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What Is Business? Pt 2

It takes “Organized, intelligent and productive work” to rule. One interesting designation is the creation mandate is to “fill the earth.” It takes efficient and effective visionary leadership to “rule,” “lead,” “manage,” and fill up God’s structure – earth. All of the foregoing is the elements that make up a healthy business system. At the conclusion of work after creation episode, God enacted a “work” or “business” code called creation mandate for man to engage in filling up the “structure” that He created,

“Now no shrub of the field had yet grown on the earth, and no plant of the field had yet sprouted, for the LORD God had not caused it to rain on the earth, and there was no man to cultivate (work) the ground
Genesis 2:5

When a high-rise apartment building project is under construction, the structural engineers first put in place the structure or skeleton of the entire building, which defines how the building would look like eventually. Thereafter, building engineers would come and fill up the structure with blocks before you can fully appreciate the aesthetic appeal or value of the apartment building. After God, Adam was the first worker or business man on earth; he was mandated to fill up or work up God’s structure of creation i.e. administer and market productively God’s vision on earth

It becomes clear that business is divine in nature; business is a veritable vehicle to do the will of God; it isn’t created to support sin – self enrichment and nepotism. While I would concede that money or profit is a corollary of obedience to ruler-ship; it isn’t the primary objective of business. The beauty of the business system is appreciated best when it is organized under a harmonious and congenial atmosphere.

So, what is business from God’s perspective?

Business is the efficient and effective organization of your skill, talent or gift under a healthy and compatible business system. Business is the organized supply of human needs and the promotion of human well-being under God’s program. Every kingdom business should have healthy and compatible system in place that encourages efficiency and effectiveness. So then, what is a business system from biblical perspective? That will be the theme of our discourse in our next article!

Many years before Jesus launched His earthly ministry – at the tender age of twelve – He announced publicly to His earthly parents and those within hearing distance His principal purpose on earth,

“… Wist ye not that I must be about my Father’s business?

Luke 2:29

By this announcement, Jesus enshrouded the make-up of His ministry in mystery; even His earthly parent couldn’t understand what He meant,

Yet his parents did not understand the remark he made to them.”

I want to juxtapose the world’s definition of business and God’s purpose for business from the foregoing text. If business is all about making money through the provision of products and services (according to the world’s definition), question is, what was the product or service that Jesus rendered to the “doctors” He listened to and how much money was involved? Your answer is as good as mine – none.

Christ business wasn’t predicated on physical reality but on spiritual reality, he sought to pursue the will of God – creation mandate – by bringing His creation into alignment with God. Therefore from the outset of His business on earth, Jesus sought to bring people in alignment with the ways of God, through His ministry.

Jesus said to them, “My food (purpose) is to do the will (creation mandate) of the one who sent me and to complete his work (ruler-ship)”

John 4:34

If given that Christ perspective of business wasn’t predicated on provision of physical goods, products or services for the purpose of making money! So then, what was the father’s business that He alluded to in the text above? His father’s business is the work given Him to do on earth which is the will of the father – creation mandate.

Christ business on earth was is rulership. From the foregoing, one can understand the fundamental elements of God’s business which are:

  1. His will – VISION
  2. Rulers-hip – ADMINISTRATION
  3. Working – PRODUCTION
  4. Dominion – MARKETING

This is the core of what is known as “business system” that Christ explained in the parable of the householder in the twenty-first chapter and verses thirty-three and thirty-four of the books of Matthew. In my follow-up article, I’ll explore “The anatomy of a business system.”

Becoming an Entrepreneur – Toolkit for Your Start-Up Home Business

This Toolkit for your Start-up Home Business outlines all the basic guidelines you will need to get your home business up and running. The goal is to ensure that you have all the relevant information and a structured approach in getting your business off the ground as soon as possible.

Step #1 – Determine what type of business you want to get into.

Business ideas and suggestions may come from many sources. You may have some ideas of your own based on your passion or you may recognize that there is a need based of discussions you have with others. A case in point, I recall when my children were younger we needed transport to pick them up from school (there was no school bus service). After discussing with a friend, he assisted us with picking up the children, and soon realized that there was a demand for such a service. There and then his new business was born.

Step #2 – Research the business idea

In the school transportation service example given above, my friend conducted an informal survey by speaking with other parents, he was quickly able to determine the demand for such a service and the potential revenue to be generated. Depending on your business idea you may be required to do a combination of both informal and formal research, but the goal is to gather as much information as possible that will help you to make an informed decision on the business idea.

