Posts Tagged ‘christian financial advice’

Four Keys to Success In A Mission-Focused Business

July 8th, 2014

Article first appeared in Faith Today magazine, page 42, as Four Keys to Success, Tips for executives at mission-focussed businesses.

Book publishers today will tell you business is tough. My American publisher recently emailed me to say their business was bankrupt. They couldn’t pay outstanding royalties from 2013, but would ship my inventory – at my expense – to any destination I chose. My first Canadian publisher trod a similar path five years earlier.Today I’m working with another publisher who could be headed in the same direction.

The eventual demise of these Christian-led businesses was obvious for several years in partial and delayed bill payments. However, many of us don’t heed such warnings and thus miss the opportunity to deal with structural challenges. Instead, we chase money-driven, unsustainable quick fixes.

But business executives who focus on relevant success factors will spot threats and opportunities early, and respond appropriately. I suggest these four keys for a successful organization:

  • a clear vision and mission
  • careful attention to success factors
  • an attitude that puts people first
  • a simple strategy understood by the workforce.

Vision and Mission
For a Christian-led business, the vision and mission should satisfy needs or wants that honour God. (In business, “vision” defines an organization’s purpose in broad strokes, while “mission” expands and clarifies it.)

Highly visible and understood affirmations of the organizational vision and mission are essential to help a workforce remain engaged and motivated.

Unfortunately most organizations drift away from their mission. During boom times, new money-making ventures can seem too enticing to pass up. Leaders may hire and use loans to grab short-term benefits. But as the new business fades, debt grows, employees are laid off and a toxic environment develops.

Executives must never forget that the mission is the guiding light. Leaders must pursue it passionately, methodically and consistently. Doing so enables them to resist the temptation to follow every business opportunity that crops up.

Success Explained and Tracked
Employees should know how their organization measures success, not only in their department, but overall. They should know the ingredients of success and understand it’s more than one bottom-line number.

I learned early at business school that “if you can’t measure it, you can’t manage it.” The challenge is to identify “it” – five to seven critical factors to track continually. Executives must monitor inputs that determine employee and customer satisfaction, and profitability.

Sadly, most people try to manage the wrong items. They may focus wrongly on outputs, when in fact only inputs (amount and quality of material, labour, and so on) are truly manageable.

Christian-led businesses must follow biblical principles while achieving reasonable returns. Executives must be unequivocal that the business will never compromise its values. When I served as vice-president at Alcan Inc. (now Rio Tinto Alcan), we had to submit a yearly letter to the president affirming we were unaware of violations of Alcan’s principles, objectives and policies. This formal process cascaded to front-line managers – each level submitting letters to the one immediately above.

Putting People First
People are the greatest asset of any business. Motivated, passionate workers go beyond what’s needed. They lift productivity and provide superior services to customers – who in turn willingly share their positive experiences with others, thus benefiting the business.

Executives must invest time selecting, training and developing employees. They must value employees highly and treat them according to the Golden Rule.

A Clear Strategy
Vision, mission and strategy statements need to be simple and easily understood. A strategy should depict how the business intends to do its mission – essentially, how it will provide superior value to its customers.

Executives should explain the strategy to the workforce – especially managers who must build and work with congruent departmental strategies and budgets.

The Bible teaches that the Lord will guide us when we believe in Him, trust, obey and lean on Him. Fundamentally, for Jesus’ followers, success is developing and treading paths that glorify God while doing His mission. It is aligning our lives with His – and these four keys to business success can help serve as signposts on our journeys.

© Copyright 2014, Michel A. Bell

Michel A. Bell is an author of five books, speaker, founder and president of Managing God’s Money, and adjunct professor of business administration at Briercrest College and Seminary. For information on living a debt free lifestyle, visit

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Five Tips For Setting A Budget On A Fixed Income

May 1st, 2014

Often we hear, “bigger is better, more is better,” which drives folks to the fast track for growth. However, sometimes more is a curse; it all depends on your attitude!

Mike Tyson, Michael Jackson, Burt Reynolds, Lindsay Lohan, and several celebrities earned millions each, but spent even more on unsustainable lifestyles. Their challenge wasn’t a lack of resources; it was their lifestyle choices, which pushed expenses beyond substantial incomes.

EndIgnoranceLifestyle choices will determine how you spend your income. Oseola McCarty, a poor laundress for almost eighty years, earned a small income, lived a modest life, and saved almost $300,000 during her lifetime. She saved small amounts regularly over a long time. Oseola said that her secret was contentment; she was happy with what she had.

Here are five tips for setting and living in a budget on a fixed income:

1. Accept your income

People will tell you not to accept what you have but to dream big: “Believe in your dream, visualize it, and it will materialize,” they say. Nothing is wrong with a dream; however, folks tend to ignore where they are, and live like the future is being realized.

Any decision, privately or in business that money drives, will create challenges. Money-driven decisions lead to your participating in pyramid, Ponzi, and similar schemes to “make money.” Where there is nothing substantial generating funds, schemes crash, and innocent folks lose the little they have; history is replete with examples.

The first step to setting and living in a budget is to accept where you are. Surely, consider building on where you are, but first, you must understand and reflect in your lifestyle choices, realities of your present condition.

