The challenges facing Christian Entrepreneurs (and how to overcome them).

Here in my view are the four main challenges Christian entrepreneurs face in the marketplace. The first two are common to all entrepreneurs, the second two are unique to Christian/Faith Based businesses:

1. The challenge to successfully start a business

2. The challenge to grow a successful start-up to sustainability

3. Tests of faith and obedience to resist conforming to the world’s model for success

4. A lack of Biblical business mentoring and the absence of a sense of community.

   
   

The purpose of my blog “Kingdom Perspectives” is to share insights and offer solutions to these challenges, to help Christian businesses succeed and fulfill their call to advance the Kingdom of God.

So, to start off, here is a quick overview of the four main challenges Christian businesses face:

1) The challenge to successfully start up a business: Consider this:

1. The failure rate of new businesses is exceptionally high. SBA studies show that more than 50% of start-ups fail in the first 5 years. Being Christian does not make you immune to business risk and failure.

   
   

2. The main reason for start-up failure is a poor business model combined with a lack of due diligence. Most new entrepreneurs do not conduct sufficient due diligence into the viability of the new venture’s business model or attempt to forecast financial risks and outcomes in sufficient detail. In fact, many start-ups are launched mainly on the hopes, dreams and aspirations of the founders. The absence of proper start-up due diligence increases the chance of of eventual failure. This is a big topic and will be covered in more detail in future posts.

2) The challenge to grow your business to sustainability:

In my respectful view, a sustainable business is one that is stable enough to be passed on to another owner through sale or generation transfer, and continue to meet or exceed its benchmarks for profitability, cashflow generation, and growth. The business must be able to continue successfully into the foreseeable future, not just in the absence of the current owner, but in the hands of a new one. This borrows from the accounting “going concern concept” where the business continues successfully for the “foreseeable future” even if the leadership or ownership changes. The strength of a sustainable business is not in its owner, but in its model. Here are some basic sustainability challenges:

1. Many businesses that survive start-up, often do not grow to sustainability. They struggle for long periods, barely providing owners with enough return to meet basic financial needs and remain financially stunted despite all efforts to take them to the so-called “next level.” They usually generate insufficient returns to reward owners for the risk they take and capital they invest and often eventually fail when passed to a successor owner.

   
   

2.  In my experience, there are 3 reasons for a failure to grow to sustainability. These are:

   - Market limitations or model deficiencies that restrict growth prospects

   - Lack of leadership expertise to identify growth opportunities

   - Lack of ability to properly monetize opportunities

   - Lack of access to capital to finance growth.

   
   

3. If your business is not growing at all, or not growing as fast as your competitors, then it is in a state of stagnation leading to likely decline. Most businesses lose part of their clientele every year as existing customers drop off, or switch to competitors for one reason or another. If you are not adding more new customers than you lose through market attrition, then eventually your customer base will shrink taking with it your sustainability.

   
   

How to overcome viability and sustainably issues: Business failure and sustainability challenges can be very difficult to overcome. Some businesses have entrenched issues which include owner/manager limitations, business model deficiencies, and overwhelming financial problems. In my years of experience, some of these can be solved and business turnaround achieved, and some are just too complex or entrenched and the business continues to decline. One of the most frustrating and depressing experiences you can have as a business owner is managing a declining or stagnant business while you watch helplessly as your equity slowly evaporates. In my experience decisive, painful surgery is often needed to save some businesses or salvage some value. My advice to business owners is to address challenges before they become issues, and issues before they become problems. This requires both vigilance and diligence. I will be addressing topics of business viability and sustainability in more detail in subsequent posts.

Here now are the two top challenges that Christian entrepreneurs uniquely face:

3) The challenge of faith and obedience to generate ethical profit without compromising our integrity:

I have worked with Christian businesses full time as a consultant, advisor and tax-preparer for more than 12 years now. In my experience, Christian entrepreneurs face constant tests of commitment to Biblical integrity. Some of these tests are obvious, while some are very subtle. Here are a few examples:

1. The temptation to engage in dishonest business acts. For example, under-reporting business income and making false expense claims in tax returns; charging customers for substandard work or overstating the client’s issue to charge for unnecessary work.

   
   

2. The temptation to walk away from commitments we make when it appears that this may result in adverse financial consequences.

   
   

3. Seeking out business connections with people we know to be less than honest in their dealings, because it promises to be beneficial for us.

   
   

4. Ignoring the call to be completely honest and transparent in all our financial dealings (2 Cor 8:21) telling ourselves that we had no choice in the matter.

Now, you may think, surely Christians do not engage in such practices. What I have found is that while we all instinctively reject outright deception, we are sometimes tempted to flirt with subtle ones, especially if our backs are against the wall. While we are all endeavoring to walk in the light, the work of the enemy is to lure and entrench us in darkness. So, for some of us, especially those whose businesses may be struggling, the pressure is on.

Walking in subtle deception has serious consequences for us. In addition to the potential damage to our reputations and testimonies, it grieves the Spirit of God. Very often we forget the little deceptions we employ to get ahead, and ultimately attribute our success to the Lord’s blessing. We then present some of the profit we make as an offering to God. While we may have forgotten, God sees that the source of the profit is tainted with known dishonesty, and in the spirit, both the gift and the giver are rejected (as with Cain, Genesis 4:5). God said that righteousness and truth are the foundation of His throne (Psalm 89:14) and He will not honor our gifts and offerings if we obtain them even by small amounts of dishonesty or guile.

How to address this challenge: If we aspire to call ourselves “Kingdom” businesses, we need to address the issue of leaven in our business model and practice (Galatians 5:9). I know it may be daunting for us to suddenly bring our commercial practice into compliance with God’s word, but what I have found is that as we make the prayerful step to do so, God provides the grace. I will share more ideas on this topic in the future.

4) A lack of community incubation and access to wise, Godly mentors willing to help them address solvable problems.

Entrepreneurs generally learn from one of two main sources; the experiences of others transferred to them by coaching and mentoring, or by making their own mistakes. Mentoring is always preferred to “hard knocks” especially where money is at stake.

Mentoring is an important part of the knowledge transfer that brings success in business. A good example of this is found in our spiritual cousins the Jews whose legendary business success is heavily dependent on the coaching, mentoring and other support they give each other as a family, and as a close community. Other ethnic communities and business groups (African-American, Hispanic, Asian etc.) have established “business incubators” to assist their own small business to get established and grow.

But where is the business support, incubation and mentoring for Kingdom businesses? The needs of Christian entrepreneurs have not traditionally been a part of the ministry vision of the local church, since many pastors do not have a business background and are not comfortable discussing entrepreneurship too widely, if at all.

The result is that there are entrepreneurs sitting in our pews, who are in need of advice, guidance and encouragement, and for whom, the only place to get this, is in the world. No wonder so many Christian businesses are struggling, not just with profitability issues, but with ethical and identity ones as well.

How to address this challenge: If you are a Christian entrepreneur and there is no organized community of business owners in your local church, then I highly recommend that you seek out a local Christian business group or a Christian chamber of commerce that not only provides fellowship (which most do) but mentorship and practical business support (which some do not).

Conclusion:

I hope that this has been helpful, and I welcome your feedback and questions. Christian businesses have a vital role to play in advancing the Kingdom of God and I will address this in my next post.

Until then, God bless.

Robert.