all else fails, write yourself a letter or report describing the problem, the solutions and the timeline.

Finding and keeping appropriate accountability is essential for business prosperity. If you would like more information about becoming accountable, or if you would like to learn how a part-time, virtual CFO can help transform your business using the Bible as our guide, email me at or call Kirk at 402-658-7340.

(1) I said, “LORD, have mercy on me. Heal me, because I have sinned against you.” Psalms 41:4 (NCV)

(2) Who can find a virtuous and capable wife? She is more precious than rubies. Her husband can trust her, and she will greatly enrich his life. Proverbs 31:10-11 (NLT)

(3) Where there is no counsel, the people fall; But in the multitude of counselors there is safety. Proverbs 11:14 (NKJV)
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