When Should You Start Paying Yourself?
So, you’ve started a business; maybe last week, last month, or even last year. You’re wondering, “When should I start paying myself?”. What to pay yourself and when to pay yourself will both depend on the financial stability of your business, reasonable salary amounts, and other business-specific factors. While there are many issues to consider (some legal), the most important question for a new business to answer should be “when”. After all, a business that doesn’t make you any money, is just a hobby!
As the business is getting off the ground, you may have decided that you won’t take a paycheck in order to “reinvest” all of the money back into the business. If you’ve got the means to do so without jeopardizing your personal and family situation, that’s fine. But, eventually, you need to be paid for your work. Too often, business owners play the martyr, working the longest hours for the littlest pay. So much so, that most employees of small businesses or start up firms think it’s normal for the business owner to not take pay. But, in reality, this isn’t sustainable. No one can work forever for no pay. Simple as that.
So, set a deadline. The deadline can be 3 months, or 3 years, but there has to be a deadline. And, we’re not talking about a deadline to take some money from the business, but a deadline to get on a regular payroll schedule and amount. If your team is getting paid every two weeks, so should you. Make it a reasonable amount for the work you are doing and get paid on a regular schedule, just like normal people.