IF YOU'RE BOOTSTRAPPING, KNOW YOUR SURVIVAL NUMBER

One of the most challenging aspects of bootstrapping with less than 24 months of runway is managing your mindset and possible anxiety and making smart decisions.

Here's a cheat code to take action to extend your runway, manage your emotions and optimize your energy toward decisions that matter.

Every entrepreneur should know their SURVIVAL NUMBER to ensure that their living expenses, energy, and mental health are considered.

Your survival number is the money needed - monthly - to cover your living needs (like a personal burn rate).

Your survival number covers more than just fixed survival expenses. It also includes a few nice-to-haves, occasional takeout, Tidel, or Netflix. (How much do you need to function with minor extras that enable you to continue peak performing while boosting your energy and maintaining your mental health)?

As a bootstrapper, you're likely hardwired to invest all the capital that you have to help your business grow and prosper. I did this for many years while my business revenue was slowly increasing. 

But I was struggling more than necessary simply because I didn't realize how important it was to calculate my survival number - AND stick with it.

Add your monthly expenses to a spreadsheet. For example;

  • Rent (or mortgage)

  • Utilities

  • Groceries (monthly)

  • Bank fees

  • Credit card payments or other monthly debt obligations

  • Hair, toiletries, and upkeep

  • Takeout twice a month @ 30 per meal

  • Car payment, gas, car insurance, $100 a month set aside for possible auto repairs or maintenance

  • Health and dental

  • Hanging out with friends twice a month @ $50 per hangout

  • Audible

  • Etc

  • Etc

In some cases, I was supporting the business using my savings. In other instances, I was building on a retained earnings basis. This means that I was re-investing nearly every revenue dollar my business generated into the business. Some founders may also use income from a full-time job as they bootstrap.  

It wasn't until I recognized that I had to pay myself like an employee that I realized my bootstrapping mistake. I also didn't know I could use my savings to 'lend' capital to my company versus investing in the company. In a future post, I will talk about bootstrapping by LENDING vs. INVESTING MONEY INTO YOUR STARTUP.

Investors are secondary to you being honest about how much money you need to survive each month. If you can't - at a minimum - cover your SURVIVAL NUMBER, you will burn out, your business will die - or both.

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