How much should a business owner pay himself? Is it a certain percentage, or a set dollar amount?

Posted by admin on Jun 7, 2008 in Other - Business & Finance |
business
thelastavenger34 asked:


I have a small computer repair/webdesign business in Oklahoma. I also manage at a pizza place, go to school and am a volunteer firefighter. I dont know how much of my business funds to pay myself in order to keep everything paid for, and still help the business grow.

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2 Comments

Michael F
Jun 7, 2008 at 8:47 pm

Pay yourself an hourly, collect a paycheck from one business, and one from the other.

At the end of the year – you take a nice bonus from your end year profits.

I receive a salary as CEO and President of my company, plus receive quarterly dividends from my stock ownership in the holding company and various holdings in the subsidiary companies.


 
John A
Jun 9, 2008 at 12:38 pm

You don’t pay yourself anything until you calculate your net income. That’s your profit after all expenses. After you are sure you have a profit, you can dip into that for your needs, but don’t deplete it. Many business go belly up because the owner thinks because he worked hard he deserves a paycheck. You do not deserve a paycheck unless you have profit in hand. You don’t give yourself a paycheck based on income which is on the books, only income that is already in the bank. If you follow that rule your business will survive.


 

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