How Much Should you Pay Yourself?
As a Maryland CFO service, we work with a wide variety of businesses. One of the most common questions we receive from small business owners and start-ups is how much a business owner should pay themselves. Here are some tips to help you figure out the answer.
How Much do you Want?
When figuring out how much you should pay yourself as a business owner, the first real thing you need to consider is how much you want. Figure out what level of pay makes you live comfortably, and then figure out how your business can afford this price—not the other way around. This doesn’t mean taking a look at your own personal expenses and settle for something which covers plus a little more; really think about what you want to make to be happy.
Your Goal for Business is to be Happy, Right?
The reason we say to consider how much money you want to make is because by achieving the pay you desire and believe you are worth, you will be a happier person. By paying yourself what makes you live happily, your business will perform better. If your business doesn’t make you happy, then you will begin to see your business as a chore and it will begin to suffer.
Can your Business Afford You?
What if the amount of money you want to make is more than your business can afford? Sometimes our business ventures, while profitable, aren’t matching up to the expectation we had when we first began the start-up. If your business can’t afford to pay the income you desire, then find ways to get your business to make more money. Another alternative we commonly see for start-ups are owners who also work part-time as a consultant in addition to their new business venture to make their desired salary while their start-up is taking off.
Talk with a CPA Firm
If you can’t seem to decide on a concrete number to pay yourself, then it’s time to contact a business consultant for more help. Here at CFO Source, we’re a Maryland business consulting service with a focus in finance and accounting. We’ve seen owners who take too little, and those who are asking for far too much from their businesses. Give an expert Maryland business consultation a call today and discuss how much money you should be making from your business – it will help you to solidify a more realistic number.
The CFO Source is a Maryland business consultant, CFO firm, and accounting service specializing in helping Maryland businesses maximize their profits. For more information on The CFO Source, or to schedule a business consultation, give us a call at 410-242-0526 or fill out the form on our website, today!