Pray for Our Leaders

In our toxic political environment, it might be difficult for us to pray for the very leaders who are damaging our businesses through public policy. Furthermore, we might resent how our hard-earned money is spent after it is taken from us through the force of law. We might also find ourselves disillusioned with the campaign and governance process – learning that time and again, those who seem to be one way during the campaign often turn out to be entirely different once in office.

Paul wrote 1 Timothy 2.1-4 during a time when Christians had zero access to their leaders and they couldn’t voice any opinion about the leaders’ persona or decisions. All they could do is pray. (At least in our system of government, we can become the leaders if we want to – so we have much less to whine about.) And so Paul instructs them to pray. And by extension, he instructions us as well to pray for our king and “all those in authority”:

“I urge, then, first of all, that petitions, prayers, intercession and thanksgiving be made for all people—for kings and all those in authority, that we may live peaceful and quiet lives in all godliness and holiness. This is good, and pleases God our Savior, who wants all people to be saved and to come to a knowledge of the truth.”

Why do we enter into prayer for them? Why do we intercede for them? And why do we thank God for them? Because this pleases God – first, but also because through our praying, some will come to know Christ personally and after that, begin to understand the truth of God and by extension, the truth of how to govern properly.

In the long run, the type of government we have is less important than the salvation of men’s souls. It is true that as godlessness increases, so does a society’s move toward socialism and tyranny. This is because people naturally want a savior and when the real savior is jettisoned from the public square, he is also jettisoned from private lives and that vacuum must be filled. Nearly always, it is filled with government that is big, powerful and yet oppressive. Anytime you find a godless government, you’ll find an onerous tax system, an elite who profit immensely from their position, a corrupted judiciary that renders decisions to support the powerful to the detriment of the common man and often, a strong bigotry against one group or another. As a society moves in this direction, it is imperative that Christians pray for their leaders and essentially do a form of spiritual warfare on their behalf. This helps to slow the decay and sometimes can reverse it as those in power come to know Jesus Christ personally.

Most Christians ignore this passage in 1 Timothy. We figure all politicians in both parties are corrupt and beyond being salvaged. I would assert that what we need is a revival of gigantic proportions in this country. But this revival will touch all of life – but it will necessarily touch business and politics – not just the common masses.

I encourage you all to practice 1 Timothy. We pray because it pleases God. We pray so that we can lead quiet and peaceful lives. But we also pray because we want our leaders to come into a personal relationship with Jesus Christ and thus come to a “knowledge of the truth”.

Bill English
CEO, Mindsharp
Associate, The Platinum Group

Measuring Success

On this site, we have asserted that the four purposes for business are Products, Passions, Profits and Philanthropy. God created business, we believe, to provide a way for us, as a society, to provide products and services that enable the community to prosper. We also believe that business was created to give people a structured way to express their individual passions and creative talents, both working alone and in collaboration with others. These creative talents result in products and services which enable the community to flourish. We believe that money is a convenient way to transfer wealth (rather than always bartering goods and services) and that when the transfer of wealth is voluntary, both parties profit from this exchange. When business is profitable, sustainability of the other three purposes for business is achieved. And finally, we believe that beyond a certain point, profits are to be given away so that the community has very little, if any, poverty and that the basic needs of everyone in the community are met through the philanthropic giving by businesses to the community – which also enables to the community to flourish.

I believe most business owners need a way to measure success. If we define “success” in terms of fulfilling these four principles, then we need method(s) of measurement that will help us understand if we are being successful or not. It’s impossible to give precise definitions and benchmarks on how success is measured for each principle, but in this post, I’d like to offer some ideas for you to consider as you incorporate these four principles into your business model.

Measuring profit

When it comes to measuring profit, there are a plethora of tools that enable us to do this. The most common tools are the core financial reports: income statement, cash flow statement and the balance sheet. When read in light of current events, these three reports can information a person about the profitability of a business. Remember, without profits, a business cannot sustain its fulfillment of the other three purposes. So measuring profit on a persistent basis is essential to achieving fulfillment of the other three purposes that God has given us for running a business his way. The Christian business owner will unashamedly embrace profits as a core purpose for his or her business and will always keep an eye on this ball.

