Ryan Deiss argues that while extreme frugality works early on, founders should eventually pay themselves a salary and budget for profit as a core metric. If a business isn't profitable at modest revenue, it won't be at scale.
"Owning a business will teach you money management. I used to eat 3 times a day and now I only eat when I feel dizzy." All right, that's pretty good. And look, in the early days, this is absolutely true. But once you're beyond the startup phase, it's time to start eating 3 meals a day. Starving yourself, whether we're talking about literal or figurative starvation, just isn't scalable. And that's why I'm so big on paying yourself first from day 1 or as early as you possibly can. Not only is it more motivating to grow a business, when that business is actually paying you and you're not the lowest paid employee at the company. It's also the ultimate sign that you're building a healthy business. If your business isn't profitable at half a million dollars, it's probably not going to be profitable at $5 million or even $10 million. Profit doesn't happen by accident. You have to budget your own profit and you got to pay yourself first because the optimistic entrepreneur's ability to spend will always outpace their ability to earn.