2. Build your budget from scratch

Ignore the past; it’s not your guide to the future. Start with a fresh slate and look at your lifestyle under main categories such as these: food, clothing, transport, housing, entertainment, personal. Allocate funds to specific money-drivers under each category. Don’t put one amount for clothing, identify the precise item such as a shirt, coat, shoes, and so on. Similarly with entertainment, indicate specific money-drivers: Internet, cable, eating out, movies.

Go through the budget in detail. The first few attempts will be greater than your income; that’s normal. Look again, and identify spending drivers to exclude based on real needs. Don’t cut money, eliminate items that create spending. Maybe now you can’t afford internet, cable, new clothing, and so on. Be realistic; understand your present season.

3. Think outside the box

What lifestyle changes might lower costs? Examine all alternatives; don’t eliminate any at the start. The more absurd an option, the deeper your analysis. The idea here is to look beyond conventional thinking to what might work, at least, temporarily.

I worked with a young married couple in deep debt who decided to sell everything… everything! The husband loved driving and got a job as a trucker. He and his wife decided to “live” on the truck for a year, repay debt, and in year two, restart a “normal” life. That’s been the most out of the box idea I saw. Initially, they thought it was impossible; however, though I did not think it was feasible, I encouraged them to examine it in detail to see how it could work, instead of why it would not work.

4. Use envelope budgeting

Once you balance your budget, allocate cash to envelopes-one envelope for each category. Spend from the envelope; when it’s empty, you must wait for the next budget period. As a student in London, England, in the sixties, I lived on a small budget, and used the envelope system extensively.

When you accept your condition, it is amazing how well you handle funds in the envelope.

5. Understand temptations will abound and will be difficult to resist

Beware-enticing messages will bombard you to “spend to save”! So, cut up your credit cards, and stick with the cash in the envelopes. Do not go “shopping.” When you need an item or items, prepare a list with the item and the price and do not deviate from your list. It’s better to do two separate trips with two lists, than buy items not on your list.


Oseola McCarty in her book, Simple Wisdom For Rich Living, said, “I have led a simple life, but I let myself enjoy a few things. I have always bought the food I wanted, and I buy pretty things if they are useful.” You don’t have to be like her; however, when you accept it’s your choices that drive spending, by God’s grace, you will be able to live in your fixed income.

© 2014, Michel A. Bell

Michel A. Bell follows Jesus, is an author of five books, speaker, founder and president of Managing God’s Money, and adjunct professor of business administration at Briercrest College and Seminary. For information on living a debt free lifestyle, visit

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Will Loblaw’s Takeover of Shoppers Generate Value For Its Shareholders?

April 22nd, 2014

Will Loblaw Company Ltd.’s (Loblaw) takeover of Shoppers Drug Mart create value for Loblaw’s shareholders? Time will tell; but, I am skeptical. Let’s examine Loblaw’s reasons to buy Shoppers.

images-2Loblaw’s March 28, 2014 press release states:

“Acquisition strengthens Loblaw and Shoppers Drug Mart in competitive marketplace. Will deliver more choice, value and convenience to help Canadians Live Life Well…We will drive growth and profitability through our unmatched mix of store formats, products and offerings. This is truly a case of the whole being greater than the sum of its parts.”

Loblaw believe one plus one will equal three; sadly, research shows most acquisitions lead to one plus one equals one. Here are three questions for Loblaw’s leadership:

Do they know most acquisitions don’t produce expected results because the acquirer overpays?

Loblaw paid around 30% premium for Shoppers, which delighted me, as a former Shoppers’ shareholder. But, how will the combined company generate an acceptable return from this high base? How do individual customers get more choice? There are no empirical data suggesting the takeover will cause Loblaw’s customers to gravitate to Shoppers or conversely. Then again, how do you create significant sustainable synergies when you keep Shoppers separate?

shoppers-drug-mart-photo-langleyI believe Shoppers’ Stock Market value before the offer was realistic; a 30% premium on a high market price is a bad omen for Loblaw’s shareholders.

Sears, Roebuck & Company’s purchase of Dean Witter Reynolds and Coldwell Banker & Company real estate services business in the 1980s chronicled in Corporate Governance by Robert A. G. Monks and Nell Minow, gives me an eerie déjà vu feeling about this transaction!

Did Loblaw study my former employer, Montreal headquartered Alcan Inc.’s takeover by Rio Tinto?

I was delighted at the substantial premium Rio Tinto paid at the top of the market for my former employer of 32 years, Alcan, Inc. Though ecstatic as a shareholder, it was obvious in foresight that Rio Tinto overpaid. The aluminum industry is cyclical and prices were high by any standard. Rio Tinto shareholders’ only solace come from the CEO who did the deal losing his job, and so can do no further damage. As well, his successor acknowledged the mistake. Meanwhile, my former colleague, then Alcan Inc.’s CEO, Dick Evans, pulled off one of the best deals in recent memory for Alcan’s shareholders.

alcanrio_rt_071207What went wrong for Rio Tinto? Clearly, they were not focussed on sustainable value and were distracted by industry events. Their due diligence obviously was inadequate, and they did not appreciate the industry’s cyclicality. Realistically, like most CEO’s in these over priced transactions, Rio Tinto CEO’s exuberance during the bull market trapped him.

