There are two methods that can be used to allocate costs in a process costing system. They are weighted average or FIFO (First In First Out). Accountants and business owners can decide which method to use based on their preference for simplicity or accuracy. Of course, there are differences between the two methods. But, they also share similarities…
The FIFO and weighted-average methods each always use these same inputs:
Ending WIP units
Percentage complete for materials & conversion
Amount spent on materials & conversion
Here’s a look at some of the differences between the weighted-average and FIFO methods (by step):
Unit Reconciliation
Cost/Equivalent Unit
Cost Allocation
Weighted-average method
Considers begin WIP 0% complete
Allocates the value of begin WIP
Begin WIP + Monthly expenses = Amt completed & transferred + End WIP
FIFO method
Considers begin WIP partially complete
Allocates expenses incurred
Monthly expenses = Amt to complete begin WIP + Amt started & completed + End WIP
Both methods are, generally speaking, similar. Which you should use depends in large part on preference. It also depends on your ability to conceptualize what is taking place.
A process costing system is primarily used by manufacturing companies that mass-produce a bunch of the same product. A process costing system can be contrasted with a job order costing system. A job order costing system would be used by companies that offer custom products and/or services.
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Process costing – FIFO vs weighted-average
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The weighted-average method might be considered simpler. But, the FIFO method might be considered more accurate. That being said, once the groundwork is laid for a FIFO process costing system, calculations should be made automatically and require a minimum of effort on your part. That is…if everything’s set up correctly.
Below, I’ll compare the calculations from the weighted average and FIFO methods. Each will refer to the same inputs – Item1, Dept A, from the Process Costing workbook. That way, you’ll be able to compare the two methods side-by-side, apples-to-apples, and decide which makes the most sense for your company. Then, you can move on to more pressing matters.
The purpose of unit reconciliation is to determine the total number of units to allocate costs across in a given month.
Obviously, those units that were completed will be included. But, also factored in, are “equivalent units.”
Equivalent units
Equivalent units = WIP units × Pct complete
These units are calculated for direct materials (DM), direct labor, and overhead individually. Why? Because these value-added costs are not applied uniformly.
For simplicity’s sake, overhead is assumed to be applied on the basis of direct labor hours. These two costs are, therefore, combined in this example and called conversion (costs).
Pct complete examples
For example, a particular product might have all its materials added immediately when it enters a department. The labor and overhead, however, might be added at a slower pace as those materials are assembled, mixed, machined, or whatever… In this case, the percentage (Pct) complete might be high for DM, but low for conversion.
Conversely, the most costly direct materials might be added during the last operation in a department. Since a lot of conversion costs have been applied, but the most expensive DM are not added until the end, the Pct complete might be high for conversion, but low for DM.
Hopefully, that makes sense. Reread it if you need to.
It all depends on the product being produced and the nature of the value-added in a given department.
Beginning WIP units
You’ll notice that Beginning WIP units aren’t factored into the unit reconciliation calculation for the weighted-average method. With the weighted-average method, Beginning WIP is considered to be started & completed in the current month.
No matter if last month’s Ending WIP units were 99% complete for DM and conversion costs. This month, Beginning WIP units are considered 0% complete. Under the weighted-average method, that is.
With the FIFO method, Beginning WIP units are included in Total units reconciled. Specifically, the equivalent units that weren’t included in last month’s calculation. For example, suppose last month’s Ending WIP units were considered 30% complete. Then, this month 70% of the Beginning WIP units will be used in the Total units reconciled calculation this month.
In fact, if you change the Pct complete for DM and conversion to 0% for the FIFO method, you’ll see that the Total units reconciled are the exact same amount for both methods.
DIFFERENCE 1: THE WEIGHTED-AVERAGE METHOD CONSIDERS BEGINNING WIP TO BE 0% COMPLETE. THE FIFO METHOD DOES NOT.
Completed & transferred vs started & completed
This subtle difference in verbiage makes a big difference in calculations between the weighted average and FIFO methods.
As mentioned above, Beginning WIP is always considered to be 0% complete with the weighted-average method. Ending equivalent units are added to Units completed & transferred to determine the Total units reconciled with the weighted-average method.
With the FIFO method, that is not the case. Since Beginning WIP units are already considered partially complete, Units started & completed are quantified separately. As the title implies – these are units that were both started and finished in a given month.
Total units reconciled
The weighted-average method adds the Ending WIPequivalent units to the Units completed & transferred to arrive a quantity for units reconciled.
The FIFO method does something similar. Ending WIP equivalent units are added to Units started & completed. Beginning WIPequivalent units (1 – Pct complete) are then also added to that quantity.
Cost per equivalent unit
Unit reconciliation only focuses on units. No costs were considered. Now, it’s time to tally costs for the month and to calculate a Cost per equivalent unit.
Cost per equivalent unit = costs to be allocated ÷ Total units reconciled
Comparing total costs between months, years, or even days doesn’t give you the whole picture. In order to have the whole picture, total costs must be compared using some sort of common denominator.
Hence the need to break costs down on an equivalent unit basis. Equivalent units take into consideration how many units were started, completed, transferred, and left in WIP at the end of the month. Every unit and every dollar is accounted for. So that accurate comparisons can be made.
Total costs to be allocated with the weighted-average method includes the value of Beginning WIP + Monthly expenses incurred. So, since Beginning WIP units were considered 0% complete and added to the Total units reconciled, the Beginning WIP amount (last month’s Ending WIP amount) is also included in the numerator to offset these units.
DIFFERENCE 2: THE WEIGHTED-AVERAGE METHOD ALLOCATES THE VALUE OF BEGINNING (LAST MONTH’S ENDING) WIP. THE FIFO METHOD ONLY ALLOCATES EXPENSES INCURRED THIS MONTH.
Total costs to be allocated under the FIFO method only includes the Monthly expenses incurred. Only costs from this month are used to calculate Cost per equivalent unit. Because, unlike the weighted-average method, only units from this month are reconciled.
Because the weighted-average method includes the value of Beginning WIP and the FIFO method does not, the weighted-average method will always have higher Total costs to be allocated. Whether that translates into a higher Cost per equivalent unit depends on the Beginning WIP units and the Units started & completed.
Cost allocation
Whereas the Total costs to be allocated include costs that the company started the month with (weighted-average method) and those that were added. The Total cost allocation includes costs that were passed to the next department (or finished goods) and those that the company ended the month with.
The Total costs to be allocated should always equal the Total cost allocation. Costs can’t just disappear into thin air.
In the weighted-average method, the equation balances as follows:
In the FIFO method, the equation balances as follows:
Monthly expenses = Amount to complete beginning WIP + Amount started and completed + Ending WIP amount
Weighted-average or FIFO for process costing?
Conventional wisdom says that the weighted average method is simpler than the FIFO method. I suppose this is said because Amount to complete beginning WIP need not be calculated for the weighted-average method.
But, since you will be determining the Pct complete for DM and conversion costs for Ending WIP units (which will become your quantities for next month’s Beginning WIP units) it shouldn’t matter. The calculation is already made.
Better to go with the method that produces a more accurate Cost per equivalent unit. Rather than one that blurs the lines between what was done last month and what was done this month. Particularly if you are in a super-competitive environment where accurate costs are needed to price appropriately.
Yes, I know that the Spreadsheets for Business Process Costing example workbook uses the weighted-average method. Confession: it wasn’t until I wrote this post that I really explored the difference between the two methods. If it ever makes sense to redo the process costing example workbook, I will use the FIFO method.
What do you think? Are there any circumstances where the weighted-average method makes more sense?
Is there something I missed? Or, do you have any questions?
00:00 I’m gonna go over how to go about making 00:04 operating budget for your church some of 00:06 my previous videos you know I’ve done a 00:08 little more in depth with the individual 00:10 spreadsheets and how you know what each 00:12 field is about how its calculating 00:14 everything this time I’m going to try 00:16 something different I’m gonna stick to 00:18 kind of summarizing here and I’m gonna 00:19 put a link down in the description where 00:21 you can read the whole in-depth post 00:24 that covers every single aspect you know 00:27 in detail of the operating budget for 00:30 your church and the video here is just 00:32 gonna be kind of a summary so that being 00:34 said let’s get into it 00:36 we’ll start off here with a ordinarily 00:41 with a for-profit company you always 00:44 start with a revenue budget with the 00:45 church you have a little flexibility 00:47 there you start with a revenue budget or 00:48 with your expense budget so for the sake 00:52 of simplicity I’m going to walk through 00:54 this starting with the revenue budget 00:55 but you know it really is a matter of 00:59 private preference do to kind of 01:01 churches unique situations so revenue 01:04 budget is exactly what it sounds like 01:06 it’s a budget in a forecast for all of 01:08 the money you’re gonna bring in for the 01:10 year so in this case we’ve got the 01:13 different sources listed here offerings 01:15 donations facility whose charges trust 01:18 investments and other okay and we reject 01:21 them out for every month for the coming 01:23 year but the first month of our planning 01:25 period here so if you’re planning 01:27 creative begins in July or September or 01:29 whatever some other month with that in 01:32 there it’ll automatically populate it 01:33 out and all the forecasted amounts are 01:38 total by month and total by source also 01:42 point out real quick that all 01:44 spreadsheets for business templates 01:46 which there’ll be a link to the template 01:49 in the link to the post so you get that 01:53 by going to the post but all 01:56 spreadsheets for business workbooks the 02:00 white cells are adjustable okay the 02:02 colored in cells or other formulas or 02:03 their text so unless you really really 02:05 know what you’re doing don’t touch those 02:07 so revenue budget is pretty simple and 02:11 we’ll move on to the expense budgets now 02:16 let me get rid of the fixed cells here 02:21 there’s separate expense budgets for 02:25 each of the four kind of broad 02:26 categories of expenses the inspiration 02:29 for these categories comes from Bree mal 02:31 FERS if you’ve done any searching on 02:33 YouTube or on the web in regards to 02:36 Church strategic planning you’ve come 02:37 across 02:38 Audrey’s work and he’s does a great job 02:42 and you know definitely a good source of 02:47 information I’ve never seen him put 02:48 forth anything like this not to say that 02:50 he hasn’t that I used a lot of his 02:54 inspiration in creating this template 02:57 for budgeting so now he breaks it church 03:02 expenses into four broad categories 03:04 evangelism emissions personnel 03:06 ministries and facilities so as you can 03:09 sing along the bottom here that’s 03:10 exactly what we’ve done 03:12 each of these four budgets is formatted 03:15 in the same manner so for simplicity 03:17 sake we’ll just look at the evangelism 03:21 and missions budget here so what you got 03:26 at the top here is you know basically 03:29 when it would take those broad 03:30 categories expenses and break them down 03:31 into subcategories so do that first and 03:35 foremost for the evangelism missions 03:36 here and direct and Synod support 03:39 Convention Assessment local mission work 03:40 outreach etc of course each broad 03:44 category has its own separate sub 03:48 categories you came and you’ll notice 03:52 also you’ll have to fill those in 03:54 manually and also you’ll notice that 03:56 each bra subcategory of expenses gets 04:03 category wrap categorized as fixed or 04:06 variable and simply put the post goes in 04:11 a little more detail but you know fixed 04:14 is gonna be the same no matter your 04:16 level of revenue a more revenue less 04:19 revenue you would expect this expense to 04:21 stay the same 04:22 variable on the other hand you would 04:24 expect to increase with revenue and 04:25 decrease increase in decrease with 04:28 revenue less revenue less expense more 04:29 revenue more expense okay so you’ll see 04:32 that all these amounts are filled in 04:34 here a lot of them with zeros because 04:36 there’s a room for plenty of 04:38 subcategories well where’s that 04:39 information come it comes from down here 04:41 below this is where you get into the 04:42 detail okay so you’ll notice each sub 04:45 categories listed here and you can 04:47 detail expenses and this is where you 04:48 actually put in the inmense so you know 04:51 you take a broad category of expenses 04:53 break it down to subcategories break it 04:55 down further into details you know 04:58 depending on the sophistication of your 05:00 accounting software or your accountant 05:04 you know this could be these detailed 05:06 expenses here could be individual GL 05:08 accounts or whatever you want them to be 05:11 but as long as you address all expenses 05:14 that’s all that really matters it’s just 05:16 like I said kind of breaking things down 05:18 here into manageable chunks to where you 05:22 can forecast them out for every month in 05:26 the planning period then they’ll total 05:29 here and those totals will carry up here 05:32 okay so you’ll see like I said every 05:36 subcategory of expenses listed here with 05:39 plenty of room to entered detailed 05:42 expenses okay so you do that for 05:45 evangelism and admission you do that for 05:50 personnel do it for ministries it’s all 05:55 them all the same same format do it for 05:58 facilities so okay you better you expect 06:01 the revenue for the year then you 06:03 entered your expected expenses for the 06:07 year don’t forget like in this example 06:09 real quick here you’ll notice this ties 06:13 into the capital budgeting work that we 06:18 did – I like to make my workbooks tie 06:22 into each other so it can paint the 06:24 entire picture for you guys so that’s 06:26 what this means you know most of these 06:28 are Justin Eric detailed expenses but 06:30 this one here talks about snow removal 06:32 and it has to do with the 06:34 creation of a new parking lot that we 06:36 looked at in the capital budget so check 06:38 that video out to check that post out to 06:41 so and yeah once all expenses are 06:46 entered then that’s the biggest part of 06:51 budgeting okay all that’s going to carry 06:54 over here into your pro forma income 06:56 statement where you’ve got your total 06:58 revenue your total for each expense by 07:02 broad category okay and then we threw in 07:05 a percentage amount here 07:08 that’s a percentage of revenue if I 07:11 remember right yes it is okay just just 07:15 kind of paint the picture of what 07:18 categories are contributing most to your 07:20 expenses then we’ve got operating profit 07:23 which is revenue minus expenses one 07:27 other thing you have to fill in I mean 07:28 pro forma income statement here that 07:30 isn’t really covered elsewhere in the 07:31 operating budget is interest income in 07:35 interest expense okay so this is a will 07:39 have to be a forecast you’ll just have 07:41 to look at you know for income if you 07:44 have income earning assets savings you 07:49 know money market accounts something 07:52 that maybe earns a little more than that 07:54 dividends perhaps enter now here 07:57 interest expense it’s gonna depend in 07:58 large part on the amount you need to 08:00 borrow a lot of that will be covered in 08:02 the financial budget okay but you know 08:05 you can go ahead and do your financial 08:08 budget which I’ll cover in a later video 08:09 and a post that’s coming soon and circle 08:13 back around enter that information here 08:14 too okay you’re not gonna be graded on 08:18 your accuracy in terms of forecasting 08:20 this can be a living document come back 08:21 and change it as you need to 08:23 all right so operating profit minus 08:25 these interest expenses churches don’t 08:27 pay taxes so there’s net profit okay 08:32 there’s a couple of simple ratios left 08:34 in here that are applicable for churches 08:38 okay got profit margin which is pretty 08:39 self-explanatory you know your net 08:42 profit compared to you net sales times 08:44 interest earned looks at those 08:46 looks at interest expense and operating 08:50 profit how it relates to it degree of 08:53 financial leverage again the post will 08:54 get into more detail in degree of 08:56 operating leverage we’ll get more detail 08:58 on that too those are two interesting 09:00 concepts that basically tell you what 09:07 the based on degree of financial 09:10 leverage based on the amount of money 09:14 you borrow what effect increasing and 09:20 decreasing 09:21 operating profit would have on that or 09:25 the rather the effect you’ll have to 09:29 read the posts to get a detail because 09:30 if I start talking about it I’ll go on 09:32 for an hour here and like I said and try 09:34 to make this summary so basically the 09:39 effect of degree of financial leverage 09:41 is the effect of interest expense on 09:45 profit degree of operating leverage is 09:47 the effect of fixed expenses fixed costs 09:52 on profit okay and that’s why I asked 09:56 you guys to specify whether costs are 09:59 fixed or variable here okay so that’s 10:01 what that was for read more about that 10:03 like I said you’ve got the chart down 10:06 here pretty straightforward just an 10:08 illustration of what happens month by 10:10 month based off of your forecast you’ve 10:12 got the Green Line is revenue and then 10:15 you’ve got your different categories of 10:16 expenses here you can see how they rise 10:18 and fall in total and by categories so 10:22 one little extra bonus that I like to 10:26 add to my industry specific spreadsheets 10:29 is this likely best case worst case 10:33 scenario okay I think this is super 10:36 valuable you know and it’s it is another 10:39 step and the whole strategic planning 10:43 thing which is time-consuming in that 10:44 bed really is just the like I said the 10:50 plus one however you want to put it to 10:53 to the operating budget this is where 10:56 you know you’ve done you’ve been in put 10:58 your 10:59 expected revenue cost profit etc now you 11:02 get to toy with what the worst case 11:04 would be in the best case would be and 11:06 this just like most of strategic 11:08 planning 11:09 just get your mind working in that 11:10 direction so you’re you’re completely 11:14 comprehensively prepared for the 11:15 upcoming year okay so it starts off here 11:19 with the pro forma income statement 11:26 that’s what this is sure if it Proform 11:28 in there but yeah it’s a pro forma 11:31 income statement or rather this yeah 11:35 sorry okay so this is revenue up here 11:37 where you can toy with best cased amount 11:40 for each revenue source 11:45 worst case amount or you can just use a 11:48 generic multiplier okay so basically 11:52 what that means it’s like if I change 11:53 this worst case is gonna be negative in 11:55 the case of revenue the 15% you’re gonna 11:59 see these worst case amounts decrease 12:03 okay because I made the worst excuse me 12:08 in the worst case that much worse 12:10 okay but you have so you can change that 12:15 there it will affect everything in that 12:17 section but you also have the ability to 12:20 override it okay so see if we delete 12:25 this worst case would be 38,000 versus 12:31 42,000 for trust investments in the 12:34 quest but you know say you think no no 12:38 worst case could be worse than that or 12:40 worst case wouldn’t be quite as bad well 12:43 then you just override that amount okay 12:46 everything else is based off of this 12:48 multiplier but now you’ve overwritten it 12:51 with an amount so same same principle in 12:55 the best case I’d come down here to 12:58 expenses we have our abroad expense 13:00 categories again use a multiplier this 13:04 is just a ballpark figure the multiplier 13:06 basically if you know best-case in the 13:10 Fuhrer expects is going to be the 13:11 decrease 13:12 worst case for expenses gonna be the day 13:15 increase and I keep doing it 13:17 so keep that in mind and you can 13:20 override you don’t like what you see so 13:22 yeah just toy with it you know that’s 13:25 the whole point of this exercise just 13:28 toy with it see what playing with 13:32 different scenarios gives you what it 13:35 makes you think about what you might do 13:37 to plan to avoid a worst case what you 13:39 what planning you might do to take 13:41 advantage of the best case okay so just 13:44 like the pro forma income statement on 13:45 this executive summary 13:47 you got your operating profit here you 13:50 can see negative under worst case this 13:54 will match what’s on the executive 13:55 summary the ten thousand twenty eight 13:58 operating profit and best case 14:05 considerably better six times the 14:07 operating profit so that’s pretty good 14:10 it brings in interest income and expense 14:14 here also and then that profit always 14:20 calculated the exact same as it is on 14:21 the executive summary so then of course 14:25 the you know the whole purpose of ratios 14:26 is to kind of put amounts into 14:31 perspective from your financial 14:34 statements and the same thing takes 14:36 place here you know profit margin can 14:38 range from negative seventeen point 14:41 eight to twenty seven positive twenty 14:43 seven point two times interest earned 14:45 degree of financial leverage is going to 14:48 change all that it’s gonna going to 14:50 change based off of what you enter in 14:52 the best case in worst case fields above 14:57 some anyhow that’s quick rundown of the 15:01 church operating budget template you 15:04 know go get your own copy to toy with I 15:06 get his follow the link and there’ll be 15:10 a links on there follow a link to the 15:13 post there’ll be links on there to 15:14 download your own copy of it and then 15:16 you know you if you’re dealing with 15:18 concepts you’re not familiar with just 15:20 check out the post I’ve got more or less 15:22 every single field on here 15:24 addressed in there and you know if you 15:28 get stuck on something just check that 15:30 out and it’ll help you make sense what 15:33 you’re looking at so appreciate you 15:35 guys’s time appreciate you watching this 15:39 video if you have until this point the 15:41 very end YouTube it is a popularity 15:45 contest just like anything on the 15:47 Internet and if you like this video if 15:50 you think this seems like something 15:51 useful to you best way to let me know is 15:55 to either leave a comment down below or 16:00 better yet maybe I don’t know depends on 16:03 the YouTube algorithm comments are good 16:06 likes or good subscriptions are good I 16:08 know 16:10 alerts are good any of that stuff you 16:13 know I’ll feedbacks good I’ll crank out 16:16 more content there’s also a lot of stuff 16:19 to check out not just for churches but 16:22 for small businesses in general on 16:23 spreadsheets for business comm thanks 16:26 you guys take care
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Categorize and list detailed expenses
Forecast revenue needed to cover expenses
Review the pro forma income statement and ratios
Plan for the best and worst-case scenarios
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Operating budget example for small churches, big churches, and every church in between
This is the second post on church budgeting and the fifth overall on church strategic planning.
Previously, the capital budget for the church was covered in depth. This post will focus on the operating budget. The capital budget, if you’ll remember, is the budget that the church completes for every potential project it plans to take on in the coming year. The operating budget consists of a forecast of revenue and expenses for the coming year. The culmination of the operating budget is a pro forma (or expected) income statement.
After completion of the capital budget and the operating budget, the church will be ready to tackle the financial budget. The financial budget will be covered in the next post.
What is an operating budget for a church?
An operating budget allows a church to be proactive regarding its revenues and expenses for the coming year. It allows the church to plan accordingly and to be ready for any scenario that might come its way. Doing so will allow the church to better meet its mission.
Information gleaned from the mission statement, SWOT analysis, strategy formulation, and capital budgeting will all play a part in preparing the Operating Budget for the coming year.
Creating an operating budget can be as simplistic as writing down a guess about how much revenue the church will make in the coming year and the number of expenses it will incur. This is better than nothing.
Dedicating some thought to each revenue source and each type of expense, plus estimating how they might rise or fall over the course of the year helps to paint a more accurate picture of the church’s financial position. Additionally, using the Spreadsheets for Business church operating budget template will give you the ability to not only estimate what the most likely scenario to play out next year will be, but will also help you to plan around a best case scenario and a worst case scenario.
Download the template by filling out the form at the top of the post.
How much time and effort should be dedicated to a church operating budget?
Any amount of planning is better than no planning. There is, however, such a thing as over-planning – AKA, paralysis by analysis. The sweet spot is somewhere in the middle – enough planning for you to feel confident that your church is in a position to thrive in the coming year.
The amount of thought you dedicate to each item in this church operating budget example is up to you. I urge you not to overthink it. However, after going through the following steps, I think you’ll find yourself rather confident about your church’s future going into the new year. With some of the worry off your plate, you can focus on other areas that will help your church achieve its mission.
How might an operating budget for a church differ from a for-profit business?
Fortunately, creating an operating budget for a church is much less complicated than for, say, a manufacturing company.
When creating an operating budget for a manufacturing company, you start with revenue and work your way through budgets for materials, labor, overhead, production, and a lot of other inputs.
When creating an operating budget for a church (which is essentially a service) some of that complication can be avoided.
Should you start with budgeting for revenue or expenses?
Personally (and maybe this is due to my background in budgeting for manufacturing organizations), I still think it’s smart to start budgeting with revenue. That way, you know how much you expect to make in the coming year and can plan your expenses around that information.
However, there’s also a school of thought, particularly by Aubrey Malphurs and his organization, that claims you should plan your expenses first. Then, you know how much you need to bring in to cover those expenses. Aubrey is much more of an expert on church operations than I am, admittedly. I can see the rationale behind this school of thought.
You should start with whichever you’re more comfortable with – expenses or revenue. I imagine as you get deeper into the process of forecasting, that you’ll be bouncing back and forth between the two anyway. So, ultimately, what you start with won’t matter. Unlike a manufacturing company, the levels of your revenue and expenses won’t necessarily affect each other. All that matters is what you end up with.
Look, your budgets are never going to be exactly right. That’s fine. What’s not fine is going into the coming year with a church that is at risk because you haven’t dedicated adequate thought to what the coming year may bring.
An operating budget won’t guarantee that your church will be successful. That’s why you shouldn’t spend every waking second working on it. It’s just a matter of giving appropriate thought to the matters of revenue and expenses.
The Pareto Principle states that 80% of outputs come from 20% of inputs. If you buy into this – 80% (or so) of the benefits of creating an operating budget for your church will probably come from the first 20% of the time that you spend on it. What this means, of course, is that by merely dedicating a tiny bit of thought to these matters, your church will reap big benefits.
How to create an operating budget for your church
Operating budgets look complicated, but at their core, they’re fairly simple. All you’re going to be doing is estimating your expenses, estimating revenues, and then filling in a couple of other details. There are no wrong answers. As a steward for your church, you’re in a better position to answer these questions than anybody else on Earth.
Let’s get started!
Your church’s expenses
Obviously, your church has costs that it incurs to provide needed support to its membership. Again, I have to give credit to Aubrey Malphurs for the framework of how expenses are grouped together.
Expenses are grouped into four broad categories: evangelism/missions, personnel, ministries, and facilities.
Within each broad category, each Expense is broken down into more specific categories and beyond that, into greater Detail.
So, depending on how organized your accounting is, you should be able to (hopefully) begin by breaking your existing expenses down into these four broad categories. Once you’ve done that, then you can begin to group similar expenses by subcategories. Then eventually, of course, you want to budget for every detailed expense.
Classifying expenses as fixed or variable
Along with every Expense in a subcategory, you’re going to classify it as fixed or variable. This sounds like a pain in the rear, but it’s good to understand the nature of each cost.
Fixed expenses, as the name implies, don’t change with revenue. They’re going to be the same whether you have a very busy year or a year where you just sit around twiddling your thumbs. For example, salaries are fixed and insurance is fixed. Any other expense which will be the same month after month, over the course of the year, is fixed.
Variable expenses, on the other hand, change. They typically change based on the level of revenue. If revenue goes up, variable expenses also go up. If revenue goes down, variable expenses would probably go down. For example, expenses related to outreach and local mission work might depend, in large part, on the amount of revenue received. So they can probably safely be classified as variable.
There’s no right or wrong answer when it comes to classifying your costs as Fixed/Variable. Some will be obvious, while others…not so much. Again, don’t dwell too much on this classification. Give it a little thought and select what you think is appropriate. The only real effect is on some of the ratios that are calculated once the budget is completed. You can always go back and change your classification.