You may have several business ideas in your head and would have to make a choice on which one to implement. In making your choices consider the following:

  • The size of the market – in terms of customers, revenue and growth potential
  • Competitiveness of the market -how many businesses are already operating in that space?
  • Who is your target audience? If a market is very competitive, as a new entrant, you may want to probably look to see if there is a particular niche that has needs that are not being met by the existing suppliers and get into it.
  • What are customers looking for? (demand)
  • Where are the customers located?
  • How do you plan to reach them and serve them? (Your marketing strategy). More on this will be discussed in a subsequent article.
  • If you are not producing your own product or service, who will be you supplier? I will suggest that you identify at least three suppliers to give yourself more room to negotiate and get the best deals.
  • If you plan to import or export then you would have to enquire about licences with the relevant authorities within your jurisdiction.

Tip – Focus on the business idea that you are most passionate about. Because when things get challenging, it is your passionate that will give you the strength to stay in the business.

Step #3 – Decide on your Business Structure

Since the focus of this article is on home based businesses, the assumption is that your business structure will be one of either a sole proprietorship or a partnership. Notwithstanding that, I will still provide a brief description of the three typical business structures for setting up and registering a business.

  • Sole proprietor- this a business where there is a single owner. It is sometimes referred as a “one-man” business. You are the business and the business is you. As the owner of this type of business you have the responsibility for making all decisions. You receive all the profits and accept all losses.
  • Partnership – this is an association between two or more persons who joint themselves together to form a business. You can partner with relatives or friends or whoever. You and your partners contribute to the business equally and share equally in the profits and losses. A limited partnership may have some different arrangements in terms of contributions and profits and losses.
  • Corporation – a business structure, where the business has a legal identity that is separate and distinct from its owners. The owners of a corporation are referred to as shareholders. In some countries a corporation can be started by a single person. A key distinction between a corporation and the other types of business structures is that the owners (shareholders) have limited liability, in that they are not personally liable for the debts of the corporation. They share in the profit of the company through the receipt of dividends and stock appreciation.

Step #4 – Register your Business

Having decided on your business structure you will need to register your business name with the relevant authorities in your country. If you are a sole proprietor and you are using your name as the business name you do not have to register yourself, since you and the business are one. However, apart from that all business names must be registered.

When you have a name in mind, you will be required to do a search of the data base of registered companies to ascertain that the name is not being used by anyone or company. Once your chosen name is available then you can go ahead and register it with the relevant government authority.

Step #5 – Calculate your start-up cost

The guidelines used here are focused on a home based business that may not have some of the typical expenses of a business operated outside the home. Calculating your start-up cost will certainly assist you in deciding how you will finance your business.

  1. Start-up expenses- examples- business cards, flyers, promotional expenses etc.
  2. Assets to be purchased- examples could include- desk, chair, filing cabinet, computer, software licences, printer, inventory etc.
  3. Ongoing monthly expenses- example website hosting fees, other online fees and charges, subscription services fees, business telephone, advertising expenses, distribution cost etc.

Tip – multiply the monthly expenses by six (6 months), since it may take approximately six months to breakeven or realize a profit.

  1. Add the figures in 1+2+3 to get your total start-up cost

Step #6 – Forecast your Revenue

To calculate your breakeven revenue – divide your ongoing monthly expenses by the number of business days to get your daily revenue. Anything in access of that is your profit.

Step #7 – Prepare your Business Plan

It is good to prepare your business plan before seeking financing, even if you are self-financing. Your business plan is your road map showing your business vision and how you will get there. The key elements you want to cover in your business plan are as follows:

  • Business Concept- Description, vision and mission, goals and objectives
  • Operations and Management- Owner background, location, staffing, inventory, suppliers, delivery and distribution etc.
  • Marketing – products and services, customers, competition, pricing, promotion and advertising etc.
  • Financing- assumptions, operating expenses, asset requirements, operating expenses, sales and revenue forecast etc.

Step #8 – Get Financing for your Business

Just to re-state the focus here is on the sole proprietorship and partnership business structures. Depending on your business structure and the size of your business, there are many ways that you can secure financing:

  • Personal Savings- you may have adequate personal savings set aside to start your business. In a partnership, partners would contribute to the financing of the business based on the partnership agreement.

