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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Managing the Cash Gap

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Understanding the factors that affect your Cash Gap will help you reduce your risk and improve your profitability. In my previous post, I presented a scenario where the Cash Gap was 56 days. With average daily sales of $10,000 and an assumed 30% margin on sales, the business must cover $392,000 [56 days x $10,000 x (1-.30)]. Typically, this is done with bank financing. Ideally, you would have a cash reserve sufficient enough to not require bank financing. But assuming you’re not there yet and financing is necessary, at a 10% interest rate (for ease of illustration), the interest on the financing would amount to $39,200.

If you increase your inventory turnover to 18 times per year instead of only 6, your days in inventory would drop from 61 to 20, and your Cash Gap would decrease from 56 days to 15. Again, assuming financing at 10% is necessary, and a 30% margin on sales, your business now must cover $105,000 [15 days x $10,000 x (1-.30)]. This results in interest of only $10,500, a savings (increased profits!) of $28,700. This is also a much easier scenario to manage with your cash reserve.

The key to managing your Cash Gap, then, is to reduce your Receivables Period and Days in Inventory and/or increase your Payables Period. In other words, get cash out of inventory quickly all-the-while avoiding payment to suppliers as long as possible. Here are some ways you can do just that:

Receivables Period

  • Provide incentives for customer prepayment or early payment (discounts)
  • Provide incentives for customers to pay for their purchases using a credit card (be careful here, though, as you don’t want to cause your customer to use credit cards when they can’t afford it)
  • Send out invoices as soon as a sale is complete
  • Use a lockbox account, in which customers mail payment checks directly to a PO box set up by your bank (this is also an excellent internal control)
  • Institute stricter collection procedures

Days in Inventory

  • Move towards a “just-in-time” inventory system (producing inventory to fulfill orders rather than accumulating stock)
  • Negotiate a better price for your inventory and materials – without sacrificing quality
  • Concentrate purchasing efforts on fast moving inventory

Payables Period

  • Negotiate longer payment terms with your vendors

Understanding and managing your Cash Gap is essential for business prosperity. In cases where sales grow rapidly and the cash gap is large, a company can quickly run out of cash. If you would like assistance in analyzing your company’s Cash Gap, 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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Cash Gap


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Do you know your business’ Cash Gap? If you do, I applaud you. It is my experience you would be the exception. If you don’t, I encourage you to read on and begin to implement this important metric.

The Cash Gap refers to the time interval between the date when a company pays cash out for the inventory it purchases and the date it receives cash from customers for the same inventory. It involves three different financial measurements: the Receivables Period, the Days in Inventory, and the Payables Period. The formula is as follows: Receivables Period + Days in Inventory – Payables Period = Cash Gap (in days). The longer the time interval, the greater the likelihood it must be financed – which adds business risk and reduces profitability via interest expense.

The Receivables Period

The Receivables Period represents the average number of days it takes to collect invoices from your customers. This is typically calculated as Accounts Receivable divided by Average Daily Sales (annual sales divided by 365 or monthly sales divided by 30). For example, if your accounts receivable balance is $200,000 at the end of the year and your sales for the year amount to $3,650,000, your Receivables Period is 20 days [$200,000/($3,650,000/365) or $200,000/$10,000].

Days in Inventory

The Days in Inventory represents the average number of days worth of sales are in the inventory your currently have on hand. This is typically calculated as 365 days (or 30 days if that is your measurement period) divided by inventory turnover. Inventory turnover is typically calculated as cost of sales divided by average inventory. For example, if your cost of sales for the year amount to $2,400,000 and your average inventory (beginning inventory plus ending inventory divided by 2) is $400,000, your inventory turnover is 6 times. Your Days in Inventory would be 61 [365 days divided by 6 (inventory turnover)].