Where does Loblaw expect higher earrings and lower costs to come from?

Here is another comment from Loblaw:

”Consumers are more focused on health and wellness and they are demanding more convenient retail locations,” said Vicente Trius, President, Loblaw Companies Limited. “Working together, we will capitalize on these consumer trends and create a compelling new blueprint for future growth and profitability.”

As part of their approval of the deal, the competition folks required Loblaw to divest some Shoppers’ stores. So, the new entity has fewer locations than the separate companies. As a Shoppers’ customer, how will this transaction alone change my buying habits and drive me to Loblaw? It won’t!

There are no significant synergies to cause the whole to be greater than the parts. What’s the “compelling blueprint”? To be sure, Loblaw’s offering “online pick up” at Shoppers won’t be a value creating juggernaut. Will existing Walmart customers choose to move to the new Loblaw because of the combination? I don’t think so. Will Loblaw go head to head with Walmart on price? This is a daunting prospect for Loblaw’s shareholders.

Loblaw and Shoppers have different cultures. A perceived simple matter as combining purchases will need significant study, patience, and exemplary leadership, to be effective. The good news is business literature are filled with many failures from which leadership intent on learning, can benefit.

If they haven’t, Loblaw’s leadership would benefit from Paul B. Carroll and Chunka Mui research-based book, Billion-Dollar Lessons, What you can learn from the most inexcusable business failures of the last 25 years. They would see clearly similar examples of failed acquisitions.

Cash Payment

Caution SignMany shareholders, including me, chose the full cash option causing Loblaw to restrict cash payment to 80%, issuing Loblaw’s shares for the rest. Accepting cash based on the high premium above market is one sign of Shoppers’ shareholders view of the combined company.

Loblaw’s leadership need to understand it is highly unlikely they will realize most synergies; the probability of unrealized synergies increases if they maintain two separate entities. That’s why Loblaw are likely to break commitments for no lay offs, no reorganizations when one plus one heads towards less than one! Leadership must understand that keeping two separate entities means less than the status quo–Loblaw, plus Shoppers encumbered by Loblaw’s bureaucracy!


I learned several lessons when I was part of Alcan’s mergers and acquisitions activities for several years. First, your investment banker is unlikely to tell you the proposed acquisition is headed for a train wreck.
Second, you tend to over estimate potential synergies; not consciously, but you can’t anticipate implementation challenges. As well, often you will compromise and defer or neglect tough people decisions. Third, in the heat of the deal, you are likely to forget where you are in the business cycle. Don’t believe me? Review the Alcan and Rio Tinto deal!

Michel A. Bell follows Jesus, is author of five books, speaker, founder and president of Managing God’s Money, and adjunct professor of business administration at Briercrest College and Seminary. Michel was a senior executive at Alcan Inc., now Rio Tinto Alcan. For information on living a debt free lifestyle, visit

© 2014, Michel A. Bell

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What Are the Main Causes of Personal Financial Problems?

April 8th, 2014

For almost 20 years I have been working with individuals and couples on different household financial challenges. Usually, several of these folks ask two questions. First, is my situation typical? Second, what are the main causes of personal financial problems?

From my experience working mostly with singles and couples who attend churches, the four items below are main causes of personal financial problems. I encourage you to understand them so you might avoid them.

1. Not realizing you can’t manage money

FootprintsYou can manage your attitude, behaviour, and choices (ABCs). You decide to spend using money. When you refer to money management, really, you mean lifestyle management. Unfortunately, society trained you to ignore income, affordability, and realities of life-stages. Instead, merchants, banks, and others encourage you to look at a ridiculous number called a credit score. What’s your ‘good’ credit score telling you? You have been in debt and stayed in debt without wild gyrations! Essentially, the world tells you to live in debt to maintain a good credit score. How ridiculous!

I suggest you start a capital fund–targeted savings to allow you to take on no debt, except to buy a house. Develop an attitude of saving before buying, using the capital fund for large purchases.

You will be ready to buy a house when you have saved 20% down payment in your capital fund, you are budgeting, housing costs fit in your budget, and you have a history of saving to buy.

2. Not working with a budget

ScalesWorking without a budget is the number two cause of personal financial problems. With no budget, you don’t plan amounts and timing of expenses; you spend based on available credit. Effectively, merchants guide your expenditures. Unwittingly, you become contented living in debt, provided you have a “good” credit rating.

People tell me many reasons they do not budget. The number one reason: “I don’t have time.” Number two: “I am not a finance person.” The first is absurd because everyone has 24 hours daily. These people mean budgeting is not their priority. The second shows misunderstanding of budgeting: no one needs to be a finance person to budget. These folks have no problems spending; why not apply forethought and set goals and plans before spending? That’s the essence of budgeting.

When you don’t budget consistently, you will end up in debt. Surely, the budget needs discipline; but, that’s the cost of good stewardship.

3. Taking out a home equity loan

Bell ABC (B)In hindsight, taking a home equity loan is the cause of personal financial problems people seem to regret most. Usually, the decision flows out of an emotional response to a TV advertising or from talking with a banking person. You might hear, “you are richer than you think.” Alternatively, your banking salesperson, otherwise called an adviser, might say, “let your home work for you.” So, you add to your mortgage and the bank sanitizes the increment and calls it an home equity loan. It starts the use of your home as an ATM. You don’t see an ‘extra’ loan; indeed, sometimes your mortgage payment reduces.

