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Reinvest or pay yourself? How founders decide in year one
A simple rule for your first profitable months.
The first time a business makes a profit, founders face a real dilemma: take the money you badly need, or put it back into growth?
This isn't financial advice for your situation. It's a way of thinking about the choice.
Start with your floor
Work out the minimum you need each month to live without panic. A founder who can't pay rent makes short-term decisions. Paying yourself your floor is an investment in better judgment.
Then split what's left
A simple starting rule many founders use for the first year:
| Share of profit above your floor | Where it goes |
|---|---|
| 50% | Reinvest in what already brings customers |
| 30% | A cash buffer for slow months |
| 20% | Paid to you |
Only reinvest in proven things
Reinvest in the channel, product or service that already made the profit, not in a new idea. New ideas get your time; proven ideas get your money.
Review every quarter
Adjust the split as the buffer grows. Once you hold three months of costs in reserve, you can pay yourself more with a clear conscience.