Use the past to plan for the future
You can refer back to historical amounts, of course, to help with the forecasting of future expenses. In fact, that’s probably a very smart thing to do. Looking back at historical amounts paid will also help you to determine if an expense is fixed or variable.
If this is your first time completing an operating budget such as this, then I would suggest that you still break each expense down into broad categories (evangelism/missions, personnel, etc.). But, maybe don’t break them down into too many subcategories (district & synod support, convention assessment, etc.). And, definitely don’t overdo it breaking expenses down into detailed categories (detail expense 1, detail expense 2, etc.). You can always go into more detail next year.
On each of the broad category budget worksheets, you’re going to start at the top and list each Expense subcategory. Also, pick either Fixed or Variable from the drop-down menu.
In the bottom section – this is where you’ll break the subcategories down into detailed expenses. All of the detailed expenses will sum for the month and that amount will be carried back to the top
Let’s look a little deeper into each broad category.
Evangelism/Missions Budget
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The Evangelism/Missions Budget is where you’ll classify expenses related to efforts directed externally from the church to reach individuals who likely aren’t members.
Next, go to the detail section and itemize the subcategory expenses. Additionally, start forecasting month by month for the whole year. Each subcategory will automatically add all the detailed expenses.
You’ll see that a Total for each month and for whole the year is calculated. These amounts will carry over into other worksheets.
Personnel Budget
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The Personnel Budget is pretty self-explanatory. This is the money planned to be spent on the individuals who help run your church.
Expenses such as salaries, fringes, utilities for housing, and guest pastors/speakers would be entered here.
Ministries Budget
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The Ministries Budget is where you will enter expenses directed toward the individuals that are already a member of your church.
You know the drill by now – enter the appropriate subcategories and then the names and amounts for the detailed expenses.
Facilities Budget
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The last category of expenses is also pretty self-explanatory. A Facilities Budget includes those expenses that are required for your church, as a whole, to function.
How do you differentiate if expenses are for personnel or facilities? Easy, if the expense is, more or less, for one employees’ benefit then it’s probably a personnel expense. Conversely, if an expense is for everybody’s benefit then it’s probably a facilities expense.
As mentioned before, this is all somewhat subjective. There are no right or wrong answers, per se. Trust your gut, trust your experience, and classify expenses in whatever way makes the most sense to you.
If you’ve been following along closely, you’ll notice a special expense listed under the maint and repairs subcategory.
In the capital budget, we examined the feasibility of adding on to the church’s parking lot. Ultimately, based on the expected cash inflows and cash outflows, it was determined that making an addition to the parking lot was in the church’s best interest. So, in our hypothetical church, that project will be undertaken and will need to be included in the coming years’ operating budget. You’ll see detailed expenses related to the parking lot under the maint and repairs subcategory and the depreciation subcategory.
Don’t solely rely on what you spent in the past to create a feasible budget going forward into the future. Make a note of anything that might change and of any new expenses that might be incurred in the coming year due to projects approved in the capital budgeting phase.
How much revenue will you need to cover those expenses?
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Estimating expenses is a bit depressing. But now we get to tackle the fun part, and that is estimating revenue.
Revenue also has subcategories, but they are not broken down into detail.
By now, you know the routine. In the Revenue Budget, enter the start date for your budget in the cell D9.
You’ll see that the Revenue Source column is already populated but you’re welcome to change the descriptions as you see fit.
For each month and each Revenue Source, enter the forecasted amount of revenue. A Total for the months and for each Revenue Source will automatically be calculated.
Maybe you’re baffled as to how to forecast revenue. Offerings and donations are probably at least somewhat consistent. But, other sources of revenue like facilities use charges and trusts, investments and bequests are difficult, if not nearly impossible, to accurately predict.
First of all, I’ll say the same thing I did when it came to forecasting expenses, and that’s to just come to terms with being wrong in the first place. The value in this, again, is to dedicate a little bit of thought to it.
Spreadsheets for Business has a free tool that can help you forecast revenue (or expenses, or anything really…) accurately and it can also help you gain insights into what drives revenue.
Once the information is entered into the Revenue Budget, then you are very nearly done with the operating budget.
The church’s Pro Forma (expected) income statement
After completing all of the expense budgets and the Revenue Budget, you should see a nearly completed Pro Forma Income Statement. All that’s left to enter is information about interest.
If your church keeps funds in an account that pays a reasonable amount of interest, enter what you might expect to earn this year in the Interest Income field.
On the other side of the coin, if your church borrows money, then you will likely have Interest Expense over the course of the year. That amount in the Interest Expense field should be added as a negative amount.
Now you should have a pretty reasonable idea of what the coming year will look like from a revenue and expense standpoint. Notice that each of your expense categories has the amount as a percentage of Total revenue listed next to it. This gives you an idea of how your expenses are weighted.
For reference, Aubrey Malphurs recommends the following weightings:
Evangelism/Missions 10%
Personnel 40%
Ministries 25%
Facilities 25%
Obviously, your church doesn’t have to have this exact percentage for each expense category. But it simply gives you a benchmark to measure your church against.
All the calculations in the Pro Forma Income Statement are pretty straightforward. Operating Profit is Total Revenue –Total Expenses.Net Profit is what’s left after Interest Income and InterestExpense are accounted for.
Ratios and chart
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Now we’ll look at some very basic ratios to put the Operating Budget into perspective. These ratios were designed for, and are primarily used by, for-profit businesses. But even though a church operates differently than a for-profit business – especially a manufacturing company – they still might provide a little insight and perspective for the church leaders to use in decision making.
Profit margin
Profit Margin is pretty straightforward. It’s just Net Profit ÷ Total revenue. It shows you, in percentage terms, how much revenue you bring down to the bottom line.
Times interest earned
Times Interest Earned is a ratio that focuses on your ability to cover your interest payments.
Obviously, if an organization borrows money it needs to be able to meet the additional obligations placed upon them. So Times Interest Earned shows you, by taking Operating Profit ÷ Interest Expense, how many times over your church can cover its Interest Expense.
Degree of financial leverage
The Degree of Financial Leverage shows the amplification that borrowing money can provide to profits and losses. So, for instance, in the example operating budget, the Degree of Financial Leverage is 1.4. This means, at this level of borrowing, that for every 10% change in Operating Profit, Net profit would increase by 14% (10% × 1.4).
That sounds great, but the opposite is also true. If Operating Profit declined by 10%, then this level of borrowing would cause Net profit to decrease by 14%. That’s the nature of leverage. It amplifies gains and losses.
Most people can pretty easily grasp the nature of financial leverage.
If you borrow money and get to keep the gains from the borrowed money, then financial leverage is great. If you borrow money and your investment loses value, then you not only have the loss to deal with but you also still owe for the money you borrowed.
Degree of operating leverage
What’s not so easy to grasp is the benefits and detriments of other fixed costs, besides interest payments. The Degree of Operating Leverage quantifies the benefits and detriments of incurring fixed costs.
Why are fixed costs so important? Well for lack of a better answer – because they’re fixed. You are going to pay them anyway. So, if fixed costs really help you ramp up your operating profit, then that’s great. Because fixed costs aren’t going to increase on you.
The inverse is also true. Since fixed costs don’t change, you still have to pay them even if they are dragging operating profit down.
The Degree of Operating Leverage tells the same story as the Degree of Financial Leverage in the sense that it tells you how much greater Operating profit (not Net profit per se) would have been in the absence of fixed costs. This ratio really starts to get into detailed management accounting. That amount of detail is probably beyond the scope of this post, but since it’s included in the Executive Summary, I wanted to touch on it briefly.
In the example workbook, the Degree of Operating Leverage Is 10.2. This means then that a 10% increase in Total revenue, everything else being equal, would translate to a 102% increase in Operating Profit. Obviously, you know what that means if Total revenue went the other direction. It means that a 10.2% decrease would put Operating Profit in the red.
More about degrees of leverage
There is no good or bad Degree of Financial Leverage or Degree of Operating Leverage. It’s simply a reflection of the way your costs and borrowing affect your income statement. Leverage is great if Total revenue and Operating Profit are increasing. Leverage is bad if the outlook for the coming year is bad. So if your leverage is high and you’ve got concerns about your ability to bring in revenue for the coming year – then you’d better start looking to reduce fixed expenses and Interest Expenses.
Finally, at the bottom of the Executive Summary, you’ll see a handy chart that will illustrate the level of revenue and expenses (broken down by broad category) for every month in the upcoming year. This allows you to visualize how all these factors, which affect the financial health of your church, are expected to fluctuate throughout the year.
Plan for every scenario your church might face
Say that creating a simplistic operating budget is working at level 1 out of 10. Completing the Spreadsheets for Business operating budget template takes you up to 7 out of 10. This next section is what will push your church up to a 10 out of 10.
On the Likely-Best-Worst Scenario worksheet, you’ll see all the information pulled in from your Pro Forma Income Statement and the subsequent ratios under the Most Likely Amount column. But, what you will have the opportunity to do here, is to imagine multiple scenarios – some good, some bad. You’ll get to picture what your Pro Forma Income Statement will look like in the best-case scenario and the worst-case scenario.
Better or worse than expected revenue and expenses
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To use this valuable worksheet, all you need to do is start with a multiplier for the best case and worst case. Obviously, the best case for revenue is going to be a positive percentage, and for expenses, a negative percentage.
On the other hand, of course, the worst case for revenues is going to be a negative percentage, and for expenses, a positive percentage. Here, you are going to have the opportunity to play around with positive and negative future outcomes, and see what feels right in terms of multipliers for revenue and expenses.
But beyond simply entering a Best Case Multiplier and a Worst Case Multiplier for revenue and expenses, you can also refine the scenarios even further. You do this by entering specific amounts in the Best Case Override Amount and Worst Case Override Amount.
What are override amounts?
It means that you can tweak the dollar amounts for revenue and expenses even further. For instance, maybe you hope that your church might be blessed with an extraordinarily high amount of revenue from trusts, investments or bequests. You can thus enter a specific amount in the Best Case Override Amount for whatever would constitute the “best case” for your church.
On the flip side, say you know that, potentially, the worst case scenario for facilities expenses is that you need to replace the church HVAC system. So, you enter an adjusted amount in the Worst Case Override Amount for facilities that reflects this added expense.
You can also tweak the override amounts for Interest Income and Interest Expense.
At the very bottom, you’ll see the effect on the ratios from the Executive Summary based on what you entered for the Best Case and Worst Case Multipliers and Override Amounts.
There’s an old saying that goes, “hope for the best, but plan for the worst”. With this scenario planner, you’re able to do just that. You’re able to protect your church from contingencies while being prepared to act accordingly if the coming year is full of blessings.
Church operating budget
Maybe all of this seems overwhelming. That’s understandable if you’re not accustomed to planning with this level of detail. Again, I urge you (as the creator of this “overwhelming” budgeting template) to not overthink it.
What I do urge you to do however is to download the template at the top of the post – and to boldly use it.
Go over it once, quickly filling in the information you have handy, then walk away from it. After that, come back to it, look at it, reflect on what you’ve already entered and make any changes you feel are necessary. Then walk away from it again.
This is (for lack of a less cliched term) “a living document”. It is designed to take the relatively simplistic information of your forecasted revenue and expenses and to do the hard work of providing valuable output. That will allow you to be proactive for the coming year and give you confidence as a leader of the church. It can help your church not only stay financially solvent but also fulfill its mission and achieve its goals.
What other (sub) categories of revenue and expenses would you include?
What percentages and amounts would your church enter to prepare for worst and best-case scenarios?
I write as thorough of content as I can about the subjects I cover. I also have a lot more helpful posts that I want to write.
But once I’ve written all those posts, there will still be other valuable resources out there. I’ve built my material off of some of these great resources and someday, if I’m fortunate, somebody will use my material to create content that’s even better than mine. And so it goes…
I still have to cover operational budgeting and financial budgeting in my series on church strategic planning. In the meantime, however, I thought it would be helpful to point you toward some other resources for church strategic planning that I’ve found helpful when putting this material together.
I hope these resources will make your church’s strategic planning task more efficient and will help fill in some of the gaps in my material.
Not all of these will revolve specifically around churches. In fact, most will be geared toward for-profit business. Don’t let that discourage you though. A lot of the principles are the same no matter what industry you’re in. Plus, it can be helpful to look at things from a different perspective.
This is a good resource to get you warmed up for drafting a mission statement of your own. Ideas might come more naturally to you once you’re in a “mission statement” mindset. You could be browsing this site while you’re brainstorming on your church’s mission statement.
This site displays mission statements for companies big and small across many diverse industries. Plus, there are mission statements for non-profits, schools, and even personal mission statement examples.
Oh yeah…there’s example church mission statements too! Remember when I mentioned in my mission statement post for churches, you can search the web for “[insert state here] church mission statement” to give you ideas? Well, before you spend all that time and effort, check out the dozens of examples here.
Each mission statement is rated by users. Think about why some might be rated higher than others. Jot down some notes about what you like and what you dislike.
With the diverse array of examples, you should have a general idea of what constitutes an inspiring mission for your church. That, coupled with everything else you know about drafting an effective mission statement should help you nail this step of the strategic planning process.
ChurchConsultants YouTube – Developing a church’s mission statement
If you’ve done any searching online regarding church strategic planning you’ve come across Aubrey Malphurs and/or Chuch Consultants.
I’ve referred to Aubrey’s content frequently as I’ve put together my own strategic planning posts. I figure Aubrey has more hands-on experience than I do in this arena (particularly in the “soft skills”). So I appreciate what he’s put out there.
This video is very short, but it offers some good tidbits on drafting a church mission statement. For instance, I like the emphasis on keeping it short while also stressing the importance of detailed language.
This is not the most coherent page ever. I get the impression that this site is run by a non-English speaker. Which is fine, but you’ve just got sort through some non-sensical material to get to the good stuff.
Nevertheless, if you’ve got the patience, there is some good food for thought here. I particularly like the downloadable (Word) template. It gives a lot of great examples of strengths, weaknesses, opportunities, and threats. Also good is the 2×2 matrix that outlines how the four components of the SWOT analysis can interact with one another.
This is another site that gives a lot of great examples of factors to consider when doing a SWOT analysis for your church.
In particular, I like the use of the USED acronym for each component of the SWOT. E.g. How can we:
Use each Strength? Stop each Weakness? Exploit each Opportunity? Defend against each Threat?
Also, RapidBI provides a thorough example of a SWOT analysis. It’s for a for-profit business, not a church, but it gives you the opportunity to see one in action.
Strategy formulation
Reference for Business – Strategy Formulation benefits
I like the focus on the first step about defining your organization. In particular, I think that the emphasis on the customer (member) makes some really good points.
The post also raises the important point of managing the implementation of a strategy. Drafting a solid strategy is fine and good, but if it can’t be acted upon it really has no value. If Reference for Business has more content on the subject, I wish they would have linked to it.
This well-formatted and well-written post focuses on the competitive sub-strategy. This is especially valuable for churches. While a lot of people will be bound by their preferred denomination, there are others that are not. Understanding how to best position your church and make it stand out can help you get people in the door and in the pews.
Marketing MO emphasizes the need to understand what your organization’s identity is. You need to carve out an authentic niche and not try to be everything to everyone.
They go on to provide steps that your church can take to solidify its competitive position. These steps include defining your market, clarifying what value you’re providing, looking at the competition, and pinpointing where you want your church positioned in a complex environment.
Capital budgeting
University of Florida – Capital Budgeting for a New Dairy Facility
What in the world do church management and dairy farming have in common? Admittedly, not much. But, when it comes to capital budgeting, both industries (in fact, all industries) should approach it in the same way.
This document goes into tremendous detail about all of the considerations that must be made when preparing a capital budget. One thing, in particular, I like is the suggestion that “what-if” analyses be run. Using a spreadsheet to make a capital budget makes this easy. You can simply make a copy of the original file and then start playing around with all the numbers. See what happens to the NPV if cash flow amounts and timing are changed. Make a best-case, worst-case, and most likely scenario so that your church can have a plan no matter what ends up happening.
Another great point that the author of this document makes is that the drivers of cash inflows and outflows should be considered. Sometimes thinking about the cause and effect can help in making more accurate forecasts. It can also help to serve as a reality check and to provide context to a situation.
Drivers are the factors that influence the amount of cash coming in or going out. An example cited in this document is using herd size, milk sold per cow, and the market price of milk as a driver for the amount of revenue received from the sale of milk. In other words, milk revenue is a function of these three variables.
Operating budget
AAUP Wiki – The Operating Budget
Link (Note: as of the time of this writing this link was broke. If that link won’t work, try this)
I haven’t been able to find many quality resources for church strategic planning related to operating budgets.
This document is written for managers in the printing and publishing industry. It’s certainly not a bad source of information, it’s just that since it’s written for a manufacturing organization, there are few parallels that can be drawn with church management.
Nevertheless, it is a detailed document that walks through the steps necessary to prepare a comprehensive operating budget. One aspect I really like is the emphasis on engaging those lower in the hierarchy when putting together forecasts for expenses. The people who work with these expenses day in and day out can provide valuable input when it comes to understanding how these costs might change over the coming year.
Financial budget
Amergy Bank of Texas – how to prepare a cash budget
A bank understands that cash flow is the lifeblood of any organization – regardless of industry. This is a relatively short and simple PDF that walks readers through the process of creating a financial (cash) budget.
Financial budgets share a similar format no matter the industry. So, while the example used in this PDF isn’t for a church or non-profit, the principles are the same.
Not only is step-by-step guidance provided, but definitions are also given, and help in analyzing the cash budget once it’s completed is made available at the end of the document.
Wrap up – resources for church strategic planning
I strive to provide the information and tools I would want if I were in your position. What I would want or need might not include everything you would want or need, though. Fortunately, a lot of other people have produced material on these subjects (some of what’s been created is actually useful!). Just know that it might take a bit to wade through the superficial and unauthentic material to get to the good stuff.
I hope that these additional resources for church strategic planning will help fill in any gaps that are left after reading my posts. If there’s something you’d like me to cover in more detail – leave a comment and I’ll take it into consideration.
A church capital budget helps you assign values to projects and prioritize which projects should move forward
The costs of assets, expected benefits (revenue), and ongoing cost (savings) help determine the viability of a project.
Net present value (NPV) and the profitability index (PI) are the primary outputs of church capital budgeting. Other outputs can help paint a picture of project desirability too.
Church capital budget explained
Now we’re getting into my wheelhouse.
Like I said before, I don’t pertain to be the greatest guru of the soft skills (mission statement, SWOT analysis, strategy formulation) covered previously. But now…now we’re breaking out the spreadsheets, and I can promise you that I can help you solves some problems when it comes to finances.
Church capital budget template download
Want to play around with the example used in this post?
Complete the form below and click Submit. Upon email confirmation, the workbook will open in a new tab.
What is a church capital budget?
You might not know what capital budgeting is. That’s fine. When the average person hears the word “budget” they think of what money comes in during the month (sales, income, contributions) and what money goes out that same month(expenses). That’s an operational budget and we’ll cover that in a little bit.
Capital budgeting is the process by which an organization chooses which long-term projects to invest in. In a business setting things such as the time value of money, depreciation, and taxes are taken into consideration.
Capital budgeting for churches vs for-profit businesses
When conducting capital budgeting for business, projects are typically ranked based on their forecasted profitability. The projects that are thought to be the most lucrative are usually prioritized.
However, since churches are nonprofit, we’re going to have to attack this from a slightly different angle. Some projects might bring in more members and therefore more money. Other projects might help to achieve the church’s mission, but not bring in a dime. If that’s the case, we’ll have to consider other types of value besides cash money.
Capital budgeting is designed for for-profit organizations. However, with a little creativity, we should be able to tweak the process so that your church can use this powerful tool too.
You’ll be able to quantify what you foresee the expected returns to be on the big projects you want to undertake. You’ll be able to rank projects and choose how you employ your scarce resources. Best of all, you’ll be able to make wise decisions that will lead you closer to achieving your mission.
How to create a church capital budget
Big goals sometimes require big projects
Taking into consideration all of the previous steps you’ve completed in the strategic planning process (mission statement, SWOT analysis, and strategy formulation), think about what large-scale projects will need to be undertaken in light of your future plans.
Some things have probably already come to mind. Don’t systematically dismiss a particular project just because it seems infeasible. The point of the capital budgeting process is to make it obvious what projects you should pursue. So, all you’re sacrificing by running a project through this process is a bit of time.
Ultimately, you’ll want to select your projects and move on, so you can’t let this step drag on forever. But, if a project potentially plays an important part in your strategy or would help you achieve your mission, then, by all means, give it its time in the sun and then decide if it’s feasible or not.
With a list-in-hand of the projects you want to explore, let’s move on to crunching numbers.
By the way – all of the numbers you input into this workbook can be changed. So don’t overthink/over stress about any of this!
What church project will we be using as an example?
For the example used in the screenshots, we’ll keep it simple. The project will be a parking lot addition.
Our hypothetical church is seeing that membership has outgrown its existing parking resources. Many members are forced to park on the street during service. Additionally, the church leaders hope to keep the recent rate of growth up and they want to provide their members with plenty of room to park.
In light of this, they have decided to use some of their undeveloped land to add an additional 52 parking spaces.
Disposing of assets – is something being replaced?
If you’re replacing an old asset with a new one then you’ll have to input some information about the old asset. Why? Because even though an asset is being replaced, cash flow in the present and future can be affected. It’s cash flow that gives us your net present value (NPV) and NPV is how you (mostly) prioritize new projects.
*If this is starting to get too technical for your taste – hang in there. These terms will be explained in a simplified manner. Leave a comment if you have any questions.
Fortunately, for a church, the only thing we need to know about the old asset is what it can be sold for today. Since churches don’t pay taxes, none of the other information matters. Not even the original cost. Why? Because it’s a sunk cost.
So, if the old asset can be sold for cash, enter a value in the Current market value of old asset(s) field.
Disposing of assets – church parking lot
In our example, something new is being created. There’s nothing old to dispose of. Even if we were replacing an existing parking lot – old parking lots don’t have much value to anyone else.
So, in this example, the Current market value of old asset(s) is $0.
If, when you’re analyzing your church’s capital projects, you have an existing asset that might be worth something – enter the market value here. Whatever you can sell the old asset for will help offset the cost of the new asset. This will help increase NPV.
What is a sunk cost?
Sunk costs can be tough for people to grasp and even tougher to act upon.
A sunk cost is one that’s already been incurred and should have no bearing on future decision making. Meaning – the cash has left your hands and there’s nothing can be done about that anymore.
That’s not always how people feel emotionally, but from a strictly logical standpoint – it’s true. Money spent in the past is already gone. It cannot be unspent. Only cash flows in the present and future matter.
So, if you find yourself making decisions (in your personal life or on your church’s behalf) based on the money you’ve spent in the past – you need to stop and check yourself. Realize that nothing you do now can fix those mistakes. Base your decisions on what you can control now and in the future.
Initial cash outlay
First and foremost, what’s the new asset going to cost?
Include every expense that will need to be incurred to get this asset into service. Taxes, fees, shipping, labor…everything. These extra costs can add up and can significantly affect your decision making, so be sure to include them all.
Enter the grand total into the Cost of new asset(s) field.
Initial cash outlay – church parking lot
In our example, we’re estimating the total costs to be $208,000.
This will be enough to cover not only the parking lot itself but the design and ancillary costs too.
What will the salvage value of that new asset be?
Thinking about what your brand new asset might be worth when you’re done with it might seem silly. It’s so far in the future – and so hard to guess at, why bother?
Well, it is far into the future and you really can’t know what it’ll be worth. But, it will matter. Especially if it’s a higher-cost asset. Even if it will have no value in and of itself, will the scrap be worth something? Will your church be able to get anything out of this asset when it’s reached the end of its useful life?
You’re not going to be exactly right about what it’ll be worth, and that’s fine. Here’s a little trick to get you in the ballpark – start out with a number that’s absurdly high. Then, come up with a number that’s absurdly low. Start working your way back from the high number and up from the low number. When you feel like you’ve reached something feasible – go with it.
If you can’t settle on one good number then average the two numbers out if you need to. Just make sure you’re comfortable with the number when you’re done. It’s always best to be more conservative with forecasting than liberal. This gives you a margin of safety.
Once you’ve got your number, enter into the Salvage value of new asset(s) field.
Salvage value – church parking lot
Again, parking lots aren’t really worth anything to anybody else. So, unfortunately, we’ll have to enter a salvage value of $0.
What is the new asset’s useful life?
An asset actually has two different life spans. A depreciable lifespan and a useful lifespan.
What’s the difference?
An asset’s depreciable lifespan is the number of years an asset will take to be “written off.” Depreciation is a concept created by accountants. What it does is spread the cost of an asset over many years rather than having it hit only one year.
For example, say a company bought an asset for $50,000 with a depreciable life of 10 years. Rather than having that expense hit the year of the purchase, they would charge $5,000 to their income statement for the next ten years. The cost is spread out – not swallowed all at once.
Confused? No worries. Since you’re doing capital budgeting for a church, and aren’t subject to income taxes, you don’t have to worry about depreciable life (at least as far as the capital budget is concerned).
Okay…what about useful life? Well, depreciable life is for accounting in income statements. It’s roughly accurate but doesn’t really have any correlation to how long an asset can really be used. An asset’s useful life might be shorter or much longer than its depreciable life.
It can be hard to say how long an asset might really be useful. But, you have to put forward your best guess. I usually recommend that forecasts err on the conservative side.
Since a longer useful life will mean a higher value, I suggest you enter a value in the Useful life of new asset(s) in years that is on the low side. Start at 1 year (if an asset has a useful life of less than a year, it probably doesn’t belong in the capital budget) and work your way up. Once you hit a number that isn’t on the absurdly low side, you’re probably pretty close to a nice and conservative estimate.
Useful life – church parking lot
A quick Google search reveals that the expected useful life of a paved parking lot is 10-15 years. Since our example church wants to get the most out of its investment, we’ll enter a useful life of 15 years. This will require a commitment to proper maintenance and will cause the church to incur additional costs – which we’ll address later.
How much of a return does your church want on its capital projects?
Time, money, and other resources are limited. Not just for you and your church, but for everyone.
In order for a project to “make sense,” it has to eclipse a minimum acceptable rate of return.
For instance – if your church was presented with the “opportunity” to invest $1,000 and you were promised $1,050 in ten years, you would probably pass. Why? Because it’s just not worth it to tie up that $1,000 for a decade and to only receive 5% (about .5% per year) back for doing so. That money could be used for something more worthwhile now.
