Below Momma’s Money Tree has shared an excerpt from our upcoming book, Home Business Basics: Lessons From The Proverbs 31 Woman. For more information or to purchase the book, please visit our Products & Services page.
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A Blast from The Past
It was the early 2010s, and I had decided that it was time to finally take action on plans to open my own practice. Although I was excited about future possibilities, the experience of accumulating hundreds of thousands of dollars of educational debt while securing my graduate degree also caused me to be cautious. I discussed my options with trusted sources of counsel, and there was a recurring theme of advice. Multiple parties recommended that I secure a small business loan. I didn’t really care for the advice, but I resolved to finish the process of investigating the option. I made plans to speak to a business loan specialist at the nearby branch of a national bank.
On the day of my appointment with the banker, I made arrangements for my husband to accompany me to listen in on the conversation. I am a firm believer that two wise heads are better than one, and I was curious to hear my husband’s evaluation of the loan options that might be offered. We entered the building and were seated across the desk from a gentleman who greeted us warmly. Our banker requested a brief moment to complete a phone call, and we obliged.
Having secured our permission, the gentleman picked up the phone and placed a call to a party that I could only assume was a recipient of one of the bank’s business loans. From the side of the conversation that we heard, I can only conclude that the businessperson was in an unfortunate situation. The banker greeted the other party. He then advised that he had reviewed the account, but there were no other options for extension of the loan payment. This being the case, it was recommended that the businessperson move forward with making the agreed-upon payments. From the banker’s responses that followed, it became painfully obvious that this was not the answer for which the business owner had hoped. The banker respectfully concluded the conversation, thanked us for our patience, and proceeded to provide information on our options for receiving a small business loan through the bank.
My husband and I thanked him graciously, accepted a folder full of information, and stated a desire to more thoroughly review the options. During the car ride home, we discussed the data provided and the phone call preceding the appointment. It was our consensus that taking out a loan for my brand new practice would be, at best, a massive mistake. After all these years, I clearly recall the phone call and the conversation during the car ride home. However, time has erased the details of the loan options, and it’s probably better that way. If I had accepted the loan, it would have made the process of growing, managing, and eventually having to close my practice even more challenging than it proved in reality.
Why tell this story? Because it typifies the modern method of entrepreneurship. Today’s business owners are encouraged to secure credit or loans to provide the leverage needed to more quickly advance their ventures. There seems to be a modern-day rush to do more business faster. My question is the following. If you inject a baby business with growth hormones in the form of credit and loans to make it grow faster, do you end up with a healthy business as a result?
As I write this chapter during the early half of 2020, the world is held under siege by a virus, communities and economies have been locked down, and both people and businesses are being forced to survive on savings. The only problem is that no one seems to have any – savings that is. It’s as if our culture decided that “savings” was a 4-letter word, which was not to be used under any circumstances. The new system of capitalism recommended against using large amounts of savings anymore, and people were happy to agree, leverage, and spend. Only now, the economy has slowed to a pace that rivals molasses on a cold morning, and the payments associated with the leveraged funds are coming due. After sending a stimulus check to a large number of its citizens, the United States government has gone to extreme measures to bail-out big businesses and a few smaller businesses. Whether or not additional government stimulus will be processed in the future is unknown. Unfortunately, this variable poses a problem when the prevailing economic wisdom of the day has consistently encouraged leverage over savings.
Although I dodged the bullet of taking out a business loan, I have fallen prey to other financial dogma. Remember my student loans? If I had the process to do over again, there would definitely be changes. In addition to accepting advice from trusted advisors, I should have crunched the numbers for myself and believed that data that the process returned. My mistake was that I kept ignoring the data in favor of the advisors. I kept telling myself that they knew something that I didn’t. What time has proven is that my suspicions were correct. My advisors were making recommendations based on outdated data. I should have acted in accordance with my instincts. My eyes weren’t lying. I was just too naïve to realize that I was being coaxed down a primrose path of debt and financial obligation.
My experience with educational debt has informed my choices for building a business. My network includes individuals with advanced business degrees who work for financial institutions that we regularly hear mentioned by the news and economists. As a result, I’ve had the chance to ask a few questions and see how far the rabbit hole extends. What I’ve learned is that the answers are consistently the same, and they are echoed in varied ways throughout the business and financial system. Perhaps some of the following statements sound familiar to you.
“You’ve saved enough to buy a starter home without a loan? Great! Let’s take those funds and invest them! You can put a down payment on a substantial home for yourself and also plan for a rental property!”
“Why would you want to buy a used vehicle? Are you sure it’ll be reliable? Take your money, and lease instead. If you decide to keep the vehicle, you can always buy it later.”
“Congratulations on your profits during the past 6 months! We’re so happy that you’ve chosen to use our payment processing service; you’ve been preapproved for an $8,000 business loan!”
I burned out and became tired of the hype. It wasn’t that I didn’t believe in the use of credit and loans. I just didn’t believe in the use of debt as Plan A. For me, it had become more of a Plan Z. At the same time, I was constantly pestered by the same question. “Isn’t there another way?” What did people do to run a business before credit and debt? Community businesses and economies have existed since the dawn of civilization. Hadn’t anyone documented an old-fashioned method for running a business that didn’t involve starting with debt? If I asked my associates for suggestions, I was pretty sure that their answers would fall along the lines of “I guess you’d have to save up the money to get started.” Yes, of course. That option was obvious. My hope was to find a response that might be a bit more detailed than that.
It turns out there was one place that I could recall an example, and it was definitely about as old-fashioned as a person could get. It was an unexpected description of a businesswoman, who is never referred to by name. Instead, she is described in Proverbs 31 of the Bible as being a virtuous woman and a good wife. During my teens and twenties, this Proverbs 31 woman was regularly presented as a sterling example of the exceptional Godly wife, “The Wife of Noble Character”… and she is, but of course, my brain works differently. When I read Proverbs 31:10-31 as a youth, I was always left with a biblical description of the daily activities of an extremely impressive businesswoman. She juggles a textile business, a vineyard, a husband and kids, retail and wholesale business ventures, and employees while also serving the poor in her community. No wonder everyone loves her; she’s a theological Superwoman!
So as controversial as the Bible may be in the current day, I’ve decided to study this old-fashioned example of home and small business from Proverbs 31. I’m doing this because I intentionally want to examine a different and antiquated way of approaching personal finance and business. I’m doing so as a means of returning to the fundamentals of business and finances. It’s an examination of these processes before we complicated them with a debt-based system of monetary transactions. At the same time, I hope to use the process to help readers begin to craft their approach to establishing or refining a small business of their own.
I’ll include references to verses and sources. I’ll also compare what’s found in Proverbs to the commonly recommended business and financial practices of today. There will be notes about my own personal growth process at the ends of chapters. Additionally, each chapter will have assignments to facilitate the reader’s process of establishing their own small business.
This won’t be a zero-sum process because there is no winner to take all. The focus will simply be on learning from this description of ancient home business and community economics. Rather than engaging in an emotional response to the source material, I simply choose to examine the data and grow as an entrepreneur. In the end, I anticipate walking away from this journey with a business plan informed by both old and new approaches to home business and personal finance.
The overall goal is to learn. The source of the study material just makes the process a bit more – interesting. 😉 See you in chapter one!
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Thank you for reading! If you’d like access to this section’s author notes and assignments, click here to purchase ebook access.
Until the next chapter, good luck with the growing!
D’Loreyn