George Lovato Jr

Where Does Small Business Go For Financing Under $1 million?

March 2, 2012 By George Lovato Jr Leave a Comment

Small Business Owner There is a void in the financial world specifically affecting small business. They just can’t seem to find money to finance their future through the traditional commercial banking channels. Also SBA is not very active in the $50,000 to $250,000 lending/guarantee space. So where does small business go for financing under $1 million?

The Micro Loan

As we know the government is trying to push all the right buttons for economic recovery. On the flip side commercial banking is stalled. The two are not meeting in the middle on a solution or for that matter working on the same problem. However BH Capital does have a solution. As a result of requests from the BHCL Affiliates we test marketed a program call the Micro Loan. Now this is not the traditional micro loan for small business of between $500 and $2,500. This is the BH Capital program of serving any loan request for just about anything under $1,000,000. This is a hot space that no one institution is paying any attention to at this time when sthey need all the help it can get. We recognized the need and filled the gap.

Small Business Financing Under $1 Million Dollars Is Now Much Easier To Find

BH Capital went to over two dozen sources providing various kinds of loan products from equipment leasing to unsecured term loans and everything in between. The sources agreed to accept our underwriting package and process the applications with a sense of priority. BH Capital gave the sources a target budget so they knew what to expect. After a few packages were put into the landing pattern with some of these sources we announced the program and made it available to the BHCL Affiliate group in November of last year. Since then it has been a huge success. Listen in and you will see how it works for the average small business.

BH Capital Listened To The Small Business Cry For Help

The BHCL Micro Loan Program will not solve every small business financing needs but it is a start in the right direction. The Micro Loan Program is designed to respond quickly and introduce the small business owner to a world of financing sources that are hard to find and often times overlooked. It is a program that has many options insofar as the type of specific products that are available. In other words it is flexible and has a broad bandwidth. BH Capital listened to the small business cry for help.

Filed Under: Finance

Beware of Bogus Commitment Letters

January 31, 2012 By George Lovato Jr Leave a Comment

A Letter of Commitment Recently I have been deluged with prospects presenting bogus commitment letters. Just in the last six months I have seen over 100. These letters are from people that obviously don’t have the slightest idea of what structured finance is all about. In addition and in almost every case the mere issuance of the letter is illegal and unlawful.

Two Common Denominators

I have spoken before about commitment letters. I emphasized why a letter may not go to fruition. Also it is people behind the commitment letter and not just banks or semi-regulated lenders. In the cases where I have seen the bogus letter I have noticed two common denominators.

The language is not correct. It looks like it was written by a person without any clue as to the proper legal language that should be included in such a document.
Second, it is written by a source that is either not properly licensed, or for that matter duly authorized to issue a letter of this kind.

Due Diligence is Critical

After you have a chance to do your due diligence you will find that they have no wherewithal insofar as cash, capital or capability to finance a used car let alone provide multi-million dollar commitments.

Due diligence is critical. In talking with the source that has or is about to issue this bogus letter it will be apparent that they are not the real deal. Look for these warning signs:

If they do not care to share the successes of their past that is clue one.
If they do not have the proper licensure that is clue two.
If they seem just to be using the words of the financial insider lexicon without proper placement then that is clue 3 – you have a bogus banker.

I explain in more detail what to look out for in the video below

So in closing be careful and pay attention. These letters and the people that issue them are everywhere. They can’t do what they say and for that matter they know nothing of what they speak. Do your due diligence.

Filed Under: Finance Tagged With: bogus banker, bogus commitment letter, bogus financial commitment letter, commitment letter, due diligence, financial commitment letter, structured finance

Three Plus Three Equals The Brass Ring

January 24, 2012 By George Lovato Jr Leave a Comment

Three Indicators You Are Not Managing Your Enterprise For Success and Three Signs Your Enterprise Needs Financing

I am asked all the time…”How do you know when you are on the right path with your business?” The answer is simple I use my Three Plus Three Equals The Brass Ring Method or P+P+P+C+CR+CFO=TBR. “What is that?” you ask. Well is a formula that has not failed me in thirty five years of running and building many successful enterprises. This method is so critical in fact I have decided to put these simple lessons in a new teaching format and formal instructional guide called “The Next Step On The Obstacle Course… Managing For Success and Financing Your Enterprise For Profitability”. But more about that later. I want to share with you just the basics of my method. I think at least in the interim, until I send you the guide that it will help you immensely. Keep reading and you will see.