So, you might not know exactly what your hurdle rate (minimally acceptable rate of return) is, but you probably know it’s more than .5%.
If your church borrows money, keep in mind what you’re interest rate is – you’ll want your hurdle rate to be at least that much. Otherwise, you’re not getting a good return on investment on that borrowed money.
Other than that, I can’t say what your hurdle rate should be. This is a very subjective thing. Every church will be different.
I would recommend that you undertake the same exercise I suggested for determining the useful life of the asset – start at 1% and work your way up. Once you say “okay, I suppose I could live with that return,” then you’re probably in the neighborhood of a practical hurdle rate.
If you want to be a little extra conservative (and I would recommend as much) then go ahead and tack on a little extra to your rate. For instance, if your hurdle rate is 5%, maybe up it to 5.5%. If it’s 8% consider increasing it to 8.8%.
This tiny increase puts just a little more pressure on your projects to perform better in order to be accepted.
When you’ve finally settled on a hurdle rate enter it into the Hurdle rate field.
Hurdle rate – church parking lot
The rule-of-thumb is – the riskier the project, the higher the hurdle rate.
A parking lot might not seem like a particularly risky project. But, as you’ll see, justifying its construction is contingent upon church membership continuing to increase. That might seem likely for our example church, but it’s no sure thing.
An 8% hurdle rate seemed reasonable under the circumstances. However, that was bumped up to 8.8% to provide a little more room for error on the part of the projected cash flows.
The most important part of a church capital budget – the forecasted cash flows
As I’ve mentioned before – investments are defined, ultimately, by three variables. Cash in, cash out, and time. Notice I said “cash.” Not sales, not promises, not receivables.
Cash.
This step involves all three variables. Cash flow out, cash flow in, and the timing of each.
Cash outflows
Most projects will incur more costs than those required up-front. Many times costs are necessary as a part of the ongoing project.
The types of costs can vary. Here are some ideas for ongoing costs that a church may incur as a result of undertaking a new project:
wages and fringes
maintenance
utilities
supplies
insurance
interest
leases
advertising
And on and on…
I cautioned you to not overthink any of these steps earlier, and I stand by that. However, make sure you think this part through thoroughly. Overlooking expenses and not including them in your church capital budget can make a project look more attractive then it actually is. You don’t want to be ten years into a project and realize that there were expenses you never accounted for.
Next, think about the timing of the expenses. Are they monthly, weekly, yearly, or erratic? The capital budgeting worksheet is set up to look at cash flows yearly; not monthly or weekly. So, if monthly or weekly cash flows are expected, you’ll have to multiply them by 12 or 52 respectively.
Finally, keep in mind that costs tend to rise over time. A capital budget forecasts many years into the future. What cost $100 today could cost $125 or more fifteen years from now. Be sure to account for inflation – which traditionally runs 1% to 3% per year.
The future cash flow worksheet
The Future CF Worksheet is a scratchpad you can use to itemize costs, revenue and cost savings. None of the information entered here will affect the rest of the workbook.
Use the Comments field to enter your own notes about the expected future cash flows. This is useful because you can refer back to this information if you ever have a “what was I thinking…” moment.
Once you feel you have a sound (conservative) forecast of the cash outflows, enter these amounts in the Additional costs column. Keep in mind that these values need to be entered as a negative number. Don’t worry about messing that up, though. The workbook has data validation rules that will prevent you from entering a positive number in this column.
The capital budgeting workbook is set up to only accept Additional costs for as many years as you said the asset would have a useful life. So, if you entered “15” as the Useful life of new asset(s) in years, you can enter 16 years worth of expenses, but Year 16 won’t be included in any of the calculations.
Cash outflows – church parking lot
More parking lot means more parking lot maintenance. For starters, I assumed that there would be additional costs for snow removal every year. This was estimated to be $450 in Year 01 and increase by 2% every year thereafter.
If this were a real church performing this capital budgeting, I would caution them to not enter their entire expected snow removal expense here. The costs tied to the existing parking doesn’t matter in this analysis. They’re going to pay that anyway. Only expenses (and revenues and savings) tied to this project should be considered.
Parking lots also need to be restriped to keep them looking good and resealed to keep them from deteriorating.
Restriping was estimated to take place every three years starting in Year 03. This cost was also expected to grow at 2% annually, or 6.1% every three years.
Resealing was expected to take place every three years starting in Year 04. The cost was expected to be $2,850 at that time and then, you guessed it… increase at a 2% annual rate.
Okay, we got the negative cash flows (the costs) out of the way, let’s move on to the cash inflows.
00:00 hello again small business professionals 00:03 small business owners and church 00:06 management professionals that’s what I 00:08 meant to say hey now I’ve got another 00:11 video I hear about strategic planning 00:14 for churches this will be the last one 00:19 of the soft skills as I put it other 00:24 ones in the soft skills category of 00:27 being mission statement and SWOT 00:28 analysis check out my channel to see 00:31 those let me also point out real quick 00:34 that there will be a link to my post on 00:37 the subject in the description and I 00:40 also like to put shortcuts you know in 00:43 the description because I can tend to go 00:46 on for a while and you know if you want 00:51 to jump to a specific part and then 00:53 gives you the ability to do that so hey 00:57 now let’s get into it so this video is 01:04 on strategy formulation in specifically 01:11 in strategic planning in general I kind 01:14 of molded them together because the way 01:17 I look at is strategy formulation is 01:18 like a piece of strategic planning 01:22 strategic planning to me includes the 01:26 videos I’ve made previously on like 01:30 mission statement and SWOT analysis but 01:34 in addition to that also capital 01:36 budgeting operational budgeting and 01:39 financial budgeting I’d also include in 01:43 their capacity planning but you know I 01:48 don’t have any content on that so the 01:54 time being that you’re on your own and 01:55 there you’ll I’m sure there’s somebody 01:58 somewhere that did address this capacity 02:00 planning for churches so we’ll start out 02:05 talking a little bit here about 02:06 strategic planning and then getting it 02:10 more into that actually 02:11 actual strategy formulation part of 02:14 things and a little later on so let’s 02:24 just start off here by thinking about 02:28 two different strategic plans 02:31 sorry I’m not enunciated agreat tonight 02:36 let me back up for a second and 02:40 apologize again and I know that’s not 02:43 you know really selling it when you 02:45 apologize for you on video but you know 02:49 for these soft skill videos mission 02:51 statements SWOT analysis strategy 02:53 formulation I don’t have a ton of like 03:00 you know visual material to accompany it 03:04 I could do it may someday do a 03:07 PowerPoint on those subjects but I don’t 03:12 know that that’s gonna really grab your 03:15 attention all that much more I mean 03:17 we’re all a little tired of powerpoints 03:19 aren’t we and you see my outlines up 03:21 there on the screen 03:22 so at least you kind of know what’s 03:25 coming up and if you see something bitch 03:27 thank you my board be more interested in 03:29 than the section that I’m talking about 03:31 a given time and go down in the 03:32 description click on shortcut jump 03:35 around you know as you see fit you know 03:37 there’s plenty of other people writing 03:42 on the subject of church strategic 03:44 planning and some very skilled and 03:48 experienced people so you know I I’ll 03:52 say you know this is not a definitive 03:57 look at church strategic planning or 04:00 strategy formulation it’s merely a 04:05 something to give you a couple ideas on 04:08 where to start 04:08 and how to go about addressing those 04:11 subjects so combine it with the other 04:13 great information that you get take the 04:15 best part of it take the best part of 04:17 something else combine it you know you 04:19 should be alright some 04:21 I am let me get back to my outline here 04:24 let’s consider two different strategic 04:26 plans okay so let’s say two churches 04:34 next door to each other okay 04:37 two different strategic plans first one 04:41 says they’re gonna put a handrail on the 04:44 steps for the elderly members of the 04:48 congregation that’s it 04:50 it’s our only plan for the upcoming year 04:52 there’s no budget 04:53 there’s no it doesn’t tie into any sort 04:57 of mission statement no SWOT analysis 04:59 anything like that they’re just gonna 05:02 put up a handrail because they think 05:04 that’s what’s needed okay and they do 05:06 that all right because it’s simplistic 05:11 and easy enough and they have a couple 05:13 volunteers over one weekend to get that 05:15 hammering put up that’s look at the 05:17 other church next to it this you know 05:20 they make a big production out of it 05:24 that’s not necessarily bad you know it’s 05:26 it’s planning it’s thinking about the 05:28 future of your church but they bring in 05:30 the pastor the elders consultants 05:32 members of the congregation and spend 05:35 six weeks poring over every step of the 05:38 strategic plan from mission statement 05:41 through SWOT analysis through strategy 05:43 formulation capital budgeting 05:45 operational budgeting financial 05:48 budgeting okay so they they give 05:49 everything it’s due time or anything 05:52 they think things through thoroughly and 05:54 have an outstanding plan when all said 05:57 and done but once the six weeks is up 06:03 and the new year comes it’s never 06:07 referred to again okay so which of those 06:11 two is the superior strategic plan well 06:17 I would say it is the first one because 06:19 it’s the one that got acted upon okay 06:22 all the thought in the world doesn’t 06:25 mean anything without action and this is 06:29 coming from a guy who is a proponent 06:32 of you know bringing in people to to 06:38 give differing opinions on strategic 06:41 planning giving it time giving it its 06:44 thought excuse me you know particularly 06:50 I’m a proponent of doing the capital 06:53 budgeting doing the operational building 06:55 that’s all great should be done but 06:58 again it’s all useless if no actions 07:02 taken because of it it’s it’s a waste of 07:06 time you know it it’s old it’s only as 07:11 good as the the actions that it leads to 07:13 okay so keep that in mind in terms of 07:20 the strategic planning going forward 07:22 when you watch my other videos when you 07:24 look up information from anybody else in 07:27 terms of I mean on anything you know 07:31 when it comes to reading a book you know 07:33 I’m I I used to think well just reading 07:36 a lot is great and it is potentially but 07:40 ultimately reading and learning a lot is 07:43 only as useful as the amount of variable 07:46 to apply okay I mean how much have you 07:48 read how much have I read that is a 07:51 distant memory it’s gone it’s you know 07:53 it’s it might be somewhere in there deep 07:56 down inside of my brain but you know I I 07:59 didn’t I never applied it to anything 08:01 you know so that’s something I’m working 08:02 on personally now is when I read 08:04 something you know I try to do my 08:06 homework and make sure it’s worthwhile 08:08 and make sure that I apply it one way or 08:12 another you know that may or may not be 08:15 completely practical all the time but I 08:17 don’t apply it because I want to learn I 08:19 want to commit it to memory I want to 08:20 commit it to habit you know I want if I 08:24 find something that’s worthwhile to read 08:26 that’s good to read I want I want to 08:28 absorb it okay so I would say the same 08:32 is true about strategic planning you 08:35 know if you make the commitment to go 08:37 forth with it and I believe you should 08:39 as I said before then you know I mean 08:44 throw yourself into it 08:46 okay absorb it lip take action upon it 08:49 right learn your lessons get your 08:51 feedback make your mistakes all those 08:54 sorts of things all right so you know 08:58 like I said I’ve given you a couple of 09:00 videos already and I have posts on all 09:03 of these except the financial budget for 09:05 churches which is coming soon I promise 09:07 as soon as I finish up the latest 09:12 spreadsheet template on activity-based 09:14 costing and going back I’m going to 09:16 write that darn financial budgeting for 09:20 churches Post I’m gonna get a video out 09:23 on it and I’m gonna have something the 09:28 post in a video for every aspect of 09:31 church strategic planning coming soon I 09:34 promise I am so you you know I’ve got 09:40 videos and all this you know I’ve got my 09:42 steps you know I’ve got my opinions on 09:45 how to approach things and you know just 09:50 as a reminder I touched on earlier you 09:52 know that starts with creating a 09:54 reviewing your church’s mission 09:55 statement performing a swot which 09:57 strengths weaknesses opportunities and 09:59 threats analysis of your church 10:01 formulating a strategy in particular 10:05 laying out goals to be med in for the 10:12 coming year for the coming years for 10:16 your church looking at any large-scale 10:19 projects your church might take on with 10:21 the capital budget again there’s the 10:24 analyzing your organization’s capacity I 10:26 don’t have closer videos on that 10:28 particular one but it’s worth worth 10:32 considering because you know your 10:35 capacity is the peak amount of demand 10:38 that you can handle you can’t have more 10:39 members than you have capacity for you 10:42 know maybe in this day and age with 10:44 virtual this and that and that might not 10:47 be entirely true but that’s that’s kind 10:50 of the good rule of thumb anyways beyond 10:52 that we’ve got the operating budget 10:53 which is a forecast of income and 10:55 expenses and then a financial budget 10:57 kasa the timing of cash flows that’s to 11:00 me comprehensive steps in strategic 11:04 planning okay now does that mean follow 11:10 those steps no question you know that’s 11:15 the only way to go about it no not 11:18 necessarily but I would say those steps 11:20 will give you if you legitimately go 11:22 through them legitimately commit thought 11:24 to them will give you a super 11:29 comprehensive review of your church its 11:34 goals your environment the reality of 11:39 money coming in and money coming out and 11:43 a number of other things it’s just a an 11:46 intense self reflective sort of thing 11:51 that might be uncomfortable at times but 11:53 will ultimately lead to your benefit it 11:58 just you know it’s it’s hard to picture 12:03 a situation where going through that you 12:05 would come out worse off than you went 12:08 in you know we need also say these these 12:15 steps are originally generated conceived 12:20 of in the for-profit realm you know the 12:23 the regular business realm or would we 12:25 call it not necessarily the not for 12:26 profit but they translate over just fine 12:29 you know that was something that I I 12:33 wondered as I got into writing these 12:35 posts making these videos you know what 12:39 how different would it be to and part of 12:42 the reason I chose to address churches 12:44 as kind of the first industry as I was 12:46 getting my website off the ground as I 12:49 was curious about how the how it would 12:57 all translate to the not-for-profit 12:59 realm in it translates just fine you 13:01 know there are a couple other things to 13:03 consider in frankly more so when we get 13:05 into the budgeting aspect of things but 13:09 a couple of things to consider they are 13:11 a little different than for a for-profit 13:14 business but you know really it’s very 13:20 very similar okay 13:23 so covered yeah I got the other videos 13:28 there okay so I’ll qualify this video 13:41 since I did the same for my mission 13:45 statement video and my capacity planning 13:48 video capacity planning no I didn’t do 13:53 that 13:53 sorry brain got scrambled there SWOT 13:56 analysis video so I don’t know this is a 13:58 mission statement video and I do this to 14:01 be completely upfront to be authentic to 14:03 let you know that I’m not trying to I’m 14:06 not trying to sell you anything I’m not 14:08 trying to pretend to be something I’m 14:10 not 14:11 I’m you know like I said just a guy who 14:15 is better skilled in the hard skills as 14:22 I put on the spreadsheets the budgeting 14:25 the numbers the quantifiable stuff okay 14:27 admittedly that’s my thing but created 14:32 these videos on the softer skills to 14:34 round out the whole the whole street 14:40 church strategic planning series I 14:43 wanted to cover more or less all of 14:45 those steps not just the the hard skills 14:47 because I thought it had something to 14:49 offer an effect and then on those issues 14:52 on those steps and I never pertained to 14:56 say no this is the way to do it 14:58 absolutely unequivocably you know I’m 15:02 right if you think different you’re 15:04 wrong I’ve never come off that way okay 15:08 these are after giving a lot of thought 15:11 the steps I would take to address these 15:18 qualifiable everyone to put in steps 15:21 mission statements swatter 15:23 says strategy formulation that you’re 15:26 doing right now so depending on I want 15:29 to get that out there I’m also not I 15:36 guess what I’m getting at with all this 15:38 and I might not have mentioned earlier 15:39 is I’m not a churchgoer per se I’ve been 15:42 to church I’m familiar with churches my 15:45 the remainder of my family goes to 15:47 church I’m been around people who are 15:50 regular churchgoers for many decades now 15:54 and I respect it now but you know I’m 15:58 not I’m not in the pews every Sunday so 16:01 if that bothers you and if you think 16:04 that I have absolutely no value to add 16:06 because of that then you know what to do 16:09 you might have done it already 16:11 you know check out another video or 16:15 whatever but you know I do think I have 16:18 something to offer I do think what I’m 16:20 saying is authentic and how I would 16:21 address it and I encourage you to hear 16:24 me out and take the ginn take the good 16:28 parts of what you hear I’m sure I have 16:30 something to offer so you know take the 16:33 take the best of what I have to offer 16:35 them and add it to the great stuff that 16:39 you’re already doing and you’ll be RI so 16:42 yeah that’s a little background about 16:47 where I stay in dead let me add to you 16:52 know for whatever it’s worth I’m not a I 16:56 have a pretty decent amount of education 16:59 but I’m not a big proponent of formal 17:04 education having been through it and 17:07 maybe just I don’t know I’ve learned 17:13 more on my own than I ever have from a 17:16 from a professor but I have you know an 17:20 MBA I am certified management accountant 17:24 okay and most people don’t know what 17:26 that is so if you’re wondering you think 17:28 I made that up but it may 17:29 but you don’t know what it is don’t 17:31 don’t beat yourself up about that most 17:33 people don’t but you know I can say this 17:39 about myself okay so if you are in 17:43 church management and you probably know 17:46 that a person can’t really understand 17:48 religious texts until they’ve read it 17:50 many times until they pondered them 17:51 thought about them debated about them 17:54 you know just reading it doesn’t do 17:56 anything and that’s that’s part of my 17:58 problem with a formal education you know 18:00 if you go and just sit through class 18:03 you’ll probably be alright most people 18:05 are gonna graduate just doing that some 18:07 people have to work harder than others 18:08 some people have to work less hard you 18:09 know we’re all a little different that 18:11 respect but if you just go and give it 18:13 the time you’re probably gonna be 18:15 alright that’s hell it’s not half the 18:17 battle it’s 80% of the battle just going 18:19 you know but to really learn something 18:22 like you probably have when it comes to 18:25 these religious texts you know to really 18:28 be able to speak knowledgeably about it 18:31 and to really you know just wrap your 18:35 head around it you have to immerse 18:37 yourself into it you have to you know 18:43 just dive deep get really down in there 18:47 and and challenge things and think about 18:51 them and decide how you feel about 18:52 certain things and maybe test things out 18:55 and all that and that’s what I’ve done 18:56 with a lot of this stuff particularly 19:01 the quantitative aspects the the hard 19:03 skills as I put them of strategic 19:06 planning I’m I’ve taken a time and 19:09 conceived of these hypothetical 19:12 companies and in situations and I’ve 19:15 tested and I have you know just ran my 19:21 head against the wall just several times 19:23 you know with the things I couldn’t 19:25 figure out I couldn’t make add up I 19:27 couldn’t make equal out together and you 19:31 know so I 19:34 I you know I give myself a hard time 19:38 about the soft skills but you know and I 19:40 think you know I do think I have some to 19:42 offer there but when it comes to the 19:43 hard skills I’m you know I know my stuff 19:48 I’m confident in that and I can help you 19:50 out in those so those hard skill videos 19:53 are coming like I said it’s operational 19:56 budget capital budget financial budget 19:59 okay so we take your intimate knowledge 20:02 of your church and add it with my 20:05 intimate knowledge of finances and the 20:09 quantitative side of things I’m sure 20:12 that I can help you in your church 20:16 address any problems that might fall 20:18 under that umbrella okay so you know 20:25 let’s get into the actual that’s a 20:29 little bit about strategic planning 20:32 let’s get into actual strategy 20:35 formulation okay so what is strategy 20:43 formulation how’s it how’s it different 20:46 from strategic planning and I’ll go back 20:49 to the analogy I made I know I made it 20:53 in a mission statement video I think I 20:54 made it in the SWOT analysis video and I 21:01 said the mission statement gives you 21:05 direction you know do you think about 21:09 north south east west north west south 21:11 west south east north west medicine team 21:15 twice but whatever you know a mission 21:18 statement helps point you in the right 21:19 direction you think about the 360 21:21 degrees there that make it an entire 21:23 circle helps you narrow down the 21:27 direction you want to go five degrees 45 21:30 degrees 180 degrees you know whatever 21:34 okay the SWOT analysis I would draw the 21:39 analogy then Maps the terrain for you 21:42 okay here’s the rivers 21:45 here’s the hills here’s the impassable 21:48 cliffs here’s an ocean 21:51 here’s freezing weather or the you know 21:56 the frozen tundra here’s the desert 21:58 those sort of things 21:59 that’s the terrain okay so then I would 22:03 say the strategy formulation is mapping 22:07 your route okay just like when you put 22:09 in your GPS and that blue line 22:13 highlights the roads you’re going to 22:14 take from where you are to where you 22:16 want to go that strategy formulation 22:18 each step of the strategic planning 22:28 makes clear the map okay and your your 22:34 direction you’re going and how you’re 22:35 gonna get there okay so you know what is 22:40 a requisite to planning a route dub well 22:50 you have to know where you’re going okay 22:52 I mean right now I live in Kansas and if 22:57 I just type in northwest Kansas into 23:00 Google Maps or Apple Maps or whatever it 23:04 may be I don’t know that I’m gonna get a 23:07 result because that’s it’s just not 23:11 specific enough okay I mean I can put in 23:13 a city and it’ll tell me you just take 23:15 me you know to the dead center of the 23:18 city but you know you think you have to 23:22 have you know a pretty clear idea of 23:25 where you want to go before you can plan 23:27 a route to get there okay so planning 23:31 the route in terms of strategic planning 23:34 is and strategy formulation is to 23:39 crystallize your vision of your church 23:42 okay this is the close your eyes let 23:46 your mind wander and what do you see 23:48 where is your church 23:52 you know what just what did look like 23:56 you know just what a what do you want to 23:59 see if it if if you had the opportunity 24:04 you know to wiggle your nose in your 24:10 church all of its problems would be 24:13 solved 24:14 it’d be operating exactly as you would 24:18 like what you know what would that look 24:21 like it’s your vision you know in five 24:23 years or so excuse me 24:30 so that’s destination and then we want 24:37 to talk about the landmarks that you’ll 24:40 pass on the way there those are the 24:42 goals that need to be met to get you 24:44 from where you are to your destination 24:48 okay you know I’m a big proponent of 24:52 keeping things simple or as simplistic 24:56 as possible complication has well 25:01 complication always tries to push itself 25:05 into anything we do okay where we’re 25:09 thinking creatures okay and we I mean I 25:16 know I do we think you just start to my 25:23 mind runs away with all these variables 25:25 things that go wrong and that and it 25:26 ends you know it’s great to plan and ifs 25:30 and buts and all that sort of thing but 25:32 you know especially if you’re just 25:34 starting out okay don’t want to get 25:38 overwhelmed don’t want to you know don’t 25:43 want to get burnout don’t want to say to 25:46 heck with it and you know and and first 25:49 of all not do any strategy formulation 25:50 but then if you do feel overwhelmed and 25:53 not take action on it talked about that 25:55 earlier 25:57 plans no good if you don’t take action 26:00 on it okay so there are within strategy 26:09 formulation three different strategies 26:12 that need to be considered three 26:15 different but complementary strategies 26:17 that you need to think about you might 26:19 be thinking you to sell three strategies 26:22 you know man one was gonna be enough of 26:25 a problem why do I have to make three of 26:28 them and that’s a perfectly logical 26:33 thing to think but stay with me or it’ll 26:37 kind of make sense here to understand 26:41 what these three strategies are and how 26:42 they all fit together so the first 26:45 energy is the one I’ve kind of talked 26:47 about so far that’s the overall strategy 26:48 Kay the this is known as the corporate 26:51 strategy in the business world it’s for 26:53 the entire company 26:54 okay the goals that your church as a 26:57 whole has to achieve to get from where 27:01 you are to where you want to be where 27:03 that vision is okay where that 27:05 destination is now a subset of that is 27:09 the competitive strategy okay and maybe 27:13 you think to yourself now well I’m a 27:16 church we don’t have competition I would 27:21 if that is what you’re thinking I would 27:24 urge you to rethink that okay because 27:26 from what I can see is an outsider 27:28 looking in there are two drastically 27:32 different views in terms of how a church 27:39 might address competition okay there’s 27:42 the the meta perspective I might call it 27:47 where a church things that as long as 27:51 somebody is a peace with God or 27:53 acknowledges Jesus as their Savior 27:58 or does any of those big picture things 28:03 then 28:07 it’s okay they might come here they 28:11 might go somewhere else but as long as 28:13 they’re they have these these big 28:15 picture tenants addressed as as long as 28:21 people you know are cool with these big 28:25 picture things then you know here 28:28 they’re what we’d love to have him here 28:29 but they go somewhere else that’s all 28:31 right you know they don’t necessarily 28:36 revolve around people just coming to 28:39 your church okay that’s the kind of meta 28:40 view the other perspective the other 28:43 extreme I should say would be the notion 28:47 that you and your church are basically 28:50 the one true way into paradise after you 28:57 die it’s the the one right way to live 29:02 you know in that case your competition 29:05 has every other Church that doesn’t 29:07 conform to exactly your your your same 29:11 doctrine okay 29:13 in either case both of you are gonna be 29:17 competing against anything else that 29:18 might keep persons from going to church 29:20 in the first place because the person 29:22 doesn’t go to church in the first place 29:23 they’re not going to come to your church 29:26 that believes that it’s you know the one 29:28 true the one true way okay so you my 29:35 point with this is you’re competing with 29:37 something whether you know it doesn’t 29:41 matter where you are you’re somewhere 29:43 probably between those two extremes your 29:45 church okay I would imagine most arm all 29:49 right but you know I’m not passing 29:54 judgment either way okay that’s you tell 30:00 you know I’m in absolutely no position 30:03 to tell you or your church how to what 30:06 to think in those respects okay like I 30:08 said I just use the extremes those 30:11 column as an example okay my goal is to 30:14 help you reach your goals whatever they 30:16 may be 30:17 and I make that illustration like you 30:20 said to help you understand that you 30:23 have competition okay so you have to 30:35 keep that keep that in mind as you move 30:38 forward and make your goals you you have 30:40 to have a competitive strategy to a 30:43 greater or lesser degree okay 30:45 the last of the three different 30:48 strategies is the functional strategy 30:50 okay 30:53 functional strategy is where you take 30:55 the overall strategy and break the goals 30:57 down into the departments in your church 31:00 okay so let’s look at our counterparts 31:03 in the for-profit world they will have a 31:09 corporate strategy but then have a 31:10 strategy for for manufacturing for 31:15 customer service 31:17 Stratton by strategy I mean goals okay 31:20 for marketing for sales for quality 31:24 control okay and all of those goals are 31:28 going you know achievement of those 31:32 departmental goals the functional goals 31:34 are gonna contribute to the achievement 31:36 of the goals by the organization as a 31:39 whole 31:40 so your church might be big small in 31:44 between but no matter how informal it 31:47 might be okay you have departments most 31:49 likely you have somebody that kind of 31:51 does your finance accounting you have 31:53 somebody kind of does operations so to 31:56 speak interaction with members so as we 32:02 move into the how-to portion of things 32:04 you can ultimately have to think about 32:07 what goals make sense for those those 32:09 