InfoSphere™ Business Alerts And Intelligence

Friday, May 25, 2012

Crisis Communications, Protocols And Management - Emergency Planning And Rapid Response

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The proper crisis communications, protocols and management, as well as definitive emergency planning and rapid response actions can mean the difference between life or death for your organization. Not only is it a matter of damage control and mitigation of exposure, but it is a means, if used wisely, to positively exploit the crisis for a publicity or public relations gain -- that's right: Imagine the power of converting a liability into an educational experience and newsworthy asset!

To successfully handle and triumph over a crisis, your company must have the following pieces in place at all times:

1) An immediate emergency alert system. Sometimes numerical or verbal codes, similar to those used in law enforcement, are excellent to convey a crisis alert.

2) A crisis response team within your ranks -- like a SWAT team.

3) A command and control hierarchy with a separate channel of immediate communications -- text message alerts and the like can be very helpful here, as well as a dedicated crisis conference line or web-conferencing facility.

4) A specific step-by step plan for each type of emergency, by category.

5) A virtual "Situation Room" where you and your SWAT Team can rapidly build a damage control, loss containment and "let's make lemonade out of this lemon" program for immediate effectuation. Make absolutely certain to get these five pieces into position today -- not when a crisis is already upon you.

An article excerpt of interest from the SmartBrief Newsletter follows for your information. When you've finished, please return to this page for a checklist outline of actions that you should take for crisis planning, damage control and risk/loss containment. We'll be waiting for you...

How to communicate during a crisis
Drafting a "holding statement" can help to get you through the early parts of dealing with a crisis, Alex Honeysett writes. Such a statement should be simple and it should let interested parties know you are aware of the issue. Once you know more about the problem, you can create more in-depth communications, she writes. "Always be as transparent and honest as possible," she recommends. TheDailyMuse.com (5/23)
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Some other actionable items should be noted in dealing with a crisis:

1) Vigilance and skill in crisis evasion or intervention is better than having to deal with a full-blown crisis. Have all of your alarm systems in place and be proactively responsive. Be aggressive in acknowledging, communicating and attacking problems before they get the "jump" on you.

2) Advise all affected parties (clients, customers and others) immediately in the event that a crisis might impact them. Tell them what to expect, what you are doing, and they they will be rewarded (discounts, coupons, free servicing, gifts....whatever!) for their patience and loyal patronage.

3) When your crisis is over, maximize PR and social media with a story about how you triumphed, and praise and thanks all of the parties who helped you in the "successful collaborative effort." Example: "Had it not been for the faith, support and creative input of our clients, we could not have come through this bit of turbulence so smoothly. Our [name your company] clients are one of our finest sources of intelligence, constructive feedback, and general enthusiasm -- they motivate us to do our best."

You can send this type of announcement out to your email list, and through a very inexpensive NEWS RELEASE. Turn what might have been a possible defeat into a stunning victory. Everyone loves a Human Interest story.

Two recommended resources for blasting your News Release to achieve maximum results are listed below. It's a good idea to use two services, and send releases out (each with a slightly different slant, two weeks apart:

PR WEB and eRELEASES

Douglas E. Castle for The InfoSphere Business Alerts And Intelligence Blog

Sunday, May 13, 2012

The US' Biggest Export: Jobs! -- Outsourcing And OffShoring

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This embedded photo was proudly produced in the USA using legal citizen labor!

Recent data would indicate that large U.S.-based corporations are creating jobs and employment opportunities. The catch (in reading the unwritten fine print) is that most of these jobs are being posted and filled overseas [either "outsourced" or "internationalized" - a Lingovation] and not domestically.

This is lamentable, in that it produces no new on-shore jobs or disposable personal income in the United States, further starving its economy. But is an inevitable result of global market forces at work. Productivity is more cheaply sourced overseas, while expanding international consumer and B2B markets are increasingly becoming the focus of product and service development, promotion, advertising and selling efforts. The combination of these two effects is turning the US into something of an offshore jurisdiction, subsisting on its market cache and history of innovation.