How To Finance a Business

In my corporate finance consulting practice, I teach. I teach the client about the hundreds of methods and tools to finance a business, when each is appropriate and how they work. I actually, in most cases, spend more time teaching than executing on the process of financing their business on their behalf. However I feel that when a client knows all he/she can know they are able to make informed and ultimately successful decisions. Read more to learn about the formula.

How to Manage a Business

On balance, I often find myself teaching basic management along the way. In the chaos of running your own business sometimes the basics get fused into the confusion or lost in the white noise of attempting to control what is most of the time out of control. So I find myself teaching techniques about a “Controlled Crash Landing” or how to select “The Right People, The Right Partners and The Right Professionals” . But it is all part of what I do in the end. So here are the basics of what I call my Method. I guarantee it works and it is so simple!

People

An enterprise that manages to achieve success, consistently evaluates the people inside the organization. People are the key both inside and outside the enterprise that perpetually influence a desired successful outcome. First you must have the right people assigned to do the right tasks inside the enterprise and you must be doing business with the right people outside the organization. Also you must have the right professionals around you involved in the enterprises daily activities. And if you have a partner then the partner must be the right choice. You cannot operate a business with a partner as a handicap. So choose the right People! Is the first step for managing your business in order to achieve success. But there is still more.

Planning

I often get a kick out of the number of lists my wife makes on a daily basis. But guess what? It is what keeps her on track to manage a multitude of tasks successfully. She plans and plans and plans yet even more. So in managing your enterprise you must plan. You also must understand that your environment is dynamic. Therefor plans change. You must therefore keep your plans up to date. The second most important element for managing your business to achieve success is to plan and plan often and adjust your planning as the environment demands. This does not mean you change your goals or priorities. This means you are just maintaining a dynamic posture at all times. This point is important but there is just a bit more to add.

Projection

I talked a lot about projection and visualization in my book. Projection is a valuable tool that should be used in the enterprise environment every day. You must visualize your plans and aspirations in your mind continually. It is a tool that allows you to keep your eye on grabbing the brass ring. (Here is a hint in the previous sentence…the brass ring is the TBR of the formula) Projection is a key tool to keep you focused. Use it. Keep going!

92% of American Enterprise Needs Financing

A recent study revealed that 92% of all American enterprises are in some need of financing. However of the 92%, 88% do not know how to acquire the financing or for that matter what is an appropriate financing mechanism for them. Wow! Here are the basics to manage your enterprise for profitability. You are now in the home stretch.

Cash Flow

First if you are managing cash flow more than you are managing the business then you need a more appropriate financing tool. If cash flow is your constant focus then you need help. Cash flow should consume 5% of you time. Not 95%. More than 5% then you need to evaluate all the elements that are causing the conflict. Too much time focused on managing cash flow will distract you from recognizing opportunity and being able to exploit it. More about that in a minute. Are you starting to see the formula take shape?

Credit

Second if credit with your suppliers is problematic then you must again evaluate the situation. The credit terms with your suppliers should complement the credit with your customers. If there is a conflict then you need a financing solution. Leaving this condition unchecked will ultimately lead to disaster. Constantly evaluate the condition of your entire enterprise credit landscape.

Can’t Finance Opportunity?

Finally, if you cannot finance opportunity then “Houston we have a problem!” Exploiting opportunity is the key element to ultimately grabbing the brass ring. If this is a constant challenge then you must immediately seek a financing solution. The proper financing tool will allow you to do just that, exploit opportunity. Thus financing opportunity and exploiting opportunity are two sides of the very same coin. You should never discover that you can’t finance opportunity. If you do, then you need to adapt and fast! Never allow the answer to that question ever to be Yes!

