Friday, September 25, 2009

Belay Enterprises: Incubating Faith Ventures & Connecting Entrepreneurs with Business as Ministry Opportunities

Belay Enterprises was started by Mile High Ministries in 1994 by a group of businessmen and urban pastors with a heart towards business as ministry. The faith venture organized itself around the mission of partnering with the local church to create businesses that employ and job train individuals rebuilding lives from addiction, prison and homelessness. Though its mission has remained unchanged since its early days, the organization’s priorities and strategy have changed over the years reflecting changing economic and ministry realities. Any nonprofit organization wanting to act entrepreneurially needs to keep an eye on the environment it operates and make changes when necessary.

Belay Enterprises was originally conceived as an organization with several employee training businesses that would fund a central microenterprise program. Belay kicked off these efforts in late 1994 with its first business as ministry, Bud's Warehouse, as well as making some initial micro-loans to urban businesses. Unfortunately, Bud's rather quickly did not hit its earning business plan projections and started using its cash reserves quickly. Over the next five years, Bud's fought for its survival by burning though lots of financial that the organization had hoped to lend out to other businesses.

In 1998, Belay embarked on a new strategy by temporarily postponing its microenterprise efforts in order to focus on the business of Bud's Warehouse. Over the next 3 years, that retrenchment was successful with Bud's beginning to make significant profits that could now be reinvested back into the mission. Now the organization faced a decision on how to best pursue its mission into the next few years. Belay choose to expand its employee training business operations by starting Baby Bud’s, a baby thrift store that employed single mothers. A few years later, Belay assisted Marc Veldhuizen in expanding his car placement ministry into a new faith venture called the Good Neighbor Garage. Baby Bud's soon started Freedom Cleaning Services. While these employee training business were being started, Belay attempted to make some micro-loans to a few for-profit businesses without too much success. The experience of these years taught the organization that a strategy of incubating faith ventures was the best approach for the future.

As the organization enters its 15th year, Belay hopes to continue this strategy of using its resources to incubate faith ventures. After these ventures become self-sustaining, we will spin them off into their own organizational entities and then refocus resources on other start-ups. Belay is bullish on the prospects of faith ventures when Godly men and women are empowered and then set free to run their own operations.

A couple of years ago, I made a very bold prediction that I wanted to see Belay create 100 businesses over the next five years. We are not going to achieve that goal without making a sizable paradigm shift. If Belay prides itself in being an entrepreneurial organization, we need to migrate from a model of internal incubation to a model of external collaboration and inspiration. I really believe in the positive power of faith ventures on behalf of disadvantaged communities. I also know that there are lots of talented Christ-following entrepreneurs out there looking for opportunities to use their gifts and talents on behalf of the kingdom. Over the next five years, I hope to lead Belay and other organizations towards connecting entrepreneurs with faith venture opportunities to create real change for individuals rebuilding lives.

Tuesday, September 22, 2009

A Fresh Start from Fresh Coffee

Last week, I had coffee with Dave Scavotto, one of the founders of Second Chance Coffee Company, LLC. This faith venture business combines business and ministry by hiring ex-offenders to micro-roast its premium organic I Have a Bean coffee brand. Besides employment, individuals coming out of prison are provided job-training and a nurturing community in which to restart their lives.

If you like coffee, the I Have a Bean brand is for you. Coffee aficionados will appreciate the company’s commitment to selecting beans from the top 1% of coffee in the world. The beans are then roasted in small batches and shipped on the same day. This focus on quality and freshness is evident from your first sip.

Dave left me with a sample of the company’s organic El Salvador Las Lajas coffee from the Rain Forest Alliance. Wow! This is a great cup of coffee. I tend to frequent the usual coffee stores and forget how good a specialized premium roast can be.

Right now, I Have a Bean coffee is roasted in Wheaton, Illinois, but the company is hoping to build a network of micro-roasting sites around the country. I'm hoping they come to Colorado.

The Second Chance Coffee Company sells online from its web site Many churches and businesses are discovering the value of purchasing high quality coffee online that is delivered the same day from an organization committed to making a difference for individuals rebuilding lives from prison. I’m going to recommend that my church makes the change to this great coffee.

Thursday, September 17, 2009

Five Lessons I've Learned in Business as Ministry

For the last 10 years, I have been working in the challenging world of business as mission at Belay Enterprises. Someone recently asked me what would make up my list of five important lessons for a faith venture. As a reminder, I define a faith venture as a for-profit or non-profit business that creates employment and opportunity for a disadvantaged population. In no particular order, here’s my list:

1. Let the business lead the ministry- A faith venture has two bottom lines. It seeks business profits in order to support itself and grow. It also hopes to change lives by accomplishing its ministry. The great danger is that sometimes these two goals conflict with each other. In certain cases pursuing the mission will cost the mission and vice versa. I believe that if one is pursuing a Christ-centered business then all of business is ministry. So it then becomes acceptable to let the business lead the ministry because without a focus on the bottom-line this unique ministry opportunity disappears.

