It is my joy to write articles regarding generosity in our church’s monthly church newsletter. I am thrilled to share them here on my blog and hope you’ll follow our church’s journey toward generosity.
I have loved numbers as long as I can remember. From the very first debit and credit that lead to my work as a CPA, numbers have always made sense. If you can’t put it into a spreadsheet, it probably doesn’t have a solution. Personal finance has also interested me for many years. Last year, my husband, Dan, and I were blessed to lead Financial Peace University at our church. That experience changed our lives, our marriage and the way we manage money.
Since then God has continued to work in my heart in the areas of personal finance, generosity and stewardship. I have felt challenged to dive deeper into His Word and learn how it relates to generosity. Through Bible study, prayer and books, I have discovered that God continually has much to say about generosity.
Generosity is truly a heart matter and God is a heart surgeon. When we allow God to work in our hearts and we fully focus on what God has done for us by sending his son, Jesus Christ, to die for our sins our heart is changed.
A changed heart, in turn, becomes a generous heart. With the full knowledge of all God has done (and continues to do) for us, how can we not praise Him? How can we not be generous? Just like a fruit tree cannot help but bear fruit (unless it’s sick), generosity will flow from a changed heart.
These are my thoughts as I’ve been looking at generosity through God’s word. How is God is speaking to you about generosity?
In our society, borrowing, is acceptable. A given, if you will. Individuals and businesses borrow money. In fact, many believe that you must borrow to run a successful business. But is debt in God’s plan for the church? The purpose of this article is to start a conversation about debt in ministry.
People today are enslaved to debt. In fact, 46% of adults cannot withstand a $400 emergency without selling something or borrowing money. That means almost half our nation cannot handle a $400 car repair without going into debt. Of the households that have credit card debt, the average credit card debt is about $16,000. It’s probably safe to say that if they have that much credit card debt, they probably also have a mortgage, one or two car payments, and potential student loan debt.
Enough of the negative! Let’s talk about the positive. The Debt-Free Churchby Jeff Berg and Jim Burgess points out several benefits of being a debt-free church. Let’s discuss two this month.
1. Leadership sets a financial example.
People are hurting and come to church to be led, even in the area of finances. What better way to lead than by example! When we choose to operate a borrow-free church, we are leading by example in choosing to trust God – and not the bank – to fund the ministry.
How can we not, as ministry leaders, live by example? People will see the joy of nancial freedom and feel empowered to follow with similar decisions in their personal lives. When a ministry walks the debt-free journey, it is able to wholeheartedly share personal nance tools such as Financial Peace by Dave Ramsey.
2. Debt-free ministry fosters member engagement.
When we commit to not call the bank, we must tap into the gifts and talents of our members and volunteers. To do this, we must engage with our members. Engaged church members see that they really, really matter, and they are energized to stay involved. Engaged church equals healthy church!
The Hills is a debt-free church based in North Richland Hills, Texas. Mike Washburn, Executive Pastor explained to us that,
“God called The Hills to be debt-free, and there are incredible blessings that come with the decision to operate a debt-free church. We are set free to use the resources that God gives us. In fact, we are able to be more generous with kingdom expansion because we are debt- free. This emphasis on working with what we have has brought about a focus on discipleship with our members to help them man- age what they have and become joyful givers.”
Catch two more positive aspects of debt-free ministry next month!
As Certified Profit First Professionals, we help business owners become proactive to find intentionality in their financial decisions. We also work with ministries to gain greater focus in their finances so they can achieve their vision.
We’ve noticed three different levels at which leaders adopt Profit First (or Vision First for ministries).
Let’s discover the Profit First pace that’s right for you!
First, we’ll start with the Deep DivePace. The Deep Diver has read Profit First, is pumped up about the possibilities it presents and doesn’t hesitate to implement the Profit First habits. Before we even book their consultation, they have opened multiple bank accounts and started making transfers to their Profit Account. This type of person is an early adopter of new technologies and methods and not afraid to try something new. They think, if something doesn’t work, I can just undo it! Command Z or Control Z is their favorite keyboard shortcut. (If you haven’t figured it out yet, I’m describing myself!) We love the enthusiasm of our clients who take a Deep Dive approach to Profit First. Also, we enjoy being there to give guidance and insight into their (sometimes drastic) financial decisions.