The Method

Without using the aforementioned measurement tools related to financing you cannot achieve profitability. Without using the tools for management you cannot stay The Obstacle Course with having continual collisions with disaster. In conclusion here is my Method in a nutshell;

People (P)
Planning (P)
Projection (P)
Cash Flow (C)
Credit (CR)
Can’t Finance Opportunity?(CFO)

Now you see what or P+P+P+C+CR+CFO=TBR means. You have all the puzzle parts now. And it is simple If you follow my Method you will ultimately grab the brass ring or TBR. I want you to be successful. I am sure you will find these simple little rules easy to follow and very useful. They may seem too simple but sometimes simple is best. Getting back to basics can be the most refreshing thing you may do to stay The Obstacle Course. I’ve expanded on the Method in the video below. Good luck!

Stupid Without A License

I will be giving you more information in the form of a Free E-Book coming out very soon “Stupid Without a License”. These are stories about my clients that have not followed the Method or formula as I have laid it out in this blog. You may think it a bit negative to teach from a negative perspective. But we are all grownups and we have all been around. These stories will amaze you. They are all about more signs you need to look for in order to avoid disaster. Keep them in your mental hard drive and you will see they will become useful over time as points of reference.

Managing For Success and Financing Your Enterprise For Profitability

In just a few weeks you will be able to get a copy of “The Next Step On The Obstacle Course… Managing For Success and Financing Your Enterprise For Profitability” from The Obstacle Course website. After thirty five years I felt compelled to provide the basics to everyone of what has worked for me time and again… P+P+P+C+CR+CFO=TBR but in far more detail and in a simple teaching format along with an audio CD and DVD of all the best Just Ask George Radio shows that help to illustrate the teachings in the guide. More to come very soon. All The Best!

Filed Under: Business Tagged With: Brass Ring, Business Credit, Business Partners, Business Planning, Cash Flow, Financing Opportunity, George Lovato, How To Finance a Business, How to Manage For Success, just ask george, Just Ask George Radio, Managing For Success, Obstacel Course, Obstacle Course Book, Projection, stupid without a license, The Brass Ring

Facebook IPO – a New Paradigm – Banks Not Relevant?

December 1, 2011 By George Lovato Jr Leave a Comment

Recently I read where Facebook is considering an IPO. Further how the Facebook executives are telling Wall Street that the investment banks may not be relevant or for that matter important to raising the ten billion dollars they seek to raise. Hmmmmmm. Investment Bankers not relevant you ask? Yes. I have been saying that for years. And in this case very not relevant. But more about that later.

The 80’s Model is Dead

Back in the 80’s the small emerging company could raise a few million dollars and trade on NASDAQ. That was usually enough dough to get the engine started but for the most part that was never enough to keep it running strong enough to get over the hills and through the valleys while suffering the pains of growth. That model is dead. So is the model of soliciting money from American investors and getting the stock to trade on the latest foreign exchange. That is just a dead horse in all its colors.

I did however invent the model to raise money in a pre-public offering, file a Form-10 and then raise all the money the company needs in subsequent private placements. You have an advantage of to a large extent influencing the value of the stock and keeping the stock from leaking into the market in the early stages. Later it all catches up and off to the races you go trying to keep your investor relations program hot enough to fuel active and upwardly mobile trading. I did raise $16 million this way and it was quite successful as a technique. It does however take a mountain of management. In the end, more management is dedicated to running the concept than running the company however.

Can a Small Company go Public?

Well, can a small company go public? The answer is maybe. But like I mentioned before, you better have all your ducks in a row. The best model is to raise your money pre-public, then grow the company then file an IPO. And keep in mind that the company valuation is key to the process. Without a mountainous valuation the IPO will never get off the ground or if it does the stock will spiral downward and auger in. Growth must be evident and consistent. The earnings must be measureable and management must instill confidence long term for investors to stay interested. In addition you must have a high quality comprehensive investor relations program. Your required SEC reporting must also be spot on and timely. You really need to have your act together. I talk about this at length in the video below.