The following article excerpt appears courtesy of SmartBrief, an excellent informational resource for a great number of vertical industries and a frequent resource for The Internationalist Page Blog, as well as for The InfoSphere Business Alerts And Intelligence Blog. After you've viewed the article, please click the back arrow on your browser to return for some further considerations and the potential impact which this might likely have on every US-based company - as well as actions which you can proactively take in order to mitigate potential losses and maximize your profit opportunities.

If we add the US taxation, regulation and reporting requirements to this mix of major trending factors, The Global Futurist Blog would predict that the US is heading toward a de-industrialization, a de-consumerization and an increasing exodus of talented minds, workforce participants and company domiciles.

Analysis: Most new jobs at U.S. multinationals are overseas
Big multinational corporations headquartered in the U.S. are creating jobs faster than other employers, but 75% of those positions are overseas, according to an analysis by The Wall Street Journal. While the 35 firms analyzed added 113,000 workers to their U.S. payrolls between 2009 and 2011, they hired more than 333,000 employees in their foreign operations, the newspaper notes. The Wall Street Journal (4/27)

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The truth is frightening, and the associated trends are accelerating. What are SMEs to expect, and what are they to do, based upon this information?

Of course, there is no simple answer, but there are some practical strategic moves which you might make:

1) Start investigating global markets for your products or services. You can obtain some excellent information through the Small Business Administration (SBA) about exporting, international financing, and global agent-distributor service;

2) If you are U.S-based and provide low-skill level support services, prepare to be outsourced by your clients or customers by adding value to differentiate your service (to lessen pricing as a deciding factor between your firm and firms overseas), or by pre-emptively outsourcing all of part of your service - in this way, you can offer varying quality "levels" of service in a menu fashion;

3) The "made in the USA" label carries some weight, both domestically and overseas, but in a troubled worldwide economy, be certain that your value proposition makes competitive sense in terms of either its being a) of superior quality and/or unique attributes; or b) of a custom-created nature and/or marketably-branded for very wealthy individuals who purchase based upon criteria which don't relate to bargain-hunting or saving money.

Douglas E. Castle for The InfoSphere Business Alerts And Intelligence Blog

The Global Futurist Blog

The Internationalist Page Blog
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Thursday, May 3, 2012

Alert! FATCA - Foreign Account Tax Compliance Act

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A brief synopsis of FATCA (The Foreign Account Tax Compliance Act) follows, excerpted from Wikipedia, a wonderful source of information. The reason I chose not to cull any information from either IRS-sponsored sites or Tax Consulting (principally sponsored by large CPA auditing and tax practitioner or tax law advisory firms) Sites was because of the obvious bias associated with both of these these types of sites. [By the way, for some reason, FATCA is difficult to pronounce without making it sound like VODKA - It's ironic. Also, if you add a "T" to the end of it, it spells "FATCAT."] This is my way of whistling past the graveyard -- to lighten up a frightful topic.

Why Wikipedia? [you ask, albeit silently]

The IRS-sponsored sites extol the virtues of this "helpful" legislation because it will make it more difficult for all evil-minded {a bit of sarcasm intended) companies, funds and persons of burdensome wealth and income to escape the reaper. FATCA is yet another means through which the United States Government can increase both its jurisdiction and collections. Of course, what the Government will do with the collected proceeds should make for exciting future discourse.

The Tax Consulting sites are veritably licking their chops at the opportunity to earn additional profits through fees generated regarding compliance with the relatively new but profoundly far-reaching law, and the justifiable aura of fear that surrounds it.

Hence, from our friends at the sadly underfunded yet indispensable Wikipedia:

The Foreign Account Tax Compliance Act (FATCA), Subtitle A of Title V of the Hiring Incentives to Restore Employment Act (HIRE), enacts Chapter 4 of, and makes other modifications to, the Internal Revenue Code of 1986, the tax law of the United States.