smaller departments that are gonna help 32:11 your church as a whole reach its goals 32:14 okay so let’s get into the actual how-to 32:22 again this is just one way to address it 32:26 not the definitive way to dress it so we 32:30 talked about vision okay what is your 32:33 church look like in five to ten years 32:35 what do you picture what you know what 32:40 would make you feel like oh man we made 32:43 it you know its challenges are addressed 32:50 things are rolling good I mean you can 32:54 never Alton I don’t think then maybe 32:56 this apartment personality I’m a little 32:58 high-strung in that respect always 33:00 pushing to do more achieve more and that 33:04 but you know but putting in this is just 33:08 a thought exercise so you know what 33:10 would your church look like if you did 33:14 that if you you know if you took time 33:18 and thought about your vision and you 33:22 know what do you what do you seeing what 33:24 did what would it take to reach a goal 33:27 what has to happen 33:28 you can try working your way backwards 33:30 from that vision you can try to work in 33:32 your way forward from it and hopefully 33:34 as you kind of look at both you know 33:38 work your way backwards from the 33:39 destination work your way forward from 33:40 where you are hopefully you can start to 33:42 paint a picture of the goals that need 33:46 to be met in order to create that route 33:52 for you to get from where you are to 33:54 where you want to be you know I mean 33:55 think about it if you want a thousand 34:02 members in your church and currently 34:04 only have a hundred well you’ve got to 34:06 have 200 before you have 500 before you 34:11 have 800 before you have a thousand okay 34:14 things have to happen just in steps it’s 34:16 not tomorrow a thousand show up okay 34:19 that would probably frankly be 34:22 disastrous so it’s about thinking about 34:25 the milestones that have to be hit on 34:27 your way to achieving your vision 34:30 this should start to give you a little 34:32 idea of your path okay this is since 34:35 things are still a little big here but 34:37 it should start to hopefully you know 34:40 see a little little bit of that blue 34:42 line to lead you from where you are to 34:44 where you want to be you know in 34:49 particular the things you know what 34:52 happens tomorrow what happens next week 34:55 next month the theme the short term is 34:59 more under your control and it’s more 35:00 certain than the long term okay that’s 35:03 the case in whatever you’re doing 35:05 whether it’s strategy formulation or 35:07 forecasting you know when it comes to 35:12 making revenue or expense estimates for 35:20 capital budgeting operational budgets 35:22 know that okay so you know you want 35:28 probably more goals in the in the 35:32 short-term as in the coming year than 35:35 you do in year two three four five six 35:37 seven eight nine ten okay there’s you 35:43 know there’s any infinite number of 35:44 things that you could do to move 35:48 yourself towards that vision and you 35:51 don’t have the time and energy to do a 35:53 lot you don’t have the resources to do 35:54 them also so keep it simple and 35:57 achievable okay you know if you do your 36:02 little part keep in mind that the other 36:05 organizations out there that are doing 36:07 good in the world they’ll do their 36:08 little part and you know when you 36:10 combine all the little parts that you 36:14 know all the churches over the world do 36:16 then you know what what that can add up 36:21 to could be pretty significant okay so 36:25 with your goals I mean you probably 36:28 heard the old analogy about goals they 36:30 got to be smart I don’t even remember 36:32 them so you can we look that up here 36:39 it’s not not bad it’s not bad advice I’m 36:45 not cracking on it but smart means 36:48 specific measurable achievable relevant 36:53 and time-bound it’s good good rule of 36:55 thumb to to keep in mind when coming up 37:03 with goals okay you know you just I want 37:09 to I say this in every video and I want 37:12 to re-emphasize it you know just make 37:14 sure you’re dealing with reality don’t 37:17 don’t make pie-in-the-sky goals don’t 37:19 make goals I’ve worked for for-profit 37:22 companies they make goals they’re just 37:24 silly 37:25 I mean it’s just they’re they’re 37:26 arbitrary and they don’t you know they 37:29 don’t do anything to motivate anybody 37:30 they don’t you know it’s just going 37:33 through the motions it’s pointless it’s 37:34 a waste of time okay so so simple and 37:38 achievable okay focus on your strengths 37:42 from the from the SWOT analysis okay you 37:52 know if you have a car that’s meant for 37:59 met for speed then take those roads that 38:04 are long straight flat tops that you 38:06 know you can see the cops coming from 38:08 ten miles away right and you can take 38:11 that bad boy up to 150 I mean if that’s 38:14 your strength that’s your car if you 38:15 have the you know off-road vehicle or 38:21 that then take that that that can only 38:24 go you know 50 miles per hour tops don’t 38:27 worry about those take that take the 38:29 shorter route that can take the rough 38:31 terrain and and can handle it okay so 38:35 yeah keep in mind your strengths don’t 38:38 don’t fight yourself on your own goals 38:41 you know I’m saying so a couple of 38:44 things to keep in mind there 38:48 when coming up with goals based on your 38:53 vision another thing to do is put 38:54 yourself in the public shoes okay so 38:59 like it or not like said we talked about 39:04 so where’s the vision kind of addresses 39:08 the back up forcing it where the vision 39:10 kind of addresses the corporate strategy 39:13 all right putting yourself in customer 39:15 shoes is going to address the 39:17 competitive strategy the next section is 39:19 going to address the functional strategy 39:23 okay so when it comes to the competitive 39:26 strategy put yourself in the public’s 39:28 shoes okay you have to think about how 39:32 you’re perceived when you’re compared to 39:33 the alternatives alternatives might be 39:35 Church down the street or they might be 39:37 something frankly a little less 39:40 desirable okay a little less holy so to 39:44 speak but you know these temptations 39:47 exist if they didn’t everybody would 39:49 come to your church you’d have 7 billion 39:52 people there every Sunday I mean that’s 39:54 not the case there there are 39:56 alternatives now obviously there’s old 39:57 geography saying there it’s an extreme 40:01 example but you get my point 40:03 ok there are alternatives if people have 40:09 to make that decision 40:10 Sunday morning Saturday evening whatever 40:12 it might be Sunday afternoon to come to 40:19 find transportation and to come to your 40:21 church and make the commitment to stay 40:23 for 45 minutes an hour an hour and a 40:26 half two hours whatever it may be 40:27 okay so there’s competition so it just 40:30 helps to put yourself in your customers 40:32 shoes your member shoes your potential 40:35 members shoes and try to see things from 40:39 their perspective okay so you know that 40:46 the number of competitors depends kind 40:48 of where you are on that spectrum if you 40:50 take the the meta view as I said and you 40:53 know you’re really just competing 40:55 against temptations that would keep 40:56 people 40:58 from being religious or being spiritual 41:01 or something like that you know in the 41:03 end if your your your you feel as though 41:08 your church is the one way then you’re 41:09 gonna have a lot more competitors I mean 41:11 that’s just simple logic 41:12 you know you you’ve got a taller task on 41:16 your hands okay so think about what 41:23 makes your church different what it you 41:25 know again the for-profit parallel I 41:31 might draw as you know they always talk 41:34 about a unique selling proposition I 41:36 mean what’s your what what why you why 41:39 your church you know why why should 41:42 people to choose your church why do they 41:44 you know the the will probably come 41:47 from the do you know if you if something 41:51 doesn’t pop in your head right away you 41:52 know talk to your people solidify it 41:55 think about why you’re there you know 41:57 why you chose the work of this 41:58 particular church or volunteer or 42:00 whatever it might be you know you want 42:05 to you want to keep that in mind as you 42:06 make goals for a competitive strategy so 42:10 you know again does it also say there’s 42:15 a reason that these strategic planning 42:17 steps take place in the order that they 42:20 do because you want to think back to 42:22 your strengths and weaknesses from the 42:23 SWOT analysis which should my opinion be 42:26 done before this step okay about how you 42:29 set your church apart you know 42:31 weaknesses or things you want to avoid 42:33 strengths or things you want to 42:34 capitalize upon you know think back to 42:37 when you cross-reference strengths 42:38 weaknesses opportunities and threats 42:39 okay those are good ideas about goals in 42:43 terms of competitive advantage and you 42:46 think back to that I mean it had 42:48 everything from what the SWOT analysis 42:54 was your environment so you know you 42:56 want to if having considered your 42:58 environment the reality you work and you 43:00 want to make goals based on that you 43:02 want to make goals that are gonna set 43:04 yourself your church apart from other 43:07 churches based on the environment 43:11 you operate it okay so things from you 43:14 know your traffic and your signage to 43:17 the demographics of where you operate 43:21 out of to the culture of where you 43:26 operate up and all those things all 43:27 things to consider as you make those 43:30 competitive strategy goals so you know 43:35 keep in mind competitive strategy is a 43:37 subset of your overall strategy so don’t 43:39 make a competitive strategy the 43:41 contradict your overall strategy okay it 43:44 it it should just be a more detailed set 43:49 of goals that feeds from your overall 43:55 strategy okay because you can’t serve 44:00 two masters so to speak have a 44:02 competitive strategy that with goals 44:05 that have you doing one thing and 44:06 overall strategy has you doing a quickly 44:08 different thing okay you’re the the path 44:11 there’s gonna break off in okay or it’s 44:14 going to turn into a dead-end okay you 44:16 gonna have a fork in the road and 44:18 they’re both gonna be dead ends you get 44:20 to go back to the map analogy so the 44:24 final part here addresses and last part 44:31 the functional strategy so you got your 44:35 overall strategy you got your 44:36 competitive strategy you’ve got goals 44:38 for each okay it’s time to start then 44:43 thinking about what the departments 44:47 within your church what they can do what 44:50 they can achieve what they need to 44:52 achieve for those competitive goals and 44:55 those overall goals to be achieved you 44:58 know if your church is super small those 45:03 you know the the different functional 45:05 roles might be fulfilled by the same 45:07 people okay it that doesn’t matter you 45:12 know it again it’s more about the role 45:15 the number of individuals doing it okay 45:19 so that’s kind of a thing where you need 45:24 to 45:25 custom make it for for your church and 45:30 you know just again you might have 45:34 departmental goals if you’re not big 45:35 enough to have departments then it might 45:37 just being a goal for Sally who helps 45:41 out with the books a goal for Joe who’s 45:44 the pastor a goal for you know Bob who 45:50 does the outreach in a community or you 45:53 know whatever it may be just you know 45:57 it’s kind of breaking those goals down 45:59 and then the smaller more more tangible 46:05 chunks that just things that the 46:09 individual people okay because any any 46:13 organization any church is made of 46:15 individual people goals that those 46:18 individual people can say okay if I do X 46:21 Y & Z every week every day I can picture 46:25 achieving this that or the other in a 46:30 month in six months and then if I keep 46:32 doing it beyond their achieving this in 46:35 you know a year and then by achieving 46:38 that in a year that’s helped to improve 46:41 the church’s competitive position you 46:45 know whether it’s filling out or 46:49 somebody running your social media and 46:51 just doing doing something on there and 46:53 it all of a sudden helps set your church 46:54 apart that helps you achieve your goals 46:58 from your competitive strategy and you 47:02 know that coupled with other goals 47:04 achieved from your competitive strategy 47:06 can help you achieve an overall goal you 47:10 know an increase in membership a 47:13 stronger membership whatever it may be 47:16 I hope I’m painting that picture about 47:18 how you know you know it just all breaks 47:21 down to individuals day in day out it’s 47:24 a grind sometimes these sorts of things 47:26 but you know doing the right things 47:31 moving towards a goal achieving small 47:34 goals that compound in the big 47:36 goals and snowball to even bigger goals 47:38 which take you from where you are okay 47:41 to your destination your vision so kind 47:48 of wraps things up I want to emphasize 47:49 again you know try to keep this stuff 47:51 simple especially if this is your first 47:52 year doing this sort of thing you know 47:54 it you might be gung-ho about it if you 47:57 know if hear me talk about these sorts 48:00 of things get you gung ho then I’m 48:01 flattered okay but rein it in a little 48:04 bit keep a practical focus on you know 48:11 understand the first time around you do 48:13 this that you know it’s not gonna be 48:16 perfect you’re getting get better every 48:18 year that’s good okay you want to get 48:19 better at it every year all right so 48:21 don’t just keep it I just you know 48:25 that’s my advice to keep things simple 48:29 okay and understand that it’s through 48:31 failure really that we learn our lessons 48:34 okay 48:35 learn two things that we need to to 48:37 succeed so don’t you know don’t look at 48:40 that failure is the end of the road okay 48:43 just uh just a detour okay roads 48:47 washed-out there’s construction traffic 48:51 jam okay on the way so you know keep you 48:58 know just don’t let falling short you 49:01 know keep you from making big plans high 49:04 aspirations and that sort of thing if 49:06 you need to go through the steps again 49:09 these strategic planning steps I think 49:12 you’re gonna be better off and you’re 49:14 gonna be closer to those you know 49:17 everything that you do that I’ve 49:20 outlined I think will help you get 49:24 closer to achieving what you want to 49:26 achieve again if I were starting my own 49:29 church tomorrow these are the things 49:32 that I would do okay so that kind of 49:38 wraps up the main part of the video you 49:43 know I like to end my videos 49:46 with with a few questions 49:51 food for thought so to speak for the 49:52 comments before I do that I have to do 49:59 something that I’d love to do suck up my 50:01 pride and just ask for likes 50:07 subscriptions notifications comments are 50:11 good I guess anything that sends 50:12 positive feedback to YouTube that you 50:16 liked what you heard even if you’d only 50:18 like some of it it’s it’s free you know 50:21 you’re you don’t only have like so many 50:24 likes to give over your lifetime you 50:25 could like every video on youtube if you 50:27 wanted to you know like I said I hate I 50:32 hate to grovel but you know if you did 50:35 like something that you heard it’s it 50:38 does help it gives me positive feedback 50:42 to do more of this sort of thing and it 50:46 gives positive feedback to YouTube 50:51 Google whoever it may be that you know 50:54 hey get this in front of more people 50:56 that’s just the way the system works and 50:59 you know it’s not necessarily always the 51:02 best videos that get in front of the 51:05 most people okay you know thanks first 51:08 of all for even just watching the video 51:10 um you know this this YouTube video or 51:13 YouTube channels and it’s empathy and 51:15 and you know I’m thankful to have people 51:19 who watch it but yeah so any of that 51:22 stuff like subscribe you know because I 51:26 do have a lot more coming up you know 51:28 not just in church is just a lot of 51:32 great information coming up just for 51:35 business in general Alerts comments all 51:40 that so thank you in advance for all 51:42 yeah so yeah in the comments look what I 51:46 want to hear back from you guys is kind 51:48 of two things you know first of all 51:50 what’s your vision for your church okay 51:52 if you’re in church management great 51:54 what let me know what your vision is 51:58 for the church that you manage on the 52:02 flip side though – if you’re just a 52:04 member of a church what’s your vision 52:06 for the church that you’re a member of 52:08 okay I mean or what’s your vision of a 52:10 church in general how would you paint 52:12 your perfect church okay what you know 52:16 what would it do who would it serve a 52:19 bit would it be you know whatever 52:21 whatever comes to mind 52:23 whatever happens when clear your mind a 52:26 little bit close your eyes and think 52:27 about it and then on top of that another 52:30 thing I’d like to know from you guys is 52:33 whether it’s you know a church you 52:37 manage your church that you attend what 52:40 what’s one goal that would bring it 52:42 closer to that you know I think I don’t 52:49 have to list you have to go through a 52:50 whole strategy formulation process but 52:52 you know look giving this feedback could 52:56 give great ideas the people who are 52:59 watching this video five years from now 53:01 you know like my hope is this content a 53:04 little bit evergreen so it’ll be up for 53:08 a while and people you know that’s 53:10 beauty YouTube people keep searching for 53:13 it and if I get you know if we convince 53:16 YouTube that it’s good content they’ll 53:19 keep showing it to people and what you 53:22 put down in the comments now could help 53:23 inspire somebody one three five ten 53:27 years from the hundred years for me who 53:29 nothing was really so I’d love to hear 53:31 from you guys on that that’s all I got I 53:34 I didn’t even keep track of this time 53:36 keep track of time this time I just I’m 53:39 sure that this was long and appreciate 53:42 you if you’re still with me appreciate 53:44 you sticking with me this long and thank 53:48 you for that take care all right
Strategic planning consists of several steps, one of which is strategy formulation – the creation of goals to help you realize your vision
Church strategy formulation actually consists of three “sub-strategies.” The overall strategy, the competitive strategy, and the functional strategy
Failure to achieve your strategic goals is only bad if you don’t admit your shortcomings or if you quit
A step-by-step church strategic planning template
Every organization makes decisions – that’s why planning is necessary.
Strategic planning can mean many things to many people. There is no one way to create a strategic plan. Even if there was, the value isn’t in the act of strategic planning itself. It’s in the execution of the strategic plan. So, ultimately, the best strategic plan is the one you follow through on.
Keep that in mind as your church goes through this process.
Let’s look at two different church strategic plans
The first consists of one goal – “put a handrail on the steps for the elderly members.” In the subsequent weeks, the job was bid out and a handrail was installed.
The second involved the pastor, the elders, a consultant, and several members of the congregation. Six intensive weeks were spent on all the necessary steps. Documents were drafted, spreadsheets were made and hours of debate took place. When all was said and done – a very thorough and well-thought-out strategic plan was drafted. Then, nothing contained therewithin was acted upon. Nobody gave the strategic plan a second thought once it was done.
Which is better?
Obviously, the first church’s strategic plan is superior. Why? Because it got something accomplished. All the words in the world are useless unless they lead to action.
Should you follow this church strategic planning template exactly?
Don’t look at this template as a blueprint that you should never deviate from. Rather, know that following these steps should ensure, at the very least, that you think about your church in a comprehensive manner. Also, maybe most importantly, it will ensure that you give careful consideration to the financial aspects of your church operations. Whether you are a for-profit business or a not-for-profit church, your strategic plan has to make financial sense. If it doesn’t, then it’s pointless.
Here are the suggested steps for creating a comprehensive church strategic plan:
Create (or review) your church’s mission statement
Perform a SWOT (Strength, Weakness, Opportunity, Threat) analysis of your church
Formulate a strategy; i.e. what goals will need to be met?
Evaluate any large-scale projects with a capital budget
Analyze your organization’s capacity; i.e. your ability to meet demand
Create an operating budget – a forecast of income and expenses
Create a financial budget – a forecast of the timing of cash flows
Some of these steps might require very little time or effort. Others might take considerable work and necessitate the involvement of many individuals within your church.
Dedicate at least a little thought to all of these steps. You’ll probably uncover something that you hadn’t even thought of before. The biggest threat to your church is probably not the “known unknowns;” the things you know you should be more knowledgeable about. It’s the “unknown unknowns;” the risks you never even knew existed.
“Are all those steps covered in this church strategic planning template?”
No.
That’s a lot of material to cover. Too much for one web page (if you want to cover it thoroughly – which I do).
Most steps warrant their own page. As they’re created, they’ll be linked.
This post will cover strategic planning in general and strategy formulation in particular. What the heck’s the difference? That’ll be made clearer as you read on. Long story short, strategy formulation consists of the creation of goals and the fine-tuning of the direction of your church. It is a component of the broader concept of strategic planning.
Since this guide is for churches, I suppose I should kick it off with a confession
I’m not the most religious person in the world. Far from it, in fact. I can probably count on my fingers and toes the number of times I’ve been to church in my life.
Now, before you scoff, let me reassure you that I am no atheist either. I simply feel that spirituality is a private matter.
Not everybody feels that way, I know. A lot of people feel the opposite – that you can’t express your appreciation for God without doing so amongst your fellow humans. That’s perfectly fine; it’s just not where I’m at.
I wanted to be upfront so that you had a little background on the person writing this post.
“So…why’s a guy who rarely goes to church writing about church strategic planning templates?”
To be completely honest, it’s because “church strategic plan/strategy/etc” is an oft-searched-for term on Google.
Is that tacky? I don’t think so.
To be fair, that’s why 90% of the content on the web is written – because it’s what people want to know about. I have some knowledge on a subject and I’m sharing it within a niche where there is demand for that knowledge.
Beyond the demand for this information on Google, I’ve studied this subject extensively in the past. There’s a pretty good likelihood I’ve studied more on the matter than you. No, I’ve never started a church or led one through a miraculous turnaround.
Frankly, the “soft skills” (mission statement, SWOT, strategy formulation) aren’t my biggest strength. When it comes to the numbers (budgets) however, then you’re talking my language.
Fortunately, the soft skills involve a lot of material that can only be addressed by you and other members of your church. I couldn’t do that part for you even if I wanted to. I can sure as heck help you with the budgeting and anything else that involves numbers and a spreadsheet. At the end of the day, numbers are numbers and they have to make sense no matter what type of organization you’re dealing with.
Beyond that, I think I offer one more benefit that the professional church consultants of the world can not – I can offer you the perspective of a yet-to-be-won-over customer. If your strategy involves growing membership and reaching more people, then you need to understand how these people think. Not everybody has the exact same views I do, of course. But, if you’re wondering how the “spiritual, but not religious” crowd thinks, I can probably provide some insight.
“Do you have any qualifications?”
I’ve got a bachelor’s and master’s degree in business from AACSB accredited schools. Also, I am a Certified Management Accountant. But, all that really doesn’t mean much.
As you probably know – a person can’t really understand religious texts until they’ve read them many times. Until they’ve pondered them and debated them with their peers. Simply going through the motions and memorizing facts accomplishes very little. It takes deep-diving and immersion to get a real understanding of a subject.
That is exactly what I’ve done with the quantitative aspects (the “hard skills” so to speak) of strategic planning.
So…with your intimate knowledge of your church, your congregation, and your community, combined with my intimate knowledge of finances, we can probably get you pointed in the right direction.
Look, a lot of these concepts (especially the soft skills) come from academia. I’m going to write as authentically as I can, but some of these concepts are grounded more in theory than practice. Created by “those who can’t do.” Not by the people “in the trenches.” People like you
What is written here is not gospel (so to speak). This is not the only way to have a successful church. But, if your church follows these steps, I think you’ll uncover some valuable information. By going through these exercises, you’re bound to find a thing or two you had not considered before. If it serves no other purpose, this church strategic planning template will force you to think comprehensively about your church from a “higher level.”
That said, here we go…
Church strategy formulation
Remember that this post is kind of a hodge-podge. The section above covered strategic planning as a whole (all of the steps). This section will address the formation of a strategy – the third step.
Within this church strategic planning template, strategy formulation takes place after a mission statement has been drafted and a SWOT analysis has been performed.
What is strategy formulation?
The best way that I know of to explain this is to use a map analogy.
The previous steps focused on providing a direction (mission statement) and understanding the terrain (SWOT analysis). Strategy formulation is about deciding exactly where you want to go and what route you’re going to take to get there.
But, before a route can be planned, you have to know what your destination is.
Where do you want your church to be in five years? What’s your vision? What do you see when you let your mind wander? That’s your destination.
So, if you know your destination, that’s good. You have a leg up on a lot of other people. Let’s talk about the landmarks you’ll pass on the way there. These are your goals.
See how this is all fitting together?
As always, try to keep things as simple as you can. Too many goals and you run the risk of goals conflicting with one another. Or you might have a situation where you feel overwhelmed. Only make goals that will lead you to your vision. Not take you on detours.
As we all know, there is more than one way to get from point A to point B. In fact, you’ll be developing 3 separate, but important strategies (routes) for your church.
The 3 strategies
Maybe you’re rolling your eyes now. “Three strategies?!?! One was going to be enough of a pain!” I know, I know. Again, I urge you to read through this and give some thought to the topics covered. Also, don’t make things too complicated. If you and the other decision-makers in the church ever feel like you’re spinning your wheels – take a step back. Make sure you aren’t over complicating things.
By even giving just a little thought to these topics, you’re setting your church up for improvement.
So, what are these three strategies I speak of?
1. The “overall” strategy
This is what would be known as the corporate strategy in the business world. This will be comprised of the goals of the church as a whole and the strategies that need to be adopted to reach those goals.
Maybe you don’t consider church management to be a competitive industry. Personally, I don’t think it should be.
I suppose there are two extreme schools of thought on the matter.
There’s the “meta” school that says what’s important is that people make their peace with God and they live in a manner that is in harmony with all other living beings. In this case, your competition would be anything that might potentially disrupt this harmony. Your goals wouldn’t necessarily revolve around people following you, but rather that people followed someone, anyone, worthwhile.
The other end of the spectrum is the notion that you, and your church, are the gatekeepers of the “one true way.” In this case, your competition is any other church that doesn’t conform exactly to your doctrine. Plus anything that would lead people away from the church in the first place. Put another way – you are competing against the vast majority of the rest of the world.
Probably you and your church fall somewhere in between. You feel like your church and your beliefs offer the best chance for salvation. Following others might help someone…but you can’t offer any guarantees.
I’m not passing judgment either way. My goal is to help you reach your goals.
Here’s the reality of the situation, though. No matter how strict your beliefs, you are competing against something. Whether it’s another belief system or the most unforgivable sin imaginable, something is tugging at your current members and you’re would-be members. You’re competing with something and your church has to develop a strategy to compete. Or…you probably won’t reach your goals.
3. The functional strategy
This is where you take the overall strategy and break it down between the departments within your organization.
For example, a for-profit corporation would have to consider what operations, sales, finance, and marketing would need to accomplish as departments in order for the overall goals to be achieved.
No matter how informal they might be, your church likely has departments of its own. However small, your church has a finance/accounting department. It has an operations department – e.g. the actual interaction with the members. And so on…
What do these “departments” within your church need to accomplish so that your church can reach its overall goals? Again – try to keep it relatively simple. Keep this strategy oriented toward the bigger picture and the overall goals.
How to formulate a strategy
We’ll start first with the overall strategy and work our way down.
What does your church look like in 5 – 10 years?
That vision you have for your church in 5-10 years – what has to happen to reach that goal? Try working your way backward. Before you can say to yourself “we did it,” what took place?