Facebook Can Reach Out and Solicit 800 Million Potential Investors Anytime They Want

But back to Facebook.Ten billion dollars?A one hundred billion dollar valuation?Without bankers? The answer is very possible. How? Well think about it. Facebook has 800 million users. Some of which are investors or investor types. They can reach out and solicit those prospective investors at any time and as many times as they please. Within the rules of course. But think about. The company that provides a service they use is offering its stock directly to the subscriber. A self-underwriting by the company using the very communication/distribution product that reaches the 800 million users. Genius! Possible? Yes! And in addition the bankers would not be able to put their markup on the stock thus saving the investor some fat carved in. Now I am sure the SEC would have something to say about this and they may suddenly come up with new rules for Facebook but it still would be doable.

Self-Underwriting – the New Paradigm

The new paradigm. Bringing self-underwriting back in a unique way.And in a way not ever seen by the public before. I can see why Facebook is confident. I can see how they feel bankers may not be relevant. All I have to say is the bankers need to pay attention. Facebook could do it all by itself. And at a premium if they manage it right! But that is not the end of the story. Remember when I mentioned investor relations? Well Facebook on a long term basis can use Facebook as the focal point and information dissemination tool for the ongoing investor relations program. Wow! Facebook sells its own stock through Facebook. They manage their own investor relations program through Facebook! An all in one self-controlled IPO and stock promotion program. They could in fact control its future without the banking community. Who would have thunk it? Me and maybe Facebook? We will soon see.

Filed Under: Banking Tagged With: Banking, Facebook, Facebook IPO, Going Public, How to go Public, Investment Banks, investor relations, investors, IPO, NASDAQ, NYSE, Public Company, public offering, SEC, stock promotion, underwriting, Wall Street

A Tall Story on Bill Kurtis

November 14, 2011 By George Lovato Jr Leave a Comment

BHCL has provided financing for scores upon scores of agricultural ventures for over 30 years. Most recently I have rather circuitously stumbled across a very unique venture, Tallgrass Beef. This enterprise was founded by the ever famous Bill Kurtis. Mr. Kurtis is truly committed to making a good product. He has a real passion for ranching. That always helps when you become a newly indoctrinated cattle baron. I interviewed Bill and had a great time working with a real pro. The video interview is below. He was very forthcoming with a lot of very important information about why his product is so superior. I learned so much about how to grow healthy beef. Take a peek at the interview and witness a man who has a real passion for his newest enterprise.

Star Power of the Founder

There are a few interesting aspects to this enterprise. First is the star power of the founder. Yes, I have seen something like this before but in this case the founder is very passionate about his business and product. So much so he is part of the production side of his Tallgrass Beef process. He owns his own ranch and grows some of the beef that winds up in some very notable restaurants.

The Power of the Product

The next unique aspect is the product itself. The product is a grass fed beef product that tastes great. I have personally been the recipient/consumer of one of the Tallgrass steaks. Wow! Normally the grass fed product, at least in the beef world is thought of as very lean. Well this does to the naked eye appear lean but the flavor tells a different story which speaks to the power of the product.

Beef as a Health Product

Additionally, is the fact that this beef is really good for you. Chock full of Omega 3 and Omega 6 this steak tells yet again another story to the consumer. Beef as a health food you ask? Yes, and a resounding yes! Flavor and healthy all packed into the Tallgrass Beef product.

Success Despite All Odds

But there is still another story to tell. That is the story of success despite all odds. Allow me to give you just a couple of examples. First this is the beef business. This is a tough and demanding business. It requires a lot of capital and a good deal of backbone. The volatility of the marketplace has driven many a wealthy individual to their knees. But Bill Kurtis and Tallgrass have found a way to mitigate a good deal of the risk. This is a field to table product. They grow it then they sell it direct to the consumer or retailer. No middle man so to speak.

Lastly is the fact that this business was started in the midst of one of the biggest recessions ever. A volatile industry. And yet this very risky business is successful. I think that the punch line to this story is when something is good it is good in all economic conditions. With Tallgrass the product is good and the timing is impeccable. Our society is looking for healthier foods. And Mother Nature knows best about how to grow what is good and healthy for us. But insofar as business is concerned this is sound business model with a good position in the marketplace. Now all it needs is additional capital placed in the right spots structured soundly and off to the moon. Tallgrass will grow!

