Watching Your Numbers: How to Be Realistic About Your Financials

Our panel of mentors regularly answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

I am aware of the tendency to be a bit idealistic when working through the Financials section of a Business Plan. As I start thinking about the numbers, what are the hard questions I need to ask myself – or invite others to ask?

~ Crunching the Numbers

Dear Crunching,

The financial section of a business plan – this is where the rubber hits the road! Unless the BAMer pays attention to the finances, the business will not be around for very long, and any missional impact will be cut short. 

Whether you are a business person looking to raise capital for a growing business, or a new entrepreneur looking for start-up funds, you will need to to work on your figures. You can be as enthusiastic as you like about all the potential opportunities and impacts, but unless this enthusiasm translates into numbers, based on some valid assumptions, you will be walking on very thin ice.

Over the last 10 years I have been constantly astounded by the lack of financial acumen in the BAM movement. One major challenge I’ve found in working with BAMers is getting a valid set of financial statements. This lack of acumen isn’t necessarily intentional in many cases but it certainly is prevalent. I think this is largely down to two reasons: Read more

Ask Critical Questions: Number Crunching Quickly and Responsibly

Our panel of mentors regularly answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

I am aware of the tendency to be a bit idealistic when working through the Financials section of a Business Plan. As I start thinking about the numbers, what are the hard questions I need to ask myself – or invite others to ask?

~ Crunching the Numbers

Dear Crunching,

There always seem to be two extremes when it comes to the issue of financials in business planning. The first is what I term “magical thinking” and says, essentially, “Since I believe that God is leading in this business it is sure to succeed. Why waste time on financial plans?” The second and opposite says, “My business plan needs to look like something for a Harvard MBA project so I will be perfect on the numbers.” Both, as most extremes, are wrong.

I can fill volumes with stories of businesses that God “led” people to start that failed miserably. I can also point to businesses that either failed or failed to start in spite of incredibly deep and thorough financial analysis. However, I think we can resolve this dilemma based on some words that Jesus spoke related to discipleship:

For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’ – Luke 14:28-30, ESV

The point of this passage is to make sure of some basics before you launch into following Him and, by way of extension, before you launch into business. Loosely translated, it would be something like, “Don’t launch without thinking and don’t overthink launching.” In business planning, I’d suggest the following critical questions. Read more

Succession Planning: How Do We Plan for Our Exit?

Our panel of mentors regularly answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

I keep hearing about succession planning and having an exit strategy… But when should I be thinking about this? How does it tie in with leadership development in my team?

~ Thinking Long-term

Dear Thinking,

Start the Beginning with the End in Mind

So let’s keep focused on that goal, those of us who want everything God has for us. If any of you have something else in mind, something less than total commitment, God will clear your blurred vision—you’ll see it yet! Now that we’re on the right track, let’s stay on it. – Philippians 3:15-16 MSG

Every life experience has a beginning and an end. The multiple stages of parenting is a fairly accurate depiction of this truism. First-time parents know, even in those first days of newborn-nuzzling, they must one day release that child. The busyness of the initial parenting season blurs the reality of inevitable separation. When the eventual becomes the reality, the detachment process can be palpable. As painful as this process can be, if it doesn’t happen, the child will most likely never continue to develop into a fully productive, self-sufficient individual.

Similarly, one can view the life-cycle of a business and its founder in the same manner. For founders, the early stages require us to do just about everything. We build and test product, we market and sell, we provide customer service, we make coffee, we clean toilets, and we take on any and every unenviable task, if seen as advancing our vision. Our “new baby” is solely dependent on us. For some in this stage, we can’t even leave the “baby” for fear we will return to a mess at best, or a dangerous situation at worst.  Read more

When Should I Be Thinking About Succession Planning or Exit Strategy?

Our panel of mentors regularly answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

I keep hearing about succession planning and having an exit strategy… But when should I be thinking about this? How does it tie in with leadership development in my team?

~ Thinking Long-term

Dear Thinking,

None of us will last forever. Every manager and every employee someday will move on, either to another job or another company or to retirement or to death. If Jesus returns shortly then the calculation is different, but it is a pretty good bet that no one will be in the same job 80 years from now.

