A Radical Approach to Business Management

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GOD'S WORD
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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 info@commonsensecfo.com 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

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Are you investing in your employees?

Ken Olsen's primary concern about customers an...
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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 info@commonsensecfo.com or call Kirk at 402-658-7340.

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Hiring Decisions

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Do you have an established “system” for hiring your employees? Have you carefully determined the criteria you require?

Hiring quality employees is essential for business prosperity. Studies have shown it is considerably cheaper to hire the right people than it is to replace the wrong ones. In a previous post, I shared that those times when I have hired based on perceived skills, background and education, I have almost always fired on the basis of character – or the lack of it. So how do you hire the right employees?

Larry Burkett, in Business by the Book, suggests the following:

  • Define the Job Clearly. In order to hire the right people, it is necessary that jobs be well defined.
  • Hire the Best Person for the Job. Most small businesses seldom hire the best person. Instead, they hire someone who is available. (1)
  • Match the Person to the Job. Utilize a personality test to help hire properly. A small investment of time and money will provide a huge return on your investment. Use it with all potential employees in your organization. The best employees are those whose jobs match their basic personalities. Here’s a couple options:
  • Make Hiring Policy Decisions. Make some basic policy decisions ahead of time. In the hiring process, the only criteria that should be used are whether the person can do the job and follow the rules established for all employees.
  • Establish a Trial Period. I suggest a 90-day trial period for new employees, during which the employee can be evaluated for job performance and compatibility.
  • Pray. Spend time in prayer with your key staff and ask God to bring the right people and then give you the assurance that the people match the available jobs.

Ultimately, a well-thought-out hiring process will save you many headaches and heartaches and will enable you to have the teammates you need to achieve your vision. If you would like to learn more about 12 Steps to a Proper Hire or how a part-time, virtual CFO can help transform your business using the Bible as our guide, email me at commonsensecfo@yahoo.com or call Kirk at 402-658-7340.

(1) Do you see any truly competent workers? They will serve kings rather than working for ordinary people. Proverbs 22:29 (NLT)