Filed Under: Business Tagged With: beef, beef business, Bill Kurtis, grass fed beef, Mother Nature, Omega 3, Omega 6, ranching, Tallgrass, Tallgrass Beef, Tallgrass Beef Company

Are There Any Bankers Banking Anymore?

October 27, 2011 By George Lovato Jr Leave a Comment

This is a Stupid Without a License story from my new soon to be released E-Book! It was inspired by a surreal meeting I had with a young banker regarding a construction loan. I left the meeting completely dumbfounded and wondering if there are any bankers banking anymore!

I explain the details at great length in the video below but first let me set the scene for what I believe is a growing trend in this tough economic climate.

It’s a Privilege For Me To Do Business With Bankers Who Can’t Market – Yeah Right!

Recently I’ve been approached by a host of commercial bankers looking for business. It seems their marketing efforts are not producing the numbers so they’re on a hunt for more deal flow. Who do they call but me! Well this new lot are looking for lay downs or no brainers. To be quite honest I save those for the proven and smart bankers who deserve good borrowers. One banker went as far to say he was giving me a chance to prove myself. And he was asking me to send him deals? What a jerk!

Another banker said they were one of the best commercial lenders in the country and it would be good for my company and reputation to do business with them. Can you believe it? These guys can’t even market and they consider it a privilege for me to do business with them. What a joke. But it does get kind of interesting and worthy of a laugh now and then. Watch the video below and you’ll see why!

Commercial Bankers Are Losing Their Mojo

Are bankers banking anymore? Do they understand the mechanism they employ to make money? Have they lost their understanding of how to build assets in their institution and reliability in their community? Judging by this experience you’d think they’ve forgotten how to put a transaction together. I think commercial bankers are losing their mojo. What do you think?

Filed Under: Banking Tagged With: banker, Banking, commercial banker, construction loan, good borrowers, how to build assets, smart bankers, stupid without a license, young banker

When a Commitment May Not Be a Commitment

September 16, 2011 By George Lovato Jr Leave a Comment

This prospect story is worth telling you about. One of BH Capital Ltd’s 25 affiliates made arrangements for a conference call. These calls are designed to more fully investigate the prospects’ opportunity and usually a chance for the prospect to convince me to take him on as a client. At this point we have usually reviewed a mountain of documentation. We have a pretty good idea of what the project holds. We just want to hear from the horse’s mouth the finer details of the project/engagement and what kind of financing structure the prospect has in mind. This was a real head turner.

Commitment Letter? Foreign Bank?

The prospect pontificated for about twenty minutes when he made a U-turn. He said he had been talking to a foreign bank and that they were willing to issue a commitment letter for long term financing. All I needed to do was lend him money for six months to build a power plant. Six months? Power plant? Commitment letter? Well he mentioned the name of the institution and where it was located…a half a world away. I said that I was not familiar with the bank and that the commitment letter, although it may be real, I could not count on it. He became argumentative and said it is the Bank of America of… I responded and said that that may be true but as the lender taking the biggest risk, and the lender having to rely on a bank I have never heard of, that I felt there was another way to meet his needs without the reliance of the third party. I went on to say that there were a couple of dozen American banks that I would not accept a commitment letter from now for various reasons. Basically he said he wanted to do it his way or no way at all and then he promptly hung up.

Banks Unable to Honor Their Commitment

Over my thirty years in structured finance I cannot tell you how many times I have been on the short end of the commitment letter. In my book The Obstacle Course I told a story of how a banker welched on his commitment. It has happened time and time again. I have seen banks unable and or unwilling to honor their commitments literally dozens of times. Sometimes the bank was financially incapable of funding as prescribed. In other cases they just changed their mind for no good reason. In yet other cases the internal consensus of a transaction shifted and they just pull out and leave you in the breach right at the closing table. After some research the picture was very clear. The prospect was naive and convinced with his own BS that this was a real bank with real capability. After some research the picture of the bank was quite different than he knew.