The Payables Period

The Payables Period represents the average number of days it takes to pay your vendors for your inventory. This is typically calculated as Accounts Payable divided by Average Daily Purchases (annual purchases divided by 365 or monthly purchases divided by 30). For example, if your accounts payable balance is $125,000 at the end of the year and your purchases for the year amount to $1,825,000, your Payables Period is 25 days [$125,000/($1,825,000/365) or $125,000/$5,000)].

Given the circumstances of this example, your Cash Gap would be calculated at 56 days (Receivables Period of 20 days plus Days in Inventory of 61 days minus Payables Period of 25 days). In other words, you are paying for the inventory 25 days after receiving the invoice but not collecting the receivable until 56 days later. Next, I’ll discuss ways to improve your Cash Gap, reduce your risk, and improve your profitability.

Knowing and understanding your Cash Gap is a great way to reduce your risk and improve your profitability. If you would like assistance in analyzing your company’s Cash Gap, 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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Gap Analysis

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A Gap Analysis is a visual examination of the current state of your business compared to your desired state. It starts with an honest assessment of where you are today. It also helps capture a clear vision of your business’ future. (1)

Here are 9 Practical Steps for preparing a Gap Analysis:

  1. Describe, in writing, the problem, issue, or area that you want to make progress on.
  2. Describe, in writing, the benefits or reasons that you need to solve this problem and why you need to create an action plan for getting there.
  3. Focus on a particular aspect or element of your desired state. The best way to eat an elephant is one small bite at a time.
  4. Define your deadline for achieving your desired end state. This is actually the point in time you expect to arrive at your destination.
  5. Describe your current state of affairs as it relates to the end state or dream. Be sure that there is a balance of both your assets or positives and the areas that you are deficient. Keep your focus of today’s status or reality on those things that contribute or detract from your desired end state. Work to remain honest and grounded.
  6. Describe what your destination will look like. Ask yourself:  a)  What will you have?  b) What will it look like?  c) How will it feel?  d) How will you know when you have arrived?
  7. In as detailed a manner as possible, identify specific actions or steps that must take place so you can go from “today” to “tomorrow”. Often, the bridges between the two will pop out clearly.
  8. Use the information you’ve listed as your missing links to create a specific formalized action plan. Set a priority to each of the major action steps, often asking the question, “What has to happen before you take this step?
  9. Review and update your Gap Analysis on a regular basis. Use it to check your progress and see if there are other items in the missing links that were overlooked.

Performing a Gap Analysis is a great way to move your company to the next level. If you would like assistance in preparing a Gap Analysis for your company, 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) Where there is no vision, the people perish: but he that keepeth the law, happy is he. Proverbs 29:18 (KJV)

Hiring Tips

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Having quality employees is essential for business prosperity. Here are 10 things to consider to improve the quality of your employees:

  1. Proper hiring creates a good team. A good team lowers turnover. Lower turnover equates to more profit. Consider both the cost of lost productivity and reduced team morale.
  2. Team members typically leave or are let go most often because they never should have been hired in the first place. This is really a character issue.
  3. Take your time when filling positions. It is better to find “the right” hire rather than “the best” hire.
  4. When you are posting a position, give enough information for candidates to rule you out without wasting your time.
  5. Word your posting in such a way as to attract the personality and character traits you want.
  6. Look for a team member with a combination of opportunistic motivation and philosophical motivation.
  7. Never sell a “Job”. Always have an “Opportunity” available – work that matters.
  8. Set short initial interviews that are no longer than 30 minutes. Listen for 20 minutes and talk for only 10. God gave us 2 ears and 1 mouth – keep the listening to speaking ratio the same. Determine if the candidate is only looking for a paycheck. At this point, you’re weeding out those that are not a fit for your culture. Future interviews should be longer and more involved.
  9. If the candidate is preoccupied by benefits and compensation, you will never be able to do enough to keep them happy.
  10. The person hired properly will perform better, will not cause problems, and will be more likely to stay.

If you would like to learn about 12 Steps to a Proper Hire – that will lead you consistently to “the right hire”, 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.

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