You have to have 500 members in your church before you can have 1,000. You have to have 100 members before that. Think about the milestones that have to be hit on the way to achieving your vision. Hopefully, after giving this some thought, your path should start to take shape. Maybe you’ll see that this grand, overarching, vision you have for your church isn’t unattainable. It’s just a matter of steps. First one, then the next, and so on until you’re finally there.
Focus, in particular, on the coming year. Don’t get ahead of yourself. What milestones must be hit if you’re going to get where you want? These are milestones that, if they aren’t hit, then realizing your vision simply isn’t going to happen. Got it? Okay, those are your goals.
Again, don’t venture too far off the path here. There is an infinite number of things you and your congregation could do to benefit the world. There simply isn’t enough time and resources to do them all.
Fortunately, there are a lot of other do-gooders like yourself out there. Between you and them, you can make a considerable impact on the world.
What if the goals for the year seem too unattainable? Then you’re going to have to back up and rewrite them. Unattainable goals won’t motivate you, and they sure as hell won’t motivate those that work for you and volunteer for the church. We’re dealing with reality here and anything that is unrealistic serves no purpose. I can’t reiterate it enough. Particularly for the overall strategy – keep it simple. If you do that and focus on your strengths (don’t try to be everything to everyone) you’ll have a shot.
Put yourself in the public’s shoes
Next, you have to consider how you’re perceived when compared to alternatives.
The alternatives might be the church down the street or they might be something much more sinister. This is where you have to consider who your competition is.
If you take the “meta” view mentioned above, then it’s probably not the church down the street. It’s the temptations in this world that would lead people away from religion in general.
Conversely, if you take the view that your church’s way is the is one true way, then your number of competitors is considerably higher. It’s the church down the street and it’s the religious figures on the TV. It might even be any number of authors or bloggers. Again, if that’s the view you take, I’m not passing judgment – just trying to help you put things into perspective.
Most churches are going to fall somewhere in between these extremes, however. With your competitors in mind, whoever or whatever they may be, consider what makes your church different.
Think back to your strengths and weaknesses from the SWOT analysis. Your strengths are how you will set your church apart. Your weaknesses are, obviously, things you want to avoid when constructing a competitive strategy.
Did you cross-reference your strengths, weaknesses, opportunities, and threats when you did your SWOT analysis? That’s a great resource for ideas about goals that can help your church gain a competitive advantage.
Also, keep in mind that your competitive strategy is a subset of your overall strategy. Don’t get pulled off in a completely different direction. Think about what competitive goals for the coming year (and beyond) fit in with your overall strategy. As with the overall strategy – limit the number of competitive goals you create to a number that is manageable. Less is more.
Break your church’s strategy down even further
Every overall and competitive goal for your church as a whole is comprised of smaller goals that must be reached by the separate functional departments within your church.
If your church is small, many of these roles might be filled by the same person. No matter who does what within your church, you now want to consider what each functional department must accomplish in order for your overall strategy and your competitive strategy to work.
Not every church will have the same departments and if they are not big enough to warrant their own strategy, that’s fine.
You know the drill by now – make sure every goal set for a department is congruent with the mission, overall strategy, and the competitive strategy. Goals that play to a particular department’s strengths and takes advantage of opportunities are more likely to be achieved.
Finally, and most importantly, keep the number of goals as minimal as possible and keep things simple.
Complicated strategies are less likely to be carried out. Particularly if it’s your first time drafting a strategy.
Hopefully, this isn’t a make-or-break year for your church. Your strategy probably won’t be flawless, even if you are an experienced strategic planner.
I watched a really good YouTube video today about entrepreneurship. The gist of the video is that it’s only through failure that we learn what we need to in order to succeed. The only time we really fail is when we refuse to admit that we messed up and when we quit.
So, don’t let a fear of falling short of your goals prevent you from planning big things for your church. If you went through the previous steps (mission statement, SWOT analysis) you should have a better grasp on what goals can help your church reach its vision.
What does your church look like in 5-10 years? What’s your vision?
If you could make one goal for your church this year, to move you toward that vision – what would it be?
Leave a comment and let me know!
Also, check out my video on church strategy formulation below.
00:00 how’s it going small business owners and 00:04 church professionals this is Chris 00:07 Charles with spreadsheets for business 00:10 comm and this is the accompanying video 00:16 for my post on conducting a SWOT 00:21 analysis for your church it’s the second 00:27 in the series that focuses on strategic 00:31 planning for churches and it’s another 00:35 one like my previous one I focused on 00:40 mission statements that is on in the 00:43 soft skills as I put it 00:47 most of what you’ll find on spreadsheets 00:50 for business comm is of course about 00:53 spreadsheets you know conducting the 00:57 SWOT analysis isn’t necessarily a 01:00 spreadsheet centric sort of thing 01:04 so it’s there’s no spreadsheet in this 01:09 one so I’ll apologize in advance for the 01:11 kind of dull background this might be in 01:14 the type of video you’ll just want to 01:16 put on in the background I don’t really 01:19 have much visually to put in there to 01:26 spice it up it’s just mostly gonna be 01:28 audio so I admit that that’s probably a 01:33 touch boring I mean I could have put 01:35 together a fancy-pants spreadsheet I 01:38 guess but in the interest of getting 01:41 this done and getting it out and you 01:43 know ultimately arms not fancy-pants 01:45 spreadsheets are a fancy-pants 01:47 presentation slideshow that’s what I was 01:50 looking for could have done that but you 01:55 know ultimately the value in this is in 01:57 the audio so you might be wondering well 02:04 okay if your spreadsheet if you’re gonna 02:08 spread sheet on the brain if your 02:09 website is 02:11 around spreadsheets then why do a post 02:14 on in a video on SWOT analysis and 02:19 that’s a good question and kind of like 02:21 a touched on in the mission statement 02:23 video because there are other elements 02:27 of strategic planning that involves 02:31 spreadsheets involve them heavily 02:33 capital budgeting for the church 02:36 operating budget for the church 02:38 financial budget for the church those 02:42 all build upon the softer points of 02:50 strategic planning specifically mission 02:52 statement SWOT analysis and strategy 02:59 formulation is the other one so they you 03:05 know these this video and post serves to 03:09 kind of round that out fill in fill in 03:13 the blanks kind of paint a complete 03:14 picture of what takes place during 03:17 strategic planning so you know since I 03:20 covered the the harder skills if you 03:24 will the spreadsheet and number 03:28 crunching and all of that I wanted to 03:30 like I said paint a complete picture by 03:32 covering some of the softer skills 03:36 heading out there will be a link to this 03:40 post on the website in the description 03:43 and it’ll kind of serve as a reference 03:48 if you know you want something in print 03:52 to refer to if you think back to 03:56 something in the video that I mentioned 03:58 and maybe you wanted to touch on again 04:00 it might be easier search for it and 04:02 print you know some of them the link 04:04 will be like I said in the in the 04:07 description there okay so let’s get into 04:13 a little bit of what a SWOT analysis is 04:14 and I’m gonna do my best to kind of push 04:18 through this this is a 04:20 it’s a big post it’s a complex topic 04:23 it’s you know it could go on for a while 04:26 and if you’ve seen in my other videos 04:29 you know that I’ve got no problem 04:32 rambling on about these subjects but you 04:37 know I’ve got a lot say on the matter 04:41 and you know I’ll try to but I’ll try to 04:43 keep it focused keep it moving here and 04:45 get this bad boy done under an hour okay 04:50 so a SWOT analysis what is a SWOT 04:52 analysis and if you can probably read it 04:54 in description 04:56 it’s about s wo T and that is an acronym 04:59 and that stands for strengths weaknesses 05:02 opportunities and threats okay s wo t 05:08 alright and what it does the point of it 05:12 is to paint a picture of the environment 05:15 that your church operates in so you’ll 05:19 hear a SWOT analysis referred to 05:22 sometimes as a situational analysis okay 05:26 the same thing it’s just taking time to 05:29 commit thought to your environment okay 05:37 understanding what your internal 05:40 environment is you strengths some 05:42 weaknesses your external environment 05:44 your opportunities and threats and how 05:47 all those interact will help you should 05:51 help you in your decision making over 05:54 the coming year okay so you know where 06:01 to even start with a SWOT analysis 06:09 start with thinking about you can start 06:13 with strengths and weaknesses or 06:14 opportunities and threats but you know 06:16 sometimes it’s easier to wrap your arms 06:21 around things that are within your 06:22 control and that’s the strengths and 06:24 weaknesses okay and when you’re thinking 06:31 about your strengths and weaknesses it’s 06:36 not a time to let yourself off the hook 06:41 it’s not a time to you know put on your 06:46 rose-colored glasses you if you want 06:49 this whole exercise to be effective 06:50 you’ve got to be painfully honest with 06:54 yourself okay so don’t list things you 07:01 think should be your strengths or wish 07:03 were your strengths and ignore things 07:06 that are your weaknesses you know you’ve 07:10 got a ultimately to put to make this 07:15 whole strategic planning process worth 07:18 your time you know you’ve got a deal in 07:21 reality so you’ll want to focus you know 07:25 once the SWOT announced has done focus 07:28 on your strengths and control your 07:32 weaknesses okay so the other side of the 07:35 coin is or excuse me opportunities and 07:39 threats these things outside of your 07:41 control be and you’ve been done so to 07:46 speak 07:48 you could probably be a little more a 07:54 little more in touch with reality when 07:59 listing your opportunities and threats 08:03 but you know don’t also when you’re 08:09 thinking about these you know don’t 08:13 don’t let political correctness or 08:15 stubbornness or you have your blinders 08:17 on or anything you know be be forthright 08:20 about 08:21 with real opportunities in your external 08:24 environment armed with the real threats 08:25 are okay so what I’m getting at kind of 08:31 in the intro part there is just be 08:33 prepared to see things as they are and 08:42 communicate things as they are because 08:44 you and your team that are doing this 08:47 SWOT analysis don’t really stand to gain 08:49 anything by fooling yourself or by you 08:54 know pretending really reality something 08:57 different than what it is okay so we’ll 09:04 get into how kind of a strategy for 09:09 doing the SWOT analysis I’ll make the 09:12 point like I did with the mission 09:14 statement excuse me that you know 09:19 whatever gets the job done its job done 09:22 you know this is looking at this video 09:25 and the post as a guide and an idea of 09:29 where to start they you know build on 09:32 that in whatever manner serves your 09:36 church best okay it’s not a you know a 09:41 strict step one through whatever process 09:44 that I promise is the only right way to 09:47 do a SWOT analysis now I mean whatever 09:49 works works and you know it’s sort of 09:55 thing every year 09:56 we should do it you’ll get better at and 09:59 more efficient at it but before I get 10:06 into that let me also qualify myself 10:11 briefly in terms of you know 10:16 Who am I to give you advice on how to 10:19 manage your church and you know as I 10:22 kind of hinted at earlier I’m more of a 10:25 numbers guy okay that’s that’s my 10:29 strength what I’m good at 10:31 it’s when my website revolves around and 10:34 you know so I don’t manage a church I’ve 10:39 never done a SWOT analysis with the 10:43 church and I don’t go to church on a 10:47 regular basis I have been to church I 10:49 think churches certain valuable purpose 10:53 and for the most part are a valued part 10:59 of society so I’m not coming from this 11:03 from some sort of weird angle or 11:05 anything okay I go to my website my my 11:11 post my free downloadable workbooks 11:16 spreadsheets okay all free so I’m not 11:20 trying to again pull something over on 11:24 you here by talking about something I 11:28 don’t know anything about you know what 11:30 what I did do when writing my post and 11:33 in making this video is give a lot of 11:38 thought to how I would do it so it’s 11:40 authentic in that respect anticipating 11:44 on my site is something I’m strive for 11:46 so you know not not trying to be a 11:53 charlatan or anything here you know I 11:56 here’s the thing it you know I I make 11:59 these videos for a for churches these 12:03 strategic planning videos because 12:05 there’s a demand for them based off of 12:07 what I found looking on the Internet 12:10 okay so it’s no different than I made 12:15 the point in the mission statement video 12:18 that if I were a or I might not never go 12:23 to like a nail salon or a women’s 12:26 clothing boutique to shop okay and I 12:29 wouldn’t start those types of businesses 12:31 because that’s just not what I’m into 12:34 but but nevertheless you know these a 12:36 lot of the things that I’m going to 12:37 cover in this video and 12:40 the soft skills and strategic planning 12:42 in general are applicable doesn’t matter 12:46 the industry you know the the thing is 12:48 and part of the one of the other reasons 12:50 I chose churches was because it gave me 12:52 the opportunity you know most of my 12:54 education training experience in that is 12:57 in the for-profit realm okay this gives 13:00 me an opportunity to look at things from 13:02 the not-for-profit perspective and I 13:06 thought that was a good opportunity for 13:07 me to learn something and kind of look 13:10 at things from a different point of view 13:12 you know because churches not not 13:15 everything’s about the bottom line okay 13:18 there’s a greater good to be served so 13:23 to speak so you know it was a great 13:25 opportunity for me to dedicate a lot of 13:28 thought and research to these sort of 13:30 things and again I’m not giving any any 13:33 advice that’s inauthentic tonight you 13:35 know if you’ve had me start a church 13:39 tomorrow these are the steps I would 13:41 take to do a SWOT analysis okay so let’s 13:44 get into it here first thing you’re 13:54 probably going to do is again like the 13:57 mission statement or brainstorming it’s 14:03 okay this gets the gears turning and 14:07 your brain gets you and your team that’s 14:13 doing a strategic planning and the right 14:16 frame of mind okay the right mindset so 14:21 really I think you know you can use some 14:26 of the tactics that I outlined there in 14:29 the mission statement video like I said 14:35 if you do a quick search online for 14:41 brainstorming techniques let’s bring 14:43 that up here 14:47 pardon my ancient computer and slow Cox 14:54 internet web connection disappointing 15:04 hang on you can search for brainstorming 15:08 techniques and you’ll get a multiple 15:12 multiple multiple of results that will 15:20 give you ideas of different ways to 15:21 approach brainstorming so you know yeah 15:24 there’s these the old fashioned lists 15:26 the first thing to come to your mind 15:28 no ideas are off the table it’s fine and 15:31 good there’s resources out there for 15:34 different techniques ok so let’s see so 15:49 ok so you get all that kind of down on 15:51 paper and then you want to start 15:58 consuming kind of information ok so 16:03 you’ve got you have a bunch ideas down 16:05 for your strengths of weaknesses your 16:08 opportunities and threats and you know 16:15 it’s time to start gathering some 16:19 solidifying those kind of vague ideas ok 16:25 here are a couple ideas that I have on 16:30 what it might help you to gather in 16:33 terms of strengths weaknesses 16:39 opportunities and threats there are 16:43 several different well I mean really an 16:47 infinite number of different things that 16:51 might qualifies a strength weakness 16:53 opportunity or threat again this is just 16:56 kind of an idea kind of get the 16:59 I get the gears turning and everything 17:01 to get you help give June the right 17:05 mindset so for instance you can start 17:11 with traffic count okay your church is a 17:16 piece of real estate okay what is the 17:20 most important thing in real estate 17:22 location okay so one of your strengths 17:28 or weaknesses might revolve around 17:30 simply the number of people that pass in 17:32 front of your church any given dating 17:35 okay most metropolitan areas that I’ve 17:44 found keep traffic count information 17:48 okay what that is is basically where the 17:52 Department of Transportation or 17:53 something similar similar counts the 17:56 number of vehicles that drive in front 17:58 or on a particular stretch of road in a 18:02 given day well day week month whatever 18:05 it might be 18:06 [Music] 18:08 let’s look at an example here we need to 18:12 search for one like we look for traffic 18:16 count what’s kind of a midsize it’s just 18:25 a single this big city not really 18:28 midsize bit you look here that’s just 18:35 not gonna work with me is it 19:04 that’s Google or what apologies for the 19:08 delay let’s see okay there we go so we 19:14 look first result was Missouri 19:16 Department of Transportation traffic 19:18 volume maps st. Louis district okay it’s 19:22 2016 it’s a couple years old at this 19:24 point well let’s see what they got here 19:27 I just pulled this out at random okay so 19:31 here we are we got us a PDF and Kenneth 19:38 and this one here scroll over you can 19:43 see we’re in the st. look a st. Louis 19:45 metropolitan area and it’s got data now 19:50 this one’s kind of on the like the 19:55 highways state highways interstates and 19:58 that sort of thing but gives numbers and 20:05 I bet there’s kind of a key somewhere 20:07 here the traffic volume and truck volume 20:13 for each of them so you can see in red 20:15 and black respectively so I said I 20:19 literally just pulled that up at random 20:22 and I did that to make the point that 20:24 this information is out there so your 20:27 your particular city I mean if you’re in 20:29 the real small town maybe not but you 20:32 know if you’re in at least a decent 20:36 sized metropolitan area you can find 20:40 this sort of information okay 20:44 so what what’s that tell you you know I 20:47 mean it’s basically you want to 20:49 understand what your visibility is to 20:51 passersby 20:52 okay if you’re getting heavy traffic in 20:55 front of your church that’s an 20:56 opportunity to reach people with a limit 21:01 call them just the marquee or whatever 21:04 or you know if you have a little better 21:07 technology out there a you know like a 21:11 LED like a display same thing input 21:15 video or 21:17 you know some sort of advertising 21:18 something so that’s a big billboard on 21:25 your property that’s a big opportunity 21:27 to reach people but more of a strength 21:29 excuse me not an opportunity 21:31 okay opportunities in external this is 21:33 under your control so hey I’m there’s 21:37 one idea another thing is to track your 21:41 church attendance okay and the point of 21:46 doing so is to gather data okay so you 21:52 just want to know how many people are 21:55 attending maybe you have a rough idea 21:56 maybe it’s small enough where you know 22:02 really well how it can fluctuate from 22:03 week to week but you know this this just 22:08 gives you an idea of the number of 22:10 behinds the chip put in the pews okay so 22:16 soft Lord exists for this depending on 22:18 the sophistication Church probably even 22:20 needs software but it’s just a matter of 22:22 accurately you know counting how many 22:25 people are you getting in getting an 22:27 idea you know the of your of your 22:30 customers okay in this case for your 22:32 church you know the people that attend 22:35 or your customers kind of so on the same 22:38 token you can do a church census alright 22:43 and what that is and it just might sound 22:45 a little intrusive and in a certain 22:48 sense that it is but you know like I 22:50 said if if the members are your 22:53 customers okay these are the people that 22:55 you’re serving the better you can 22:58 understand them the better you can serve 23:00 them okay and then what they need and 23:03 and again it it depends on your church I 23:06 mean if you’re you’ve got a tiny little 23:09 Church you might know in a small town I 23:12 come from a small town you know you 23:13 might know everybody’s family tree and 23:18 you know business that extends well 23:21 beyond church and and all that neck you 23:25 know might know they work 23:27 they live all those sort of things okay 23:29 you know in that case maybe an official 23:33 census wouldn’t make sense but other 23:35 instances where you’ve got you know a 23:38 lot of people that you know that you you 23:45 might recognize faces but not know 23:47 circumstances of or so many that you 23:50 don’t even recognize any but just a tiny 23:54 few amount of faces you know so since 23:58 it’s what it sounds like it’s like a 24:00 census that the government does today 24:02 you know you’re just basically getting 24:05 demographic information you know and you 24:07 don’t have to be intrusive with it you 24:12 know it depending on the culture of your 24:15 church the information together might 24:19 you know might be real high level or a 24:22 little more personal to to do a point of 24:26 course so depending on just things age 24:30 professions you know family size contact 24:37 information this is a good opportunity 24:38 to get that contact information I mean 24:41 look you might not ever use it you know 24:43 and I mean you probably not the type of 24:45 church that once put the hard sell on 24:47 people and exactly I don’t think you 24:48 should be but to have contact 24:51 information is valuable a to let if for 24:55 no other reason to let members should 24:57 know you know you’re doing a fundraiser 24:59 you’re doing volunteer opportunities 25:02 they you know things that they would 25:03 want to take part in potentially but 25:06 might not know about unless you market 25:07 it to them so you know none of this has 25:10 to be Shady or you know underhanded or 25:14 anything like that so the the challenge 25:18 you might run into with doing a church 25:21 census is how to get people to fill it 25:22 out you know and that’s just a my 25:28 opinion a matter of being the right 25:30 amount of pushy okay just general 25:33 reminders that you know during service 25:36 that you would appreciate if people 25:38 would fill 25:39 would complete these returned them to 25:41 you you know you don’t want to be 25:44 obnoxious of course but just you know 25:46 just reminder over a several week period 25:49 you know and you get what you can not 25:51 everybody’s gonna turn it in not 25:53 everybody’s gonna participate but you 25:55 just keep your your information in check 25:58 now once you have that information 26:00 depending on the size of your church it 26:03 might be a pretty high volume of 26:04 information okay so so then you’ve got 26:07 an issue of what what to do with all 26:10 that alright and you know you can use a 26:14 database you know access you can even 26:17 use Excel potentially depending on how 26:19 much information you talking about and 26:21 and I love Excel but you know it it’s 26:25 not a it’s darn close but it’s not a 26:28 cure-all for everything excuse me but 26:33 there suffer out there called CRM 26:36 software customer relationship 26:38 management and it’s meant to happen 26:41 handle this type of data okay so that’s 26:44 an option to if you want to make that 26:46 investment again I’m thinking along the 26:51 same lines from a church you know 26:57 attendance tracking and census would be 27:01 a a survey okay 27:14 and you know of course what a survey is 27:18 and it’s just basically getting feedback 27:22 from your customers do you members and 27:26 this can help to maybe confirm or 27:32 debunked information that you 27:35 brainstormed initially in the SWOT 27:39 analysis okay you know the things it 27:45 kind of serves as a reality check you 27:47 know particularly if the survey is 27:51 allowed to be filled anonymously you 27:56 know and I was can be done online can be 27:57 done in person it’s kind of up to you 27:59 with the best manner to collect that 28:01 information is but anyhow you know 28:06 really think through if you do that what 28:08 the the questions in your survey should 28:11 be make sure they’re pertinent you know 28:13 don’t don’t make it too terribly long 28:16 don’t make the questions trivial keep it 28:19 to 10 or 15 tops I would say you know 28:22 you don’t want people to get tired of 28:24 doing it and then just you know yeah 28:28 yeah yeah their way through it okay so 28:31 there’s uh there’s no shortage out there 28:35 of ideas for survey questions again a 28:44 simple search on the handy-dandy 28:48 internet will give you plenty ideas as a 28:55 starting point and you know also refer 28:58 to those the things that I said that 29:00 shut it down with your brainstorming at 29:03 the beginning of the SWOT analysis okay 29:10 here it was quick search first years old 29:14 you know plenty of resources out there 29:17 and you know there’s there’s no no shame 29:20 in 29:22 building off of someone else’s work you 29:25 know they a lot of a lot of great 29:29 information there so you know whether to 29:33 do the surveys and the census as a paper 29:44 or online kind of up to you it’s kind of 29:48 up to your congregation 29:51 you know what suits them what makes 29:54 sense for them and you know that’s 30:00 really kind of an individual subjective 30:02 sort of thing so gathering information 30:07 digitally is tends to be more efficient 30:10 you know otherwise you’re probably going 30:13 to be inputting it in to a digital means 30:17 but if you gather it like paper copies 30:21 but you know again that kind of depends 30:25 size of the church nature of the 30:28 membership those sorts of things so the 30:33 other way to get an idea of to do a 30:38 little scuttlebutt as it’s called in the 30:43 investing community is to do good 30:45 old-fashioned talking okay talk to you 30:50 family talk to the leaders in a church 30:52 talk to the people aren’t lead isn’t 30:54 working in the church talk to the 30:56 membership talk to if you’re part of a 31:00 network of you know church management 31:04 talk to them okay 31:06 you know up the ladder down the ladder 31:08 sideways everything just you know get 31:11 get these topics out on the table and 31:15 you know people God uh you know 31:21 obviously different perspectives and 31:23 they you know it could help you come up 31:25 with ideas you might thought about maybe 31:30 put a you know a strength weakness 31:32 opportunity or threaded 31:34 active those sorts of things so it’ll be 31:39 afraid to do that so we’ll talk a little 31:42 bit now about ways to get you thinking 31:49 okay these are these are ideas and they 31:51 kind of play not ways to get you 31:54 thinking like ideas if this is kind of 31:57 your first time doing a SWOT analysis to 32:01 and you don’t know where to begin these 32:04 are some ideas that I gathered from 32:06 doing a little research on potential 32:08 strengths weaknesses opportunities and 32:10 threats okay this is not an exhaustive 32:12 list okay you know you don’t have to go 32:15 through these bullet points and say 32:18 answer these questions and then you’re 32:20 done yeah you did you SWAT it on us no 32:22 this is just things to think about okay 32:26 so let’s see let’s actually copy this up 32:37 here so here’s an idea for possible 32:47 strengths okay you talked a little bit 32:52 earlier about the traffic you churches 32:54 on a high traffic road okay 32:57 membership is stable or growing would be 33:02 a strength and most of the members have 33:04 been with the church a long time you 33:07 have a pool of retired members with time 33:11 on their hands and hopefully a 33:14 willingness to help with skills that 33:16 could help the church your church is 33:21 welcoming the newcomers okay it’s 33:28 probably hard to grow membership if you 33:32 Church is considered like closed off or 33:35 cliquish sure or that but that you know 33:40 fairness might be what you’re going for 33:42 you know maybe you want to screen people 33:46 out you only want a certain type into 33:47 your church you decide these things a 33:50 lot of this you know this is why we do 33:52 the mission statement before the SWOT 33:53 analysis because you what you consider a 33:58 strength is going to depend in large 34:00 part on what your mission statement is 34:02 you know strengths are going to serve 34:03 your mission statement weaknesses are 34:07 going to help are going to contribute to 34:11 you preventing you from achieving your 34:14 mission okay but I guess these are just 34:19 ideas as far as possible strengths Kate 34:21 Church has a good reputation in the 34:23 community strong sense source of 34:26 donations for better or worse money’s 34:30 got to keep coming in the door okay you 34:33 know in order to keep the lights on and 34:35 doors open you know great leadership 34:38 that’s always a strength because the 34:42 opposite is certainly a weakness so you 34:46 know a self-sufficient attitude rich and 34:50 lanky history could be considered as 34:53 strength you know there’s a lot of 34:54 social proof there in terms of your 34:58 church that you know you’ve longevity 35:04 and this doesn’t mean that you know well 35:07 if your new church there’s no hope 35:09 obviously because new churches spring up 35:10 all the time they also disappear a lot 35:13 over time