I believe in KMBC because the Administration follows very sound business and financial practices.
When I was new to this job, I observed that schools like KMBC got into serious financial trouble and even had to close because they followed poor business practices. I tried to learn from their mistakes and promised myself to never get KMBC into financial trouble.
Listed below are some of KMBCs business practices:
- Never let your expenses exceed your income. When our income slows so does our spending.
- Don’t borrow money from outside sources. It is easier to stay out of a hole than it is to crawl out of one.
- Always raise the money for a building project before you spend it. Borrowing money and then having to pay off a mortgage is as exciting as paying for a dead horse.
- Keep a special emergency fund to help with unexpected emergencies.
- Always look for ways to lower expenses. Benjamin Franklin said, “A penny saved is a penny earned.”
- Try to increase the school’s net worth every year. Our annual audits have shown that we have been able to do this with few exceptions. KMBC’s most recent audit showed a $500,000 increase over last year.
- Try to be proactive when economic downturns loom on the horizon. When the economy was collapsing and banks were closing during the recession of 2008, the KMBC administration held an emergency session and dug out ways to cut our budget by 10%. Because we did the school rolled through the “recession” hardly noticing a bump in the road!
- Maintain a healthy safety net for a solid safety net. Schools are considered financially sound if they follow this formula. KMBCs financial safety net is double the recommended amount!
- When remodeling or building new buildings use buying connections and volunteer work teams. By doing this, in 2010 we were able to build a state of the art chapel valued at 2 ½ million for less than one million.
A number of years ago a gentleman who had been a very successful Bible college president and a wise elder statesman asked me how we were handling the college’s finances. My answer mildly shocked him. He said, “My brother, let me wash your feet! I know of no other college that is doing what you are doing. If you keep this up KMBC will someday have a tremendous financial foundation!”