COMPONENTS OF ZIG NUMBER 1

Because your first zig is so important, I want to dissect its components and look at each one individually next.

FINANCIAL NUMBER

Zig number 1 is a financial number. You have to have a financial target number specifying how much you want to bring in. Refer back to the nut you determined in the last section.

ALLOCATION OF TIME

How much time are you going to dedicate to getting to cash? How long will you give yourself to achieve this financial target? I will typically dedicate 65 percent of my resources toward getting to profitability, 30 percent toward zag number 2, and 5 percent toward zig number 3. And, as I look ahead, I never plan beyond three zigzags.

DURATION OF TIME

How long are you willing to run at this pace? Anyone can sprint for a block or two. But what reserves do you have if you end up needing to run a marathon?

FINANCIAL TARGET

What is your target for the profit you want to make? How and why is this different from the financial number above? After you have covered the nut, what is your goal for how much profit you want to make?

FINANCIAL RESOURCES

How much in the way of financial resources are you willing to invest? How do you want to allocate your financial resources? In the early days of entrepreneurship, I used to be more willing to mortgage my house or use my emergency buffer to help fund my businesses. Now I have a policy: I absolutely will not mortgage my house or dip into my safety net. We will talk more about this in Chapter 7 when we talk about guardrails.

RELATIONSHIP CAPITAL

We have already talked about relationship capital in Chapter 1. Think carefully about how much relationship capital you want to use when driving to profitability. One of the reasons I choose not to sell to my close family and friends is because I am not willing to expend all my relationship capital in one fell swoop. It is important in the early stages of your business not to drain your whole relationship bank account. Selectively choose a few key individuals who can help you, but carefully define and limit how much relationship capital you’re willing to spend. Then make sure you give those people a “thank you” and put something back into their relationship bank account. Gratitude goes a long way with relationship capital.

GIVE YOURSELF PERMISSION TO BE MISERABLE

I’ll be honest; this is not an easy stage. Sometimes, in getting to cash, I have to do a lot of things I really don’t like doing. I have to do the books, answer the phone calls, and open the mail. I do it all! I can do it; I just don’t like to do it. So I give myself permission to be miserable and endure—but only for so long.