Growing up, I remember watching the Braves in the ’70’s and ’80’s on TV station WTBS Atlanta.  Fortunately as a kid, I was more interested in baseball cards and individual players than game stats and Braves wins.  I remember, however, catching Braves fever at the Blue Moon Saloon Piano Bar in Augusta, GA, watching all seven games of the 1992 National League Championship Series between the Braves and the Pittsburg Pirates.  Who could forget pinch-hitter Francisco Cabrera’s two outs, bases loaded, Pirates leading the Braves 2-1, bottom of the nineth game-winning single to left field, bringing in David Justice to tie the game and slow-footed Sid Bream’s slide into homeplate to beat Barry Bond’s throw to the plate for the winning run?

The silence was deafening as all in the bar quietly questioned Cox’s last-minute genius, and Lady Luck’s blessing of placing Cabrera in the batter’s box, the silence shattered only by the crack of a big bat and an eruption of cheers – and the rest is history.

In my humble opinion, there’s nothing like the sweet taste of victory to drive a man to continue the pursuit of excellence in his future endeavors.  Herein lies the bond set between Cox and Pendleton.

Although Terry Pendleton may be the fan favorite to lead the Braves, there’s another great coach that just became available for the position.  The  Marlin’s just fired Fredi Gonzalez.  Sports Editor Rob Rains of the St. Louis Globe-Democrat, wrote an excellent article Inside Baseball: Pendleton’s managerial hopes drop a notch on June 24, 2010, comparing and contrasting Gonzalez vs. Pendleton, and makes an excellent case Pendleton may have slightly lost his edge as a shoe-in to manage the Atlanta Braves.

Most Orders begin with a discussion around a Notice of Charges and of Hearing detailing the unsafe or unsound banking practices and violations of law and/or regulations to have been committed by the bank.  The Order will also indicate whether or not the bank agrees or disagrees with the Order by voluntarily entering into a Stipulation and Consent to the Issuance of an Order to Cease and Desist.

If your bank disagrees, the FDIC may issue a Prompt Corrective Action ordering the bank to raise its capital levels or find a buyer or merger partner.  If your bank consents to the Order without admitting or denying the alleged charges, then the bank must raise its capital levels and cease and desist a list of unsafe banking practices until the FDIC is satisfied all conditions have been met and lifts the Order.

The Order usually addresses the Board of Directors and Management to take affirmative action to:  1.) Raise and maintain capital levels to a specific amount; 2.) Eliminate all assets or portions of assets classified as “loss” or “doubtful” from its books by charge-off or collection; 3.) Reduce “substandard” or “doubtful” classified items; and, 4.) Issue no additional credit to any borrower that has been classified as a “loss”, “substandard” or “doubtful.”

There are many additional items an Order can address to the Bank.  What matters most to any small business trying to obtain or extend a line of credit is how that business has been classified internally by the bank as its customer.  Adverse classifications can put you out of business if no credit is extended or an existing line of credit is called due.  At the very least, “doubtful” classifications can leave you with inadequate capital to grow your business or very unfavorable loan terms.

But here’s the kicker:  what banker is going to discuss this topic with its customers?  As an established business owner, you must do your homework to gather information about your bank.  If lending negotiations are heading in the wrong direction, trust your gut instincts and find a bank that can service your financial needs and help your business succeed.

The problem as I see it, human nature has not progressed as much as technology.  We still have virus writers, con-artists, scammers, identity thieves, child molesters, ad. naseum walking amongst us, hiding in the digital shadows waiting to rip you off or worse.  While I don’t advocate cutting connections or communications, I do recommend taking steps to lose any false sense of security you may have developed regarding your personal information due to the anonymity of the internet.

ConsumerReports.org has a great article posted on Yahoo Finance, 7 Things to Stop Doing Now on Facebook , for more information.

Remember Yoda’s wise words:  “Yes, a Jedi’s strength flows from the Force. But beware of the dark side. Anger, fear, aggression; the dark side of the Force are they. Easily they flow, quick to join you in a fight. If once you start down the dark path, forever will it dominate your destiny, consume you it will, as it did Obi-Wan’s apprentice.”

