I spend a very big part of the day looking and forecasting out cash flow for next 2 years.    I had some of it done already, but it was nothing like building your own tool to get to really know the nitty gritty.

End result was that as I started rolling things up and up, is that my cash flow for 2009 is in great shape.   I secured additional $ for this Christmas but as it looks I will most likely not need it  – not a big deal – if the sales go beyond what we think they will – I will not be scrambling.

More interesting insight was that I am investing some $300K/year on R&D.  I split out the main labor into two sections, operations and R&D (new site development).   Basically, prior to this my ideas was that it would cost me $5 to $10K to pilot a site – I didn’t fully account for the labor involved in getting this – since I was giving some of this labor to operations as well.

Well,  with this new focus, I can see that if I’m aiming for 5 site streams launched per year, my cost is $60K labor per site + goods, samples, etc.   So, the question is, was the infrastructure ready to handle 5 sites a year a year ago?  Answer – no!   So, I figured I have about $500K+$750K R&D –that was build in to support growth.    Given this – my FOCUS MUST be growth, to leverage the R&D investment.   This aligns with my move of Mina into growth area -  My drive for the team will be 7 new streams between now and end of next year.       I’m sure they can do it – they just have to eliminated the bottle necks in the execution stream – Silver Devotion was a great pilot – it showed us our critical paths – I think (although I will not be the decider on this) – that my current $300K/year investment is performing at 20% of what it can be – I think if I only need to bump it by $50K+80K to get the 100% performance.

So, from cash forecast, I need to decide if I want to increase my R&D team from $300K  to $400K.   If that changes from 1 or 2 sites, to 8 sites – then clearly that is wise investment.    Need to get everyone in one place and have them come up with the solution.   My message to the team will be:  You have get me 8 sites, between now and next Oct.    Go, go, go!  🙂

Did the semi-annual pay reviews.  Focused on getting top performers increases – some people that are top-performers  are ‘over’ their bracket so left those alone.  Now the debate is if to commit funds to the rest of the operations staff – need to balance that vs.  growth.

Increasing salaries across board will give me more stable org. which in turn will empower to me run faster BUT will take away the capital I need to run faster.   Less increases, will take away from the ‘run’ but make things more stable.    Ideally, I would have super stable base and enough cap. to grow.   I can do both, but will suffer in Oct 2010, IF the execution team DOESN’T deliver the new sites and the revenue doesn’t show up.   So, I could take a risk for next 1 year – bump salaries, truest the GROWTH team to grow.    If GROWTH screw up and don’t delivery – I will be over my labor.    Instinct now is to take this risk – the numbers look good overall and I need to capitalize on the prior investment.   So ideally, I should put in place a nice stable launch pad that will give 12 months of clean/easy runway.     

Lise decided to leave the company early – today vs. end of month.   Its funny because this morning I was thinking that she was being destructive for the business and if I she was someone other than my wife, I would be walking her right there and then.  So, it was nice to see that she perhaps had the same insight.    Was sad to see her leave – felt sorry for her to go – she had build that company with me together – I think it was very hard for her to leave – I know it would have been VERY difficult for me.  But, change is good, so in my gut I feel that this will lead to many greater things – not only better relationship between Lise and me, but also for what I will be able to do with the company.   I am very very much in the growth mode.    Although before I pushed it half hearted – say 20%.   The heat is now going to turn on – I really want and demand 7 new streams to come online by end of next Oct.  My decision making is much freer and faster.  I will be able to make my mistakes faster, correct them faster and run faster.   Great day overall – nice sense of clarity.

One more thing: I’m going to ask Mina to come up with some compensation/reward plan to for getting these sites up for the people involved in getting them build.     Speed is of the essence.   I don’t want $300K in R&D to lay idol.