The bank was facing huge current losses. Their recent attempt to float new equity had failed. Even more recent their attempt to float new debt had failed. They were facing huge projected losses because they had acquired companies that were bleeding at a very rapid rate. In short they were in very poor condition and on top of that fact they had no experience in the energy field. They were just another bank on my list that I would not deal with.

Behind Commitment Letters Are People

So many people think a commitment letter will solve everything. It is the Holy Grail to completing andy kind of project. Frankly it is not. Behind commitment letters are people. Sometimes those people do not do what they say. Also things change and so goes the commitment letter. Banks just like businesses can fall the way of Lehman Brothers. They can fail too. And with the failure so goes the outstanding commitments that the bank has made.

The Deal is Closed When the Cash Shows Up

The rule for commitment letters is who is behind it? Do they honor their commitments and do they have experience in the area the project is situated? Look at who and what is behind this Holy Grail of letters. Remember the deal is closed when the cash shows up. A commitment letter is only a piece of paper.

Filed Under: Banking, Finance

The Cost of Capital Formation

September 1, 2011 By George Lovato Jr Leave a Comment

Recently I gave my ten thousandth explanation of why it costs money to form capital. Most entrepreneurs do not understand the process of capital formation. If it is borrowed money or an equity infusion there are a host of costs associated with capital formation. So let’s talk about the costs.

Lawyers Cost Money

The client is always responsible for the costs of capital formation. First is legal. Lawyers cost money. The client will have to have a good general corporate lawyer on hand to read and interpret contracts, loan documentation and various agreements associated with a loan transaction as well as review and assist in the preparation of due diligence documentation. Also if the transaction involves the infusion of equity then the entrepreneur will need a top flight securities attorney. These are a special breed of lawyer. If they are worth their salt they will bring capital resources to the table as well. These lawyers are a bit more expensive than the corporate lawyer. So be prepared for the bill to be larger and more extensive. However if they are good they will be well worth the cost.

Accountants Cost Money

Lenders and investors want the most up to date financial statements and also desire as much disclosure as possible. Enter the accountancy costs. Accountants also charge by the hour. Getting your most up to date financial statements prepared or for that matter a full blown audit will cost you a pretty penny. The fact is the “numbers” as we say will tell the story and are a requirement. Don’t balk at the need for the preparation of financial statements. If you need capital you are required to provide disclosure. This one of the first steps you need to take.

Professional Reports Cost Money

Appraisals, Valuation Reports and Feasibility Studies are a fact of life. Even the Need and Necessity study is now par for the course in required documentation. If it is real estate or asset based financing these reports are a must. They can get quite expensive. Third party opinion reports are now the second set of eyes on almost every transaction. The lender or investor uses them as a touchstone to test their own impressions of value and need. Appraisals are usually accompanied by a Feasibility Study or at the very least a Need and Necessity Study. Equity or convertible debt transactions now require a Valuation Report. There is less reliance on the appraisal then before. That is why you see the Feasibility Report as the second requirement to real estate documentation requests. Hold on to your wallet because these reports are costly and getting the highly experienced and recognizable firms will cost even more.

Professionals Do Not Work For Free

The due diligence process takes not only time but money. Structuring a transaction should be done by the pros. Hiring a corporate finance consultant is a must. Get your own private banker to ply his skills during this phase of the process. A surgeon does not perform surgery on himself. Therefore the entrepreneur should let the professional step in and guide this part of the process. Getting the entrepreneur ready for the dance takes time and money as well. Preparing the documentation in an acceptable format takes time and money. Presenting the deal the entrepreneur seeks costs money. Presenting to the reliable sources takes time and money. Determining the final appropriate source for financing takes time and money. Your accountants, lawyers and corporate finance consultants will all have to pitch in to make the transaction a go for the entrepreneur. Even the final documentation will need all hands on deck for review and final negotiation. This costs money. Professionals do not work for free.

There are a host of other costs such as entitlement expenses, master planning costs, forecasting and budgeting, title searches, litigation and background checks. The list really does go on and on. Suffice to say that if you do not have this money in the bank when you start the process don’t start. No one worth his salt is going to work for free of put it all on the line for the entrepreneur when the entrepreneur can make or break the entire transaction. You need money to form capital. This is not a process where everyone around the entrepreneur is expected to take all the risk when there is little to gain.