Think about this? Do you want to amortize a $2000 vacation over 20 or 25 years?

4. Signing agreements without understanding terms

Fireworks1Folks come to me complaining about auto dealers, furniture stores, and other businesses charging unreasonable interest. These people took a “no money down” or other financial ‘deal’ and did not read it. After six months, one or two years, they do not have funds to pay amounts owing and are surprised their interest payments start from the original purchase date.

Another frequent complaint comes from co-signing a loan. A grandma co-signs her granddaughter’s extra student loans. Her granddaughter can’t repay, so grandma must repay $50,000. Grandma is upset with the bank and cries foul; but that’s the agreement she signed.

This starts grandma’s personal financial problems when she should be debt free enjoying her retirement. Grandma forgot the “large print giveth, but the fine print taketh away”!

There are many other significant causes of personal financial problems; however, I see these four most frequently. Still, I think the generic cause is number one-people do not accept they can’t manage money. Obsession with credit scores traps them, and unconsciously, they live in debt.

Let’s understand you do not have to consider credit scores if you have a debt free lifestyle, which is doable with patience, humility, and dependence on the Lord. The first baby step is to start living in a sacrificial budget that deals with necessities only.

© 2014, Michel A Bell

Michel A. Bell follows Jesus, is an author of five books, speaker, founder and president of Managing God’s Money, and adjunct professor of business administration at Briercrest College and Seminary. For information on living a debt free lifestyle, visit

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7 Housing Myths Leading To A Debt Sentence

March 19th, 2014

Your mom’s best friend’s second cousin’s husband, Fred, told your mom that renting a home is a waste of money. As you just got married, your mom passed on this valuable advice to you.

Not because Fred stressed that this is common and widespread knowledge means it’s true. When myths take hold, they create disciples who cling to them as sacred. Bury these seven housing myths that lead many folks to a life of perpetual debt.

1. Renting means throwing money away

MythsBustedpngDo you know you pay almost $100,000 interest on a $100,000 mortgage over 25 years at 6%? Paying interest on the mortgage, and paying property taxes on your house is like throwing away money, too. The opportunity cost of home ownership is huge; it’s the alternative to spending home ownership costs, such as property costs, repairs, maintenance, insurance, and so on.

Without a functional Capital Fund, and a down payment on the house that produces a mortgage that fits in your monthly budget, you are better off renting. A down payment that does not require mortgage insurance (20-25%) is a good base to start examining the home buying process.

2. You can get a mortgage less than your rent so you should buy the house

Watch out! This is a hook some mortgage brokers and banks use. Some put mortgage calculators on their web sites to suck you into easy, quick pre approvals. These calculators show only a portion of actual costs of owning a home. When you factor in additional home ownership costs you could end up with nearly twice your rental amount.

3. You can afford a mortgage as long as total debt payments are less than 40% of your income

You are unique; the bank does not know your attitudes, behaviours, or choices. This generic rule is meaningless to you. Your prime focus must be as mentioned earlier—ensure your mortgage and other home ownership costs fit in your budget.

4. All you need upfront is the down payment

You start with the down payment. Closing costs can be another 2-5% of your home’s purchase price. Home ownership costs include repairing the leaking roof, unblocking pipes, replacing the furnace, and other “emergencies”.

5. Buying a bigger house and renting a section is a good strategy

This is gambling; you are “betting” you will have tenants to help you pay your mortgage. Besides, if you do not fit conditions above, you have dug a bigger hole in which you will live a long time.

6. You don’t need a pension, you own a house

This reasoning has several problems. When do you sell your home to realize the equity? Suppose the market is significantly below what you expected? When and how do you invest those funds? Where do you live?

Your home is not an investment. If this is a strategy you wish to follow, why not rent, and invest the equivalent of home ownership costs above rental, regularly?

7. Adding student loans to your mortgage is a great way to repay your student loans

Repay your student loans before buying your home. Normally, your student loans will cost less than your mortgage. Besides, some governments have incentives to help repay student loans. Surely, you do not want to repay your student loan over 25-30 years at the mortgage rate.

Think deeply about money or finance ‘advice’ from the Fred’s. Before acting, check the facts–following financial myths will only sink you deeper in debt!

Michel A. Bell is author of the The New Managing God’s Money-The Basics, founder and president of Managing God’s Money, adjunct professor of business administration at Briercrest College and Seminary, and a former senior business executive. For Christian financial advice, biblical stewardship advice, and advice on personal effectiveness improvement (time management), and other leadership matters, visit: Managing God’s Money.

© 2014, Michel Bell

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3-Spending Guidelines For Financial-Stress Freedom

March 10th, 2014

Consumers continue to fall deeper in debt, while merchants contrive clever schemes to get them spending more. Without a solid offensive plan against merchants, consumers will fall prey to stores’ conniving tricks.