If you have a Deep Dive mentality toward Profit First, be sure your financial decisions make sense. As an example, if you allocated 10% to profit, 15% to taxes, and 15% to owner pay, you would be left with only 60% for operating expenses. In this scenario, you must keep your operating expenses at or below 60%. Otherwise, you’d simply be “borrowing from Peter to pay Paul”.
If the Deep Dive Pace doesn’t work for you, there are more options! Let’s discuss the Wade In Pace. This is the middle-of-the-road approach. We see this pace in a business owner who has read the book but has questions about how to make it a reality. They wait to open their accounts until after we have met and prepared their Profit Assessment. They start at a moderate pace and might ask for our input before making major financial decisions like buying a building or hiring staff members.
If you take a Wade InPace, our suggestion is to find a guide to help you wade into the waters of Profit First. Choose a Profit First Certified Professional to hold your hand through the changes that need to come in order to make significant progress.
The third pace is Toes-in-the-Water. This leader is more measured and deliberate with their Profit First decisions. They may or may not have read the book before sitting down to discuss it with us and they are open to the idea of change. We see a much slower pace with adopting Profit First, and that’s not bad! They make intentional decisions to move toward profitability, but it does not happen overnight.
To a Toes-in-the-Water person, we say you should start by moving 1% of your income to a profit account. You won’t miss it. In fact, you’ll be pleasantly surprised at the end of the quarter. If your profit distribution is only enough to take your family out for a pizza dinner, you will have begun the habits that develop into good financial decisions over the long haul.
We don’t feel one pace is necessarily better than the other. In fact, the secret to Profit First isn’t pace at all! The secret is a focus on taking small steps over time. These steps become habits. And the habits generate profits and sustainability. Profit First only works if you work it!
What’s your Profit First pace? How is it working for you? Have you started Profit First yet? If not, call the Knutson CPA office at 817.488.8939 and ask to speak with Lindsay about what Profit First can do for your business.
Own it. All Cards on the Table. You Really Really Matter.
If you’re around the Knutson CPA office very much, you will hear these phrases used on a regular basis. Why? Because they’re promises. More importantly, they’re OUR promises.
Why do we have promises? We’ve learned that it’s critical to know who we ARE. Just as principles guide us in our personal lives, core values guide us in our business.
When we started consulting with Mike Michalowicz, author of Profit First, The Pumpkin Plan, Toilet Paper Entrepreneur, and most recently, Surge, he encouraged us to develop Immutable Laws for Knutson CPA. He said that these Immutable Laws should be personal to me, as the business owner, so that they could clearly represent who we are as a company. One of the blessings of being a business owner is having the ability to pass along what I consider to be significant values. It’s a joy to let my heart shine through the business; I hope that each person on our team is able let their heart shine as well.
The first thing I decided was to change Immutable Laws to promises, and the Knutson team agreed. The word promise seems to more strongly represent to us what our values really mean.
During a recent brainstorming session, our team defined promises with these terms: commitment, follow-through, character, dedication, fulfillment, integrity, obligation owed, taking action, having an “I care enough” attitude, and knowing that your word is your bond.
We know that promises can be made between people or between organizations (which are really just groups of people.) Promises can be kept. Or promises can be broken.
We should not make promises lightly. Abraham Lincoln once said, “We must not promise what we ought not, lest we be called on to perform what we cannot.”
At Knutson CPA, we make our three Promises to our clients and to one another. They have become the filter through which we operate and the lens through which we view our relationships.
Hopefully, our promises give you insight into who we are. It is essential to build trust in a professional relationship. We hope these promises will be the first step in building your trust in us. As we grow our professional relationship together, our team will strive daily to fulfill these promises to you. Our mission is to empower you, through strong financial principles, to focus on your vision and your hopes and dreams for your organization.
The Knutson CPA Promises:
Good or bad, we take responsibility for our work, and make it our own.
