Getting Paid?

Discussion in 'Starting a Business' started by Arcaign, Nov 4, 2011.

  1. Arcaign

    Arcaign
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    It's often expected that everything goes into starting a new business and every red cent made is no exception to this rule. In order for your business to grow, its important to put profits back into it but at what point do you feel your business is stable enough to start earning a salary?
     
  2. Shahrier

    Shahrier
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    When you are earning some good profits. Enough for you to live a decent life.
     
  3. Mountain Man

    Mountain Man
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    This is a issue I have struggled with in the past for quite some time. Every time my business would earn some money I would "invest" in more tools, advertising, fix my logo, update my website etc. Every business is different but the owner should not get paid until the business is self sustaining. That is: The business can pay ALL expenses and still have money left over for investment, unforseen expenses, future advancement ect.
    It can be frustrating to be earning money and not seeing any of it, but if the company goes under because of a lack of funds you won't get anything. You could start out slow, pay yourself $100/month or a percentage of the quartly profits. This way you will at least be getting something and you can adjust this as the company becomes more profitable.
     
  4. mvh

    mvh
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    IMO, the business must show profit and have enough money in the bank to cover fixed costs (OPEX) for about 6months to a year. Then you can take out for yourself.
    What we do here is take a small salary for ourselves to cover our living expenses (this keeps the fixed costs down) etc.. and when the bookyear closes and dividends are declared - take a large portion.
    I agree with Mountain Main about "owner should not get paid until the business is self sustaining".

    Remember this: You cannot control revenue, but you can control costs. Positive cashflow is your bloodline.
     
  5. td2011

    td2011
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    This is a tricky one. I suppose the business has to be self sustainable as mvh said. Giving the business time to develop is obviously very important. Maybe do as mvh suggests and just take out your essential living costs until you are confident that the business can cope.
     

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