Back in March, I introduced Moby, our brand new Goldendoodle puppie.  As a reminder, here is a picture of him when he first came home with us.  I am not really known to be a cuddly, emotional kind of guy.  But, seriously, AAAWWWEEE...Sweetie, cutie-pie...Who’s a good boy…Who’s a good boy…oh yeah... back to the blog.

Pretty cute, quiet and, after rereading the blog I wrote about him, my memory was jarred into remembering he was a lot of work.  Still….time heals all wounds and many great improvements have taken place.  First of all, he no longer conducts any of his…business, in the house.  That is a super positive result.  He also does not chew the heck out of all the wood in the house.  We have to replace baseboards, window blinds and a table leg, but that behavior is gone.  Woo-hoo, positive check number two.   All good things.  All good things.

So, here is Moby now.  Obviously, he has changed significantly.  He is much larger (I am brilliant at stating the obvious, thank you very much). He is also loving and sweet.  Mr. Moby has really settled into being an integral part of the family.  That is not to say we have no issues.  Where before we just had normal puppy troubles, we now have a full throttled, critically thinking bundle of strategic energy.  Our little cutie has developed strategies to get what he wants.  He kindly summarized them in the following graphic (I actually made the graphic, he just told me what to write down).

I am not sure his premise is correct that getting more snacks makes him a better helper, but what the heck, let’s just run with it.  He has developed strategies to ensure that he gets the necessary sustenance to be that good helper.  He sneaks food when we are not looking.  A missing plate of raw hamburger proves that.  He acts like he is interested in one food item, say a tangy, pucker-inducing yellow citrus fruit, and then drops it and runs to steal a more appetizing morsel when we reach to pick up the fruit (see  picture…that is not a ball in his mouth, it is a LEMON).
The following pictures illustrate the point even more.  He steals socks and pillows, takes them into the backyard or into other rooms of the house, and holds them for ransom until we provide a treat.  Should we treat him for stealing our stuff?  Of course not, but he is incredibly fast and impossible to catch when he gets outside.  We are trying to change the behavior, but sometimes I am running late and just want my dang socks.

So, as business owners, what can we learn from this “dumb” dog?  Creating plans and strategies to meet objectives is smart business.  Strategic planning is an evolving, dynamic process that adapts to surroundings and the business environment to accomplish a beneficial goal.  Every business, no matter its size, should create strategic plans that contain measurable objectives with timetables and responsibilities.  These objectives should be changed and evolved as market conditions change. 

The old Soviet planning method created five-year plans that remained static and monolithic.  And, of course, the Soviet Union collapsed.  Trying different tactics to reach the goal is important and can keep an organization agile.  Be willing to move and adjust.  Learning what does not work is a critical part of planning and strategic thinking.  Think in terms of plan, evaluate and evolve and then repeat, repeat, repeat.  It has worked for my dog and I think it will work for you.  Moby is available for a consult at your earliest convenience.  Just make sure you leave your socks on.

It has been awhile since I wrote a blog.  The entire summer seemed to get away from me.  I blinked and vacations were over, the pool closed and school started up again.  So where did the time go?  I cannot use the alien abduction excuse again.  Surprisingly, it only works once or twice during a career.

So what happened?  Well... we completed the largest deal in the history of the organization.  The largest by a long ways....Seriously, nothing else has even come close.  Actually, for a small organization, it was kind of spooky big.  Why do I consider the loan scary?  Well, obviously a large deal has way more money changing hands, and in the case of a "Fall of Rome" style collapse, the risk to Enterprise is higher than a regular sized loan.  And carrying that logic to a more personal level, the risk to my job and house and reputation and... well, you get the picture.  These thoughts go through every conscientious lender's mind.  It is what makes us human.  However, dwelling on these "Eeyore meets Chicken Little" thoughts is the enemy of anyone in commercial lending.   

First of all, making this scary risk tolerable is the very purpose of the SBA 504 Loan Program.  Enterprise Development Corporation and its banking partner worked together to understand the positives and the negatives of the deal and shared the risk.  Secondly, doing the proper due diligence by thoroughly examining the 5 C's of Credit (Collateral, Capital, Character, Cash Flow and Conditions) dials the scariness factor way down.  With this attention to detail, a lender can sleep better at night.

The loan will sit in our portfolio for up to 20 years, so obviously it needs to perform.  We feel comfortable with this loan because we sent the summer doing due diligence.  I sacrificed my TAN for the loan (honestly, I have kind of a transparent Scandinavian Lutefisk skin, so it wasn't that big of a sacrifice.

Here are some key points we looked at during our process:

1.  The Borrowers:  We reviewed the borrowers' credit and collateral.  Their credit was absolutely top notch and they had enough personal assets to guarantee the loan.  They were willing to put enough of their own capital into the start up to show how confident they are in its ultimate success.  Finally, they are known as reputable, honest people who give back to their community (character).

2.  The Existing Businesses:  The existing businesses already operating under the corporation are run professionally and successfully.  They have systems in place and keep meticulous records that are necessary to help a lender make a decision.  The businesses also have a good enough cash flow position to support the new venture if it starts more slowly than expected.

3.  The Proposed Business:  The proposed business appears like it will meet the needs of the market and the conditions seem right for success.

This process seems easy right?  In theory yes, but we look at every affiliated business within a borrower’s corporate reach, and we review any potential issues each piece of the corporate whole might have.  For a normal borrower, this process is easy.  This particularly borrower had seemingly multitudes of affiliated business (less than 100, but not a lot less….).  We make good loans and have a solid portfolio because of this due diligence process.

Summer is over and the days are shortening.  I have no tan and I have gotten a few months older.  Sorry there was not a blog for the past few months, but, obviously, a lack of visibility does not mean a lack of activity.  It is good to be back.