All Cards On The Table
We will be open and honest with you. Sometimes you might not like what we say, but know that we speak the truth out of respect for you and your organization.
You Really, Really Matter
We truly care about you and your organization and do our best to prove it.
It’s tax day, friends! More and more of our clients are adopting Profit First in their businesses. As they make their tax payments this year, we are able to see major changes in the psychology behind writing those big checks to the IRS. We talked to one client who said they mailed a BIG check to the IRS last week. (They owed taxes for 2015 and also their April 15 estimated payment.) They also paid their franchise and property taxes that same day!
Whew! That’s a lot of money to be sending off to the government in just one day. In the past, this would have sent most business owners into a state of panic or depression.
So we asked this client, how does it feel to make these payments now that you have implemented Profit First in your business over the past year? (For a quick primer on how the Profit First system and accounts work, click here.) They said:
“In past years, when tax day came around, I would do everything possible to avoid paying my taxes. I felt panicked that I had to come up with so much cash to pay the government. If I actually had the money (which I probably didn’t), it was a real downer to see my bank account be drained of funds. But this past year, I implemented Profit First in my business. I transferred the prescribed amounts throughout the year. Today when I had to mail a check, all the money I needed was waiting for me in my tax account.
I feel a strange mix of emotions today. It’s definitely a different feeling than in years past.
Today, I feel glad that I have the funds ready to pay these tax bills.
I feel sad that I have to spend the cash.
I feel empowered– like I can do just about anything because this worked out so well. I have no fear.
I also feel like my business is successful. It has value and it matters in this world, and I feel love for this business of mine!”
Wow! What a difference just one year made with this client. We want to bring this change to your business, too!
Are you still teetering on the edge of deciding whether to implement Profit First in your business? Let’s schedule a time to talk through what it can do in your business, and the peace of mind it can bring – on tax day and every day. Call us at 817.488.8939.
We recently discussed a new trend in growing churches- small groups- and how they are very similar to teams or pods in businesses. Today, I want to explore ways you can make teams part of your business dynamic. We will look at principles carried out by churches who are successful with their small groups.
WORK TOWARD A COMMON GOAL.
Different people with many different personalities and backgrounds merge together in the church. Leadership must constantly help their group members feel engaged by encouraging them to love each other as they should. Ultimately, all churches have a vision of reaching people for Christ. Church staff cast the vision to church leadership (elders, deacons, and ministry leaders). These leaders then bring the vision to small group leaders who in turn push the vision to the members.
In business, we must focus on the vision and the work we do for the greater good. It’s important to keep the vision front and center so that teams stay focused on what matters most. Focusing on the vision helps us put aside our differences and work toward a common goal. You must talk the vision, walk the vision, and make it an integral part of your company’s culture. As a bonus, focusing on the company’s vision will help develop cohesiveness within teams while also avoiding a cliquish mentality.
CREATE AN ESTABLISHED STRUCTURE.
Churches who successfully utilize small groups create a structure that works with their member’s culture and lifestyles. This may look like having small groups that are demographically based (like grouping by age, place in life or marital status). Or it could look like having small groups that are geographically based (so that members can attend a small group close to their home or work). Some churches create a blend or something that’s entirely different. What matters most is that they intentionally create this structure based on what they know about their people.
For your teams to flourish, they need to have an established structure. This might look like a buddy system, a peer system, departmental teams, work pods, etc. Find ways to make teams a part of your culture and workflow. The goal is for the teams to feel completely natural.
IMMEDIATELY HELP YOUR NEW EMPLOYEES PLUG INTO A TEAM.
Pastors use sermon-based curriculum to help newcomers as well as members to integrate into small groups. Attenders hear the sermon in worship and are given the chance to flesh it out and live it out with a small group. By making small groups attractive in all discussions, small groups become the lifeblood of the church culture.
When you have a new employee join your business, immediately plug them into a team or pod. As they watch you and other leaders demonstrate commitment to the business model, they will be encouraged to commit to the model as well. Have leadership within each team help the members get to know each other as they live their work lives together.
MENTOR POTENTIAL LEADERS.