Here are three things you can do to defeat merchants:

  1. Spend only after you know the opportunity cost
  2. Spend only after you realize the effects of debt
  3. Spend using a money map always

Spend Only After You Know The Opportunity Cost

Before you go to the checkout counter ask this question: By spending these dollars, what will I sacrifice—not be able to do? That’s the opportunity cost. If you planned to buy two tires in the next three months, but found a new phone or other grown-up toy irresistible, will purchasing this toy prevent you from doing something you need, want, or planned to do, such as buying the tires? Get in the habit of asking this question and you will be surprized how often you leave the store without the coveted item.

Spend Only After You Realize The Effects Of Debt

Bad DecisionsMost people see the cost of debt as the interest rate. What about the emotional stress that lingers for years as you try to liquidate the debt? When you start to checkout and someone tells you that you could save 10-20% if you took a store credit card, remember these three points.

  1. You don’t save when you spend.
  2. The interest rate on a store credit card is likely to be 29.95% after tax, 42.8% before tax. Therefore, you need to earn around $42.8, pay taxes of $12.85, to pay the store $29.95, with a 30% tax rate.
  3. You will spend 30% more with the card than if you used cash.

Spend Using A Money Map Always

Would you leave home for a destination you don’t know without a map or a GPS with the directions? You wouldn’t; you would get lost. Yet, people leave home to shop, without a list, without a plan, without a budget. Any wonder they get lost and fall deeper in debt? You need to work with a budget, which is your expected spending in a future period to do specific goals.

moneymapsmallBefore you leave home to spend, extract from the budget a list of items you plan to buy, and the budgeted amounts for each item. This list is a money map for the trip. When you are at the store, you must stay with the listed items. If you planned to buy one shirt for $50, and you buy a shirt for $40, eliminate the shirt and $50 from the list. You do not have $10 extra; you went to buy one shirt at a maximum price of $50.

Without this money map or trip map, merchants will entice you to spend, and you will spend with invisible money…your credit card! We can’t manage money, but we can manage our choices.

These three tips are not panaceas, but following them could be a major step to a debt free lifestyle.

Michel A. Bell is author of the The New Managing God’s Money-The Basics, founder and president of Managing God’s Money, adjunct professor of business administration at Briercrest College and Seminary, and a former senior business executive. For Christian financial advice, biblical stewardship advice, and advice on personal effectiveness improvement (time management), and other leadership matters, visit: Managing God’s Money.

© 2014 Michel A. Bell

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Meaningful Control Elements Key To Effective Budgets And Control

February 11th, 2014

A budget represents an organization’s best estimates of resources needed to achieve distinct goals in a specific future period—normally one year. It’s part of a firm’s stewardship activities—counting the cost before acting described in Luke 14:28-33.

Business 059 copyA budget is an essential segment of PEACE Budgetary Control (PEACE), described in the New Managing God’s Money-The Basics. Generally, an organization produces capital and operating budgets that together show its expected cash flow. Principles to develop each budget are similar, however, later comments refer specifically to the yearly operating budget.

The budget helps to allocate scarce resources, but it can restrain managers when viewed strictly as a financial tool. And because it deals with the future, it will be ‘wrong.’ Even so, that’s not an issue since we budget primarily to identify opportunities and challenges ahead, so we can plan to deal with them dynamically.

One of the finance division’s roles is to help the organization achieve its mission; thus, where feasible, it must fund qualified non budgeted projects that pop up during the budget period. Many financial executives block these ventures and do not attempt to find ethical, creative ways to fund them; they regard the budget as static and constraining.

Before an organization starts to budget it needs to be clear on its mission, overall guiding principles, major assumptions needed, critical control elements, and important goals it plans to do in the budget period.

Mission, Guiding Principles, Key Assumptions
flip coin smallEverything an organization does must facilitate implementing its mission. That’s why it must ensure budget goals are congruent with its mission and principles. If there is a maximum borrowing ratio, the budget must not exceed it. As well, the budget should comply with the firm’s stewardship and accountability guidelines.

Deciding main assumptions could be a stumbling block. What might be the state of the economy? How many students are likely to enrol next semester? What price might our products attract? What’s the likely inflation rate? These are a few of many assumptions the organization’s executives and managers must decide. Mathematical models, consultants, technical papers, and other sources can help, but the executive team must choose.

Critical Control Elements
ControlElementNormally, the budget produces figures: revenues, expenses, balance sheets, and cash flow, which many managers and executives try, but fail, to ‘control.’ Unconsciously, they don’t realize that to control these numbers they must focus on input elements that produce them. Before doing the budget, front line and other managers need to identify critical control elements or inputs to track during the budgeting period.

A private school with a 2,000-student enrolment goal must identify tasks to achieve that number: marketing, visits to specific organizations, presentations, and so on. But it doesn’t end there; the school must assign these tasks to individuals and teams and review their performance regularly—daily, weekly, monthly, as relevant. Firm’s must understand success is identifying and monitoring systematically, methodically, and consistently, control elements—major inputs that affect its targets.

Organizations should ensure the right people and teams have responsibilities for the right control elements. People must be responsible and accountable for costs they influence; we control behaviours, not costs. That’s why firms should be careful how they allocate service departments’ expenses.

Organizations might have maintenance, IT, transport, and other service departments. Where should the control focus be? User departments or service providers? Demand for services originate in user departments; however, generally, providers control these activities, and should bear their costs.
Sometimes it might be effective to develop shared goals with service departments and their major internal customers.

peaceAfter reminding itself of its mission, overall guiding principles, major assumptions needed, critical control elements, only then is the organization ready to consider goals for the budget period.