2. Stay true to your mission in the midst of the business- The second great danger facing a faith venture is losing sight of the ministry because of the focus on the business. Never forget the original God-purposed redemptive DNA of your particular faith venture.

3. Sell, sell, sell- An entrepreneurial organization must be about selling its product and mission at all levels of its organization to its target market. An organization that forgets to sell is an organization that is forgotten.

4. Cash Flow, Cash Flow, Cash Flow- Many a good faith venture or enterprise has died for lack of focus on cash. Knowing your cash position at any given moment drives your strategy and actions.

5. Trust God- In reality, when you combine business and mission, it is going to get messy. One must work hard toward your business plan and mission goals and then prayerfully trust God with the results.

These are five ideas that deserve more attention in future posts.

Tuesday, September 15, 2009

The Insurance Issues of Hiring Ex-Offenders

Earlier this year, I worked with an individual interested in starting a faith venture business that employed individuals rebuilding lives from prison. This new business as ministry aimed to provide property maintenance services for landlords and apartment communities.

Unfortunately, the venture ran into a significant obstacle when pricing liability insurance for the potential operation. The prospective business owner was told by his insurance agent that he would be unable to hire felons under his insurance policy. And he discovered that an expanded policy would be prohibitively expensive. He decided to not pursue the venture, ending the possibility for 5 positions for ex-offenders.

We’ve explored the issue of insurance and felony employment in the past here in the Faithventure Forum. It’s the biggest obstacle to increasing opportunity for individuals rebuilding lives from prison. And studies show that finding employment after prison saves money by reducing up to 50% the chances of individuals re-offending and ending up back in jail.

A recent article in Business Insurance explores the tricky issue for employers of crafting a hiring policy around the issue of felony offenses. I’m not a big fan of legislation that tries to level the field for the hiring of ex-offenders because I believe that the only individuals that benefit are employment lawyers. The additional costs and higher potential legal liabilities decrease employment opportunities for the very people such laws are supposed to help.

But the Business Insurance article does point out one area that does concern me. If the government wishes to increase the employment of ex-offenders, it needs to craft legislation that protects business owners from the legal challenge of “negligent hiring.” If an employer wants to hire ex-offenders then they need to be protected from potential liability related to that decision. A “negligent hiring” legal theory chills the willingness of employers to hire ex-offenders.

In addition, the government can set up a public/private insurance entity that provides cost effective liability insurance for employers that are willing to hire ex-felons. Right now, the government offers bonding for felons, but the main area of need and biggest potential benefit is in the area of commercial liability.

Friday, September 11, 2009

The Difficult Road Back for Ex-Offenders

The Las Vegas Weekly provides a fantastic and colorful story, “Now What?” on the difficulties ex-offenders face reentering society… a task made tougher by the recent economic downturn.

This is a story I have become familiar with over the last 10 years at Bud’s Warehouse and Belay Enterprises. It’s the very reason we promote the start of faith venture businesses to create opportunities for individuals rebuilding lives from felony convictions.

I appreciate ex-offender Phil Lacasse’s raw honesty about his struggles:

“It’s rough out here. It’s rough. It can be done. Anything can be accomplished. But a lot of people, what happens is, when they’re in my shoes, they come out and they get real discouraged. And they get real disappointed. And everything is happening at 100 miles per hour, and you can’t find work. And what happens is after a while they decide, Well, I’ll pick up a gun, I’ll sell some dope. I’ll pimp some broads. I gotta make a living somehow. And that’s the biggest thing that brings us back, is we try and we try and we try and we get out with good intentions, but when there’s nobody to help us, eventually you’re going to go back to becoming what you were. Change comes with help.”

Phil Lacasse, “Now What?” Las Vegas Weekly, September 10, 2009.

Phil’s words are a call to action. For ex-offenders seeking to rebuild lives, real change requires help from the community. And it’s my hope that more business leaders will catch a vision for starting faith ventures that create real opportunity for ex-offenders seeking change.

(Thanks to @DWFreedom for pointing out this article!)

Wednesday, September 9, 2009

Sometimes You Just Need a Hug

Last week, the guys on our Bud’s Warehouse truck ran into a difficult situation. While picking up items from a residential donor, an on-site contractor decided that he was going to keep some of the cabinets for himself. And when he found out he couldn’t, he decided to pick a fight with our driver.

Not a smart move. And the kind of decision that gives me heart failure when I hear about it later. You see, our driver is an ex-boxer… a good one. And over the years, he freely admits that he has struggled with his temper. This situation was ripe for a disaster.