Small group leaders in churches watch for potential leaders of new small groups. Elders watch small group leaders for potential elders. Church staff observes elders for potential ministry leaders.
As a business leader you must constantly be on the lookout for possible leaders. You’ll know it when you see it! Once you recognize their potential as a leader, begin recognizing their strengths and trusting their expertise to make the most of their abilities. Spend time mentoring them so that you can recognize what they are passionate about and provide ongoing training and leadership. Don’t leave new-found leaders hanging out there on their own. Keep them engaged. Teach your leadership to recognize potential leaders in their teams and create a step-by-step plan to work them up the leadership ladder.
I believe that businesses can learn SO much from churches that are run well. After all, these are organizations that inspire, train and empower dozens of (unpaid) volunteers. These volunteers are essential to the church fulfilling its vision and work for the greater good. Reaching people with the gospel. Churches lead people and get things done with “free” labor! Business owners can learn much by watching how church leaders motivate their unpaid volunteers.
Lets take a look at small groups, an emerging trend among growing churches over the past decade. They are called by many names: life groups, home groups, discipleship groups or Sunday School classes. The purpose and function remains the same: to engage the church body in smaller more intimate settings for spiritual growth, community outreach and personal relationships.
Small Groups cultivate fellowship, spiritual growth, and an empowered church membership. They are often the life-blood of a church’s culture. Church members are much more likely to stay if they are in a small group.
In fact, noted church researcher George Barna and Lifeway’s Thom Rainer combined their research to formulate the following in Rainer’s book, Surprising Insights from the Unchurched and Proven Ways to Reach Them:
Involvement in small groups, such as Sunday School, is key to assimilation… New Christians who immediately became active in Sunday School were five times more likely to remain in the church five years later than those who were active in worship services alone.
Teams in Business
As a business owner myself, I find a strong correlation between small groups in churches and teams – or pods – in business settings.
I’ve noticed that businesses that grow past about a dozen employees can begin to lose the small business feel. It’s just not possible for one business owner to be a CEO and also lead every team member. As you outgrow your ability to meet with and get to know each employee, a scalable team structure will allow you, as the owner, to influence each of your employees through the leadership efforts of other leaders in your organization.
Most business owners are looking for ways to create engagement among their staff members. By creating small teams or pods in your business, you can create natural opportunities for employees to feel more engaged in the operation and culture of the company. Setting up this structure will allow the business owner to lead the leaders (I’ll write more on that in an upcoming post.) and continue to build in scalable layers of leadership and mentoring as the business grows.
The end result of implementing teams or pods is customer satisfaction. How? Teams increase employee satisfaction by helping to foster relationships and a sense of community among employees. When employee satisfaction increases, employees stay longer creating continuity and a better experience for your customers.
Interested in ways to make teams work in your business or small groups thrive in your church? Stay tuned for my next blog post on small groups and how churches (and businesses) can keep their members engaged in them!
Hi! My name is Wendy. I am a productivity nerd and a planner addict!
Productivity planners are seemingly the perfect answer to my dilemma of wanting to live a more focused and productive life. However, I want to tell you a brief tale about how focusing on HOW to be productive was actually COUNTERproductive in my life!
Last summer, I purchased the Best Planner Ever, and I have used it faithfully since. In fact, I was SO enamored by the planner that I sent comments to the developer, letting her know what I liked and didn’t like. (Unsolicited feedback, you know is the very best kind. 😉 I do my part!)
As the end of 2015 neared, I couldn’t wait to get my hands on the new, slimmer 2016 model and eagerly ordered it as soon as it was released.
When January 1st rolled around, I met the new year armed with the 2016 version of Best Planner Ever. I was SO excited to dive into this new year and embrace the productivity my planner would bring.
However, I started to notice that my Facebook feed was littered with one planner after the other, touting more perfect solutions to my disorganization, lack of focus and tendency to over-schedule my life. These other planners led me to believe THEY might be the answer to my out-of-control world. I found myself knee-deep in planner shopping before I ever knew what had hit me! Why, oh why, am I so drawn to these ads? (Google and Facebook know a bit about this conundrum when it comes to Google searches and ad placement, by the way! Where else would all those ads on Facebook have originated?)
