Business According to the Bible

A recent survey found that 51 percent of Americans would like to launch a business within the next five years. If you sense that God may be leading you to start your own business someday, there are several steps you should take to position yourself to succeed.

1. Prepare yourself financially.

It is important to have your personal finances as stable as possible when starting a business. When you no longer have credit card or consumer debts, your monthly expenses are lower. And set aside three month’s living expenses so you have a margin in case you need income from the business during some of its lean months. This may surprise you: It is preferable to start your business before you buy your home. The Bible says, “Build your business before building your house” (Proverbs 24:27).In other words, create your source of income; then acquire your home.

One of the most common reasons for the failure of start-up businesses is lack of capital—not enough cash saved up. When you begin a business with lots of borrowed money, you invite added pressure to be profitable quickly. Many businesses require several years to become profitable.

This is my recommendation:

Be patient!
Save as much as you need before launching your business.
Use as little business debt as possible, and pay it off as quickly as possible.

When you operate with little or no debt, you have a competitive edge against businesses saddled with large monthly payments. You also have more financial stability to weather unexpected challenges.

2. Identify a good business opportunity.

Research business opportunities for which you are well suited—ones that you think you would enjoy, that you can afford to start, and that meet your personal goals. When you discover one, gain some experience in the business before launching into ownership.

3. Pray for a mentor.

Ask God to provide you a mentor who really understands the business you are considering. I did this when I started in real estate, and it was the best decision of my business career. I took a cut in pay to work for my mentor, but it was well worth it. He was so experienced that he taught me more in two years than I could have learned in ten years doing it on my own.

4. Draft a business plan.

Unfortunately, about 80 percent of all business start-ups do not survive beyond the second year. Many fail because they do not have a written business plan. One of the advantages of writing it down is that it forces you to think clearly. For example, the business plan may reveal that you will need to start smaller than you originally thought. Pray regularly when developing the business plan. Remember, God is the owner of the business, and you are its steward. Ask the Lord for his insight. This is the most important thing you can do. The Bible says, “I the Lord will instruct you and teach you in the way you should go; I will counsel you and watch over you” (Psalm 32:8). One of God’s names is “Wonderful Counselor” (Isaiah 9:6). Pray. Take advantage of his willingness to offer you direction.

Address these issues when you create a business plan:

Funding: Determine how you will finance the start-up costs of the business—inventory, equipment, buildings, advertising, etc.

Organization: Choose between a sole proprietorship, a partnership or corporation.
Marketing: Identify your competition and determine how you will promote the business.
Employees: Decide how many and what skills will they need.
Financial projections: Estimate your income and expenses.

When it comes to planning, gather all the facts you can. Good planning is always based on accurate information, and that takes work. World War II military leader General George S. Patton constantly preached to his soldiers about gathering facts. When reviewing the reasons for his commanders’ recommendations, he would frequently ask, “How do you know that?” One of the general’s principles was, “Know what you know and know what you don’t know. Every plan is based on a mixture of known facts, unknowns, and assumptions. Many assumptions can be turned into facts with a little research.”

5. Set up your accounting.

Many start-up businesses fail to keep accurate accounting records. This is dangerous because you will be unable to track your profitability and tax liabilities. I recommend using a business checking account for depositing all business income and paying all expenses. Record a description of every transaction in a check register or an accounting software program. At the end of an accounting period, it will be easier to compute the profit or loss. If you are self-employed, a good rule of thumb is to set aside about 30 percent of your net income for taxes and withholding so you won’t be forced to use debt to fund your tax payments.