Some people are pretty comfortable playing things as they come and responding to problems as they arise. Often that works. But it’s really a wiser move to have some plans in place, especially for key positions. If something unexpected happens to a key employee it’s not at all a sure thing that you will be able to find a replacement in a reasonable time. In our work we have seen expatriate managers suddenly blocked from entering the country or suddenly have a spouse announce he won’t live in the country any more. Kids get serious illnesses or require therapy that is not available locally. We have also seen national managers suddenly decide their family will be better off if they relocate to a wealthier or safer country. In most of the cases I can remember the decision was sudden and unexpected and the consequences were very hard for the company, sometimes fatal.  Read more

7 Principles for Running a Kingdom Business from a 20 year Journey

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

Starting out, I have BAM goals for my business and part of that is a company culture I want to intentionally develop. I expect my values and intentions will hit some roadblocks as I work that out on the ground…. How have you intentionally developed your company culture so that it reinforces and integrates with your BAM goals? What have been some challenges to that process, especially when operating cross-culturally?

~ Crossing Cultures

Dear Crossing,

Starting a business whose explicit goal and raison d’etre is to serve Kingdom concerns is difficult, but not impossible. My take on ‘Kingdom concerns’ is that they essentially boil down to developing people and glorifying God. Down through the ages, many Christians have successfully set up businesses for the same purpose. No doubt, many have also failed. While I do not have empirical evidence, I believe a majority of failures could be down to the business end of things, rather than their choice of Kingdom values over commercial interests.

I started a BAM company in India about 20 years ago. It took me three years to get to a point where I could formalize in writing how I would run the company as a “Kingdom Business”– as I referred to it at the time. Here are seven key principles that I discovered along the way, especially during those first three years of trying to figure it all out. I hope these principles will help you in your own discovery of what it means for you to be a BAM entrepreneur. Read more

How to Integrate Kingdom Culture in Company Culture

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

Starting out, I have BAM goals for my business and part of that is a company culture I want to intentionally develop. I expect my values and intentions will hit some roadblocks as I work that out on the ground…. How have you intentionally developed your company culture so that it reinforces and integrates with your BAM goals? What have been some challenges to that process, especially when operating cross-culturally?

~ Crossing Cultures

Dear Crossing,

Company Culture is Kingdom Culture

If we believe that the first step of any successful mission is getting a believer together with an unbeliever, then we can immediately see the power of business. If the business context may be the only encounter a person has with the Kingdom of God, then that business culture becomes mission-critical. As Peter Drucker says, “Culture eats strategy for breakfast.”

If you wish to get something done in business, the environment the people do it in is important. If you wish to get something done and have people encounter the light of the Kingdom, then developing the right culture is a non-negotiable. In our business operations, we say that we, “Show people around the kingdom and introduce them to the King.” Read more

A BAM Practitioner’s Thoughts on Taxes

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

What are some guidelines you could pass on from your practical experience of paying taxes? I am in a challenging environment for business, and while I don’t want to evade tax, I do want to minimise company taxes to give my business the best chance of survival.

~ Taxed

Dear Taxed,

In short, it is critically important that BAM companies do their tax and legal work in a “world class manner.”

What does this look like? You find and retain good tax people who will keep you within the laws while also minimizing taxes. Plan ahead and stay current.

Be wise as serpents and innocent as doves – Matt 10:16

The mature…have their powers of discernment trained by constant practice to distinguish good from evil – Hebrews 5:14, ESV

Some Background

Since 1990, our BAM-focused holding company has had partial or full ownership in over 25 companies with another 20+ companies being “management-supported” by us, with total workforce around 5,000. These legal entities have been in eight different countries, with five of those countries among the least reached of the world – China and four Islamic countries. We have holding companies in three other countries primarily for tax purposes: Hong Kong, USA and Mauritius

We have had situations where we were trail-blazing operating a foreign-owned company in a place. We were the very first foreign company registered in a certain Central Asian country when it was still part of the Soviet Union. We were the second foreign company registered in that same country, under the new system, when it when it became independent. Read more

How to Approach Company Taxes in Challenging Situations

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

What are some guidelines you could pass on from your practical experience of paying taxes? I am in a challenging environment for business, and while I don’t want to evade tax, I do want to minimise company taxes to give my business the best chance of survival.

