Part Two: You Think It's Time to Expand. Now What?

(Originally published as an article within ECCU’s former e-publication, Ministry Banking Today.)

When your ministry is considering expansion, first steps are crucial. What are common mistakes to avoid? What are best practices? Here's the conclusion of our interview with four of ECCU's senior ministry development officers, who together have spent over 40 years serving the financing needs of growing ministries. See part one.

What are some common mistakes?

Jim Litchfield: Jeremy alluded to one earlier. It's signing contracts and making commitments before you have all the information. Never do that!

Mike Boblit: Again, this can happen when a ministry is getting into their first facility. They sign a purchase contract, then suddenly realize they can't come up with a sufficient down payment. Suddenly, it's the worst-case scenario—they're out of time and alternatives.

Jim: Another common mistake has to do with contingencies. You should have a sizeable contingency fund in the budget to cover any surprises.

Jeremy Moore: Ministries are usually surprised that you need a 10 percent contingency fund. Some ministries even argue about it. But most projects go over budget.

Mike: You should have time contingencies as well. Ask, What's the worst thing that could happen to delay each phase of the project, and talk about how you'd manage through it.

Bob Schepman: Another common mistake is to include the pastor on the project team. The pastor needs to be aware, but not involved. When a pastor is managing the construction and making all the financial decisions…that's a big red flag.

What's the best advice for a ministry considering expansion?

Jim: If you get into an expansion project, work hard to keep it about ministry—more effective, broader, and deeper ministry—and not about the project. Don't get so bogged down in the details that you lose your ministry perspective. The building project must be presented as the means to the greater end of ministry effectiveness.

Bob: Start by choosing a skilled team of partners—architect, contractor, project manager, financing expert—and then trust them.

Jeremy: Agreed. If you take time at the beginning to put together a solid team, you’ll save time, energy, and money.

Mike: It’s that idea of time contingencies. Try to set realistic time lines for each phase of what you have to accomplish.

For more information on how to best prepare for an expansion project, check out the ECCU white paper When to Finance or Not.

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