Getting into swing

Last few days have been ‘off for me’  – fighting some kind of weird fatigue and stomach bug.  Seems to come and go – been over a month now and has really affected my ability to perform.  So, today, back to the doc, and dill full screen for everything imaginable.

Why?  Well – operations run just fine with out me (finance aside) – BUT – for growth, I would LIKE! to participate – it’s the fun part.  And last few weeks I haven’t been able to.

So, this is not to say that work wasn’t done.

  • PearlsOnly.de is now translated and skinning is happening as we speak.
  • French site is 80% done and we are moving with that fast.
  • Japanese sites is also in progress.

Our financial results (top line) for last month has been quite good – we beet 2008/2009 in sales.   In fact, each year our sales have  improved on YonY comparison.  This is of course consolidated reports.
Had it been just the US, I would NOT be in such a cheery mood.

But as is, we are protecting against US markets via expansion into Europe and Asia.   Once this trial run works, we will consider other regions as well.

I have been still spending considerable time in getting Account/Financial systems in place.   Very happy to have found this awesome place for SOPs/ Policies.  I have been humming and hawing about buying accounting policy package from there.  Its $500 – so it seems like not a lot BUT it has been giving me heartburn to spend so much on a SOP package.   Was I ever wrong.   

Amazing document, with pretty much everything you need to get your Accounting/Financing up and running.  So, very happy that I found it – was going to write it from starch, BUT seriously, this package is so amazing, that on my own effort I would not have been able to get this.

Most likely, even hiring a CFO to do it, would have taken months – so this bundle that I got for $400 is a huge, huge accelerator towards getting my accounting / financing humming.

This week been working on getting our US accounts moved into HSBC.   Some ridiculous rules about having to have an office present and registered with the state to get a bank account.    Normally I would walk away and look at other banks BUT HSBCnet has been such a good little system, that I’m now going through the effort to drop a Cali based office, JUST for the purpose of getting bank account with HSBC!  

French office presence has been established and just today, German presence has been finalized.Japan is much easier since we have people on the ground there already.

MJC is starting to move product – not huge, but moving.   We had a huge powwow session on how to position MJC and basically how to establish a Value Proposition for the site.  I run the meeting as a brain storming session and it was truly upber cool with what as a team we came up with in 8 hours.

So, I’m not going to discuss MJC strategy here, but let me say this ‘I like it!”

Beyond that, we are moving on Muse sites – and will aim to have those in before Xmas.

From Corporate side, I have hired a lawyer to help me put together a shareholder agreement for RedStores Holding.  I’m going for the dual class structure (in the footsteps of Google and Facebook).
My valuation of the business, given our top line, bottom line, new sites, customer base, is coming in at around $20 to $35MM.  Given that I’m moving into dual share structure, I expect to take a hit on the B class valuation by 5-15% – but nevertheless, maintain management control (and make sure that I get to see my baby grow up and don’t get kicked out along the way makes this much more palatable).

So, once the share holder agreement is in place, I will look at how much I’m looking to raise (really need expansion capital which is low risk) – and then go and get the funding.

One of the things I’m strongly considering is to grow via equation. Given the state of US economy, I would imaging there should be tons of mom and pops – having trouble making payroll and wanting to get out.    Given that I have few years to take over these sites and grow them (i.e.. no shareholder pressure (yet) for instant dividends), some of those would be great opportunities.   Will be looking at some of those.

So, as we move forward, we will of course continue to originate and develop our own sites, but acquit ion are also in my window.

One grip – which I come back to over and over – my accounting/finance system is basically not existent – so little done and what is done is of really mom-and-pop quality.   I guess the business has been doing good in that I managed to have such a nice run without financial infrastructure.

So, the beauty is, imagine how well it WILL run, once I get this sorted.

Speaking of sorting, we onboard 3 or 4 people last week – a senior account being one of them.  However, with me diving deep into accounting now, I can see that this stuff is simple stuff – not rocket sciences – requires more business acumen and planning than debits/credits.

So, its has taken me a year – BUT now I have a pretty good crasp of WHAT I don’t like about our existing system (answer: pretty much all of it) – but also great idea as to what I need to have this department ready to keep up with growth.   So, given that – its just work now that needs to be done.

Opening of the second Chinese entity is proceeding, so it will be fun next 6 months dealing with countless government bodies, etc. (thank god its sourced out to an angel, but just filling the paperwork is a big chore in itself).

This week we also onboard a IT Project Manager, whose role will be to execute staging of new sites.  Basically, we will be pumping site after site.    Gerry had proven that its possible and had two runs at it – so now it will be ready to systematically transfer that execution into a more ‘stable position’ – so that we get to the point that doing a new site, is just like shipping out another package.

Salary reviews are coming up, and this time, I don’t expect a lot of increases.  Basically, with onboarding of the new staff, I need a 6 month window to get payback on the ‘people investment’ – as such there will be some increases to those that are badly off the salary grid – but otherwise, I need to maintain my labor costs low.   I’m hoping that we will blow things out of the water during this Xmas, and that in next salary review I will have more budget to play with.

Speaking of budgets – key, key piece of the new financial infrastructure.  My decision is to push as much power and authority into the people that know best, and as far away from the CFO’s office as possible.   For this, of course, a number of subsystems like budgets have to kick in BUT I’m really looking forward to have my team become financially responsible.  It’s a huge development step for the crew and that small little step, I believe, will have a long lasting affect on the culture of our company.

Personally, this weird bug (or whatever it is), has been quite frustrating.  I’m low energy for last 3 weeks, but have so much COOL work I could be doing.   But, working on a compressive ‘Paul’ checkup.  I figured out that I lost over 9 days of work last month.  So, I have decided if this persist, I’m better off dropping myself into a clinic in Singapore and having them do the ‘full run diagnostics.”

Basically, each day I’m off costs the company 4-5K in lost growth.   So, I feel it I own it to the crew to be there and drive the growth.

Next week, my Accounting Guy starts, and will start by making a plan of what we will do, then delivering on that plan.  The doc I have will be of great use – and will help us with the planning.

Beyond plan, I need to invest some time looking after Xmas forecasts and purchasing.

So, a bit of a rambling blog – BUT – trying to capture a weeks worth into one.