The commitment that’s required to fully utilize a planner reminds me of the commitment that is needed to embrace a Capsule Wardrobe. And in my case, planner shopping was becoming an addiction when I already had the Best Planner Ever siting on my desk! Like my mom always said, “You should leave with the one who brung you!” The Best Planner Ever and its designer, Jennifer Dawn, have taught me to set goals. This has been a long-time struggle for me. This planner has already helped me make huge progress in this area.
I’ve decided this:
The Best Planner Ever and I have a good thing going. We’ve set goals together, made appointments together, planned dinner together, and even de-cluttered together. I am officially committing to no more planner shopping. I am truly sorry, my 2016, 6-month, chrome-cover edition friend. Please forgive me. From this day forward, I am fully committed to you and all your wonderful features!
I am a member of a Facebook group where various people recently committed to taking a 90-day challenge. When I saw what others were contributing, I posted:
I’ve been thinking about giving up TV, but I’m not sure…
Why Would I Consider This?
I realized that TV is very passive in nature. It took up a lot of valuable time in my evenings, and the shows did nothing to feed my soul. Instead of spending what time I did have interacting with my husband, I typically vegged out on the couch and fell asleep with my mouth gaping open.
Living the Challenge
It surprised me when several people commented on my post with encouragement for getting rid of my TV. One lady said,
I turned off my TV and sold it three years ago and I have never looked back.
That was all I needed to hear. My thought was out in the universe, and I was all in. Challenge accepted!
As I’ve mentioned in previous blogs, I’m an all-in kind of girl, and at the time, we were doing some remodeling in our living room. So I immediately unplugged the TV, moved it to a spare bedroom and adopted this no-TV rule in my life (with my husband fully on board).
However, football season rolled around, and I’ve always been a big Cowboys fan. So, I decided that I would allow Cowboys games, and that would be the only TV I would watch. (I even updated the Facebook group about this change to my accepted challenge.)
When the pre-season Cowboys game aired, I hooked up the TV and sat down on the couch, ready to watch. However, I fell asleep during that game and when I roused myself to get off the couch, I decided that was a total waste of my time and I didn’t even enjoy it, so there would be no more Cowboys watching for me.
What I’ve Learned
I’ve noticed some positive new habits forming in my life since turning off the TV. For one, my husband and I used to watch TV before we needed to work on things together as a family, like important decisions or paperwork. But now, we schedule time to do those things and get to it right away in the evening when we are still focused and awake. We are making progress on our goals, and we don’t feel deprived because they no longer interfere with planned TV time. It doesn’t feel like a loss to spend time doing other – more productive – things.
Am I legalistic about this? No way! Am I so staunchly dedicated that when I go to someone’s house and they are watching TV, I go to the other room? Absolutely not! Will I watch it in the nail shop? Certainly.
I’m aware that there are some great TV shows out there, even shows that can help you run a successful business. Some examples are The Profit or Shark Tank. But, I’m realizing that there’s so much other good content and information available that my business will never lack.
During this 90-day challenge, I’ve improved my communication skills by talking more with my family. I’ve seen less procrastination in my life because I have more time to finish projects. Also, I’ve been filling that void of time with reading and better sleep.
When it comes to your life as a business owner, are there areas where you are unwisely spending your time?
Fiddling around on social media during the day
Distracting staff at your office rather than working on your goals
Attending groups that are not edifying or helpful
Have you noticed that if you go test drive a certain car, you will see that car EVERYWHERE! Now that I’m not watching TV, I’m picking up on lots of people out there who don’t watch television.
There are so many active things you can do to help advance your dreams. There are people you should hang around that will help you and make you stronger. Ensure that the things you are doing are profitable.
What will I do with the big, fancy TV currently sitting in my spare bedroom? I’m not sure. Maybe I’ll sell it!
Will I go back to watching TV? I don’t think so. There are so many great books to read, podcasts to listen to, webinars to attend, and time to invest in my family. And speaking of investing time, please comment below on how you are investing your time and any changes you have made to how you spend your time!
