Amisight 9/22: The Debt Paradox
Here is a pattern that we often see.
When we start our businesses, we are so excited to get going that we are willing to sell our firstborn to do it. We take on debt and do whatever it takes to get up and running.
The first few years are often rough, as we struggle to figure out our model, and soon we have monthly loan payments to worry about.
If things go well, we work our way through it. The business gets on a stable footing, and we get our loans under control.
At this point, we understandably never want to see another loan payment again. However, the paradox is that we have finally figured out the model, and this is the time to scale up and throw the fuel on the fire. It's less risky to borrow money at this point to grow than it was before.