FATCA has a few main parts:

It requires foreign banks to find any American account holders and disclose their balances, receipts, and withdrawals to the US Internal Revenue Service (IRS), or be subject to a 30% withholding tax on income from US financial assets held by the banks.^[1]
Owners of these foreign-held assets must report them on a new Form 8938 along with US tax returns if they are worth more than US$50,000; a higher reporting threshold applies to overseas residents.^[2] Account holders would be subject to a 40% penalty on understatements of income in an undisclosed foreign financial asset.^[1]
It closes a tax loophole that investors had used to avoid paying any taxes on dividends by converting them into dividend equivalents.^[3]

The reporting requirements are in addition to reporting of foreign financial assets to the US Treasury Department,^[4] particularly the "Report of Foreign Bank and Financial Accounts" (FBAR) for foreign financial accounts exceeding US$10,000 required under Bank Secrecy Act regulations issued by the Financial Crimes Enforcement Network (FinCEN).^[5]

There are fears of imposition of capital controls, and assertions that capital flight is underway as a result.^[6]^[7] There have also been privacy concerns, in particular for those with dual citizenship.^[8] As a result of FATCA, European banks such as Deutsche Bank, Commerzbank, HSBC, ING Group and Credit Suisse have been closing brokerage accounts for all US customers since early 2011 citing "onerous" US regulations,^[9]^[10] which FATCA will make more complex when it goes into effect in 2014.^[11] American Citizens Abroad, a Geneva-based organization representing the interests of 6 million Americans residing outside the U.S., has launched a campaign to repeal FATCA.^[12] Many have expressed doubts as to the implementability of this legislation.^[13]

FATCA added Internal Revenue Code § 6038D (26 U.S.C. § 6038D) that requires reporting any interest in assets over $50,000 after 18 March 2010, and § 1298(f) (26 U.S.C. § 1298(f)) that requires shareholders of a passive foreign investment company (PFIC) to report certain information. The IRS issued temporary regulations (TD 9567) on 14 December 2011 requiring the filing of Form 8938 with individual income tax returns,^[14] and proposed regulations (REG-130302-10) for domestic entities.^[15] Treasury and the IRS issued proposed regulations (REG-121647-10) regarding information reporting by foreign financial institutions on 8 February 2012,^[16]^[17] and issued final regulations and guidance (TD 9584) on reporting interest paid to nonresident aliens on 17 April 2012.^[18]
Five countries have consented to co-operate with the U.S. on FATCA implementation.^[19]

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What FATCHA Could Mean To You:

While I offer no tax, accounting, investment or legal advice, I do offer the following general thoughts for your consideration...

1. There are no offshore or out-of-country (foreign) tax shelters for U.S. citizens or entities owned directly or indirectly, in whole or in part, by U.S. - domiciled interests or persons;

2. There will no longer be any such thing as a private or secret overseas or offshore bank or brokerage account for anyone except a very privileged few (and you know who you are, you lucky sports, you);

3. Many multinational funds (public and private), as well as many international or multinational firms will have more rigorous and expensive compliance standards;

4. There will be more fines and prosecutions (civil and criminal) for anyone daring to tread into any seemingly gay area of the Internal Revenue Code; and, sadly,

5. Fewer and fewer reputable foreign financial institutions will want to conduct any type of savings, trust or investment transactions or business with any persons or entities described in item numbered 1, above.

As a closing note, I believe, as a trend-spotter and as the author of The Global Futurist Blog, that FATCA will ultimately have the effect of decreasing the US tax base (due to an increase in renunciation of U.S. citizenship and flight or re-domiciliation of U.S. domiciled entities), and increasing the tax burden on the shrinking tax base. In the short run, this might be a good mechanism for collect more money to fund a government which has lost the faith of too many of its citizens (i.e.,#occupy, #bailout, and the like). In the longer run, it might just serve to prove the oft-quoted philosophy that "The Power To Tax Is The Power To Destroy."

Douglas E. Castle

The Internationalist Page Blog and The InfoSphere Business Alerts And Intelligence Blog

Tuesday, April 24, 2012

Is IT Eliminating Jobs? The Shocking Truth...

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As IT advances in its sophistication, functionality, affordability and widespead utilization, it is eliminating more jobs (principally certain clerical, administrative and lower-level skilled and unskilled jobs) than it is creating (primarily higher level, better-paying technical and and project management jobs). As a Global Futurist, and being obsessed with trends, the Luddite nightmare of "machines" displacing "Human Beings" is steadily increasing in this particular functional sector.