But then God showed up. Don remembered our anger management and customer service training back at the warehouse. He took a deep breath and listened to the man. And when it became clear the problem wasn’t going to be solved, he called his manager and left the scene.

Don shared that story this morning during a special customer service training session by a volunteer from Morgan Stanley. We talked about how the three most important factors of customer service are listening, repeating back the problem, and treating the other person as you would want to be treated yourself.

And sometimes people just need a hug. If you have worked at Bud’s Warehouse any length of time, you quickly realize that people show up carrying baggage. And we’re not talking about shopping bags from other stores. Sometimes it’s a fight with a family member and other times it might be a close-encounter on the highway, but whatever the case, they come primed with a bad attitude and a desire to share it with others.

One of our other employees, Kelly, told about a customer that wanted to pick a fight last week. She complained, griped, and argued all the way to the back of the warehouse. Kelly walked up to her and attempted the first two steps of our process to no avail.

And then he jumped to the last part and announced that he thought someone needed a hug. She looked shocked and took a step back. She thought for a minute, paused, and then hugged Kelly. She walked out of Bud’s Warehouse that morning with a big smile. And our staff had another story about how conflict can be resolved with respect and love.

Friday, September 4, 2009

Growing the Funding Pie through Faith-Based Social Enterprise

Later this fall, Bud’s Warehouse celebrates its 15th Anniversary as a faith venture business as ministry. Over the years, a strength of the Bud's Warehouse model has been its ability to attract resources for a community cause that often struggles to find private financial donors.

Research studies show that potential donors are less likely to give money to organizations that support individuals with felony convictions or addictions. Donors tend to be attracted to causes that help mothers & children, individuals in need, educational institutions and religious organizations. Other studies have shown that employment and job training is the top factor leading to a decrease in recidivism for ex-offenders. But this is a need less popular with public donors. That reality makes it more difficult to find funding for a program that offers society a big return on its investment.

Bud’s Warehouse and Belay Enterprises have been able to expand the resource base by moving beyond the traditional model of nonprofit support by operating self-sustaining businesses. Most nonprofits have to recapitalize themselves on an annual basis by seeking out individual donors and foundations. But with a business making earned income for the organization, there is no longer a need to recapitalize every year. The business expands the funding pie for the organization, increasing the impact of the charity in an area that is less popular with donors.

I am a big advocate of creating businesses that employ people rebuilding lives from addiction, homelessness and prison. A self-sustaining business provides real opportunity for individuals with significant barriers to employability while establishing a sustainable resource base for a less-popular cause with significant cost-savings for society.

Wednesday, September 2, 2009

The Accidental Janitorial Company: Freedom Cleaning Services

Sometimes opportunity finds you.

In 2003, Cherry Hills Community Church called Baby Bud's Director Dianne Sager with a question. The recovery organization that had been cleaning their facility had just closed and Cherry Hills needed a new partner. Would Baby Bud's be interested in cleaning the school at Cherry Hills?

Normally a retail baby store would think twice about committing to a job completely unrelated to its core business. But Dianne had 20 years of experience managing a janitorial company prior to Baby Buds. She saw this as a new opportunity to employ more single moms. Within a couple of weeks, Baby Bud's added five single moms for a cleaning crew and Freedom Cleaning Services was born. Within a year, the business had grown to employ ten women with several other churches and commercial businesses as clients.

One of the challenges to any business start-up is maintaining the focus on your core business when other opportunities arise. Sometimes it's good to pursue opportunities to expand the business into new areas because it increases revenue. But, many times, expanding takes away from the focus of the venture and creates new layers of complexity that hurt the business in the long run. It's not hard to find the stereotypical entrepreneur who pursues five different ventures but is unable to focus long enough on one of them to find success.

The decision become even more complicated when you add the unique nature of a faith venture's double bottom line. A faith venture pursues a mission that seeks both earned income and changed lives. In the case of Baby Bud's, we made the quick decision to start Freedom Cleaning Services because we saw a definite opportunity to employ more single mothers in an area that key members of our staff were extremely experienced. This unique situation would also be profitable right from the start. We saw it as a chance to subsidize our other expenses related to Baby Bud's.

But over the years, this decision has become more complicated as Freedom continues to grow. It is important to remain vigilant to avoid the danger of focusing too much on one of the ventures at the expense of less focus on the other venture. If our goal is to hire more single mothers rebuilding lives, we need to constantly analyze how best to spend our resources towards achieving that goal.

Belay Venture Partners Program Selects First Founder

I’m excited to announce that Belay Enterprises has chosen Brittany Marlett as our first participant in the Venture Partners Program. B...