Measuring products

Our purpose as Christian business owners is to create products and services that allow the community to flourish. Most of the time, the creation of these products and services are achieved through other people that we employ. These products and services will take numerous different forms.

Generally speaking, businesses that engage in sinful activities will degrade their communities and will not fulfill this purpose. For example businesses that engage in the selling of sex, or the marketing of addictive drugs that are likely to destroy an individual’s life, or the selling of get-rich-quick schemes that are closer to gambling then they are true investments, or enabling people to have disagreed affairs and cheat on their spouses – all of these (and more) are businesses that might be profitable but they don’t enable the community to flourish. While it’s impossible to write down the exact rules that differentiate between products and services that achieve this purpose and those that don’t, I’d like to offer a few principles against which you can measure your business to ensure that the products and services you’re offering fulfill this principle:

  • If the development or the providing of the product or service requires people to sin, it is not a product or service that will enable the community to flourish
  • A product or service that asks people to violate their values is not a product or service that will enable the community to flourish
  • A product or service that destroys relationships that are key to a community thriving is not one that will enable the community to flourish
  • A product or service that has addictive qualities to it such that the people lose voluntary choice in future transactions is not a product or service that will allow the community to flourish
  • A product or service that asks people to violate the laws of the community is a product or service that does not enable the community to flourish
  • A product or service that enables one group or individual to win at the expense of another group or individual when the transaction is not fully voluntary by both parties is a product or service that does not allow the community to flourish
  • When the product or service relies on the force of government to achieve adoption of that product or service is not one that will allow the community to flourish

I realize there are inherent dangers with these principles, especially in the last two. It could be argued that capitalism is inherently a win-lose economic system. I would not agree with those arguments because I believe that when people voluntarily barter goods and services or monies for goods and services, that this is a win for both parties. It does not really matter if other people outside the transaction view it as a win or not. If the two people involved in the transaction voluntarily enter into that transaction, both parties win (assuming there is no fraud in the transaction).

Obviously we need laws against fraud and regulations to ensure that people deal in an honest fashion with each other. It doesn’t take a starburst of insight to realize that given our sinful nature, we are likely to lie to others cheat and essentially steal from them money or goods and services if possible. This is why our fraud laws and other laws ensure that people engage in economic transactions voluntarily and with full disclosure from the other parties.

The larger point here is that these principles can be used as a starting point from which to develop solid ways to measure success on how we are doing as Christian business owners are providing products and services that enable the community to flourish. I invite discussion on these principles – that you would post here at the end of this blog article your thoughts objections or comments about these principles.

Measuring passions

If you thought that measuring products and services that allow the community to flourish was difficult, then try measuring how well you’re doing at providing an environment in which people can express their creative passions and talents. The larger point of measurement is found in connecting the dots between what the business needs accomplished, what the job description states, and what the passions and talents are of the individual that you put into that job. The more closely you can align those three things, the more likely it is that the person will be able to fully express their God-given talents and passions. Hiring people with one set of talents and passions for job that requires a different set is tantamount to hiring the right person for the wrong job or putting the wrong person in the wrong position. Measuring this principle is not easy. But it can be done.

There are a number of human resource tools that measure job performance. I’m not recommending any one of them in particular for you to use. In measuring this principle, you simply need to have good measurements of job performance but also elicit feedback on whether or not the individuals feel like they are growing personally and professionally. The job performance of individuals in your company should be a two-way street. Not only do you measure their performance, but they should be given the chance to honestly evaluate themselves relative to what the job needs are, and have the freedom to state that perhaps they should be looking around for a different job, either within your company or somewhere else. As a Christian business owner you should not be surprised or feel insecure that some people will want to move along to another company to perform work. Instead you should be open to the notion that people moving on to other companies and other positions might be the best thing for them and for you. Having an honest assessment and evaluation will help your individuals feel like they have permission to state what they honestly think and will give them the opportunity to either grow in the position that therein or find a position that enables him to fully express their talents and passions. Working with them as they transition out of your company can bring you and your employee a great deal of satisfaction and goodwill, which is usually quite valuable down the road.

Measuring philanthropy

As a Christian business owner, you can hear directly from the Lord about how much money, products and services you should be giving back to the community. There is no doubt in my mind that businesses that do not give back to the community in one form or another are businesses that will not thrive well. Why? Because they are not fulfilling the purposes that God has given to business.

