An Effective Strategy for Your Church

By Mariel Villarreal

Read Time: 3.5 minutes

God calls churches and ministries with a huge vision. They dream of impacting their community, reaching the lost, seeing lives set free and transformed through the power of the Gospel.

But to fulfill the Great Commission in our neighborhoods and the nations, we need a strategy. But not just any strategy—pastors, leaders, and ministers need time-tested and anointed steps and plans to fulfill God's purposes.

And if God's given you a big vision that doesn't match your current bank account, you are on the right track! He will give your PROvision for the vision.

Let's talk about a powerful strategy that has worked for many churches and ministries: starting a for-profit arm.

Modern-day tentmakers

In Acts 18, we see an excellent Biblical example of combining ministry and business to fulfill God's purposes.

"Paul went to visit them, and he stayed and worked with them because they were tentmakers by trade, just as he was." Acts 18:3-4

Apostle Paul traveled to different cities making and selling tents. He evangelized and used his business as an opportunity to spread the Gospel. By doing so, he also contributed to the community's needs and helped build up the economy. His trade also provided additional funding for his ministry. 

By starting a business, your church can accomplish the same goals!

Wait, you may be wondering. Can a church start and own a business? How do we do that?

The simple answer is "Yes! You can."

Now, let's take a deeper look at the process of starting a for-profit arm, otherwise known as a church or ministry-owned business.

The benefits of starting a for-profit arm

Having a business creates a source of revenue that is entirely independent of tithes and offerings. This additional income gives pastors freedom to do what God has called them to do without worrying about the lack of resources or number of members.

Not only does a church business create revenue for the church, but it also creates job opportunities that can add value to the local community. It also provides a great outreach opportunity to spread the Gospel in the marketplace.

By starting a local business, you'll also create a unique way to spread the love of Jesus to people who may not go to a church. 

How a church or ministry runs a business

As mentioned earlier, we call it a “For Profit Arm.” In Section 502, the IRS calls it a “Feeder Corporation,” and describes it as a business operated for the primary purpose of carrying on a trade or business for profit even if the profits are distributed to your church tax-free.

This is a unique corporation that is set up as a for-profit business controlled by the church or ministry. The company can engage in any lawful activity and be open to the general public. It doesn't matter what type of business the ministry chooses, as long as it is a legal business and it aligns with the ministry's values.

Businesses or for-profit arms are not subject to the same requirements and rules as nonprofits. Because of this, a business has more freedom and creativity with its business activities.

The church or ministry controls the business, but it is separated from any business liabilities because they are both separate entities. The ministry owns the business by owning the business's shares of stock. When the business is formed, the church enters into a stockholder agreement and can purchase shares of stock. 

As the business makes money, it pays the ministry in the form of dividends. The dividends are 100% tax-free to the church, and the church or ministry can then use those funds however it wishes.

While ministries, churches, and other nonprofit organizations are exempt from paying taxes, businesses must file and pay taxes at the end of the year. This is something to plan for while creating and launching your church business, even with the expectation that your business may not turn a profit in its first year.

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When is the best time to start?

Now that you have a better understanding of church-owned businesses, you might be wondering when would be the best time to start one. 

It's a great time to start your church business when you have 3 things in order:

• A marketable business idea
• The people and finances to support it 
• Your church is established and thriving

To start, you want to make sure your church can handle creating and maintaining a business. This includes finances and any staff members or volunteers who choose to be a part of the business. 

You will want to make sure that it is not over-extending your ministry or your staff members. Eventually, you will want to hire staff specifically and only for your business.

Creative ideas for for-profit church businesses

There are so many possibilities for potential church businesses.

Here are a few examples to consider:

• Coffee shop
• Landscaping
• Bookstores
• Brewery
• Restaurants
• Hotels & Bed and Breakfasts
• Media Productions
• Recording Studios
• T-shirt company
• Conferences
• Design Firm
• Real Estate
• Magazines and Newspapers
• Software Repair
• Retail
• Clothing Line

No matter what type of business you choose, make sure you do your research to see if it is a viable option for your church and community. You will want to do market research and know the cost and demand of what it will take to make your business thrive.

Expand your church's impact

If you've been praying and wondering what the next step is for your ministry, starting a church or ministry-owned business may be the answer you've been looking for! 

While even the thought of creating a for-profit arm can be overwhelming, you don't have to do it alone. At StartCHURCH, we'll come alongside you to help you fulfill the vision (and save you precious time and money - so you won't have to figure it out on your own!)

If you are ready to start a business for your church or ministry, please call us at 877-494-4655 or click the link below to schedule a call. 

Let's accelerate you on the path to fulfilling the vision God's given you!

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