Please have a look at the article (from the archives of several months ago) extract which appears below, courtesy of BigThink , and then hit the "Back" button on your browser to return for some commentary and implications:

Big Think Daily Ideafeed
January 2012

DANGEROUS IDEAS
IT Killing Jobs Faster than Creating Jobs

Unemployment and economic output are at near-record highs. So where did all the jobs go? Fast-advancing, IT-driven automation might be playing the biggest role in our current jobs crisis.

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1) Labor costs in businesses, particularly in the the western industrialized nations will begin to decline, increasing profit margins and possible international market pricing advantages;

2) Unemployment will be further exacerbated by this development before during the next decade;

3) Career opportunities will be opening up (in small numbers) for IT experts and IT-oriented Project Management Professionals;

4) The educational focus will be shifting over to IT-based training during the next four to eight years;

5) As IT becomes more affordable and accessible to smaller-sized businesses, particularly in the western industrialized nations, small businesses will be slightly impaired in their traditional historical role as national economies' jobs creation engine.

Take whatever actions you may deem necessary in anticipation of this change, whether you are an employer, an employee or a student, making an educational and career decision.

Douglas E. Castle For The InfoSphere Business Alerts And Intelligence Blog

p.s. Please visit The Global Futurist Blog, The Internationalist Page Blog as well as The Twitterlinks Hubspot Blog for a list of wonderful Twitter Feeds about a wide variety of subjects worth following on Twitter. Thank you.

Monday, April 23, 2012

Big Banks A Declining Resource For Small Businesses - It's Time To Get Creative.

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Larger Banks are becoming a poorer source of capital for small business loans. Generally speaking, if you have a small business or an entrepreneurial enterprise, you best resources for financing are either small banks, non-bank alternatives (asset-based and transaction-based financiers, factors, discounters and the like), credit unions, angel investors, venture capitalists and major suppliers or major customers which may have a knowledge of your business and a symbiotic need to see you succeed.

Please take a look at the following report, hit the BACK button on your browser, and return for some actions which you can take to get your business financed:

Big banks approved fewer small-business loans in March
Large banks' approval of small-business loans reached 10.9% last month, compared with 11.7% in February and 11.6% in March 2011. Meanwhile, the Biz2Credit Small Business Lending Index shows that small banks' loan approval stagnated at 47.6%. Small Business Trends

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Welcome back to the InfoSphere Business Alerts And Intelligence Blog.

If you are an habitual Googler, search under SMALL+BUSINESS+FINANCE+SOURCES. That will produce a string of leads to prospective financiers.

If you want to be more creative and proactive, start investigating factors, purchase order financing, receivables financing, equipment leasing, accredited angel investors, and then examine your own suppliers and clients for non-traditional private sources of loans or other types of capital infusions which would serve their interests (their own motivations and concerns) as well as those of your company.

The harsh assumption you should make in your thinking and creative processes...

"No one would want to finance my business for a mere return on investment or because of a passion for what we've built -- how will investing in or lending to my business help them to achieve their own business, emotional or other needs and objectives?"

Douglas E. Castle

Friday, April 13, 2012

Exit Strategy: Objective?... Or Lifeboat?

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Article: Exit Strategy: Objective?... or Lifeboat?

Author: Douglas E. Castle

Until the mid 1980s, the term "Exit Strategy" was not normally associated with the business planning or capitalization (i.e., fund raising) processes. The term itself derives from the classic (but often unstated) "Greater Fool Theory," wherein if I invest in something, I only do it at the very outset if I am reasonably assured that there is some party waiting in the wings who will buy it at a price greater than my investment cost, thereby generating a capital gain for me.

The notion of an exit, or escape, emerges from the idea that an investor or financial participant will likely not derive any income, cash flow or gain unless and until a specific event occurs where that investor (as well as the brokers, advisers, investment bankers and other intermediaries assisting in the orchestration of the transaction) will be taken out of the investment, either in whole or part, and will recoup the sum invested plus a substantial gain. The point of exit is the focal and pivotal point of the entire transaction from its very inception -- oftentimes, especially among contemporary venture capitalists, the only time that any return will be seen.

Today, the prevalent mind set is on the quick "killing" and not on organic growth by increasing profitability and net cash flow. Investment conversations are dominated by talk of exit strategies, just as junkets to Las Vegas are filled with gamblers hoping to "strike it rich."