~ Taxed

Dear Taxed,

Jesus was very clear about giving Caesar what is Caesar’s and God what is God’s. He also once told his disciples to go fishing and to pay the temple tax with the coin they’d find in the fish’s mouth. Jesus lived and worked in a pretty tough context where neither Roman nor Jewish tax officials were known for reasonableness, but he taught us to pay taxes and to respect governmental authority. So the core principles are straight forward. It’s just the practical application that hurts!

Tax evasion is illegal, but in some settings is virtually inevitable. Tax avoidance can be either clever or immoral based on circumstances. Much of the world is angry with large corporations which legally avoid taxes by moving their headquarters to tax havens and while making massive profits pay little to the countries in which they really operate. It’s legal, yes, but it’s not very honourable behaviour. On the other hand, paying unneeded taxes is simply wasteful. Read more

Education and Identity: Managing Connections to Christian Networks

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

Dear BAM Mentor,

How do you manage your associations with Christians and Christian networks – both national and international – in light of security concerns? My ideal is to maintain my relationships with churches and Christian organisations (and indeed receive vital support/services from these); and I want to be well connected into the local church. However, I am concerned about how those connections may endanger my business. How have you managed both the relational side and other more formal associations you have with organisations or churches?

~ Feeling Cautious

Dear Cautious,

I personally believe that there are two key areas that you need to focus on as you consider your associations with Christians and Christian networks while working in a hostile environment. You should concentrate on education and building a strong identity.

Ever since we moved into a restricted access country, we have been working on educating all of the different parties involved in our lives. Most of our sending churches had only dealt with traditional missionary models, so we had to talk with them about:

  • How they communicate with us in email
  • What they could post about us online
  • How they should refer to us during their services.

During the first few years, we had to be vigilant about what they were writing in their online bulletins and websites. Over time, they have come to understand the seriousness of their actions. One simple way to make your point clear is to share real life stories of people who have been questioned because of “church mistakes.” Read more

Pragmatic and Prophetic: Managing Connections to Christian Networks

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

Dear BAM Mentor,

How do you manage your associations with Christians and Christian networks – both national and international – in light of security concerns? My ideal is to maintain my relationships with churches and Christian organisations (and indeed receive vital support/services from these); and I want to be well connected into the local church. However, I am concerned about how those connections may endanger my business. How have you managed both the relational side and other more formal associations you have with organisations or churches?

~ Feeling Cautious

Dear Cautious,

This is first and fundamentally a theological-missiological issue, secondly a relational issue, and thirdly a risk-related issue. Let’s tackle the question in this order.

By “theological-missiological” I mean that the question takes us to the core issues of spiritual warfare, identity with the Kingdom of God, and the often overlooked and neglected matter of suffering for the sake of righteousness, in fulfilment of God’s purposes. The point is that, ultimately, our security is not our concern! We are engaged in a spiritual warfare, in which the advance of the Kingdom of God is often painfully slow and subject to setbacks, and that suffering, even to the point of shedding blood, let alone expulsion, is the New Testament norm. It’s commonplace, but profoundly erroneous, to assume that because we are doing something as value-added as business, we have therefore some sort of iron-clad guarantee that we’ll be exempt from the same tests, trials and trauma of any other missional effort.

By “relational” I mean that our being blood-bought brothers and sisters in Christ by definition implies a willingness to be associated with this community, to take pride in our shared identity, and to find meaningful ways to engage with other Christians. Our businesses should not be seen by the host country as discriminatory (i.e. don’t hire all Christians!) or a cover for activities that may be illegal at worst, or at least misunderstood (i.e. avoid associations with certain styles of activities or messaging that can be counter-productive). But we should resist any fear or shame in being identified with the local and global Christian community which shares the Name of Jesus, just to protect our business – which, while important, is of secondary importance to the Body of Christ. Read more