Appreciate the confidence, but not positive I am the right guy.
If I say so myself, I am great at analysis and building processes to make life efficient and easier. But I cannot claim I have proven decision making skills because I havent been given the keys to the decisions. I typically just make other peoples decisions actually work.
I'd say I am pretty good at reacting to situations in front of me. But I am far from being able to provide the open ended road map to the promise land.
I will use this soapbox to react to a couple things I see in play that can put us in good position to capitalize on whatever the right choices are. Or at least prevent us from shooting ourselves in the foot. But I probably dont address your question at all, and really, my conclusion is the company is already doing them
Brief summary on our Debt
- "always keep the cash" - do not pay early for no reason
- paying early, as opposed to later, would be unlikely to save us any total shares (because we can expect to only pay X amount, where I think X will be about $200K) and the interest saved would be $20K cash in a year.
- In the end game - $20K, even $40K, extra cash in the bank will not change our valuation one iota (unless we are valued at $20K or less, in which case nothing matters). And the interest expense which reduced our income in the past will be ignored because it is discontinued.
- I once thought we should pay early, I now recognize that is pointless and could have been a disaster if they did. You do not want to be backed into a corner where you need money (act of god wiped out all inventory) and dont have it, or you are back to weak handed negotiations to keep the lights on. All in the name of a negligible benefit on the flipside.
Brief Summary on expenses
- we know we have better margins than POTN because of the whole retail approach, but we also have lower significantly lower overhead costs
- it takes a big machine to start churning big results
- and there is a big risk that a big machine breaks
- last 4 reported quarters we posted net income of $411K. It is very easy to spend more than $411K shooting for the stars.
- and there is an infinite difference, between $411K gain and any sort of loss
- And you need to spend that money first, to find out if it was effective after.
- so we need to be responsible in our growth
- comparing the past two Q3s, our gross margin increased $158K, and our expenses $162K, slightly reducing income. This is acceptable in the name of growth, especially if working towards even more of it, but to grow our costs beyond this could be brazen and problematic
- the same can be said for an audit. Do we really want to spend like $50-100K for an initial 3 year look back audit, so that they confirm results which would be worse than otherwise reported without spending that money? Perhaps soon, but not in the past
--- side note, our record keeping seems to have been really good the past few years, based on the detailed level of the income statements, so I think there is the chance the wheels are in motion to make it as efficient and cheap as possible for the right time on that front
To layout some analogies, extra thick -
- The only possible way to make it to the promise land is to ensure you survive the trip.
- Do not get winded in the first round of a 5 round fight, or you will not make it to the bell.
And I think our management have been doing some right things to get us where we are trying to go, even though they are rarely recognized for any positive reasons.
/ end rant, not even sure why I went on it in the first place
- and all my opinion. I could be wrong, many will think I am, and most probably did not bother to read all that - and they are the real winners
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