  • Line of Credit- you may have a decent line of credit from you bank which you can use to finance your business.
  • Credit Card- depending on your credit limit, your credit card could be a good source of short term financing. The interest rate on this could be very high.
  • Borrowing from friends- to supplement your personal savings you may borrow from relatives or friends
  • Institutional Borrowing- you may approach a financial institution (bank or credit union) for business financing, and this is where your business plan will come in handy. Your financial institution would only lend you money based on a solid business plan.

The above are the basic tools required to get your home business started. Have fun utilizing you toolkit and best of luck with your business venture.

Additional note for those who are getting into Import and Export

Get familiar with these shipping terminologies

  • Free on Board (FOB) - The quote reflects the cost of the goods plus the cost of loading them on the ship or plane. The supplier handles all customs export formalities at the loading port. No insurance or freight is included.
  • Free Along Ship (FAS) - The seller is responsible for delivering the goods alongside the vessel at the agreed port of shipment. It is the buyer’s obligation to clear the goods for export and must also absorb all costs and risks of loss or damage from that point on.
  • Cost and Freight (C&F or CFR) - The price quoted include the cost of the goods and the cost of the ocean freight to transport the goods to the agreed port.
  • Carriage Paid To (CPT) - Seller absorbs cost of freight for the carriage of the goods to the destination. The seller clears the goods for export.
  • Cost Insurance and Freight (CIF) - The seller pays for the insurance coverage of the goods up to the time they reach the designated port of entry.
  • Delivered Duty Unpaid (DDU) - The seller is obligated to deliver goods to the named place in the country of import. The seller absorbs costs involved with bringing the goods to that point (excluding duties, taxes and other charges)
  • Delivered Duty Paid (DDP) – The sell absorbs all the DDU costs in addition to the duties, taxes and other charges of delivering the goods to the destination.

5 Things You Must Consider When Starting Your Own Business

Starting your own business may involve a lot of headaches. There’s having to find office space, getting permits, hiring people, and more. Aside from those, you also need a business plan. In what direction do you want the business to go? How much money would you like to make five, ten, or so years from now? Those are very important questions to ask, but since you’re still in the early phases of your business, you should also seriously consider these five things.

1. What sector will you be in?

Let’s say you want to be in IT (information technology). It’s a huge, cutthroat industry, with lots of companies, both big and small, competing for market share. It’s a lot tougher for you as someone just starting if you want to jump into the industry as well. So then, you first have to find your niche. What sort of products or services will you specialise in? What can you offer that your competitors don’t have? Don’t just go with the flow. Be unique and offer something really valuable to your potential customers. Ideally it’s something they’re looking for that your competitors just can’t offer them. That way, your business will stand out above the rest!

2. How much will you invest?

Of course, as a business, you need capital to turn your business ideas into a reality. If you don’t pour in the capital, your home business idea will be nothing but a big flop. One important thing to know is how much money your business needs to both begin and maintain itself.

Where would you get the money? You could use your savings, if you have a lot. If not, you could find some business partners and ask them for an investment. Or, you could take out a loan from a bank or a reputable finance group. You could even try crowdfunding like many startup owners do these days. Last but not the least, you can seek professional advice from financial planners, business experts, or business coaches.

3. Who will operate the business?

Managing your small business by yourself is never an easy task. It’s even less easy when your company is already expanding. One way or another, you will need to enlist the help of well-trained people to help run your business. Their knowledge and skills will be great assets to your expanding small business, helping it grow further.

4. When do you expect to make money?

Certainly you would want to make money at some point. How could any business owner not want to make money? With that in mind, it’s good to set a target date for recovering your capital and earning profit. And if you have a goal, you need an action plan. Let’s say you want to recover capital after one year of starting your home business. What actions will you take to achieve that goal?

5. Do you have what it takes to build your own business?

Running your own small business requires a lot of sacrifices on your part. And there’s even the chance that your business idea won’t work out. That’s something you have to contend with. You can’t avoid running into a few (or many) obstacles along the way. But if you’re convinced that running a business is your road to financial freedom, then go on ahead! By all means, do your best!

You may find these questions far too serious to think about, but one way or another you have to answer them. Starting your own business is a major life decision, and as with any major life decision, you have to be absolutely sure before you say yes. The more you know what you need to do to succeed, the more likely you will succeed. Remember that these questions are not here to discourage you from starting a business. Rather, they serve to prepare you for the journey ahead. So go ahead and start your business, for it may change your life forever!