Beginning December 31, 2011, the following provisions will change:  1.) Incorporated payees will no longer be exempted from 1099-Misc reporting; 2.) Payments for property (goods, materials, merchandise, supplies, etc.) will no longer be exempted from 1099-Misc reporting; 3.) there will be a six fold increase in penalties from $250,000 to $1.5 million for non-compliance; and, 4.) there will be a doubling of B-Notice penalties from $50 per record to $100 per record.

From a practical standpoint, what does all this mean for small businesses and how will it effect you?  First, you will be required to file 1099’s on all “for-profit” companies that sell either services or goods, regardless of incorporated status .  At my company, I easily estimate a five-fold increase in forms to file.   This could be a very conservative estimate, especially since you will now have to “1099”  Sam’s Club and every other similar vendor for  supplies purchased to operate your business.  Continuing this example, with postage at $0.44 per stamp (not for long!), postage costs would increase proportionately as well as costs for perforated tax forms and mailing envelopes.  What if the IRS imposed a $1.5 million penalty? – just forget about it – what small business could stand after this judgment!  And finally, if you’ve ever had the privilege to read a B-Notice, it includes the most obtuse language imaginable.  But get one Taxpayer Identification Number (“TIN”) wrong, which by the way is not hard to do, and you get to pay double the penalty.  All in the guise of improving greater compliance to the tax code.  Can anyone say “Fair Tax”?

2010 marks the 75th anniversary of “the Scenic,” as it is known by locals.  Although I have not driven the Parkway in its entirety, I have eaten breakfast at the Pisgah Inn on several occasions, where the food is very good and the view spectacular.  And I have hiked up Devil’s Courthouse located at milepost 422.4.

Hiking the half mile up to the summit of Devil’s Courthouse is one heck of an accomplishment if you don’t do this sort of thing on a regular basis, the elevation is listed at 5,720 feet.  On clear days, you have a panoramic view of Georgia, North Carolina, South Carolina, and Tennessee.

For more information regarding activities and other points of interest, check out:  http://blueridgeparkway75.org/

Generally speaking, small business owners prefer community banks to transact business.  There is a common myth that supporting the community banks helps keep money in the local economy.  And while there is something special about conducting business on a first name basis with your banker, the reality is many smaller banks are standing on weak foundations due to unsafe or unsound banking practices.  If the time has arrived for you to assess whether your lender has become a stumbling block to your future financial success, where can you go to find out more information before making the decision to change banks?

Through trial and error, I discovered the information is readily available one click away on the Federal Deposit Insurance Corporation (“FDIC“) website.  The FDIC is an independent agency created by Congress to maintain stability and public confidence in the nation’s financial system.

The FDIC maintains a current list of failed banks and gives instructions to account holders and vendors affected by bank closings.  If your bank has not been closed and is still operating, search the FDIC website for Enforcement Decisions and Orders issued to your bank specifying any wrong doing and corrective actions that the bank is ordered to comply.  Then prepare yourself – it is within the details of these orders you may find the real reason your loan request has not been approved, but at least you will have objective information if you decide to shop for a new lender.

It is key, therefore, that owners and managers with overall control of company funds strive to develop banking relationships with three goals in mind.

The first goal is to create a relationship of trust between you and your banker.  Give your banker an opportunity to observe how well-versed you are in your trade or business.  Remember, you are trying to get him or her to make financial commitments to your company.  This can be achieved through informal monthly meetings to discuss lesser business concerns, and re-enforced with quarterly or semi-annual meetings that involve your entire management team to discuss detailed financial reports, bank agreements, credit and security agreements, etc.  Occasional social meetings or events to discuss one or two brief  business topics is acceptable, provided fraternizing beyond the business relationship is avoided to maintain integrity within the relationship.

The second goal is to help your banker become an expert in your business or industry.  As his or her expertise increases, you will realize time savings as  requests to borrow funds or extend credit lines require considerably less explanation to receive approval.  In addition, your banker will be in a position to recommend alternative solutions from their total portfolio of banking services that may provide a better solution to meet your liquidity needs.

The final goal is to provide detailed financial information to your banker on a consistent monthly basis that meets or exceeds reporting requirements stipulated  by the bank.  The availability of this information should satisfy the strictest banking requirements and put you well on the way to obtaining financing when you need it most.

Recently, I read a Wall Street Journal article from March 18 written by Emily Maltby, “When Business Credit Scores Get Murky”.   I found the topic of business credit scores timely as  I analyze spreadsheets and financial ratios to try and renew my company’s credit line.

