Paying yourself

Paying yourself

  • Just take the profit and leave a % in for the business. ( which can mean different pay each month)

    Votes: 27 61.4%

  • Pick a number from a hat.

    Votes: 8 18.2%

  • Or Say "I want to make $XX,XXX a year" And explain this one if you can.

    Votes: 9 20.5%
  • Total voters
    44
The Cleaner said:
If your not putting hours on your equipment then the answer to the salary question is obvious.
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I like that one

pressurepros said:
Officers on salary. Budgeted expenses to reduce profit dividend.

The real world balance is trying to reduce your tax bill while still trying to show on paper that the business actually makes some money (in case you want to try and sell)
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So True!
 
I never see any money.

IN reality, I take a monthly salary and a monthly distrribution. The salary is equal to what I would pay someone as a supervisor or foreman in my business.
As for the equipment, I buy equipment when I need it, and do not feel guilty. I typically repair and replace for a long time before I buy a new machine. I have a 5 or 6 year cycle, and then get what I feel is the best quality replacement. I hate being broke down when I should be making money. I also buy myself a nice truck and then turn it over to a crew at around 180,000 miles. It is amazing how fast it can get torn up after I turn it over to them. :( But I use, and maintain, the heck out of it until then.

Oh, and I am pretty profitable.
 
Dustin - we are the same way. I cut paychecks to Nate for the hours he worked at an hourly rate...probably about a quarter of what he would earn normally. Last year we made a profit in business which we all knwo is a good thing, sometimes your business may break even for the first years. All of our equipment was paid for with cash because we didnt want to have a bad month and have our equip repo'd then the next month have a huge account come along. We have done extremely well, but you get what you put into your business. I am a firm beliver in this and I work my a** off for this company, not only because I want to be sucessful but I truely love the business we are in!

Nicole-
 
I saw the equipment junkie thing and thought some more about it. There is a necessity for certain types of equipment. The accounts I target require more equipment than most commercial accounts. I figure that I can get better jobs with better equipment. I have some regular jobs that pay up significantly more than $100, when I do them, so I guess it pays.
 
Scrappy said:
over the past year i have learned a lot business wise . . so this year i'm going to pay a salary to my self . . that way i don't have to worry about having a steady income cause it will be there for me
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Scrappy,
Since you are just starting out, and appear to be turning a profit, I would advise you to find a good accountant that you can trust. Find someone that you might know that has a similar business and ask them who they use, and if they trust them. Remember that you have to trust an accountant, not like him, or her.

I am lucky, my accountant is a family friend that I can trust 100%.
 
Starting this month i am puting myself on a small salary. I want to get all of the business dept paid off. And i have been waisting way to much money lately.
 
Reef,
Maybe I misunderstand the question? You are asking how we pay ourselves? 1st of all, I see some post that say they are starting to pay theirselves. Why would you run a business if you don't get paid? If you want to do it for free, come on down, I'll work you long hrs and hard and be willing to not pay you! LOL You did not include how we decide how much to make. When you take a position with anyone, we know how much we need to be paid to accept their job offer. I certainly would not take a job for $5.00 / hr. when my bills tell me I need $10.00 / hr. You have to know how much money you need to survive. You need to know how much you want to save or invest in your personal life. This has nothing to do with your business yet. After you know what you need to make to live, then you start a process of doing a P & L of your business, then adding in your personal income. I am wondering how many survive by guessing a number? Where is you ability to make money and grow your business as well as make a fair living? What we make personally and what we charge for our business is two different items. Does this make sense? Thank You.
 
Tegrey Family of Coatings inc.
Please add a name to your signature. People like names :)

The post was for people to discuss the "hows" we pay ourselves. There are many ways to figure this. I certainly was not asking how much. Starting/Running a business can be very confusing and I was posting this discussion for others to learn the ways that others may do things.

And thanks for the post it was good, not many people compare it to taking a job working for someone else. I'm sure that will help others.
 
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We figured out what our fixed monthly bills were...power, water, car payment, hous payment, insurance, etc....We take that minimum out then at least the same amount as additional salary (split between the 2 of us). Anything thats left stays in the business, and gets used for equipment, advertising, etc...We never fail to double, or triple our living expenses in income, so theres always plenty left over for the business. If we get to the point for some reason where we cant pull that much and dont have enough in business savings to pay ourselves enough to cover bills, then its bye bye PW and hello corporate world. (shutters violently):eek:
 
Scott Stone said:
Scrappy,
Since you are just starting out, and appear to be turning a profit, I would advise you to find a good accountant that you can trust. Find someone that you might know that has a similar business and ask them who they use, and if they trust them. Remember that you have to trust an accountant, not like him, or her.

I am lucky, my accountant is a family friend that I can trust 100%.
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I already have one . . . He to is a friend of the family . . .and the guy is SHARP when it comes to numbers . . . I'm very fortuned to have such a good accountant/tax guy
 
reef said:
Tegrey Family of Coatings inc.
Please add a name to your signature. People like names :)

The post was for people to discuss the "hows" we pay ourselves. There are many ways to figure this. I certainly was not asking how much. Starting/Running a business can be very confusing and I was posting this discussion for others to learn the ways that others may do things.

And thanks for the post it was good, not many people compare it to taking a job working for someone else. I'm sure that will help others.
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Reef,
I was discussing how we pay ourselves. How much comes after we figure how to pay ourselves. A business owner must know how much personal income they need to figure how much they need to pay theirselves. If my family runs on $1000. / month, Then I need to adjust my P & L statement to pay myself that much plus any extra for savings, etc. Thank You.
 
I don't take a paycheck I work for free. Take out only what I need to pay for equipment and chemicals or other business bills. At the end of the year my accountant tells me what I need to take out to make my tax return work for us. Hugh
 
David, when you have 2-retirement checks coming in and the wife works fulltime and the house and cars are all paid for I can run my business like this. If I ever did anything right in my life it was making some right decisions along the way which I benifit from now. Hugh
 
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