A goal is the destination—what the firm plans to do during the period. Settle these before rushing ahead to work out budget details. Though it is prudent to ensure enough resources exist in the budget to carry out approved goals, followers of Jesus need to lean on Him for guidance. We must be open to His intervention and be ready to start the period without a fully funded budget. But, beware; this needs a constant daily walk with the Lord to hear His voice.

The goal must be clear, complete, concise, and computable as in Exodus 3:10 and Acts 9:15-16. I agree with Richard Foster: goals need to be discovered, not created. Ideally, we should get them from our Lord.

The plan represents the steps to achieve the goal and must be specific, staged, simple and sensitive as in Exodus 26-31. It should be specific to particular goals, and show stages, or steps needed to achieve each goal. Plans need to be simple so others can follow them clearly. Most of all, organizations should remember they work with and through people, and so plans must be sensitive to people involved.

PEACE: Estimate
Building the Tabernacle, the Ark, the Temple each had plans prescribed by the Lord with perfect estimates. However, our estimates to do our plans will be wrong because they deal with the future that God alone knows. Still, firms must do their best to establish likely costs of the steps to do their plans. Each estimate should be realistic, reviewable, and reflect the organization’s principles.

Goals, plans and estimates constitute the budgeting stage of PEACE. Next comes the control phase: act, compare, execute. After the estimating stage, as the Nike commercial says: “Just do it!” Often, people disconnect the budget from their actions primarily because many firms do not see the budget as an active, dynamic document.

PEACE: Compare
This is most challenging and the part many organizations overlook. Firms need good systems to help compare budgeted control elements with results. They should do this as often as needed. Some control elements might need daily action, others, less frequent. The control phase is where the organization sees how it is doing versus plan and budget.

Regrettably, when conditions change, such as assumptions, many firms tend to follow the budget blindly, instead of reviewing where they are and how they need to change. The budget is a guide; people control it!

PEACE: Execute
The comparing phase will show whether there is need to change behaviours to stay with estimated time and costs to achieve goals. Normally, departments must change how they function to finish the journey on time and on cost. Remember, individuals’ decisions influence costs.

Time line & Nuances
BudgetTimeLineIn over 30 years participating in every part of the budgeting process in a major corporation, I have never seen a budget done once and accepted; the process is iterative. I suggest it should start in September and end in November. In the following year, I suggest regular formal reviews as relevant.

I have seen more games played with budgets than in the Olympics! I believe in zero-based budgeting, not incremental budgeting—adding to last year’s dollars. I believe in stressing control elements, not money values. Most of all, I believe each department’s budget is unique, and so, I shun ‘across the board’ decisions.

When firms decide to reduce spending, the primary focus must be on goals and plans; not money. They should ‘cut’ activities, programs, functions, projects—they must look at cost drivers. They should never ‘cut costs’ of all departments by a fixed percentage; that’s a sub optimal approach that encourages poor stewardship, and budget games!

The primary reason to budget is to discharge the firm’s stewardship and accountability roles effectively. The budget is a tool, and like all tools, it has benefits, and shortcomings. Organizations must understand people decide, budgets don’t; people’s actions influence costs, budgets don’t; without motivated people the organization will flounder.

Applying PEACE Budgetary Control systematically, methodically, and consistently will help a firm become a better steward of its resources and increase the probability of achieving its mission regularly.

Michel A. Bell is author of the The New Managing God’s Money-The Basics, founder and president of Managing God’s Money, and a former senior business executive. For Christian financial advice, biblical stewardship advice, and advice on personal effectiveness improvement, and other leadership matters, visit: Managing God’s Money.

© 2014, Michel A. Bell

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Turn Your New Year’s Resolutions To Actionable Goals & Plans

December 31st, 2013

Are you thinking about a New Year’s resolution? Based on research, 45% of Americans make New Year’s resolutions regularly, while 38% say they never do. How about the success rate? Eight percent of people report success achieving resolutions; 24% say they are never victorious, and 49% say they hit the mark infrequently.

PathSignBefore we choose our 2014 resolutions, it might help to mull over processes followed and outcomes of previous resolutions. If we are among the eight percent with successful outcomes, let’s rejoice! Otherwise, think of what we could have done differently to achieve prior resolutions.

I want to encourage you to look beyond statistics and to the Lord. The Bible tells us we are fearfully and wonderfully made (Psalm 139:14). When we surrender our lives to Jesus, He can work in and through us to do His will. Remember how The Lord worked in and through Abraham, Isaac, Jacob, Joseph, Esther, David, Apostle Paul? These were ordinary folks like you and me!

What resolutions do you make normally? What do you wish to make now? Better yet, what do you think the Lord is telling you now? Here are Americans’ top three 2014 resolutions:

  1. Lose weight
  2. Getting organized
  3. Spend less, save more

Notice, these are loose, topical subjects people talk about regularly; they are desires. To become effective resolutions, we need to transform each to specific goals with supporting plans. After, we need to set up a review process, get an accountability buddy, and decide how we will reward ourselves to stay motivated.

Suppose we chose spend less and save more, here is a suggested approach.

