Back in February we made the somewhat difficult decision to self-fund our move and expansion by not paying ourselves for three months. In retrospect, this was a riskier move than I think we all realized. It’s really, really stressful to see your bank account dwindling without anything to replenish it. It’s also really, really stressful to work 12 hour days and see nothing in return. That said, it was the best move we ever could have made.
Taking no pay brought us together as a team – we united around the fact that we needed to work our asses off to get paid again. It also motivated each individual. While stressful for me, the desperation of the matter made me block out the rest of the world for a while and dial in 100% to the task at hand.
And right around the launch of Tastefully Driven, it all started to pay off:
- We no longer had to commit time to moving and expanding
- Our initial warehouse expenses were gone and replaced with manageable fixed monthly costs
- The marketing we had worked so hard on has resulted in several months in a row of record sales. We are consistently doing 3-4X monthly revenue from the corresponding month last year, which was on the high side of our estimations.
- We found a great new accountant to replace the unsatisfactory one we fired during tax season (who by the way seems to have cost us approximately $6,000 last year that we could have avoided….good accountants are valuable, lesson learned)
- We secured a large line of credit with our local bank. We didn’t need it, but it doesn’t cost anything and ties in with our existing bank account, so it was a no brainer to apply for and have in our back pocket for future expansion if we need it.
All of this led us to the decision to start paying ourselves again early. So yesterday, almost a month earlier than planned, I walked into the bank and cashed my first check. Sure, I’m making exactly what I was a few months ago but it just felt so much better to cash this check, mostly because I know we’ve weathered our storm and are able to cover all expenses, pay ourselves, and profit – something we thought might take a lot longer to achieve. We could have paid ourselves a raise, but we decided to play it conservative and do this for a few months just in case sales unexpectedly dip. Come mid-summer, I expect we’ll be able to give ourselves another raise, which will be significant because it’ll give us each a little breathing room financially on a personal level.
Sometimes business risks like not paying yourself can backfire. This one could have been the start of us falling apart if warehouse costs were more than expected and sales were less than expected. Thankfully, a lot has gone right lately and everything paid off. Looking back a few months, this post is probably the best possible outcome to our situation. These are the times you live for as a business owner.