but a you know history kind of 35:18 gives you like I said that social proof 35:20 it kind of for you know like it or not 35:25 proves you’re worthwhile this because 35:28 you’ve been around that long okay for a 35:30 long time in a sense of family church 35:36 members who speak the same language as 35:37 locals in the community you know Church 35:40 revolves a great deal around 35:42 communication right I mean that’s 35:45 communications almost the product really 35:48 you know you’re you’re communicating 35:54 thoughts on you know higher power and 35:59 everything 35:59 you know I’m trying to I’m usually not 36:03 the type to like walk on eggshells but 36:05 there are a lot of different churches of 36:07 a lot of different nature something you 36:09 know I don’t want to say well churches 36:12 just revolve around the Bible churches 36:14 just revolve around you know this 36:17 religious text that religious checks 36:18 whatever but any on well I’m getting at 36:21 is a you know speaking the same language 36:23 so you know what whatever it is whatever 36:26 your church is about it you know viana 36:32 it’s about communication because the you 36:34 know the greatest written text or you 36:39 know spoken word in the history of 36:43 religion doesn’t mean anything if it 36:45 can’t be conveyed to anybody 36:47 okay so whether you’re you know English 36:53 speaking Spanish speaking whatever you 36:57 know it’s that strength to be able to 37:00 reach the community to reach the people 37:02 you do want to join a church okay 37:04 next one’s quality mission statement and 37:07 like I said I have a mission statement 37:10 video that I made earlier that covers a 37:15 lot of things to think about when 37:17 drafting mission statement and like I 37:19 said I would recommend doing so before 37:21 you do SWOT analysis and frankly if you 37:24 want new members and higher donations 37:29 and a better reach and you know you need 37:35 the capacity just to accept new members 37:37 okay if you’re filled to the brand got 37:40 people hanging from the rafters at every 37:42 service you know that’s that’s gonna be 37:46 tough to to build membership in there so 37:50 that’s some idea about some ideas about 37:53 some possible strengths move on next to 38:00 potential weaknesses 38:06 okay if church membership is declining 38:14 okay that’s weakness this membership 38:18 equals less reach equals less donations 38:22 you know it’s a general rule of thumb 38:25 unless again unless you have a very 38:29 specific member type of member in mind 38:34 be believing not coming back it’s 38:37 generally gonna be bad low attendance 38:41 along the same lines low attendance from 38:42 children and young people okay I mean 38:46 over time obviously the children become 38:49 you know adults the young adults become 38:52 middle-aged adults become old adults you 38:55 know 38:55 it’s a lot of people attend church where 38:57 their parents did their family does and 39:02 if if you’re losing the kids and the 39:06 young people you know it might not 39:09 impact you so much this year next year 39:14 excuse me from a long-term standpoint 39:18 you know it’s something that you can 39:20 have to plan around them you know maybe 39:23 the welcoming process that your church 39:25 is is lacking you know there’s there’s 39:29 not a kind of a I don’t want to call it 39:31 an orientation to make it say no to 39:33 formal or that and maybe you do have 39:35 some a formal like that but you know 39:39 something that kind of makes the new new 39:42 members feel like part of the church 39:44 community okay if you got a congregation 39:48 that’s inflexible and stubborn that’s 39:51 rarely a strength usually a weakness 39:54 whether we’re talking about churches or 39:56 anything else in life you know a low 40:00 turnout when you’re doing community 40:02 outreach you similar to the one earlier 40:06 and you’re not doing a great job of 40:08 inviting people okay you’re not getting 40:10 the word out you’re not letting people 40:11 know that they’re welcome 40:14 and right growing membership that sort 40:17 of thing is going to be tough 40:19 members that aren’t getting value okay 40:22 if they’re just coming out of obligation 40:25 fillings you know feeling like it’s a we 40:32 wouldn’t call it a burden almost you 40:34 know an obligation and that’s gonna give 40:38 you trouble you know probably sooner 40:43 than later you know a reluctance to 40:46 challenge the status quo could be a 40:51 weakness volunteers that are work too 40:53 hard you know because you have low 40:56 turnout for volunteer efforts so the 40:59 people that do volunteer their time and 41:02 and do their best to do something to 41:06 help the church are getting burnout morn 41:09 down kinda you’re you’re asking too much 41:12 of them and a couple other things 41:14 antiquated technology shortage of 41:17 handicapped facilities lack of a 41:19 strategic plan okay so you know I’ll 41:23 obviously be covering that like I said 41:25 and the posts are up the videos are 41:29 coming and you know strategic planning 41:35 and there are also a bunch of other 41:38 great resources out there not just 41:40 spreadsheets for business okay so you 41:44 know your if you’re like me you’re gonna 41:48 try a couple of different things try to 41:50 take the best of what you find and 41:52 that’s great that’s what you should do 41:54 so take the best of what you find for me 41:56 take the best of what you find from some 41:58 of the other big names out there in 42:01 terms of Church management Church 42:04 strategic planning and you know yeah 42:06 give yourself the best odds for success 42:08 another one that kind of relates to 42:10 something that I do do well do do is an 42:15 inability to budget effectively would be 42:17 a weakness okay you know churches have 42:21 greater callings than just profit but 42:24 like I said it’s you know 42:28 there are still bills to be paid and 42:31 that is just the reality of the world we 42:34 live in and you know you got to plan 42:36 accordingly so I can definitely help you 42:39 out with that one now here’s a look at a 42:42 couple of opportunities that you might 42:44 consider now opportunities again or 42:49 external not internal these things 42:51 outside of your control but they could 42:54 still help you okay 43:00 population of your geographic area is 43:04 growing okay more people in the area 43:07 equals more opportunity for growing 43:10 membership local use that are need of 43:13 church services for whatever reason 43:16 maybe you know because they they’re at 43:21 risk or you know people that they’re you 43:28 know they could use your help you know 43:31 whether it’s something to do after 43:32 school something on the weekends that’s 43:36 another opportunity you’re near a 43:38 college you’ve got people for instance 43:40 young people that are probably away from 43:44 home so away from the church they might 43:46 have grown up going to and are in need 43:48 of you know what your church can offer 43:53 okay 43:55 another opportunity is members with 43:57 influence in organizations throughout 43:59 the community okay you know c-level 44:02 executives people in management 44:05 positions people on boards of directors 44:08 it’s you know basically people that are 44:11 people in government that are powerful 44:13 and you know that can only serve as an 44:17 opportunity doesn’t mean you need need 44:19 to exploit the power you know but you 44:25 know can’t hurt right so another 44:31 opportunity would be offering services 44:33 this one might be considered as strength 44:35 it since it is kind of near control but 44:37 offering services at different times in 44:39 Sunday morning 44:40 okay more flexibility on your part means 44:45 probably more opportunity to give people 44:49 in the doors and in the pews the 44:53 internet and social media of course 44:54 represent an opportunity and in hosting 44:57 community events and otherwise unused 44:59 facilities a lot of churches have a 45:01 bunch of square footage okay 45:05 you know community that’s kind of a 45:07 vague term but you know like for 45:11 instance one church something always 45:14 took my kids to whenever little was like 45:16 a trick-or-treat Street kind of thing 45:19 that they did at my watch church and it 45:25 was great God 45:26 you know again it’s not all that 45:29 different from a for-profit business to 45:34 give people in a dorm you know 45:35 opportunity to market to them again 45:37 don’t have to be pushy marketing but 45:39 just give opportunity from the seat what 45:40 you’re about increase the likelihood of 45:43 them wanting to join the ranks of the 45:44 membership okay look here then at 45:52 possible threats 45:55 okay you know I’m about 45 minutes 46:00 a little over so keep grindin alone you 46:09 know if you’re in a smaller town older 46:11 population you know the kind of United 46:15 States anyways as increased urbanization 46:17 people move into bigger towns smaller 46:20 towns older population means you 46:23 unfortunately everybody passes away 46:25 eventually more of a longer-term 46:28 consideration but as a threat laws and 46:32 regulations that inhibit actions can I 46:34 mean if you know as time goes on the 46:41 United States in my opinion gets more 46:45 there’s more as bigger differences in 46:50 the cultures of particular parts of the 46:53 United States 46:54 it’s okay and laws are enacted that to 47:02 reflect those different beliefs you know 47:06 people different beliefs select 47:09 different elected officials and have 47:11 different laws these laws might inhibit 47:16 actions that you want to take that you 47:19 feel contribute to achieving your 47:22 mission so if you’re in an area where 47:26 laws and regulations will do that that’s 47:29 a threat that’s a problem because you 47:32 know if I run a kickboxing gym you know 47:40 where I’m at and you know some buffoon 47:45 of a governor gets elected and outlaws 47:48 kick boxing gyms well I can take my 47:50 expertise move across state lines open 47:54 kickboxing gym not quite as easy with 47:56 Church you know it’s a you know you you 48:00 get customers and you get them long term 48:02 certainly that’s one benefit of churches 48:04 flipside is you know it can’t just pick 48:07 up shop typically and then can move I 48:12 can tell move a state away so other 48:17 threats are competition for new members 48:18 okay every church wants new members I 48:21 would assume and you know so there’s 48:25 competition you’re you’re competing 48:27 against the church down the block across 48:28 town you know that’s a that’s a threat 48:34 is kind of touches on what I said 48:38 earlier an anti religious culture and 48:41 environment it would obviously be a 48:43 threat and you cannot hardship in the 48:46 community okay when times are tough and 48:51 people are having trouble making ends 48:53 meet you know contributing the church 48:57 will probably fall by the wayside you 49:01 know behind rent bills car payments 49:03 those sorts of things but not just the 49:05 dollars just the 49:07 you know some people might cling to 49:10 church and no circumstances other people 49:11 might pull away from it so again the 49:15 economic hardship it is typically going 49:18 to be a threat it’s just not good for 49:21 business whether it’s a for-profit 49:22 business whether it’s a not-for-profit 49:23 business so let’s talk a little bit here 49:28 once once you’ve got you know so we’ve 49:32 talked about let me back up for a second 49:34 sorry 49:36 brainstorming okay information to gather 49:42 you know to come up with your strengths 49:44 weaknesses opportunities and threats 49:47 ideas for you for strengths weaknesses 49:50 opportunities and threats okay so with 49:52 those three things hopefully you have a 49:54 pretty good list now you’ve got all four 49:57 quadrants well-thought-out and you know 50:02 a comprehensive list for each one of 50:06 those four factors now you want to think 50:12 about how those factors interact and how 50:14 you can exploit those interactions so 50:17 exploit sounds bad you know but in this 50:24 case you just you’re you’re positioning 50:26 yourself as best you can your church as 50:28 best you can in light of your strengths 50:31 weaknesses opportunities and threats 50:34 okay so just think about what it means 50:41 where these interact you’ve got 50:43 strengths and opportunities okay and 50:48 this is where the stars align okay 50:51 you’ve got an opportunity and it 50:54 interacts with something you’re good at 50:55 that this is this is the low-hanging 50:58 fruit so to speak you want to take 51:00 advantage of these opportunities for 51:04 example might be do churches on a 51:05 high-traffic Road and the population of 51:09 your area is growing okay so you’re in a 51:12 good location you’re gonna have more and 51:15 more people driving by your church every 51:19 day every week every year excuse me you 51:24 want to make sure that your signage and 51:26 your marketing is effective okay you’re 51:28 appealing with the people passing by 51:31 another one might be your church is 51:33 welcoming the newcomers and your 51:38 opportunities the host community events 51:40 and otherwise I need four sell unused 51:41 facilities you could offer those 51:44 facilities at a reduced price to members 51:48 okay 51:48 that’s a benefit of being a member of 51:51 your church okay so you’re welcoming in 51:54 that respect by having those facilities 51:59 available and at a reduced price of 52:01 people are members and you’re in revenue 52:05 from otherwise unused facilities okay so 52:10 the next interaction we’ll talk about is 52:13 strengths and threats okay threats are 52:17 bad but if you know the strengths to 52:20 offset them you can temper neutralize 52:25 the threat to a certain extent so let’s 52:26 say you’ve got a pool of retired members 52:29 with skills that could help the church 52:31 and there’s economic hardship in the 52:33 community those retired members could 52:36 put on workshops for the community 52:39 members okay and these workshops could 52:42 be anything 52:42 well there is budgeting whether it’s 52:46 somebody you know retired member from 52:48 the financial services injury how to 52:50 deal with late payments how to deal with 52:53 creditors those sorts of things you’re 52:57 leveraging the knowledge of the retired 52:59 members to help those who are suffering 53:01 from the economic hardship another one 53:04 is the capacity to accept a lot of new 53:06 members competition for new members okay 53:09 the threat is the competition its chance 53:12 for you to set your church apart from 53:14 the others okay you don’t want to you 53:20 know having way too much capacity could 53:22 be a problem obviously a weakness but 53:27 it’s any it could be it 53:30 you know a selling point for people who 53:33 are in an otherwise overcrowded church 53:36 to come to yours and not feel over 53:40 credit and maybe you have it a place 53:41 where it’ll feel more more personal okay 53:44 next interaction is weaknesses and 53:47 opportunities okay well you know in this 53:56 case the weaknesses can be preventing 53:57 you from capitalizing on opportunities 53:59 and that stinks because opportunities 54:03 are you know sometimes a rare thing and 54:06 you want to be able to capitalize on 54:08 them but you know so what do you do if 54:11 the opportunity isn’t something that 54:14 plays to his strengths of yours rather a 54:16 weakness okay so let’s say the church 54:18 has low attendance from children and 54:20 young people and you have local use or 54:23 need of church services what’s going to 54:25 happen local users are gonna attend 54:28 church somewhere else probably so in 54:36 this case you know you’re you’re looking 54:43 at how the two things in turn the 54:45 weakness and the opportunity and 54:48 unfortunately not able to exploit it so 54:55 you want to since you you were honest 55:00 with yourself and recognize this 55:01 weakness okay you’re you have an 55:06 opportunity to fix it so you want to 55:09 think about then what can you do to make 55:13 your church more appealing to children 55:15 and young people okay because you’ve got 55:19 demand and local youth that are in need 55:22 of church services but you know for 55:25 whatever reason you know since you’re 55:27 honest with yourself and admitted your 55:28 your weakness that you’re in essence 55:31 driving children in people way so it’s a 55:33 chance to reflect on what’s causing that 55:35 and maybe the survey can help with that 55:37 maybe they’re talking with other members 55:38 too 55:38 with that and address the issue so you 55:41 can turn your church from a place that 55:44 has low attendance from children and 55:45 young people innocent driving away to a 55:48 strength where you know it is a 55:55 appealing place or you have programs 55:57 that are appealing to young people and 55:59 you can take advantage of that 56:00 opportunity where local youths are in 56:03 need of church services okay 56:07 another interaction of weaknesses and 56:10 opportunities sorry I’m going to wet my 56:15 whistle there our members aren’t getting 56:17 value from the church and the 56:20 opportunities internet and social media 56:22 so you have the ability there to provide 56:25 extra value to members and non-members 56:27 okay the social media is a you know with 56:37 with the internet and the you know 56:41 advent of internet and social media you 56:43 have that opportunity to you know if 56:46 you’re followed on you know Twitter 56:47 Facebook whatever social media to reach 56:50 your members not just Sunday morning 56:54 okay they repeatedly throughout the week 56:57 daily multiple times daily okay so yes 57:04 that’s that’s no good that you you know 57:06 you’ve acknowledged to yourself 57:08 potentially that members aren’t getting 57:10 value from the church but this 57:13 opportunity of the internet social media 57:15 gives you a chance to you know to change 57:17 that to come up with a strategy via the 57:19 you know via the internet social media 57:22 to start adding value okay to think 57:25 about how you can add value outside of 57:27 church you know the other six days of 57:30 the week theme you know whether it’s 57:33 through inspirational messages whether 57:35 it’s through showing how other people 57:38 are getting value from church okay so 57:42 you know I think the the big key there 57:45 would be to be authentic you’ve heard me 57:47 talk about authenticity earlier I was 57:49 talking about myself and talking about 57:50 my circumstance 57:51 and you know what what kind of led me to 57:54 make this video to make these posts and 57:58 yeah just definitely don’t don’t go 58:01 boilerplate here you know I would 58:05 definitely you know think about what you 58:09 would want to see in terms of social 58:11 media if you find yourself in this 58:13 situation and you know try to put 58:16 yourself in the other you know the the 58:19 person who might not be getting value 58:20 from churches shoes and I think you’ll 58:23 attract a lot more people than just you 58:26 know kind of recycling wore-out talking 58:28 points okay so the last intersection 58:31 we’ll go over is weaknesses and threats 58:33 okay this is you know this is a bad be 58:38 threat on the horizon you’ve got no 58:40 answer for it and never see now that I’m 58:44 not gonna make my hour unless one I 58:47 promise so you know but hey everybody 58:54 has weaknesses the the key is to 58:57 neutralize threats try to shore up those 58:59 weaknesses so let’s say you’ve got a 59:01 reluctance to challenge the status quo 59:03 in your church and you’re in an anti 59:05 religious culture or environment it’s 59:08 time to come to terms with reality in 59:10 that case you know there’s this might be 59:24 kind of a touchy one you know cuz 59:28 because maybe there are people in your 59:30 church that are like well this is what 59:32 it means to be our religion or our 59:35 churches or culture this is what we vote 59:37 this is what we’ve always done sort of 59:39 thing but you know you’re in an 59:40 environment that is a hostile in a lot 59:45 of respects so it might be a situation 59:48 where it makes sense to tweak you don’t 59:53 have to tweak your overall message you 59:54 don’t have to obviously go against your 59:56 mission or that but perhaps work in one 60:04 way 60:04 a little bit of a flexibility to try to 60:07 find some common ground okay with the 60:09 the people in your community okay dish 60:12 you know because if it’s if it’s an anti 60:15 religious culture environment I mean 60:16 they then they obviously are hostile 60:20 towards you so it’s an opportunity to 60:24 find some common ground in a case like 60:27 this and it gets tough situation did but 60:31 you know meet people where they are I 60:34 mean you know a good example of that to 60:36 me is volunteerism I mean nobody is 60:39 going to think poorly of a church I’m a 60:44 having a right mind anyway so some 60:46 people will not everybody’s in the right 60:47 mind but I can I think poorly of a 60:49 church that volunteers you know that 60:54 gives may get presents for kids at 60:57 Christmas that you know feeds the 61:00 homeless gives the homeless clothes and 61:03 coats those sorts of things so it’s just 61:06 a matter of you know but maybe these 61:11 things have never been done in your 61:12 church and you know this is new and this 61:15 is gonna cost money and time and effort 61:17 where you know what I mean that’s the 61:18 old status quo that this isn’t who we 61:20 are this isn’t what we do and most 61:23 churches do volunteer work obviously but 61:25 like I said it’s just kind of an example 61:27 that you know you’ve got a you know if 61:31 you’re dealing with with stubborn people 61:32 in your organization like that you know 61:34 claim this is not who we are but you 61:35 need to you know you need to change who 61:39 you are who you appear to be a little 61:43 bit to function in a hostile environment 61:47 and you know you’ve got a you know 61:54 you’ve got a deal then with the Stuber 61:57 people that are holding you back from 62:00 doing that another one is the inability 62:04 to budget effectively economic hardship 62:07 in the community you need to practice 62:10 what you preach 62:11 you know if the community’s suffering 62:14 for me 62:15 my hardship due to their own creation or 62:20 from the economy in general but you’re 62:24 over here to run in your church and and 62:26 it’s struggling so you’re you know 62:28 you’re conveying to your members that 62:32 you know we need donations cuz you know 62:36 that donations probably gonna go down 62:40 during economically tough times but you 62:43 know but if you haven’t planned around 62:47 that you know by budgeting you know and 62:52 spreadsheets for business can help you 62:54 with that 62:54 all three fascist facets of budgeting 62:56 capital budgeting operational budgeting 62:58 financial budgeting you know you’re 63:01 gonna come off is it’s gonna be a tough 63:03 sell when the times are tough for people 63:05 and because you’ve managed your finances 63:10 and effectively you’re there asking them 63:14 for money the individuals so this one is 63:19 preventable that weakness the inability 63:21 to budget effectively so you know the 63:28 the beauty of numbers and in finance you 63:32 know in particular is that their reality 63:36 numbers don’t lie Megan you know there 63:38 are tricks and games when you play with 63:40 them but you know one’s always one fives 63:43 always five tens always ten you know so 63:47 finding out that kind of wraps up like I 63:51 said how the factors might interact and 63:53 it’s time for me to wrap this video up 63:56 because I’ve been going for an hour and 63:59 five minutes or so here it’s a like I 64:03 said it’s a lot of information to cover 64:04 I did get through it as quick as I could 64:07 it probably sounds like a but a lot of 64:10 trouble but it’s one of those things 64:11 connecting the mission’s thing once 64:13 you’ve done it the first time the first 64:15 time is the toughest okay if you’re 64:17 starting from scratch 64:18 give it once you’ve done it you can kind 64:20 of build off opportunities and threats 64:21 gonna carry from your to your strengths 64:23 a weakness is gonna carry it from year 64:24 to year and 64:26 it’ll get easier but you know I think 64:29 it’s a worthwhile exercise because just 64:34 what you’re gonna learn about yourself 64:35 which can learn about your environment 64:37 okay you can have a better grasp on 64:40 reality this is gonna help when it comes 64:42 to getting grasp on reality in terms of 64:44 doing your budgeting in terms of your 64:46 your strategic planning the goals you’re 64:48 gonna make there it there’s really no 64:51 downside to doing it even if you can’t 64:54 get anybody else in your church on board 64:55 and it’s just you sitting down one 64:57 afternoon and and brainstorming and 64:59 thinking about a couple of things I 65:01 addressed here and a couple of things 65:02 that some of the other gurus and the 65:05 church management arena might have come 65:08 up with it there’s no downside now the 65:12 only potential downside is you had to 65:13 drag on and become a big convoluted mess 65:16 you know and argue over well this is a 65:20 strength this isn’t a strength weakness 65:22 not a you know that it can’t in that 65:24 respect but as long as you you know I’m 65:26 a big fan of time limits and deadlines 65:29 and just have it done by this day 65:30 because again you’ll be able to revisit 65:32 it again next year it’s not set in stone 65:36 it’s a dynamic thing life’s dynamic 65:39 teaching planning is dynamic you know 65:42 there’s really no good reason not to do 65:46 it okay so that being said if you’ve 65:52 stuck with me this long an hour-plus man 65:55 you’re a trooper and I appreciate it of 66:00 course and you know if I had the ability 66:09 to get likes and subscriptions to the 66:12 people who watch my videos from start to 66:14 finish I would do that but that’s not 66:17 the way YouTube set up so you know look 66:21 if you if you like some of what you 66:23 heard if you think that there’s some 66:28 good some good ideas in here some things 66:32 that other people might be able to use 66:35 you’ve got a you know the game is if I 66:41 don’t get likes and subscriptions 66:42 YouTube’s gonna think I’m worthless and 66:45 they’re gonna bury me okay so if you 66:48 found something that you liked heard 66:50 something you liked 66:51 and was it a lot visually and again I 66:53 apologize for that just kind of the 66:57 nature of the the video most of my 66:58 videos I’m gonna be in the spreadsheet 67:00 clicking back and forth showing how my 67:01 equations work that sort of thing but if 67:03 you like like what you saw I like in a 67:06 subscription is a great way to give a 67:09 free tip to me to let me know that let 67:15 YouTube know that so if you did do that 67:18 or do that at some point in the future 67:21 again thank you very much and as far as 67:25 comments go I like comments you know a 67:29 couple of things that I’d love to hear 67:30 from with you guys is what other 67:32 information you think is worthwhile to 67:34 gather okay when you’re in the midst of 67:37 doing your SWOT analysis 67:38 you know I touched on a bunch of them in 67:41 terms of you know the traffic count 67:44 census survey those sorts of things what 67:49 else what what’s gonna help you you know 67:52 besides just thinking of it what what 67:55 information is out there that would help 67:57 you get a better grasp on your church’s 67:59 strengths weaknesses opportunities and 68:00 threats and the other thing that I’d 68:03 love to hear from you guys on is the 68:09 ideas you know I gave bullet point lists 68:13 possible strengths when uses up to these 68:15 threats you know what are some other 68:17 ones that I left off you know you you 68:21 guys probably know more than I do miss 68:25 respect you know again I did a lot of 68:27 research one to come up with a pretty 68:28 good comprehensive list as a serve as a 68:30 jumping-off point that maybe you’ve done 68:32 a SWOT analysis before with your church 68:34 in the past and there are things that I 68:36 left off that you think that every 68:39 church should consider in terms of 68:41 strengths weaknesses opportunities or 68:42 threats so leave all that in the 68:44 comments below 68:45 again thank very much for your time 68:48 take care and I will talk to you later
(to balance weaknesses, capitalize on opportunities, and neutralize threats)
(shore up to “good enough”)
1) Long-term membership
1) Shortage of handicap facilities
2) A good reputation
2) Volunteers worked too hard
3) Rich & lengthy history
3) Uninviting
Possible opportunities
Possible threats
(exploit as much as possible)
(limit downside as much as possible)
1) Located near a university
1) Small town & aging population
2) Influence in other organizations
2) Competition for new members
3) Internet & social media
3) Economic hardship in community
A SWOT analysis should paint a picture of the environment your church operates in.
The members of your church are a great resource for ideas about what your strengths and weaknesses are.
Examining where your strengths, weaknesses, opportunities, and threats intersect will help your church understand what goals should be set as strategic planning progresses.
If you’re not familiar, SWOT stands for strengths, weaknesses, opportunities, and threats. A church SWOT analysis is an examination of the environment the church operates in. The internal environment is represented by strengths and weaknesses. The external environment by the opportunities and threats.
Strengths and weaknesses are things within your church’s control
In order to control them, though, you’ll have to be brutally honest with yourselves when listing them. Don’t include things you wish you did well or should be doing well. Don’t gloss over weaknesses because you’re embarrassed by them or because they are something you should be better at. We all have things that we are among the best at, and we all have things that hold us back. Creating a sound strategy for your church requires that you capitalize on your strengths and don’t ignore the “elephant in the room” when it comes to your weaknesses.
Opportunities and threats are outside of your control
They’re the hand you’ve been dealt and are forced to play. There is probably less of a temptation to fib with these external factors than with the internal ones. However, keep yourself and the other decision-makers honest when listing opportunities and threats. Don’t let political correctness, stubbornness, or any other sort of artificial block keep you from being completely objective in this process. Also, be thorough in your analysis. Sometimes opportunities and threats lurk below the surface. They aren’t easily seen with a passing glance. You’ve got to focus a bit harder to see what’s really there. It’s really quite simple: an opportunity is anything external that could help your church and a threat is anything external that might harm it.