Imagine what your life as a business owner would feel like if you had a bank account with funds at the ready in case things went really, really wrong for three, four… or six months. How would that affect your ability to sleep at night? If you’re like me, it would bring a great deal of peace to your life. So let’s talk about this account and how business owners just like you and me are making it a reality.
I want to introduce to you another Profit First bank account – the Vault.
An Overview of the Vault
Whereas the Profit account is what I consider to be a rainy day fund, the Vault is a long term cash reserve account. In personal finances, Dave Ramsey’s Total Money Makeover and Financial Peace University refer to this as an Emergency Fund.
This idea of the emergency fund isn’t just critical for families; it’s absolutely essential for running a business. Every company should have a cash reserve. It’s ideal to have a cash reserve to operate the business for three to six months if all sales were to stop completely. It would be a rare occasion that all sales stopped at once so this amount could actually last your business a very long time during an emergency.
Why You Need a Vault
Unexpected events happen. You cannot predict the future. It’s not a question of IF an unexpected event will happen, but when. Examples:
A sharp downward trend in market conditions.
Your largest client goes bankrupt.
A key employee leaves.
You become sick and have to be out for a long time.
How to Create Your Vault
You will actually create your Vault from part of the money in your Profit Account. So first, let’s review Profit Distributions: During each month, on the 10th and 25th, you have been making allocations to your profit Account. That money is out of sight and out of mind in that separate Profit Account. It’s even at a different bank where it’s more difficult for you to see and access the funds. At the end of the quarter, you will take a Profit Distribution- 50% of what is in the Profit Account. We strongly encourage you to take that Profit Distribution and CELEBRATE the business’ success with it. Whether it’s a trip to Disney World or going out to dinner for pizza with your family, we want you to enjoy the fruits of your labor and the profit from the business you have grown!
What’s left in the Profit Account can be called sediment. This sediment is what is used to fund your Vault. How much is used to fund your Vault, and how aggressive you want to be as you build up your cash reserve is entirely up to you! Once the Vault is fully funded, it’s important to keep track of the amount. (As your business continues to grow, your vault will need to continue to grow as well.)
When you take money from the sediment in your Profit Account and move it to your Vault account, keep in mind that this will lower your future Profit Distributions. How aggressively you want your vault to grow will directly affect how much you can take in Profit Distributions.
You should target to build your Vault account over the course of a year. In reality, it’s more typical for it to take one to two years to completely build a Vault. Because you will need only very infrequent access to this account, it would be good to open a low interest earning account for the Vault.
Rules for Your Vault
You need to create your own set of rules for your Vault. These rules will govern when and how much you can take out, and for what reasons.
These rules must be written and should be made well in advance of a time when you might need access to the Vault.
The Vault rules need to be established before you need to access it and not in a time of crisis. The rules you create are important decisions to make, and crisis time is not the time to think about critical decisions.
As a good rule of thumb, the only time you should access the funds in your Vault is in a time of great change and crisis in your business. If you are accessing your vault, you need to be making changes in your business. For example: reducing expenses, reducing payroll, etc. The Vault is your last resort.
In conclusion, the Vault acts as a buffer. It’s a defense or shield against unexpected events. The Vault may be the difference in whether your business survives a crisis or not. It will prevent you from shutting the doors or having to take out a huge loan to survive. (Loans like this often cripple the business going forward as it attempts to recover AND eradicate debt. Often, this simply proves to be impossible.)
It’s crisis prevention that keeps us away from survival cycles and allows us to make decisions for long term viability and permanent profits.
Having a Vault will change the way you make decisions. It will give you the power to be more strategic. By the way, that’s the nuts and bolts of Profit First – taking action to be strategic and plan ahead.
Profit Account = Rainy day account for short-term emergencies or extremely slow months.
The Vault = Long-term emergency fund in case things get really tough.
I'm a wife, mother of two grown daughters, and a lover of books. As a CPA, I have a passion for helping ministries and churches fulfill God's vision through excellent accounting and focused financial guidance.