Why Your Business Needs a Hedge Fund

by Brad Harmon on September 28, 2010 in Entrepreneurs

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Photo Courtesy of Flickr/net_efekt

When I worked for Atmos Energy as an accountant, we would purchase insurance policies to hedge, or protect, against unusually warm winters that would impact the sale of natural gas used in heating homes.  Some winters would be cold so this was just an added cost during those years, but in the warm winters we would collect on the policies allowing us to continue doing business as normal.  Entrepreneurs  have been using hedges like this for centuries.

They use them to protect against currency fluctuations, future commodity price increases, and a myriad of other concerns that they cannot directly control.  These types of hedges have become so commonplace that there are funds in which one can invest dealing with nothing but hedges.  Did you know that the idea of building a hedge around your business is a Biblical concept?

Jesus Talked About Building Hedges

Jesus was great at taking the common scenes of the day and using them as a parable to express a much deeper thought.  It’s easy for us today to read through much of the Bible without thinking about the context of the time and place it was written.  Take for example how He begins the Parable of the Vineyard.

33Hear another parable: There was a certain householder, which planted a vineyard, and hedged it round about, and digged a winepress in it, and built a tower, and let it out to husbandmen, and went into a far country: 34And when the time of the fruit drew near, he sent his servants to the husbandmen, that they might receive the fruits of it. – Matthew 21:33-34

This idea of building a hedge or a stone wall (sometimes even both) to protect the vineyard from animals and thieves that might try to get in is a common image used in the Bible.  Not only were these vineyard security systems still used when Jesus told this parable, the people would also know about them from previous references in Scripture.  Consider this passage from Isaiah.

1Now will I sing to my wellbeloved a song of my beloved touching his vineyard. My wellbeloved hath a vineyard in a very fruitful hill: 2And he fenced it, and gathered out the stones thereof, and planted it with the choicest vine, and built a tower in the midst of it, and also made a winepress therein: and he looked that it should bring forth grapes, and it brought forth wild grapes. – Isaiah 5:1-2

Both passages use this imagery to refer to God’s coming wrath for those who became sour grapes or tried to keep His vineyard as their own.  It both examples, and in several other scripture references, this image of a vineyard protected by a hedge or stone wall is seen.

Satan Complained About Building Hedges

While we might not all plant a literal hedge around our businesses, many entrepreneurs do so through other mechanisms like my previous employer.  I think most business owners come to realize they need some form of protection and seek multiple ways to provide this to their business.

What about the attacks your business will face on a spiritual level due to you operating by Biblical principles?  Paul warns us that we don’t wrestle against flesh and blood, but against spiritual foes (Ephesians 6:12).  Is your business building a hedge against these attacks?  Satan complained to God about such a hedge protecting Job.

8And the LORD said unto Satan, Hast thou considered my servant Job, that there is none like him in the earth, a perfect and an upright man, one that feareth God, and escheweth evil? 9Then Satan answered the LORD, and said, Doth Job fear God for nought? 10Hast not thou made an hedge about him, and about his house, and about all that he hath on every side? thou hast blessed the work of his hands, and his substance is increased in the land. 11But put forth thine hand now, and touch all that he hath, and he will curse thee to thy face. – Job 1:8-11

There are many things about the book of Job that I do not understand why God would allow to happen; however, I take comfort in the fact that God had to allow it to happen.  Satan was powerless to touch Job, or his house, or his business because of this hedge that protected him.  God had to allow Satan through the hedge to touch Job.

Hedges Are a Great Way To Deter Threats

Dave Ramsey suggests having a fund set aside to hedge against emergencies.  He calls this emergency fund “Murphy’s Repellent.”  Murphy’s Law states that “anything that can go wrong, will go wrong.”  Having a hedge built up for emergencies just seems to keep Murphy away more frequently than from those who lack this hedge.

Just look at those hedges above.  They would certainly deter animals and thieves back then, and even today.  They are imposing obstacles to overcome both to enter and exit the vineyard.  This was what Satan was complaining about.  Trouble just didn’t seem to make its way to Job.

Many of us have a hedge about us that protects us in ways of which we’re not even aware. Take for example these lyrics from the classic Amy Grant song, Angels Watching Over Me.

God only knows the times my life was threatened just today.
A reckless car ran out of gas before it ran my way.
Near misses all around me, accidents unknown,
Though I never see with human eyes the hands that lead me home.

But I know they’re all around me all day and through the night.
When the enemy is closing in, I know sometimes they fight
To keep my feet from falling, I’ll never turn away.
If you’re asking what’s protecting me then you’re gonna hear me say:

Got His angels watching over me, every move I make,
Angels watching over me!

That’s the whole purpose of the hedge – to keep bad things from happening to us.  What makes it through the hedge is allowed by God for His purposes.  If we haven’t built the hedge though, there’s a lot getting through because of us.

Does Your Business Have a Hedge Built Around It?

Peter talks about Satan as a roaring lion on the prowl seeking whom he may devour (I Peter 5:8).  Have you ever seen a lion devour an carcass?  It is not a pretty sight!  Lions go after the weakest members of the herd – those that fall behind outside of the protection of the herd.

Is that your business?  Have you built up a hedge around it to protect it from these types of attacks?  Next, we will look at how to build and maintain this hedge.  Until then, I’m curious …

Have you ever found out at a later date that you were spared some disaster or hardship because you were mysteriously led in a different direction on that day?  Won’t you share your story with us?

{ 2 comments… read them below or add one }

Sue Miley September 28, 2010 at 8:37 pm

In May 2008 I took money sitting in the stock market and bought an office building suite for my private practice. I did it so that even if I was slow in my coaching and counseling practice I wouldn’t have to worry about rent. I knew it might not be a fabulous financial investment, but for me it was a hedge for my business. As luck would have it, or God’s protection, the market crashed 6 weeks later. Even though I only rent out one office in my suite, I have a positive return and my capital is protected.

Plus in Oct-Dec of 2008 by parents took ill and I had to leave most of my work behind and take care of them for a few months. I didn’t have rent! Overall, it was a hedge plan that ended up working as the hedge I needed plus it protected my capital from the stock market crash. Thank God that He is in control!!

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Brad Harmon October 26, 2010 at 4:32 pm

Great example Sue. Thanks for sharing it with us.

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