Page 59 - The Bootstrapper Bible

ChangeThis never would have had enough money to make it to the day when investors started throwing money at him. Are you willing to move? To sell your car and buy a junker? To cut major personal expenses so you have more to invest in your business? These are critical decisions, and you need to make them with your family before you run out of money. Because adjusting your expense cycle then is way too late. One surefire way to determine if a bootstrapper is going to succeed or not is to check out how she changes her lifestyle when she starts the business. Hereʼs a quick look at why saving money in advance is so much more profitable than borrow- ing it later. In this chart, you can see what the bank balance of fictional company would be under two savings scenarios. In the first, the company cuts costs so it can bank $5,000 a year for each of the first five years, then withdraws $5,000 a year in the next five years when it needs to invest in the business. In the second, it saves nothing in the first five years (meaning it spends every bit of the profits) and has to borrow $5,000 a year in each of the second five years. | iss. 6.01 | i | U | X | + | h 59/103 f