The article investigates whether or not good business credit scores are sufficient for small businesses to obtain bank  loans and credit lines.  I concur with the author and executives interviewed that good business credit scores are one of the metrics used by lending institutions to make loans; however, even good credit rarely stands alone today when banks decide to extend capital.   From conversations I have had with bankers the past few weeks, banks prefer to make lending decisions that also consider strong cash flow and collateral. Specifically, they want collateral property to back up the deal in the event the business fails.

My company has been in business for over fifteen years, and by bank definition, exceeds the gross revenues usually attributed to a small business ($2.5 Million/year).   Extending our credit line at its existing limit is proving very challenging due to extended circumstances beyond good credit scores.  I am thankful we are not a start-up company seeking seed capital.  Based on what I am seeing, capital is very limited and/or next to non-existent for new enterprises or less established companies developing a book of business in the current lending environment.

But when searching for your offshore tax haven, there’s another player to consider just south of the good ‘ole USA:  Panama.  Since 1970 when the Panama National Banking Commission was formed by Cabinet Decree, tough banking  secrecy laws  were developed that challenge Switzerland’s long time hold on this crown.

There are several primary reasons Panama has been able to develop layers of privacy for bank clients :  1.) Panama has no tax treaties with any other countries; 2.) Panama applies discretionary compliance to the Mutual Legal Assistance Treaty within diplomatic circles; 3.) bank secrecy laws are found within legal statues of Cabinet Decree 238, Panamanian Commercial Code and Panamanian Criminal Code; 4.) Panamanian banks do not issue numbered bank accounts; and, 5.)  Panama only allows attorneys to form corporations, and attorneys in Panama are able to form anonymous Bearer Share corporations that hide natural persons behind the corporate veil.

For more information, check out Panama Bank Secrecy Laws .

While driving to work listening to Rush Limbaugh’s morning update, it was reported that Federal law enforcement agents are logging on to social media sites and are pre-texting their identities to go undercover to communicate with suspects and gather private information.

As a law abiding citizen, it’s the gathering of private information part that really concerns me.   What controls are in to place to provide accountability and to prevent government agencies from abusing or bullying citizens that are not suspects in investigations?

Go one further and read an excellent book by author John O Koehler:  Statsi, The Untold Story of the East German Secret Police.  In this book, Mr. Koehler documents how the “Sword and Shield of the Party” was able to infiltrate society to a degree that one out of every seven citizens reported on the activities of friends and family to the government.  When posting your photos and online diatribes, be careful; you may be doing Fed’s work for him!

Rush Limbaugh Morning Update – Mar 18, 2010

Hello, all! This is my first foray into the Blogosphere, and so far, it’s going quite well, as do most maiden voyages setting sail for the high seas.

To say I am a neo-Luddite when it comes to embracing social media technology is a bit extreme.   I prefer the term “slow adopter”.   This way, I can leave myself some “wiggle” room to get over my awe for the power and scale of social media and leap right  into the digital divide.  The real irony is no one cares if I leap or not, but for those that have chosen to leap, I can observe they are on a path that greatly leverages their chances for success.

Now old Ned Luddite had this little problem in Great Britain back in 1811. He resented mill owners that purchased new mechanized looms and employed unskilled labor to increase production and profits. In his opinion, this new technology stole jobs from skilled handloom weavers, and this bothered him to the point that he started a social movement, encouraging artisans to destroy mechanized looms (a man Charles Manson could admire). This movement lasted through 1812 and required the British Army to step in more than once to restore the peace and end the movement.

Although the message of his movement ultimately fell by the way, Ned grasped a major concept that many businesses are wrestling with today: you’ve got to have a social presence to create momentum to get others to pay attention to your (message/company/product) to remain viable next year, or on into the future.

Which brings me to my point.  I attended a social media event this past Sunday afternoon that is challenging my notions about the importance of social media.  I watched a You Tube presentation titled Socialnomics that put the following stats into perspective.  It took 38 years for radio to reach a 50 million listener audience, but it only took Facebook 9 months to reach a 100  million social media audience.

I am still processing the enormity of these statistics, but you can bet I’m going to find a way to incorporate social media into my company’s marketing plan – it’s that important!