School and Studies 014We need a goal that’s crisp, clear, complete, and computable. It should show precisely what we plan to do…just what, not how. Here is an example:

2014 New Year’s Goal: By January 15, complete analysis of last year’s spending, and then weekly, track expenses to learn behaviors that drive spending. By March 31, set up and start following a process to make wise choices before spending.

We would have turned this ‘resolution’ to a goal. In April, May, or later, we would know whether we are on track, and could take corrective measures, if not.

2014 Plan to do the Goal: The plan shows the steps to do the goal. Therefore, we need to set specific times and decide Blackboardformats to analyze and monitor spending. Several software and Apps can help. As well, we would need to choose a procedure to follow before spending, and a trusted same gender person to hold us accountable.

The key is to ensure we decide spending and not merchants’ enticements. Most of all, we need to prepare a simple budget; again, several effective tools exist.

2014 Review Process: Having set the goal and plan, we need to have a convenient process to check how we are doing regularly. Besides, we can set aside a simple inexpensive treat when we achieve our goals.

AdiesFamCouncilCorporations use boards of directors, small businesses boards of advisors; I suggest families establish a Family Council to meet regularly to pray, study the Bible, and to set and review goals and plans.

Turning our main desires for the New Year to goals with supporting plans is a start. Remember we are not alone, if we follow Jesus! He has promised to be with us on life’s journey. Ask Him to show us His goals and plans for 2014; He will!

As 2014 progresses, recall these words from God to Joshua in Joshua 1:9 (ESV): Have I not commanded you? Be strong and courageous. Do not be frightened, and do not be dismayed, for the LORD your God is with you wherever you go.”

Michel A. Bell is author of the The New Managing God’s Money-The Basics, teacher, preacher, founder and president of Managing God’s Money, and a former senior business executive. For Christian financial advice, biblical stewardship advice, and advice on personal effectiveness improvement, and other leadership matters, visit: Managing God’s Money.

© Copyright 2013, Michel A. Bell

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Doing God’s Vision, Mission, Goals, Under His Guidance

November 14th, 2013

Small businesses employ almost 50% of Canada’s private sector workforce; it’s an important growth area. Are you in or planning to join this sector? Probably thinking about starting a home-based business? Ensure you have a clear vision and mission, solid values, a coherent strategy, and a firm value creation platform.

100_0407Most Bible translations tell us in Proverbs 29:18 that where there is no vision the people perish. The Bible Knowledge Commentary states that a better translation is ‘without God’s word, people abandon themselves to their own sinful ways. On the other hand, obeying God’s Law brings happiness.’

If you follow Jesus and intend to start a business, listen for God’s word; He will show the business He prepared for you. Even if you have a dream to do such and such, turn it over to the Lord and if that’s His plan He will place the desire in your heart (Psalm 37:4).

Racing ahead of Him will be disastrous. You don’t know the future; He does. You don’t know what’s best for you; He does. You wouldn’t allow your two-year old daughter to do what she likes that is harmful to her; you know what’s best for her. That’s how you and I should view God. He will show you His best, as He did with Moses, Joseph, Apostle Paul, and others in the Bible.

The vision is a broad roadmap of the business’ activities. It answers the question, “What will I do?” When it comes from God, it is more than a dream. The vision should convey an overall sense of your business’ purpose. Once you get God’s vision, you have the basis for an amazing business if you choose to let God guide all your ways (Proverbs 3:5-6). Those whom you will employ must understand and buy-in to it so they can focus on it and work to it diligently.

In practice, the vision is the owner’s view of the future he or she believes comes from God. The owner must try to convince everyone in the business to believe the vision. Everybody must think it is realistic and accept it…challenging, but realistic. If the owner does not convey it passionately, clearly, unambiguously, confidently, others might not commit to it and might not be dedicated to achieving it.

Avon’s vision is to be the company that best understands and satisfies the product, service and self-fulfillment needs of women—globally.

To clarify the vision, the business needs a mission. The mission shows broadly, how the owner intends to carry out the vision. Essentially, the mission shows how God is leading the owner to do the vision at a specific time.

A mission statement captures the vision clearly, concisely, and completely, and must align with the business’ vision. It should highlight the business’ commitment to focus on its core values as it works to achieving its goals.

Avon’s mission is focused on six core aspirations the company continually strives to achieve: (1) Leader in global beauty (2) Women’s choice for buying (3) Premier direct-selling company (4) Most admired company (5) Best place to work (6) To have the largest foundation dedicated to women’s causes.

BibleThe values are the ethical guidelines the business will follow always. It will show that the business will do what’s right in every situation. The owner will stress in the values’ statement that it is irrelevant how difficult a task might be; everybody must do what’s right no matter the consequences. And the basis of right and truth is the Bible. Values should include respect for individuals and families, trust, integrity, transparency, caring, rigour, good stewardship, appropriate accountability.