If you’re honest with yourself, you’ll have a very accurate picture of the reality you operate in. It might make you a bit uncomfortable but you’ll be equipped to actually make improvements and protect what you already have.
You started brainstorming when you came up with a church mission statement, time to do some more. Gather the other leaders in your church and start jotting down ideas.
What if you find yourself in an awkward position where another one of the leaders in the church is a weakness? Mentioning this might rustle jimmies and bring the whole strategic planning process to a halt. How to proceed then?
Use your best judgment. That’s a vague answer, I know, and I’m sorry. If the buck stops with you, then you’re, fortunately, in a position to address this weakness. If not, then you’re just going to have to use whatever means you have at your disposal. That may mean that you can actually correct this weakness. Or, it may not. If not, you’ll have to consider if you can work around it. If you can’t work around it, then you may have to consider separating yourself from it.
That’s not written to be melodramatic. It’s written to remind you that you always have options.
Start consuming information
Understand your opportunities and threats as best you can. Get on the internet. Communicate with your peers. Do your scuttlebutt. Don’t rely on assumptions if you can help it. Get the whole picture.
Time to start narrowing things down
At this point, you should have a big ol’ mess on your hands. Consolidate similar ideas.
Disregard the lesser strengths, weaknesses, opportunities, and threats. We want to focus on the major factors here.
If you’re not familiar with the Pareto Principle read about it here. The “law of the vital few,” as it’s called, states that (typically) 80% of the effects are caused by 20% of the causes. What’s that mean for your church in general and your SWOT analysis specifically? It means that we want to simplify things and narrow our focus to the strengths, weaknesses, opportunities, and threats that will have a big impact. A big long list of SWOT factors is overwhelming. You won’t even know what to do with it.
So, how many of each should you list? Here comes another vague answer (apologies again). There is no hard and fast rule. If it seems like too much, then narrow it down. If you feel like something critical is missing, then add something back. The strategic planning process should be reviewed every year. So, if something is on the fence, leave it off the list. Simplify. Address the more pressing factors and consider adding it next year.
The last step of the church SWOT analysis
Try to understand how these factors can interact with each other. For instance, how will your strengths and weaknesses interact with your opportunities and threats?
If your church has strengths that are on the same wavelength as your opportunities then you have what is referred to as “low hanging fruit.” If you’re not already taking advantage of these situations, then you need to right now. Strengths are usually long-term, but opportunities can be fleeting.
Where strengths match up with threats, you know that you have a margin of safety. As long as the strengths aren’t stifled, you should maintain your protection.
What about opportunities you can’t take advantage of due to weaknesses? This is a problem. You’ll have to think about how you can shore up these weaknesses. Can you hire someone? Is there someone from the congregation that is willing able to contribute their strengths? Can you partner with someone? As I said, opportunities are fleeting. Don’t let them slip through your hands if you can help it.
Finally, where weaknesses and threats meet up – you need to assess how much risk you’re taking. Again, can you shore up these weaknesses? If not, can the threat be neutralized by some other means? This can be a scary exercise. Ignoring this reality won’t help anyone, however.
As you probably gathered, the point of this exercise is to understand your environment so that you can limit your downside and take advantage of the upside as much as possible. If your downside is limited, then there is only upside left.
Information to gather before preparing your church SWOT analysis
It might help to gather some information before starting the steps necessary to prepare a SWOT analysis for your church. This list is not by any means all-inclusive. Hopefully, though, it will give you an idea of where to start.
Traffic count
I’ve found that several major metropolitan areas keep traffic count data. What’s traffic count? It’s exactly what it sounds like. The Department of Transportation (or some similar entity) counts the number of vehicles, on average, that use a particular stretch of road over a predetermined period of time. I’ve found that usually, the counts are displayed in the number of vehicles per day.
What to do with this data? Determine your visibility – your exposure to passers-by. If you get heavy traffic in front of your church, then make sure you’re marketing to all those eyeballs. Put up a billboard, get a marquee, or otherwise ensure that those people know who you are and what you have to offer.
Church attendance tracking
Even though churches aren’t for-profit businesses, they’ve got to know their data. You’re making uneducated decisions otherwise. If you don’t know what your attendance numbers are, then I really think you should rectify that.
How to track church attendance? Software exists to help you with this. To be completely forthcoming – I’ve never used any of this software and I can’t speak to its value. Every piece of software has its shortcomings, but it probably beats tracking it by hand.
This might seem a little intrusive – and it is. There’s no way around it. So, I would suggest limiting the frequency of this step to once every couple of years. A church census is exactly what it sounds like. It’s the gathering of demographic data about the members of your church.
What should you include on a church census?
Obviously, you don’t want to get too personal. For one, it’s not necessary. For two, it’s intrusive to the people you’re trying to help. So stick to the essentials.
You’ll probably want to know the age of your members. Knowing their professions would also be beneficial. Since families will likely fill out a census form together, you’ll be able to piece together who’s married to who and who is somebody’s child. This is a good chance to gather contact information too. You don’t want to abuse that, but it’s very valuable information to have. Think about what you’d really like to know about your members and limit the questions to that information. Maybe slip in an option for those who want to volunteer and would like to be contacted.
What’s an example church census look like? Here’s an example I found online. Use it as inspiration, but make it your own. The more authentic and less pushy your form is, the better your response rate will be.
How do I get members to fill out a church census?
You’ll have to decide what works best for your church. My opinion is that you want to be just the right amount of pushy. Keep gently reminding members that you’d like their participation. But don’t be obnoxious by any means. Use your good judgment here. Let them know you’d appreciate their participation, but it is not required. A 6 week or so campaign should do it. You don’t want to drag this out.
Keep in mind too that you won’t get 100% participation. 80% would be remarkable, so keep your expectations in check.
What do I do with this information?
If you have dedicated CRM (customer relationship management) database software to handle this information, then great – put it in there. If you don’t that’s fine. Assuming the data isn’t overwhelming, you can use Microsoft Excel or Access. It’s important to get this information in digital form, however. You want the ability to search for this information and be able to filter it so that you can use it to paint a demographic picture of your congregation.
A church survey
Your congregation is your customers. If their needs aren’t being met, they will eventually go somewhere else to get their needs met. Don’t just assume that you know what your members think. Conduct a state-of-the-church survey on a regular basis (annual, semi-annual).
A survey is a great way to confirm the items you brainstormed in your SWOT analysis. Do you think you have great leadership? Okay, what’s the congregation think? Do you think that too few members are volunteering? Ask questions that can help you uncover why. You get the point.
If the results of your survey run contradictory to what you thought you knew about your church, then you had better reconcile why there’s a difference. Making decisions that run contrary to your members’ perceptions is risky. So, don’t be so sure you’re right. Just ask.
Make sure the questions in your survey are pertinent. Don’t ask trivial questions. You want to keep the number of questions reasonable; say 10-15. We’ve all taken surveys that seemed to go on forever. They’re annoying. Keep it short and keep it limited to the things you have to know.
Like I said, your SWOT analysis is a great place to start for survey question ideas. Google “church survey” and you’ll find plenty of other examples if you’re stuck. Here are some great ideas to get you started.
How to distribute the census and surveys
If you want paper copies – before and after service is a great time to ask for feedback. People are already in a church mindset, so the timing is perfect. Just make sure it’s not pushy and that nobody will feel singled out if they opt not to participate.
If you have members’ addresses, you can mail out the survey. Keep in mind that doing so will incur additional costs.
Gathering digital responses will be more efficient. It’s up to you to decide what’s appropriate for your congregation. Do whatever gets you the highest response. Here’s a good post on choosing the right digital survey platform. Just remember – if you collect your members’ information digitally, you have a duty to protect that information. Make sure the platform you use is secure, and make sure you have policies in place to ensure that their valuable personal information isn’t compromised.
Good, old-fashioned, talking
Another good way to get your finger on the pulse of your environment is to simply ask the opinion of people you respect.
Ask your family what your strengths and weaknesses are. Ask your professional network what opportunities and threats exist. Let them know that you are genuinely interested in improving and you appreciate their candor. Listen to what they have to say.
Whether it’s flattering or hard to hear, it’s valuable. So let them say their piece and don’t take anything they say personally.
Ideas to get you thinking
If this is your first time taking part in a church SWOT analysis, then you might not know where to begin. Here are some ideas on potential strengths, weaknesses, opportunities, and threats for your church. This list is by no means exhaustive, it’s merely meant to help get your mind on track.
Possible strengths
Your church is on a high-traffic road
Your church’s membership is stable or growing
Most of your members have been with the church for a long time
A pool of retired members with skills that could help the church
Your church is welcoming to newcomers
Your church has a good reputation in the community
A strong source of donations
Great leadership
A self-sufficient attitude
A rich and lengthy history
A sense of family
Church members who speak the same language as locals in the community
A quality mission statement
The capacity to accept a lot of new members
Possible weaknesses
Church membership is declining
The church has low attendance from children and young people
A “welcoming process” for new members that is lacking
A congregation that is inflexible and stubborn to change
Low turnout at community outreach events
Your church doesn’t do a good enough job of “inviting” people in
Members that aren’t getting value from church
A reluctance to challenge the status quo
Volunteers that are worked too hard
Antiquated technology
A shortage of handicap facilities
Lack of a strategic plan
The inability to budget effectively
Possible opportunities
The population of your geographic area is growing
Local youths who are in need of church services
Your church is near a college
Members with influence in other organizations throughout the community
Offering services at different times than Sunday morning
The internet and social media
Hosting community events in otherwise unused facilities
Possible threats
Your church is in a smaller town that has an older population
Laws and regulations that inhibit actions
Competition for new members
An anti-religious culture/environment
Economic hardship in the community
How the factors might interact in your church SWOT analysis
Keep these in mind as strategic planning progresses. Especially when it comes time to formulate a strategy in general and set goals in particular.
Obviously, your church’s SWOT factors are going to be different, and therefore the interactions between factors are going to be different. The examples below simply serve to help illustrate how the separate factors can interact and generate ideas about steps that can be taken to help your church reach its goals. To get the gears turning in your head, so to speak…
Strengths & Opportunities
This is where the stars align. We’re matching what your church does well with external factors that can help it achieve its goals. We don’t let these sorts of opportunities slip through our fingers.
Your church is on a high-traffic road + The population of your geographic area is growing = Ensure your signage is effective
Your building and your signage is the bridge between your church and everybody who passes by on foot or in a vehicle.
Just because your organization is a church, it doesn’t mean that you get a pass on marketing. Marketing is just as important for churches as it is for businesses and for individuals. We all have to be mindful of the image we are projecting out into the world. If we want attention, we’re probably going to have to grab it.
Here are some tips on how to make your signage effective. Beyond that, make sure your building and your grounds are well kept. Real estate that is run-down conveys a very negative image. Also, consider taking advantage of a marquee to attract attention and pass along messages that you think will resonate with the general public
Your church is welcoming to newcomers + Hosting community events in otherwise unused facilities = Offer church facilities at a reduced price to members
Many churches offer the use of their facilities to members for very reasonable prices. What I am suggesting is that your church uses these facilities as a marketing (there’s that word again) tool.
Don’t just take the stance that “the facilities are there for people if they want to use them.” Look at your facilities as an opportunity to get non-members in your church and to show them why you’re so great.
What you don’t want is for people to say “My nephew had his graduation party at some church on the East side of town.” Rather “My nephew had his graduation party at the East Side Church of Christ and man, what a great venue. I can see why my sister and brother-in-law like going there so much.”
Make sure that non-members can find out what your church is about when attending functions in your facilities. Have information available for anyone that might want to learn more. Let all who attend know about upcoming events and opportunities, e.g. singles events, volunteering, kids’ activities.
Make sure that your reputation as a welcoming church is obvious to all who attend. The more people you win over in informal circumstances like these, the more you’re probably going to win over during services.
So look at the calendar for your available facilities. Is it full? If so, great. Make sure you’re putting your church’s best foot forward during these events so that you can attract the types of members you want. If your calendar isn’t full, ask yourself why. Is your Building Use Policy too restrictive? Are the cost and the hassle too high? Do members even know that these spaces are available to rent?
Nobody likes to be faced with threats. But, they are part of life. By utilizing the things you do well to neutralize threats you can lessen their impact.
A pool of retired members with skills that could help the church + Economic hardship in the community = Classes, and workshops to help community members earn more and spend less
Match members of your congregation with those in the community who might be able to benefit from their expertise. For instance, retired members who have years of experience in financial matters such as budgeting, self-employment, taxes, and investing could be a lifesaver for those who are experiencing economic hardship.
Offering classes like these reinforce your good reputation in the community. It gives you the opportunity to really help people and it helps them to become self-sufficient. It gets people into your church and gives you the opportunity to show them the benefits of being a member.
Someday these people will likely bounce back from tough times. Many will remember who was there for them in those tough times. Using volunteer time and expertise to help others is a big part of church life. Not every contribution needs to be in the form of money or food. The gift of knowledge might be the most valuable thing your church has to offer.
The capacity to accept a lot of new members + Competition for new members = The chance for your church to set itself apart
Everybody in the world might want to come to your church, but if you don’t have room for them – they won’t. As will be addressed in a later post, you have to have the capacity to handle your peak demand, not just your average demand.
Obviously, overbuilding can create its own set of problems, but if you have more church than members now, you might have a competitive advantage. While other churches are clamoring for new members without anywhere to put them – your church will seem comfortable by comparison.
Think about it this way – would you rather try to pile into a compact car with five other people? Or, would you rather share a ride with one other person in a large SUV?
Weaknesses & Opportunities
Opportunities are typically fleeting. Not being able to take advantage of them is a tragedy. If your weaknesses are preventing you from taking advantage of opportunities, then shoring up those weaknesses is a must.
The church has low attendance from children and young people + Local youths who are in need of church services = Local youths attending church somewhere else
Youngsters are a different breed. You and I both were when we were young. If you want attendance from the youngsters then you’ve got to incentivize them to come. You’ve got to meet them where they are.
Admittedly, some of the things I was into as a kid had no place at church. But, don’t think that you can’t reach them at all. I’ve worked at after-prom parties for my daughters’ school that was relatively vice-free and the kids seemed to have a very good time.
The particulars of planning activities for young people are outside of my expertise. A church is an organization that is supposed to appeal to every demographic, including pre-teens, teens, and young adults.
I can’t envision any benefit to excluding these groups. So, if your church is losing the young crowd to other churches, then I believe you should consider steps to rectify the situation. Here’s a pretty good article I found on the subject.
Members that aren’t getting value from church + The internet and social media = The ability to provide extra value to members and nonmembers
If an individual’s experience with church consists strictly of going to service on Sunday and being subjected to the same thing they have one million Sundays before, the experience is going to get a bit stale.
Take advantage of technology and get the most you can out of social media. Share inspirational material that expands upon what you preached at church. If you add value to people’s lives, they’re going to become more engaged.
I’ll hazard to guess that a lot of your congregation is addicted to social media. Sorry to say it, but it’s probably true. From my experience, social media has its benefits, but it can also be a cesspool of negativity. Be a diamond in the social media dump.
Here’s the trick, though. Be authentic. Don’t just say what you think people want to (or should) hear. Have a real human being handle your social media. Authenticism will attract more people than tired old talking points.
When a threat is on the horizon and you have no answer for it, you’re in trouble. You’re not alone though. Every individual and every organization has weaknesses. Everybody is exposed, to a greater or lesser degree, to threats. The key is to protect your downside.
A reluctance to challenge the status quo + An anti-religious culture/environment = Time to come to terms with reality
It’s my opinion that many people in America and other first-world nations have opted to forego the worship of God in favor of the worship of government and scientists. In a lot of ways the Church has no one to blame but themselves.
It wasn’t that long ago that people would lament being preached at by the fanatically religious Christians. Now, ironically, the ones I see telling me what to think and say are those who are fanatically “progressive.” I’m getting out of my lane here – this is a site about solving business (profit and non-profit) problems. Not a soapbox.
Anyhow, it seems to me that the pendulum has swung in the other direction. I’m not saying to change your beliefs. But, if you want to win people over, you’ve got to meet them where they are. Highlight the good the church is doing. There’s a lot, I know. Don’t just read Bible verses to people – I don’t think it will resonate. Expand on what the Bible says. Apply to real, everyday life in 2018.
Those in your church that want to stick with the “way it’s always been done” might be holding you back. There’s a lot of value in religion, but you might have to employ a little more subtleness when conveying that value.
Here’s a trick I credit to Aubrey Malphurs, Church Consultant – if you find yourself faced with a stubborn (possibly older) member, ask them what they’d be willing to change to have their (grand) children seated next to them at church. When framed this way, you might find that they are a little more willing to be flexible.
The inability to budget effectively + Economic hardship in the community = You need to practice what you preach
Your church is going to thrive more in strong economic times than weak ones. That’s obvious. However, handling your church’s finances in a responsible manner is a necessity no matter the economy. Seeing a place of worship crumble in poor economic times is only going to make those who are losing hope become more despondent.
The beauty of numbers in general and finance, in particular, is their inescapable reality. Short of committing fraud, you can’t make things appear or disappear out of thin air. Embrace the reality you’ve been blessed with and make the most of it.
What are some of the hardest strengths, weaknesses, opportunities, and/or threats to come to terms with?
I have found that the hardest barriers to SWOT analyses have centered around honesty, focus and organizational commitment. A church or any organization doing a SWOT needs to provide an honest assessment of strengths and weaknesses. Often people don’t want to hurt anyone’s feelings so everything becomes a strength. If worship isn’t inspiring or if sermons seem repetitive and lifeless, call it out as a weakness. If children’s ministries lag or member participation is lackluster, call it out. A SWOT has no meaning if the organization isn’t honest about its current state of affairs. Sometimes you might have to clarify why it’s a strength or weakness. Is it related to facilities, resource distribution, leadership or church demographics. Looking at strengths and weaknesses simply says what you do well and what you might not do as well as you’d like. It’s information that can help during the planning process.
A second barrier is focus. While it comes into play more with setting objectives, most churches find it difficult to focus. Individual churches do not have to be all things to all people. Yes, we want to be the spiritual home of all those who are around us, but that’s impractical. Individual churches have different strengths and weaknesses that may or may not play into the needs of those in the community. Churches also have limited resources, so focus allows us to play to our strengths, make changes where we need to, and use our resources more effectively.
Organizational commitment is essential if the church is going to make the plan work. Having a core of dedicated people is great, but unless the church as a whole gets behind the planning committee’s work, you may create a great plan that sits on the shelf. Be sure to build in opportunities for people to contribute to the plan in order to build internal support for the process.
One last thing, planning is a process; it doesn’t stop with a document. A plan should be dynamic and change as circumstances change. This shouldn’t be a once-a-decade “cookie-cutter” exercise. There isn’t one solution to the ills of a church; there are many, but, often, people limit the opportunities they are willing to consider. We get calls from people who ask how they can resurrect their youth programs and attract families with children. Sometimes the likelihood of revitalizing a church with no children is extremely limited making it impractical to expect in a short time frame. In cases like that, sometimes the best path is the one least traveled – being led to focus on something involving other underserved individuals that fit in your “wheelhouse”.
Do you have any other sources of information you would suggest being gathered before preparing a SWOT analysis?
Demographic information is available through your annual conference office. If they are unable to support you, contact the Local Church Services team at United Methodist Communications, localchurchservices@umcom.org. I would recommend working with your annual conference if possible because they may have other resources and support available beyond demographic data. If your church’s internal information is difficult to access, visit www.umdata.org. The site has information based on what your church has submitted to GCFA through 2017. United Methodist Communications also offers a local church assessment survey. Contact umcomresearch@umcom.org for information.
Wrapping up the church SWOT analysis
Holy cow, that’s a lot of info. I write a lot of info because there is a lot to think about (it is a “comprehensive” guide, after all). If your church is new to strategic planning or SWOT analyses, your head might be spinning.
Maybe you’re thinking “this is too much trouble.” Like I said in the church mission statement post – you don’t have to follow this guide “to a T.” There are lots of other great sources of information out there. If something suits you better, use it.
There’s really no downside to going through this thought exercise. Even if you can’t get anyone else in the church to buy in. It’s hard to imagine that you would be worse off afterward if you did follow these steps.
Don’t expect perfection. Especially the first time you draft a church SWOT analysis. You’ll make mistakes and you’ll learn from them. Next year – you’ll improve, as will you the year after that…
Whatever you do, just make sure that you feel good about the direction your church is heading.
What are some of the hardest strengths, weaknesses, opportunities, and/or threats to come to terms with?
How about some good resources (available to everyone) for understanding opportunities and threats?
Do you have any other sources of information you would suggest being gathered before preparing a SWOT analysis?
