A Business Owner’s Salary

What made you go into business for yourself? Being your own boss? Was it wanting to do what you love your way? Or was it pure ambition to reach bigger goals?

However you came to the decision to start your own business, and actually take the leap, what rewards did you envision you’d get in return?

I’m willing to guess a nice paycheck, probably more than the one you were making at your last job, was part of the expectation.

Business OWNERSHIP, myth busters

While many think business owners are swimming in more cash than they can count, statistics tell a completely different story. Small businesses more commonly incur debt to the owner(s), and additional risk to their personal finances.

After twelve years in business, debt and risk seemed almost inevitable. From our own personal experience, it seemed like the more our business grew, the more money we needed. An equipment loan here, higher rent with a larger, much needed office space; but what really bothered (and stressed!) us out was making payroll. I couldn’t explain why but for so many years, it seemed we never had enough cash. Maybe we need a big project to come our way, we said, that will balance is out.

Time and time again, the same cycle. An influx of sales, crazy production time, then waiting for the payment to come in. And always, again and again, worried about basic payments like rent and payroll.

When we finally got our books up to date (don’t even get me started on how difficult it is to get a good bookkeeper!), we’d see THE number - Profit.

How much profit did we make?

Well, guess what? It didn’t matter how much that Quickbooks report said. We never had the money in the bank. We didn’t get to transfer it into our personal account. We didn’t get to take some special vacation. The report said one thing, reality said another. and in the few cases we did have some extra cash in the company account, we always felt like it was just enough to get us through the waiting period to receive payments.

It gets worse. Every year, right around March (if you’re an S-Corp) or April (if you’re an LLC), you’re hit with taxes. When does the struggle end?!?!

What’s your take home pay?

If you find yourself in a vicious cycle of struggling to meet payroll, or pay your own salary - you must read this post. This book recommendation will change your business finances and your life!

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Really. Believe me. If you’re a small business owner, you need to read this book.

It took one quarter to set things up and get used to how it worked;

After the first quarter, we received our first official profit distribution.

Two years later, it’s second nature and we only wish we had read this sooner. Cannot recommend this enough.