Money Begets Money

I always get a kick out of the prospect that says if you charge “upfront fees” I am not interested. First of all BHCL does not charge “upfront fees”. But after I am done explaining to the prospect the aforementioned his tone changes. It’s easy to spot the guys with just an idea looking for a free ride as opposed to the serious entrepreneur who knows what he is facing to reach for the brass ring. In short money begets money. You have to have it to get it. Be prepared. It can be very expensive. But when the end goal is reached and the entrepreneur gets the capital he needs, then he understands it has been worth every penny he has spent.

Filed Under: Business, Finance Tagged With: accountants, appraisals, capital formation, corporate finance, corporate lawyer, entrepreneur, equity, feasibility studies, financial statement, full disclosure, investors, lawyers, loan documentation, professional fees, professionals, valuation reports

Market Correction? Do Not Panic! This is Where We Should Be!

August 15, 2011 By George Lovato Jr 1 Comment

I cannot take it anymore! The talking heads and Washington are driving me nutty! Between the two factions everyone should be jumping out of a window by now. Stop! Do not panic!!

Those of you that know me well can verify the fact that I have been saying the market was overvalued above 10,500. Put the puzzle parts together. The White House is not providing any leadership. On his best day the President is not even an “Armchair Economist”. He does not have a clue about what the Business Plan For America is. Congress as well has done a very poor job of instilling confidence not only from the American public but from foreign governments and foreign investors. Above and beyond that, the economy in in the proverbial tank. We have a government that cannot even tell the public what the true deficit is. So then why would it attempt to bump its’ head on 13,000? An overly optimistic group of traders and investors not really paying attention to the real metrics? Well it is more than likely all the above and some. Correction you ask? No this is where we should have been all along. The market has been overvalued for some time now.

We Need Organized Leadership

Europe is having its share of issues. But as far as we should be concerned, deal with our problems first then maybe move on to assisting others I say. For now we need organized leadership. We need to show the world that we are in control of our own numbers, budgets and forecasts. We need the American people to believe that the government really does know how to steer this massive economic ship. We need to have a government that promotes growth by stimulating the small business and its owners to reinvest and hire for expansion. Building businesses for growth through governmental incentives. That is the kind of boost we need. Give the incentives to the small business person I say. Let’s not put the governments’ money into beatification and highway off ramp projects. That is very short sighted. We need a Congress that stops bickering, takes off the party hat and puts on the hard hat. Look at tax incentives as capital to stimulate business growth. Thus economic growth!

We Need the Business Plan For America

I am tired of the Presidential rhetoric. I am tired of the Congressional verbosity. What we truly need is someone that has the Business Plan For America in his head and wants to put a plan of action that will put America back on the road to growth and prosperity. So Please Mr. Romney, tell us what it is. Since you are going to be the next President, share your Plan for Prosperity. We need it now more than ever. Leadership is lacking and it shows. We need to see your vision. We need to know that you have a sensible plan for business and for prosperity. We heed to see the same light at the end of this long and dark tunnel as you do.

The President has shown absolutely no knowledge of the theory of Economics. He has shown no knowledge of banking and finance. All he has chosen to do is blame the previous administration by saying “We inherited this problem and it is not ours.” Well guess what the day you took office Mr. President, it became your problem and you are, under the law, forced to take ownership of this mess. Get on with solving the problem and stop trying to tell us it is not yours.

Look For Bargains on the Stock Market

In the meantime, look for the bargains on the stock market. Buy gold! In short go in two directions at once. I have been out of the market since early last year. I bought Ford at $1.66 I sold it at the top as well as a host of others that were all bargains I might add. I have been buying silver whenever I can and gold along the way. It is time to get back in the market but only buy the undervalued bargains. The market is where it should be. That is until the economy bounces back. So there may be a little more to go to reach the absolute bottom but you are starring at it. So pay close attention to the metrics and get in only where a bargain exists.