To carry out the business’ vision and mission, it needs a strategy. Many businesses confuse its strategy with its goals, to its detriment. Goals are the specific targets the business plan to achieve in a defined period. However, specific strategies show how the business plans to carry out particular goals as it works to do the overall mission; it is the path to achieving the goals. The strategy must be compatible with the business’ values and other operating principles. The strategy should flow from analyses of the business’ environment—economy, markets, opportunities, challenges.
Avons safety strategy

Value Creating Platform
A business’ value creating platform is the organization and principles it applies consistently to carry out its mission–how it buys, manufactures, sells, relates to customers and suppliers, and operates its business to earn its income; it shows the business’ uniqueness. It is the basic operational structure in place to do specific goals to achieve the mission. Individuals in the business should apply the organization’s practices and principles in the designed structure systematically, methodically, and consistently. Most of all, the business must establish clear guidelines to prevent changes to the value creation platform without rigorous, high level discussion and debate.

The business must be alert to changes in the business environment, anticipate market shifts, and generally be alert to overhauling the value creation platform as needed. Complacency, arrogance, and myopia can be fatal; Blackberry is an example of huge success, sitting on its laurels, and then struggling to be relevant.

Avon’s value creation platform or business model is multi-level marketing using direct selling through door-to-door representatives and through brochures.

McDonald’s value creation platform includes quality food, speed, consistency, and franchising.

Some organizations do not have explicit vision statements, instead, their vision is mixed in their mission statement. That’s not a problem as these mission statements show clearly, and broadly, the organizations’ purposes and core values.

Operating a business can be fun, exciting, and rewarding. Sadly, the reverse can be true, particularly when folks take control and let money lead their decisions. Let Jesus provide His vision and mission; apply His values consistently using a coherent strategy, and trust Him to guide you through the valleys. Stay in your circumstances always, confident Jesus will never leave you or forsake you (Joshua 1:9, Matthew 28:18-20).

Michel A. Bell is a former senior business executive, adjunct professor of business administration at Briercrest College and Seminary, author of the The New Managing God’s Money-The Basics, preacher, founder and president of Managing God’s Money. For Christian financial advice, biblical stewardship advice, and advice on personal effectiveness improvement, and other leadership matters, visit: Managing God’s Money.

© Copyright 2013, Michel A. Bell

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Funding Post Secondary Education- Student Loans Alternatives

August 29th, 2013

In Canada, and the USA, governments provide tax-efficient means for parents to save for students’ post secondary education (later refer to as college education). Fifty percent of Canadian parents don’t save for their children’s college education. In the USA, yearly, sixty percent of students borrow to pay these expenses. According to a recent study of young adults between 22 and 32, more than half financed their education with student loans. Fifty Four percent say debt is their biggest financial concern with 42% calling it “overwhelming.”

Many parents expect children to use student loans to fund college education. Several of these parents argue that children work harder and do better when they pay their own education costs. Probably, these parents hold this view because they do not teach their children good stewardship according to Deuteronomy 6:49, and Proverbs 22:6.

PathSignWe should not expect our children to be prudent and behave as good stewards when society promotes poor stewardship, and countless parents succumb to societal pressures. Numerous high school students tell me a credit card is something used to get what people want when they can’t afford it. Borrowing to fill a casual want is normal, these students say; that’s what they see. Borrowing to go to college because it is the thing to do, sets the stage for victim mentality.

What are potential sources to fund college education when parents or guardians do not save? Scholarships, bursaries, grants, earnings, loans.

You are 18-19 years old, wanting to enter college, but broke; what do you do? I suggest if you follow Jesus you need to know whether He wants you to go to college, now. Therefore, the first step is to seek Him…not my will, but Your will. Too often, folks rush to borrow because society expects a certain path…graduate from high school then off to college irrespective of circumstances.

When the Lord shows you that you should attend college, zoom in, zoom out, decide, fund, execute, review.

Zoom In
PollsWhat has the Lord revealed to you about post secondary education? What is the primary goal? What will you study? Where might you go? When might you start? Where might you live? What alternatives exist to achieve your goal? What if you took a year off? These are merely a few questions to help consider the full effects of the decision to attend college. Be precise as feasible; however, don’t consider funding sources yet. Look at whether you should study, where, why, when, costs, but not how to pay. That’s for later. Separate basic analyses of what, when, why, where, how, from payment.

As you pray, remember, God is a God of details and will show you His goal. Be open to Him. Don’t start with preconceptions. Especially, don’t let incomplete knowledge of financing alternatives influence your thinking.

The first pass of this stage might show different paths. For each, ensure you write a goal (Exodus 3:10-12), plan, and budget.

Zoom Out
Stage one placed the issue under the spotlight. Now, step back, look at the big picture, consider likely results of different paths. I repeat; now, don’t consider funding.

If an option will include moving away from home, consider your likely future lifestyle. You will be on your own, providing for yourself. Will you cook? Can you cook? You will need to grocery shop, do laundry, clean your apartment. These activities need time, effort, and funds.

Choose CHow disciplined are you working on your own? You don’t have to figure everything out now, but decide what you need to do today to start to prepare for later.

The main goal of this section is to ensure you look at the bigger picture and try to understand broad, potential effects.

You have two basic decisions. [...Read the full article]

Michel A. Bell is author of the The New Managing God’s Money-The Basics, teacher, preacher, founder and president of Managing God’s Money, and a former senior business executive. For Christian financial advice, biblical stewardship advice, and advice on personal effectiveness improvement, and other leadership matters, visit: Managing God’s Money.

Copyright © 2013, Michel A. Bell

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