As part of your budgeting process, I would strongly urge you and your budgeting process to include giving as one of the core expenses of your business. Whether you consider them fixed or variable is up to you and is probably something that you should discuss with the Lord. But not giving out of your business should not be an option for you, the Christian business owner.

We don’t have a fixed amount that businesses should be giving. But here are a couple of principles for you to work with as you engage in fulfilling the last purpose that God has for business, which is giving back to the community:

  • Giving should not impoverish your business. You will need profits to sustain fulfillment of the other purposes. If you’re giving causes you to lose money on your income statement or causes you to not have adequate reserves for known expenses in the future, then you’re probably giving too much money away
  • Giving out of your business is not the same as tithing. Tithing is a personal matter between you and the Lord and is, I believe, composed of 10% of your gross income. If you disagree with me on this point, I’m not going to quibble with you. How much you do give out of your business, however, should be something that you derive from your conversations with the Lord. For those of you that have businesses with high net profits and low retained earnings needs, God may require much more from you: to whom much is given much is required.
  • Hoarding cash is sinful. Only the Lord can tell you at what point you cross the line between keeping enough money in reserves for future expenses and hoarding cash. But clearly the latter is condemned in Scripture and should not be characteristic of a Christian business owner.
  • Make sure that you give enough away so that you do not develop a love for your money. If you find that you can’t give the money away simply because you love it or love what it brings to you or you get scared because you view your security is in your cash and not God, then you need to give more of it away – perhaps much more.

Summary

What’s frustrating about a post like this is that many will wish there were more details – more specifics. But this is actually a good thing. When you are forced to ask God how you’re doing in fulfilling his purposes for your business, you’re going to find that you’re spending more time in prayer and allowing God to evaluate you and your business in ways that only he can do. I simply point you to the person of Jesus Christ and ask that you allow the Holy Spirit to examine you and your business as you look towards fulfilling these purposes.

Bill English
CEO, Mindsharp
Associate, The Platinum Group

Porn Proceeds Don’t Excite the Banks

As Christian Business Owners, we understand that we often do business with people of different beliefs and lifestyles. But when it comes to risk management in business-to-business relationships, one needs to think a bit differently. A recent article in the Wall Street Journal (subscriber content) highlights the risks associated with doing business with high-risk businesses. Recently, several in the porn industry received letters from J.P. Morgan Chase & Co. saying their accounts were being closed. The move appears to be a standard practice by a major bank aimed at limiting risk more than anything else. The risks outweighed the revenue streams. Risk management is nothing new and shutting down accounts with customers in certain industries, such as the medical marijuana industry, is not uncommon.

The risks of doing business with those in the vice industries are real. The first risk is reputational: vice industries are considered high-risk because they are fertile rounds for human trafficking and money laundering. Many in these industries are dealing in nefarious businesses as well and they launder their money through these legal businesses. The second risk relates to chargebacks and customer disputes. It is not uncommon for men to patronize adult entertainment businesses only to later say that someone stole their card and dispute the transaction because they don’t want their spouses and others to know what they have done. Ultimately, it is the merchant who is on the hook for those charges, which can lead to uncertain income and potentially, significant losses that are sudden and damaging to the viability of the business.

Banks counsel high-risk businesses to take simple steps to lower these risks. One such step is for the business’ legal name to be something like “Steve’s Bar and Grill” and then do business as (DBA) <name_of_club> or “North Woods Medical Supplies” that has a DBA of <insert_medical_marijuana_name_here>. Note: Where ever you find vice, you’ll find money. The greater the vice, the more money you’ll find associated with it.

If you’re a Christian Business Owner, you may want to be on the look-out for those customers with common-sounding names but who seem to be abnormally cash-rich. Anytime you find an abnormal about of cash in a business relative to how that business is presenting itself, you’re likely to find either an ongoing vice or an ongoing fraud (think Enron). When evaluating the credit-worthiness of a customer, it’s a good idea to pay attention to those signs of businesses that might appear to be “normal” but who seem to have bags of money to spend. If their credit seems to be too-good, that is a sign that you should dive more deeply into that customer’s business to learn more about what they do.