There was a time when investments (especially those which were made into direct participation programs where the investee company paid profits or gains out directly to investors, or where income was actually generated during the holding period of the asset) were evaluated based upon such primitive but classic metrics as "How long will it take me until I get paid back all of my cash and start to 'ride for free?'," or "What will my yield to maturity be on this bond?," or "What's my annual dividend yield on this preferred stock?"

The closest that anyone came to talking about an exit strategy, without using that term was, "When this company goes public, what multiple of my investment do you think I might get?" Other than this, the exit was not a target or objective -- the inherent stream of income generated by the asset (i.e., a business) was where the payoff was. Many companies stayed private or family-owned (dynastic) and made generations of people rich. The reason was because these assets and businesses were forecast to actually generate profits.

If an investment is being structured or entered into with an exit as the means of capital recovery, gains and fees generated, it is merely being groomed for disposal. And if that disposal mechanism (i.e., a purchase at an inflated price by a cash rich or high 'per share'-priced colossus of a company) were to fail, the investors would stand to lose money.

Private equity fund managers, venture capitalists and other professional institution-sized investors hypothesize that the exit will be there, and the the cash parachute will open as they jump out of the investment aircraft. If this fails, the amount of the investment may never be recovered, and a loss may result. It becomes a high stakes, high-risk game when the only way to profit from participating in the financing of a company or the purchase of an asset is that the market conditions will be right to favor you when you go to sell it.

Boldly stated, many VCs are not looking at companies, but are looking at disposal mechanisms to generate gains, liquidity and reinvestable funds. This is not actually security...especially given the vagaries of the capital markets and the rapid changes in technology. But then again, if you happen to win, you can win big. In the VC's portfolio, there may be four losers and one winner -- but that single winner is expected to be a windfall, more than offsetting the rest.

Given this information, investing with an eye to the one- to three-year exit is potentially quite risky; an all or nothing at all gambit; whereas,investing in a less glamorous business or asset, but one which yields cash-on-cash [a current return, inclusive of a recoupment of invested capital] seems more practical.

As a Global Futurist, I believe that given the emergence of crowdfunding, the resurgence of entrepreneurship and the increasingly speculative nature of the "Greater Fool Theory," direct investment participations will be on the rise, and the cash which they generate will help to fuel a re-emerging economy. Instead of merely hoping to catch a windfall, these inherently profitable businesses will offer greater security, reinvestable cash, and a restoration of the old-fashioned ethos of wealth-building as this was achieved by some of the world's greatest industrialists before the "Quick Buck" became the standard, and businesses and fortunes were built on a foundation of logic, intelligence and inherent profitability.

An exit is always a desirable safety device - let's agree about that - but why would I want to exit something that was generating real, physical income, and building my actual, realized wealth? I would genuinely rather be enjoying my income while my more "sophisticated colleagues" were waiting for a lifeboat or a turnaround in the Dow Jones Industrial Average or NYSE.

Have an exit strategy, by all means, but future funding sources (particularly crowds, groups, angels and the next generation of debt providers) are going to want to see cash flow, payback, and a sensible plan for generating profits before they are going to want to place their bets on a lifeboat. For smaller businesses and real Human investors, their victory is not a terminal event -- it is in distributable profit, gain or cash flow generated by a well-conceived, well-managed business. Did I hear someone say "Amen"?

From The InfoSphere Business Alerts And Intelligence Blog by Douglas E. Castle.

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InfoSphere™ Business Alerts And Intelligence

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Friday, May 25, 2012

Crisis Communications, Protocols And Management - Emergency Planning And Rapid Response

Sunday, May 13, 2012

The US' Biggest Export: Jobs! -- Outsourcing And OffShoring

Thursday, May 3, 2012

Alert! FATCA - Foreign Account Tax Compliance Act

Tuesday, April 24, 2012

Is IT Eliminating Jobs? The Shocking Truth...

Monday, April 23, 2012

Big Banks A Declining Resource For Small Businesses - It's Time To Get Creative.

Friday, April 13, 2012

Exit Strategy: Objective?... Or Lifeboat?

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