Entrepreneurship and The Bible

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

In this verse we see the importance of planning, asset allocation, and mitigation of risk when beginning a new project. We will examine these three key-concepts as we explore these biblical principles in today’s entrepreneurial landscape.

According to a study done by The Journal of Management, businesses that have a written plan grow faster than those who do not. Could a simple outline or detailed business plan be the difference between a booming business and a bust? The details of this specific study goes into the importance of distinguishing based on the venture’s profile, the entrepreneur’s experience, and the specific circumstances under which the plan is written. The study underscores the importance of considering both the selection and impact effects when evaluating the effectiveness of business plans.

Common components of a business strategy include strategies, goals, and system of operations. Here are the nine parts to outline if you are starting a business:

  1. Executive Summary
    1. Overview, mission statement, goals, financial needs, business description.
  2. Company Description
    1. Business overview, legal structure (sole proprietorship, partnership, corporation), history, & mission and vision statements
  3. Market Analysis
    1. Industry analysis, target market, market needs, & competition analysis
  4. Organization and Management
    1. Organizational structure, ownership information, management team, & advisory board information
  5. Products or Service Line
    1. Products/ service description, feature and benefits, product life cycle, & Research and Development (R&D)
  6. Marketing and Sales Strategy
    1. Pricing & advertising and promotion
  7. Funding Request
    1. Funding requirements, future requirements, use of funds, & financial plan
  8. Financial Projections
    1. Revenue model, financial statements, break-even analysis, & assumptions
  9. Appendix
    1. Supporting documents such as market research data, product photos, resumes, etc.

In addition to planning, one needs capital. Based on research by the National Small Business Administration, the top reason for failed businesses is a lack of financing. [1] More than one-third of small businesses (37 percent) say they are unable to obtain adequate financing—the highest this indicator has been since 2008. Entrepreneurs must assess their financial resources and ensure they have enough capital to sustain their business until it becomes profitable. Possible expenses include budgeting for initial costs, operational expenses, and unforeseen financial challenges.

Risk is an essential component of starting a new venture. A survey by CB Insights revealed that 42% of startups fail due to a lack of market need, and 29% run out of cash. [2] When assessing risk, consider a SWOT analysis. In which one evaluates the Strength, Weaknesses, Opportunities, and Threats of a business venture. In awareness, there is wisdom. Consider the weaknesses of your business and see if you can make them strengths or find a strategy to mitigate them.

Build a strong foundation. Remember the man that built his house on sand in Matthew 7:24-27. When the rain came down, the wind blew, and the stream rose, his house fell. When the storm comes, when the threats and weaknesses seem heavy, know that there is a plan that can help.

[1] Elgin, Chana. “Working for Small-Business Access to Capital, Financing.” NSBA, NSBA | Since 1937, 5 May 2023, www.nsba.biz/post/press-nsba-continues-working-for-increased-access-to-capital.

[2] Why Startups Fail: Top 12 Reasons L CB Insights, www.cbinsights.com/research/report/startup-failure-reasons-top/. Accessed 24 May 2024.

AE Wealth Management LLC provides services without regard to religious affiliation and the views of individual advisors are not necessarily the views of AE Wealth Management.  Investing involves risk, including the potential loss of principal. 2425929 05/24

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