00:00 hey everyone this video is gonna be a 00:04 little different than most of the other 00:08 videos that I’ll post in that you know 00:12 my website is called spreadsheets for 00:14 business so obviously it revolves around 00:18 spreadsheets but in this case wanted to 00:22 talk a little bit about mission 00:24 statements and in particular mission 00:28 statements for churches so why make a 00:33 video you know about something that’s 00:36 not spreadsheet centric like mission 00:40 statements as well because they you know 00:43 a lot of the spreadsheets that I make 00:46 fall within a particular theme you know 00:51 for instance strategic planning or cost 00:54 management performance measurement 00:56 things like that so in order to kind of 01:00 round out the the theme you know to to 01:07 put the spirt the videos that I make and 01:10 the the pages that I post on you know 01:16 spreadsheet related things like the 01:18 budgets operating budget capital budget 01:20 financial budget you know this these 01:25 types of things help give them posts 01:28 about like the softer skills that I call 01:32 them hope to put them in the context in 01:36 terms of you know things like the 01:38 mission statement it’s one analysis 01:40 strategy formulation in that so anyhow 01:44 get into it here and you know you 01:47 probably are familiar with the term 01:49 mission statement it’s pretty widely 01:54 used you know and you might even think 01:57 it that it’s kind of a business school 02:02 sort of thing and you know it wouldn’t 02:05 be completely wrong in that respect but 02:08 you know there is some benefit I think 02:11 actually it attentionally a lot of 02:12 benefit they can come from going through 02:14 the steps of creating a mission 02:16 statement and if you create an effective 02:18 mission statement that it can definitely 02:21 potentially help your church to make 02:27 decisions that are kind of consistent 02:31 you know not not all over the place so 02:36 you know a mission statement is a 02:44 [Music] 02:45 basically a sentence or any group of 02:48 sentences a couple of paragraphs that 02:53 serve as the basis and this is kind of 02:57 my definition of a mission statement 02:59 they serve as a basis in these words for 03:03 every decision that you make going 03:05 forward so it kind of it can also be 03:12 considered a definition for your church 03:16 what’s your church about well you know 03:19 if somebody were to ask you that instead 03:21 of kind of him lon 03:24 you know having to sit there thinking 03:25 about it hopefully your mission 03:27 statement and a lot of in most instances 03:32 would basically capture that in kind of 03:35 a short and sweet memorable saying so 03:40 you know but most for-profit businesses 03:47 have a mission statement you know and 03:54 you might think well you know most in 03:59 general most for-profit businesses are 04:03 different than a church obviously which 04:06 is not-for-profit you know in the day 04:09 their mission is to make money but you 04:12 know they begin most 04:13 for-profit businesses have a mission 04:16 that 04:17 goes above and beyond just making money 04:21 you know the the goal for profit is done 04:25 within the context of something else now 04:28 you know if that wasn’t the case there 04:31 would be less people getting into 04:38 businesses and in low-margin industries 04:41 like grocery stores you know building 04:44 materials and another retail and things 04:47 like that I think that if there were no 04:52 mission statement there customer service 04:54 even element in customer services and 04:57 always gradient well for-profit 04:58 businesses we know that but it would 05:00 also suffer so what it does is it 05:05 hopefully if it’s done right it can get 05:09 everybody on the same page you know if 05:11 if you have a an effective 05:15 organizational mission statement then 05:17 you have hopefully less of a temptation 05:21 for everybody within the organization to 05:25 kind of consciously or subconsciously 05:27 come up with their own mission statement 05:29 right so if you’ve got a hundred people 05:31 in your organization each other own 05:33 mission statement their own definition 05:35 for what the company is and they may can 05:38 be working in a hundred different 05:39 directions you know and that’s a trap 05:47 that you can fall into also if your 05:52 organization has a mission has a missing 05:55 mission statement excuse me it but 05:58 doesn’t emphasize it or just basically 06:00 and it goes through the exercise of 06:02 making one print you know puts it on the 06:05 website maybe puts it up on the wall 06:07 somewhere and that’s that it’s not 06:08 emphasized then you probably run in the 06:10 same sort of situation where people are 06:14 just going to fill that vacuum and come 06:16 up with their own individual missions so 06:20 the mission statement is kind of a 06:26 you know a fixed-point I use the example 06:30 of a mission statement you can um point 06:34 your organization in the right direction 06:36 you know north south east west north 06:39 west south east whatever but it’s later 06:44 on in the strategic planning process and 06:46 when you do formulate an actual strategy 06:49 that you’ll decide that the roads you’ll 06:52 take to get there so you know you might 07:01 be asking yourself if your church really 07:07 needs one and I mean Dean the truthful 07:14 answer is no it doesn’t need one you can 07:17 still operate your church function as a 07:20 church without one but hopefully some of 07:24 the benefits that are kind of just 07:27 outlined there they upside of doing so 07:31 of creating a mission statement I think 07:36 is bigger than the downside from just 07:40 disregarding doing it now more freedom 07:46 my next bullet point here and what that 07:49 means is you know eat you might think 07:54 the creating a mission statement and 07:58 then having it weigh in on all of your 08:04 future decisions you would make with for 08:08 your organization in your church would 08:12 give you less freedom because every 08:15 decision you might think has to fall 08:18 within the context of this mission 08:20 statement that’s one way of looking at 08:23 if you turn that on its head though it 08:26 can give you more freedom and then 08:28 you’re not spending time on decisions 08:32 that don’t fall within the context of 08:35 the mission statement okay it gives you 08:37 it gives you direction 08:39 you focus so that’s how having a mission 08:45 statement might give you more freedom it 08:48 frees you up from spending time on 08:51 things that aren’t moving you in the 08:54 direction of accomplishing your mission 09:04 so let me kind of wrap up the intro by 09:08 saying you know if I had a church if I 09:11 ran a church we would have a mission 09:13 statement I think the the exercise and 09:18 kind of going through the steps you know 09:21 my my interpretation of the the steps 09:25 that I would take again if I was 09:31 constructing the mission statement for a 09:35 church you know but keep in mind as I go 09:37 through these steps that there’s no 09:39 wrong way to create a mission statement 09:41 okay if you wake up in the middle of the 09:49 night and have an epiphany and you see 09:57 you know in in the dark there your 10:00 mission statement written clear as day 10:02 in front of you and that’s just it and 10:06 it’s you know this aha moment then by 10:10 all means you know go with it if there’s 10:14 no shortage of information out there on 10:16 how to create a mission statement so if 10:21 these steps don’t work for you then by 10:25 all means use someone else’s 10:27 step-by-step program you know it’s fine 10:32 I mean I if I’m being realistic honest 10:36 myself I know this is probably not your 10:39 one-stop-shop for creating a church 10:42 mission statement probably shouldn’t be 10:44 you’ll probably combine and for me 10:46 from several different sources and 10:48 that’s fine that’s exactly what I do 10:49 when whatever I’m learning something new 10:52 or under and they’re taking something 10:53 you know I’m I want to get a couple 10:56 different perspectives so that’s that’s 10:59 great I hope that this video and the 11:02 post which I’ll link in the comments can 11:06 at least give you a couple ideas a 11:08 couple of new perspectives on how to go 11:12 about it and you know can can help you 11:16 at least in some little way when it 11:19 comes to making a mission statement for 11:22 your church so speaking of a different 11:26 perspective if I want to be upfront and 11:32 authentic which I do you know I don’t 11:36 make these videos or write these posts 11:40 to sell you anything you know my all my 11:46 spreadsheets available for download on 11:48 my side are free you know so I don’t 11:53 have some ulterior motive 11:56 you know I’m my goal right now is to get 11:59 traffic to be honest and now to get 12:01 traffic get traffic by being helpful 12:05 getting likes and subscriptions getting 12:08 paid views things like that so that 12:13 being said you know I think so I think 12:19 by being authentic that’s how I can 12:22 accomplish you know what mine my goals 12:24 are here in the early stages of my 12:28 website and when YouTube channel so be 12:31 completely upfront I am NOT a churchgoer 12:34 a frequent churchgoer I’ve been to 12:36 church I you know have family that goes 12:44 to church regularly so I’m no stranger 12:47 to it 12:48 it’s obviously beyond the context of 12:52 this video too 12:56 get into some sort of diatribe about why 13:02 you know why I do what I do or that 13:06 don’t do what I do however you want to 13:08 put it but you know let me just say this 13:10 I certainly respect the purpose that a 13:16 church serves in a community and I think 13:18 there are a lot of positive things that 13:23 take take place in church and you know 13:28 in service and outside of the service 13:29 and that so I certainly respect what it 13:35 is most churches set out to do and you 13:40 know so I’m not I’m not trying to do 13:43 this solely for views or anything like 13:48 that so you might ask yourself well okay 13:51 you’re not a churchgoer then why why 13:54 making the video on and they you know a 13:59 whole see Sierra do on church mission 14:04 statements and a whole series of posts 14:06 on strategic planning for churches and 14:07 the answer is quite simply because 14:09 that’s what there’s a demand for you 14:12 know and the way I looked at it it was 14:15 no different for me to make these videos 14:19 and post and for an industry that I 14:26 don’t frequent then it would be for me 14:29 to make them for you know a nail salon 14:31 for instance I don’t 14:33 I’ve never gotten a manicure pedicure 14:36 don’t know that I ever will 14:38 you know maybe but I you know it’s a 14:43 these principles those strategic 14:46 planning you know kind of like I touched 14:49 on earlier for-profit not-for-profit 14:53 manufacturing retail service you know 14:58 what they they transcend industries you 15:03 know the the particulars certainly can 15:05 be a little different you know between 15:08 industries but 15:10 it what the steps that I’ll go through 15:15 here for how I would suggest drafting a 15:19 mission statement are no different than 15:20 like I said if I were no different than 15:24 what I would suggest for you know the 15:26 restaurant down the road here okay here 15:30 then you know retail store or whatever 15:35 you know are the the small manufacturer 15:38 it so that’s why I chose to you know 15:47 chose to focus on churches in Franklin 15:50 cuz it got me a little bit it isn’t you 15:52 know there’s a lot is the same but a 15:54 little bit as different than 15:55 not-for-profit most of my education and 15:57 experience in that comes from the 16:01 for-profit arena and that there was an 16:04 opportunity for me to think of things 16:06 from a different perspective you know 16:07 particularly churches who might not 16:10 major everything in terms of strictly in 16:13 terms of dollars and cents so you know 16:17 yeah I think it was beneficial for me to 16:21 look at things from a different 16:24 perspective and if you’re not completely 16:27 turned away by the fact that I’m not a 16:30 frequent churchgoer perhaps you might 16:33 find that my perspective as an outsider 16:37 so to speak is beneficial for you when 16:41 it comes to not just writing a mission 16:44 statement for your church but the whole 16:47 strategic planning in general because 16:49 like I said there’s videos and put the 16:52 posts already exist all the line and the 16:54 financial budgeting posts but you know 16:57 there’s more videos to come on this 17:00 subject so anyhow let’s move on to kind 17:07 of the steps that I would suggest in 17:12 acting these steps gonna rep myself 17:16 there I think these steps apply whether 17:23 you’re starting from scratch in terms of 17:28 mission statement or you know looking to 17:30 to freshen up I think you know that it 17:34 doesn’t matter whether you’re coming 17:35 into it ice cold or kind of looking to 17:38 build upon or you know change an 17:41 existing mission statement so the first 17:44 step is good old-fashioned brainstorming 17:46 and that you know I think the benefit of 17:55 brainstorming is that it kind of if you 18:02 do it right it can kind of help get rid 18:05 of the pretense okay you know because if 18:09 you and the other key individuals in 18:11 your church are coming into this and 18:13 everybody has kind of their maybe even a 18:18 rough draft of what a church mission 18:21 statement should be already you know 18:23 those mental rough drafts might not line 18:27 up and could you know could lock things 18:33 up like the whole process up and make it 18:36 more difficult you know brainstorming 18:39 doesn’t right you probably know you know 18:43 is supposed to kind of be a situation 18:48 where any idea is allowed even if it’s 18:50 silly ridiculous or that it just kind of 18:54 helps hopefully to get you open your 18:56 mind up take the blinders off and you 19:01 know make sure you are looking for you 19:05 know looking at this this task of 19:07 drafting a mission statement for your 19:09 church from every every appropriate 19:12 angle that you can so this isn’t just 19:15 let’s plan out brainstorm a mission 19:21 statement there are different techniques 19:28 that a person can use or a group of 19:32 people some of these techniques require 19:34 people 19:38 in order to brainstorm and some of 19:42 them you know are pretty novel you know 19:44 I use them in other aspects of my life 19:48 what I yeah when I want to really open 19:51 my mind up and be open to be open and 19:55 honest with myself I you know I’ll use 19:58 some of these techniques or that and 20:01 it’s simply a matter of searching for 20:04 brainstorming techniques okay you’re 20:07 gonna get a big list of you know several 20:11 pages goes on and on of different 20:13 techniques there’s no shortage of sites 20:16 that have written on the topic and you 20:21 know I I think it would be good before 20:23 you start Matt to browse those and find 20:26 some that some topics are I’m sorry some 20:30 techniques that you might want to use 20:31 some I copied one site or link to one 20:36 site in particular here just shows me 20:38 it’s 25 techniques on brainstorming and 20:42 you know all you know in some of these 20:45 you’re selling and brainstorming it’s 20:46 kind of a silly thing you know but it 20:50 that’s the point is when it’s you know 20:52 when it’s silly it gets can get you out 20:55 of your your funk out of your tunnel 20:57 vision like I said so definitely before 21:01 you start brainstorming I would you know 21:05 browse and pick some of these techniques 21:08 to to utilize you know rather than just 21:13 doing traditional brainstorming like 21:14 saying okay everyone what should our 21:17 mission statement be and just start 21:20 rattling off ideas you know it’ll help 21:23 you approach it like like I said it from 21:26 a couple of different angles so from 21:32 then after you brainstorm and 21:34 everybody’s 21:35 kind of had there been able to weigh in 21:42 on the subject and things have been 21:46 looked at from a couple of different 21:47 angles you know now I would suggest 21:50 start creating rough drafts and you’ll 21:53 notice that that is plural not just one 21:57 rough draft I would you know set a timer 22:02 if you want and say and just start right 22:05 see how many you can write you know 22:07 rough drafts that’s a mission statement 22:08 and you know this is just a one step 22:10 removed from brainstorming and that 22:12 that’s fine you’re gonna probably throw 22:15 away all but one of these if one you 22:17 might combine them or whatever you know 22:20 you don’t necessarily have to use one of 22:22 these but it’s like let’s take all of 22:24 our our brainstorming ideas about what 22:28 we want to include it in a mission 22:29 statement or what we want to want it to 22:34 be about and let’s start turning them 22:37 into actual mission statements so again 22:41 don’t overthink this part you know get 22:45 the get a get a big number of mission 22:48 statements rough drafts created okay and 22:52 from there then you can start kind of 22:55 sorting out what those you like those 22:59 don’t really pass muster and you know 23:03 the cream will start rising to the top 23:04 so to speak so you’ll probably find that 23:08 the your best mission statements rough 23:13 mission statements will resonate with 23:16 almost everyone okay don’t give people a 23:18 good feeling they’ll make people nod 23:21 their head they’ll you know you’ll just 23:24 you’ll know it when you hear it you’ll 23:26 know when you read it okay so I narrow 23:29 it down to the your your top view right 23:32 and from there then it’s time to make a 23:35 decision now again touched on a second 23:39 ago 23:43 don’t need to you can still polish it 23:46 from there don’t need to just choose one 23:47 and then that’s it these were rough you 23:50 can polish them there and you can 23:51 combine you can subtract things from 23:55 your mission statement but you know it 23:59 comes a point of course that you have to 24:01 start to narrow it down from ideas that 24:07 you came out brainstorming to rough 24:10 drafts to fewer rough drafts to one 24:13 final mission statement and hopefully 24:19 for the most part you can really narrow 24:22 it down and settle for the money and 24:27 alibiing what you begin to settle on 24:30 will resonate with everybody and 24:33 hopefully everybody will or or less be 24:35 in agreement you know we’re all human so 24:39 that’s probably wishing for a little too 24:42 much and it might be an instance where 24:45 ultimately person with the most 24:47 authority has to make a decision and 24:49 that’s that even though but I mean 24:52 here’s the thing so after giving it as 24:56 much thought as you have and if somebody 25:00 does have to make a final decision 25:03 you’ll know that hopefully you and 25:06 everybody else will know that you know 25:11 it’s after all that scrutiny and all 25:13 that thought but into it that you know 25:16 this is a pretty good ideal for your 25:18 church to live up to this is a pretty 25:20 good direction for your church so you 25:24 know it it it might not be exactly with 25:28 this individual that individual wanted 25:30 to see but it should be after all that 25:33 time and effort it should be good some 25:38 that will be a good feeling I’m sure 25:41 when you’ve settled on a mission 25:43 statement but does that mean you’re 25:45 finished will the time being yeah it 25:48 probably does but you know life is 25:53 dynamic situations are dynamic things 25:56 changed 25:56 just know that it probably pays to 26:02 revisit this at least briefly maybe not 26:05 as much detail if you had this time 26:07 around but you know when you do your 26:10 annual your church does its annual 26:12 strategic planning to at least make sure 26:16 that this is still the direction that 26:21 your church wants to go you know if your 26:22 head and due north which this is not my 26:26 strength but if that’s zero degrees you 26:30 know 26:30 maybe over the past year things have 26:33 changed enough you need to tweak that 26:35 two degrees okay more or less the same 26:37 direction just a tiny little tiny little 26:40 tweak you know no shame in it and it’s 26:43 beneficial I think to to be dynamic to 26:46 be flexible so for the time being though 26:50 after going through those steps should 26:52 have a mission statement that you can be 26:56 proud of and that will serve your church 26:59 well so if all that if even after going 27:10 through those steps you can’t settle on 27:12 something you just not able to 27:16 accomplish what you set out to it’s fine 27:19 there’s still a another path you can 27:25 take and that is to look at other 27:30 church’s mission statements and 27:32 potentially build upon them or you know 27:37 they say what is it imitation sincerest 27:42 form of flattery just to use another 27:45 church’s mission statement so I will 27:49 touch on that again here shortly you 27:54 know let’s go briefly about why your 27:59 church might not want a mission 28:01 statement so you know for the sake of 28:04 being thorough and 28:09 you know addressing everyone’s concerns 28:12 there might be object objections that 28:14 you have thinking that you know this is 28:17 too much trouble I don’t see the benefit 28:18 and you know don’t think that a mission 28:24 statement is for you these are a couple 28:25 of reasons that I came up with why that 28:27 might be the case you know the first is 28:30 that it’s the wrong mission for the 28:34 wrong Church you know I’m sure you know 28:40 that churches full along like most 28:46 things along a spectrum and there are 28:50 strict letter letter of the law churches 28:56 you know there are more and you want to 29:01 put it just flexible churches okay if if 29:09 a more flexible Church tries to have a 29:12 mission that was you know the same 29:16 mission as the letter letter of the 29:18 Bible Church it’s probably not going to 29:24 work if if you know conversely if the 29:28 more structure ch translating the same 29:32 mission as the more flexible Church 29:36 probably not going to work it’s 29:39 pointless and it could potentially 29:40 create more harm than good so the steps 29:44 kind of went through earlier you know 29:47 should help you avoid in a situation 29:51 like that the next reason Church might 29:57 not want a mission statement is because 30:00 it’s a facade you know 30:02 you probably notice when I talked about 30:04 the steps to making a mission statement 30:10 that a lot of it was you know talked 30:12 about having a group involved the key 30:15 individuals in the church how many 30:17 individuals that is well it depends 30:19 probably a large part on the size of you 30:22 church in just the culture the nature of 30:25 your church and everything but I can 30:28 envision a scenario where if one person 30:31 at the top takes it completely upon 30:34 themselves to write a mission statement 30:36 and says this is it you know no input 30:42 from anyone else that it could do more 30:49 harm than good because you know if 30:53 they’re just using the mission statement 30:54 as a tool to control the point – you 30:57 know I created the mission statement but 31:02 I point to the mission statement so I 31:05 can make the church do X Y or Z you know 31:10 I’m deflecting it off myself and but 31:15 pointing is something that I created 31:16 nonetheless you know so if if a mission 31:21 statement is used kind of as a tool of 31:23 control like that I can envision where 31:26 it might be more harmful than good 31:29 the other two reasons that you’re you 31:34 you might think these aren’t these have 31:39 a little different tone than previous 31:41 two but you know I think that you’re too 31:42 small and you know I suppose if your 31:49 church are super small it might feel 31:54 gratuitous to create a mission statement 31:57 but I would still argue that there are 32:04 plenty of businesses with you know fewer 32:07 than 100 members which my understanding 32:11 would qualify as a pretty small church 32:12 but with fewer than 100 32:15 stammers and you know very small staffs 32:17 that still have a mission statement it’s 32:19 for the exact reasons that I outlined 32:20 earlier that you know it helps give you 32:25 direction and one hundred people still a 32:26 lot of people 50 people’s a lot of 32:28 people you know and having that mission 32:31 statement would still help you have more 32:36 freedom would still help you move 32:38 everybody in the same direction and then 32:40 you know finally I talked about earlier 32:45 a little bit how mission statement might 32:47 be viewed as a you know kind of business 32:51 school mumbo-jumbo too formal too rigid 32:55 or whatever and you know that is a valid 32:58 concern but I think the extent to which 33:04 your mission statement is formal or 33:06 informal rigid flexible whatever will 33:10 depend on what the mission statement is 33:12 you know so buying brainstorming making 33:19 rough drafts getting a lot of input from 33:23 other individuals that will be affected 33:25 by the mission statement I think that 33:28 you know it you’ll end up settling on 33:32 something that’ll have just the right 33:34 amount of formality so like I mentioned 33:42 that you know if you’re you reach the 33:47 gridlock and you can’t you feel stuck 33:51 and even the the steps that I outlined 33:55 earlier are just not getting anywhere 33:59 then you might look to other churches 34:04 and their mission statements you know 34:07 for inspiration for to borrow them to 34:10 tweak them and make them your own and 34:11 and frankly looking at other church’s 34:13 mission statements is probably a good 34:17 exercise to do beforehand anyhow is 34:20 again it just puts you a little bit in 34:23 the mind of other individuals who’ve 34:24 been in similar circumstances 34:27 we’ll kind of get get your your mind set 34:30 in a mission statement setting so I 34:35 outline on the the page like I said 34:38 which would be linked down in the 34:39 description on church mission statements 34:45 briefly I cover three random mission 34:51 statements that I found and states 34:53 across the country and they’re all very 34:55 different and kind of touched on you 34:59 know from my point of view as an 35:01 outsider what I like what I maybe would 35:04 have done different and you know again 35:09 that is quite simply an opinion I’m sure 35:11 these churches hopefully their mission 35:14 statements serve them well and that’s 35:16 fine they didn’t make them you know for 35:19 for Chris they they made up for their 35:22 congregation and rightfully so so you 35:25 know I got three different ones on the 35:27 website the web page and I picked in 35:31 preparation for this video three that a 35:37 look looking at kind of with a fresh 35:41 perspective I’ll admit my intention was 35:46 with these to look at him completely 35:48 sight unseen and give my input but what 35:53 happened was I recorded this video once 35:56 already and it recorded wrong because 35:58 I’m still getting the hang of recording 36:01 videos so I have seen him before it’s 36:03 not not a I’m not completely fresh on 36:09 him so what I what I did here is real 36:12 simple and it’s again just something a 36:14 technique that you might use and all I 36:17 did was search for random state state 36:21 being took a state of course and just 36:23 searched random state I don’t think 36:25 Google would know what to do with that 36:26 or whatever search engine you use so 36:32 that is basically a matter of 36:41 doing this and you’ll see that there’s 36:47 no shortage of results okay we can go 36:54 ten pages deep I bet here yeah here we 36:59 are you know about talks about mission 37:04 statement I guess that’s a college not a 37:06 church but ma’am this is just one state 37:09 you know just little little Arkansas you 37:17 find the same thing for any state you in 37:19 or so lots of inspiration to be had out 37:22 there okay and plenty plenty of people 37:27 who gone to this process before to pull 37:31 like I said pull inspiration upon so we 37:37 look at the first one here 37:38 Arkansas church mission statement I just 37:41 pulled this at random mrs. Furr Arkansas 37:48 Baptist Church fellowship community 37:52 church they do what you’ll find a lot of 37:58 churches do not surprisingly in 38:01 reference either directly or indirectly 38:05 from verses in the Bible their mission 38:09 is to make disciples of Jesus Christ by 38:12 leading people into a growing 38:13 relationship by seeking serving and 38:15 sending so that’s their mission and then 38:19 they expound on that which I think is 38:21 good since it’s such a kind of short one 38:24 sentence mission statement and uses 38:26 terms that are a little 38:29 up for interpretation so they expand on 38:32 that what they consider seeking serving 38:34 and sending so it’s the mission 38:38 statements unique in that respect that 38:43 it kind of has a you know expounds upon 38:52 some of the terms used and it’s like I 38:54 said I think that’s I think that’s neat 38:59 neat right the second church is in West 39:08 Virginia in its West Virginia presbytery 39:21 and they also go with a simple 39:24 one-sentence mission statement you’ll 39:27 see that that’s there’s a wide variety 39:30 of course in the length of mission 39:33 statements the several of them I have on 39:36 my website are paragraph or in some 39:41 cases couple paragraphs so it’s up to 39:45 you what suits your church best you know 39:52 another individual who is kind of in the 39:57 church consulting niche is 40:03 his name’s Audrey ralpherz and I 40:05 referenced a lot of his work kind of 40:07 putting together you know particularly 40:08 the the post on the soft skills and in 40:14 regards to the church strategic planning 40:16 and he’s a bigger proponent of shortened 40:21 to the point memorable I think is how he 40:24 put some mission statements and I think 40:29 there’s something to that but if you if 40:31 if you go that direction 40:33 you’re probably gonna spend a little 40:35 more time on it fine-tuning it 40:37 substituting one word for another and 40:39 that sort of thing but you know it there 40:45 is a benefit to it it is a statement not 40:47 a mission book a mission you know 40:52 treatise it’s a mission statement so you 40:57 know I would I would still say do don’t 41:02 don’t hold yourself you know you feed to 41:07 the fire in it has to be a one short one 41:11 sentence memorable mission statement of 41:13 whatever provides you direction whatever 41:15 outlines that direction north south east 41:18 west that you want to move your your 41:20 church I think that’s the most important 41:24 thing not the the link if it if that 41:26 takes a couple paragraphs and okay you 41:29 know maybe it’s time yours only tweak it 41:31 you can find that certain things don’t 41:35 contribute to pointing your church in 41:38 that direction that you know it that’s 41:45 you know one individual respected 41:47 individual in the church consulting 41:50 industry who that’s his thoughts on the 41:53 matter so anyhow the Presbyterian West 41:56 Virginia yes they did and with a short 41:59 one sentence mission statement and 42:03 that’s the presbytery of West Virginia 42:05 is the baptize covenant people called by 42:08 God to reflect Christ’s love through 42:10 mission ministry and relationships and 42:14 they unlike the was an Arkansas Church 42:20 that we looked at don’t expand upon that 42:24 it’s those terms mission ministry and 42:33 relationships I think ministry and 42:35 relationships is pretty straightforward 42:40 and that most people to agree what that 42:42 means but I if it strikes me as a bit 42:46 odd I’m not sure they have their reasons 42:47 but that they would reference their 42:49 mission in the mission statement you 42:53 know to say that they want to reflect 42:57 Christ’s love through their mission but 42:59 this is our mission it’s kind of 43:00 circular reasoning so there might be 43:03 something I’m missing there but I do 43:08 find that a bit curious it’s not as neat 43:13 with all due respect was virginia 43:16 presbyterian 43:18 folks they again and besides they make 43:22 that mission for me so the fact that it 43:27 doesn’t quite ring you know doesn’t 43:33 resonate with me that’s perfectly fine 43:38 the last one here is the native american 43:41 church of god 43:42 and South Dakota and it always had to 43:48 look for it in here it’s kind of buried 43:51 which I I would not recommend they do 43:56 [Music] 44:00 here it is you know kind of hidden away 44:05 and I would personally have encouraged 44:12 them to make it stand out emphasize it a 44:16 little more for people who might visit 44:18 the site and people are curious about 44:19 what the Native American church of god 44:20 ministries is that in any event their 44:25 mission statement is expressing the love 44:26 of God by practicing the ministry 44:28 presents building meaningful 44:31 relationships loving without hurting 44:33 working or partnering to disciple the 44:37 lost so of the three I know this is 44:41 probably my favorite and that probably 44:43 is why I would encourage them to 44:45 emphasize it a little more no I would 45:03 make that stand out a little more as an 45:06 individual that one resonates with me 45:11 probably the most of the thirty like I 45:13 said it’s it’s pretty simple it’s one 45:15 sentence you know with a handful of 45:18 commas a little drawn another long 45:20 sentence but you know that’s fine I 45:23 think I like personally its emphasis on 45:32 relationships and just understanding you 45:38 know that it has kind of that theme I 45:40 think of understanding so I think it’s 45:43 very welcoming for somebody who might 45:45 not be familiar with the church to read 45:47 and you know to feel like 45:54 when they got to the point if they were 45:56 interested in attending a church that 45:58 this would be you know some place they 46:01 were welcome or somebody who was going 46:03 through a particularly rough time you 46:05 know it makes a statement of partnering 46:08 to disciple the lost again somebody who 46:11 might be welcome there so anyhow that’s 46:16 just a little illustration of you know 46:20 how you can look to other churches for 46:26 for inspiration there if like as I 46:30 mentioned I would recommend doing that 46:32 no matter what just again to get you 46:36 kind of the right mindset but if you’re 46:41 completely stuck you know again plan any 46:44 of this is you don’t have to reinvent 46:47 the wheel and plenty of inspiration to 46:49 pull from so it’s kind of wrap things up 46:54 here I would be interested to know what 46:57 you guys thought in the comments there 47:00 and what what is your church’s mission 47:06 currently if it has one and what do you 47:09 like or dislike about it do you think 47:11 it’s too long do you wish that it 47:15 included something else what what would 47:19 you change about it you know the 47:20 Internet depends on how you signed up to 47:23 Google but Internet in general is an 47:27 anonymous arena so you know don’t you 47:33 you know feel free to be truthful and 47:37 you know I mean if you’re being honest 47:39 then there’s nothing to be ashamed of I 47:42 don’t think you know you know should 47:43 want to worry about any sort of 47:44 repercussions it you know be here’s the 47:47 thing and this is a good thing to keep 47:48 in mind when you’re making a mistake for 47:50 your church if it can’t stand up to a 47:52 little scrutiny if you can’t back it up 47:54 and say well this is why we emphasize 47:57 this or this why I included this didn’t 47:59 include that then you probably didn’t 48:02 give it enough thought and it’s probably 48:03 not as effective as it could be 48:06 you know if you can’t stand behind 48:09 itself you know the other thing then I 48:14 would ask for you guys to comment upon 48:17 is what do you think is essential it 48:22 related to the previous question you 48:24 know what do you like or dislike about 48:25 your church’s current mission statement 48:27 and you know what do you think is 48:28 essential is it something included in 48:30 your church’s mission statement 48:31 currently there’s something missing you 48:33 know what do you think every church 48:36 mission statement needs some a couple of 48:39 things I’d love your feedback on all 48:41 that I’ll leave you with the typical 48:45 spiel that youtubers close with you know 48:52 first of all appreciate if you stuck 48:54 with me this long I’m not sure they 48:56 didn’t at my time we’re going how long 48:57 the video is 48:58 I’m guessing it’s approaching 40 minutes 49:01 if not warm but stuff stuck with me this 49:05 long I appreciate it you know look I got 49:07 a couple more videos coming out on these 49:10 topics and if you’d like to be notified 49:12 of those you can click the bell thing or 49:15 you can subscribe you know if if you’re 49:20 just like this was okay you know I liked 49:24 what Chris had to say about this down or 49:27 the other then I likes appreciated you 49:29 know for better or worse this is the 49:33 Internet and it’s something of a 49:34 popularity contest so if you did hear 49:40 see something that you liked I would 49:42 definitely appreciate like everyone does 49:46 the like subscription notification about 49:50 all that I’m you know it it’s a way to 49:56 give a little bit of free feedback it’s 49:58 free tip love it that way so I am again 50:01 appreciate time thanks for watching 50:04 take care