The Government Can’t Help You But I Can

On to other matters what about money for my business you ask? Well it’s out there but it is scarce in some respects. In others it is abundant. All solid businesses can form capital. In other words all good transactions get done. There is light at the end of the tunnel and we at BHCL see it. But it takes hard work and a good business plan and solid management. Have hope, for we are going to see new leadership in Washington come the election. If this guy was one of my bankers I would have fired him by now. So Mr. Romney give us your Business Plan For America. We need to know new leadership will in fact put us all on the road to prosperity again. Meanwhile call me if I can help you with your business capital formation project! I know the government can’t help you but I can.

Disclaimer

This is not an offer to sell nor an offer to purchase securities. This is commentary and opinion. Any advice to purchase or sell any financial instruments, securities or government bonds should be sought from a licensed/registered financial advisor and or securities broker/dealer.

Filed Under: Business, Finance, Government, World Economy Tagged With: bankers, Banking, business plan for america, congress, do not panic, finance, governmental incentives, leadership, mitt romney, organized leadership, president, small business, stock market, stock market corrrection, talking heads, Washington

Stupid Business Decision

July 10, 2011 By George Lovato Jr 1 Comment

Writing books is very much a cathartic experience for me. As you will note in The Obstacle Course it is a series of personal stories that are intended to teach the reader on a number of issues related to running a business big or small. I have just about put the Obstacle Course II in the can and I am editing a final review now for the publisher. I love writing and I can tell you it gives me great pleasure. Recently however I had another experience with a client that I feel deserves to be added to the Obstacle Course II. It involves an SBD! SBD you ask? Yes, otherwise known as a Stupid Business Decision. I asked the publisher to stop the presses so I could add this story that I hope teaches the reader about how to avoid making the SBD.

Weeks of Intense Review and Analysis

Recently I was engaged by a client to restructure the balance of his company as well as add new financing. After weeks of intense review and analysis one of the solutions was to convert some short term debt to long term debt thus improving the ratios on the balance sheet and easing the cash flow burden. Along with a few other key solutions was to significantly modify the business model for greater efficiency and profitability. The branding was very strong but at an early glance anyone could see the internal operation and the method of delivery and inventory burden were outdated and expensive. After weeks of hard work, I could see the light at the end of the tunnel and I was just about complete with the short to long term conversion solution when the client makes a stupid business decision.

Close the Business

This is a business that produces millions of dollars in sales via a very sophisticated website. The top line is very impressive but the bottom line is very weak. Hence the need to modify the business model. That part of the project was in progress. The new model integration included a host of generally accepted business practices used by almost every internet based company. I was just about to drill down and then the client decides to close the business. Yes close the business. I was stunned. I pleaded with him not to do so. But the client was tired and did not see the forest for the trees. His emotions assisted him in making a stupid business decision. After some discussion I convinced him there was another alternative. Sell the entire package. He agreed. Now I am off to sell the entire deal kit and caboodle.

Now I Have a Business to Sell

It sounds strange I know. It sounds unbelievable but it did happen. Emotions and not wanting to adapt to a new business model were the driving forces behind this decision. He was worn out and he could not buy into the new more progressive way to run his business from the bottom line rather than the top line. Many of his business, internet and operating theories were just wrong or simply outdated. His belief in these skewed ideas also lead him to the SBD. Many things would have been required to change the business model and they were all achievable but he remained resistant. He had a tremendous amount of critical mass to work from but he was simply in love with his old and outdated way of doing things. I could not convince him otherwise. Now I have a business to sell. Not the best option but surely better than just shutting it down. So if you are interested in buying an internet business with a history of producing millions of dollars call me.

How to Avoid the Stupid Business Decision

The Stupid Business Decision. It happens. And when it happens it can have devastating effects on you, your company and everyone around you. Emotions are the key fuel to this fire. How do you avoid the SBD? It is simple. Stop! Listen! And above all bring in people around you to help you fully analyze every move you make and every decision you make when you feel overwhelmed by the environment around you. Follow your gut and not your emotions. There is a very big difference. No decision you make quickly can ever be the best one.

Filed Under: Business, Finance Tagged With: business model, company restructuring, follow your gut, generally accepted business practices, internet business, obstacle course, sophisiticated website, stupid business decision