Only the Lord can tell you who you should be doing business with. In a retail establishment, you have less legal lee-way to make this decision, but in a B2B relationship, you have ample room to choose your customers with little threat of a discrimination claim. Part of your job is to minimize the assumption of risk for your company, so be prudent about who you do business with and when it doubt, get on your knees and ask the Lord after you have done your due diligence in fully investigating your (potential) customer.

Bill English
CEO, Mindsharp

New Business Creation Less than Business Closings Since 2008

A new study by the Brookings Institute finds that the number of new businesses that have been created since 2008 are less than the number that have been closing. The study writes:

“Business dynamism is the process by which firms continually are born, fail, expand, and contract, as some jobs are created, others are destroyed, and others still are turned over. Research has firmly established that this dynamic process is vital to productivity and sustained economic growth. Entrepreneurs play a critical role in this process, and in net job creation. But recent research shows that dynamism is slowing down. Business churning and new firm formations have been on a persistent decline during the last few decades, and the pace of net job creation has been subdued. This decline has been documented across a broad range of sectors in the U.S. economy, even in high-tech.”

Small business is the job creation engine of the United States. Historically, one new business was born every minute while another one failed every 80 seconds. In general, our capitalism system is inherently disruptive (here too) – which means there is a constant process of new products and services taking root in our economy and then some eventually displace established products and services. Entrepreneurialism is inherently disruptive. New ideas, products and/or services are never envisioned and developed in the enterprise of a large corporation. Instead, they are incubated in a garage, basement or small office, usually among a small group of individuals, if not a single person. It is this disruption that gives us better products, leaner processes and more value for the same consumer dollars. Disruption is a good thing in the macro, but it can be very painful in the micro. The study offers little in the way of understanding why entrepreneurialism is declining, even though it is declining across all sectors and all metro areas except one. From where I sit, it doesn’t take a starburst of insight to see that increased regulation and the highest corporate tax rate on the planet are two likely culprits of our declining entrepreneurialism. I don’t have sources to site for my hunches – so I offer these two explanations for your consideration. But just from a sheer logic perspective, the more onerous the regulatory and tax environment is for small business, the higher the barrier of entry is for those wishing to start new businesses. Again, I see this as just plain common sense. Others will likely disagree with me. If one were to correlate just the legislative and regulatory issues that face businesses since 1980, one would find that the sheer number of Federal laws negatively affecting the profitability of small business has skyrocketed (for a somewhat interesting discussing on the interaction of regulations on small business, read here). Each of these laws represent new regulations that increase the costs of doing business for American businesses. New regulations invariable result in increased litigation costs. So, consider this comparison chart below. It outlines the Federal Government Statues and Regulations that business must comply with and compares what American business faced in 1980 what they faced in 2012. If you wonder why we’re seeing a decline in entrepreneurialism, then perhaps this is a good place to start. By the way, all of these laws and the derived regulations implied in the chart below are in addition to case, common, local, and state laws:

1980 2012
Age Discrimination Employment Act Age Discrimination Employment Act
Community Reinvestment Act Community Reinvestment Act
Employment Retirement Income Security Act Employment Retirement Income Security Act
Federal Contributions Insurance Act Federal Contributions Insurance Act
Fair Labor Standards Act Fair Labor Standards Act
Federal Unemployment Tax Act Federal Unemployment Tax Act
National Labor Relations Act National Labor Relations Act
Occupational Safety and Health Act Occupational Safety and Health Act
Pregnancy Discrimination Act Pregnancy Discrimination Act
Affordable Care Act
Americans for Disabilities Act
Americans for Disabilities Act Amendment Act
Adoption and Safe Families Act
Asbestos Hazard Emergency Response Act
Americans Job Creation Act
American Recovery and Reinvestment Act
Black Lung Benefits Act
Clean Air Act
Consumer Credit Protection Act
Consumer Credit Reporting Reform Act
Comprehensive Environmental Response, Compensation and Liability Act
Children’s Health Insurance Program Reauthorization Act
Consolidated Omnibus Budget Reconciliation Act
Copeland “Anti-Kickback” Act
Community Reinvestment Act
Contract Work House and Safety Standards Act
Defense Base Act
Drug-Free Workplace Act
Defense of Marriage Act
Electronic Communications Privacy Act
Economic Growth and Tax Relief Reconciliation Act
Employee Polygraph Protection Act
Employee Retirement Income Security Act
Fair Credit Reporting Act
Federal Insurance Contributions Act
Fair Labor Standards Act
Family and Medical Leave Act
Federal Unemployment Tax Act
Federal Water Pollution Control Act
Genetic Information Non-discrimination Act
Health Insurance Patient Protection Act
Health Information Technology for Economic and Clinical Health
Immigration Act of 1990
Internal Revenue Codee
Immigration Reform and Control Act of 1986
Job Creation and Workers Assistance Act
Longshore and Harbors Workers’ Compensation Act
Lilly Ledbetter Fair Pay Act
Labor Management Relations Act
Labor Management Reporting and Disclosure Act
Mental Health Parity Act
Mental Health Parity and Addiction Equity Act
Michelle’s Law
Mine Safety Health Administration Act
Medicare Seconday Payer Act
Migrant and Seasonal Agricultural Worker Protection Act
National Environmental Policy Act
Newborns’ and Mothers’ Health Protection Act
National Transits System Security Act
National Labor Relations Board Act
Occupational Safety and Health Administration Act
Older Workers Benefit Protection Act
Pregnancy Discrimination Act
Pension Funding Equity Act
Pipeline Safety Improvement Act
Rural Electrification Act
Railway Labor Act
Small Business Job Protection Act
Safe Drinking Water Act
Sarbanes Oxley Act
Social Security Act (updates)
Surface Transportation Assistant Act
Solid Waste Disposal Act
Tax Equity and Fiscal Responsibility Act
Tax Increase Prevention and Reconciliation Act
Technical and Miscellaneous Revenue Act
Trade Readjustment Act – 1996
Trade Readjustment Act – 1997
Toxic Substances Control Act
Uniformed Services Employment and Reemployment Rights Act
Vietnam Era Veterans Readjustment Assistance Act
Worker Adjustment and Retraining Notification Act
Worker, Retiree and Employer Recovery Act

As I said, new laws invariable result in new litigation. We’ve seen a significant rise is litigation since 1980 as well. For example, according to the Norton Rose Fulbright’s Annual Litigation Trends Survey, nearly 20% of survey respondents said their companies had faced a regulatory/investigation matter in 2013, up from 9% in 2012: “The increase was consistent among all industries and companies of varying sizes, but was most pronounced among technology/communications organizations.” The Crowell Moring Litigation Forecast outlines where they see the areas ripe for increased litigation this year. The litigation efforts against business is increasingly likely to be initiated by our government rather than a private party. Another survey found that while the number of lawsuits did not increase significantly from 2012 to 2013 for small business, the amount of money at stake in the lawsuits increased dramatically. Still, the most common types of litigation relate to labor and employment issues (arising from increased regulations that derive from increased Federal legislation) as well as contract issues. More concerning is that only 18% of companies in American faced no lawsuits in 2013, which means that 82% of the other businesses did face a litigation action of one type or another. 71% of businesses spent $1M or more on litigation in 2013. In addition, banks are much less likely to lend these days to small business. If you need capital to start a business, don’t go to a bank. They are lenders, not investors. Work with your investors to capitalize your business and work with them to create profit. Small business was having trouble getting loans in 2011 (here too) and I don’t think it’s much better today. As our business climate becomes A) more complex due to increased regulations, B) more difficult to access working capital, C) more litigious and D) known for the highest corporate tax rate on the planet, perhaps these reasons will help our leaders understand what entrepreneurialism is on the decline in America. The sad part is that it doesn’t have to be this way. We still believe in small business because of the positive purposes that business fulfills in our society. We need stability, creative outlets, giving and growing communities. Small business provides all this to a community. So, if God is calling you to start a business, then get going. Be sure to assess your risks and be sure you’re properly capitalized, but get going. Who knows? You might hold the next great idea that will improve the lives of millions around the globe. In spite of the hurdles, dive in and work hard. Stay close to God and He will guide you and be your protector as you move out for Him in the greatest mission field this world has ever seen. Bill English CEO, Mindsharp Associate, The Platinum Group

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