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How much should I pay myself?
7 Pillars of entrepreneural success
Starting in Business

How much should I pay myself?

When I’m consulting to startups or small businesses there is a perennial question: “am I paying myself the right amount?”

That really is a difficult question to answer.

On the one hand, I’d like to say that you should pay yourself what you would have to pay someone else to do what you do. That’s difficult enough as it is. After all, as business owner you are almost certainly doing things above and beyond a normal Job Description – long hours, things “beneath” a manager’s role, the literal bottle-washer. How much would you pay someone for all that?

On the other hand you did not start your business to earn a salary. What you put into the business will reap you the rewards a salary earner will never get – even though it may take a few years to eventuate. You will have equity, you will have the satisfaction of working for yourself, and perhaps the most powerful of all, you will fulfill your dream – the reason you started in business.

Watch this video for a discussion of what you will have to think about when you try to work out what you should pay yourself.

Let’s be honest. At the beginning, what you are likely to be able to pay yourself is simply what’s left in the bank at the end of the day! That can be difficult for business owners who are single income families with mortgages especially in the early days when cash available in the business is in short supply.

I’ve written before about how business owners need to realise they may have to make sacrifices, and this may be one of them.

However your reward really comes from the future, the building of a sustainable business with a base for growth, steady profitability and a structure that you can mould to your vision. Stick to the vision. Focus on what it takes to make your business successful. Be clear about quality and customer service. Stay determined and constantly on track.

Sure it gets hard from time to time, but work smart and work hard, plan your way forward and you will get there. When you do, the celebration is worth the sacrifice!

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7 Pillars of entrepreneural success

I intend to give the readers of my blog value – thousands of dollars of value – for free with each post.

In my consulting practice I can charge up to $5,000 a day for my advice and in consulting engagements on start-ups, business diagnoses, strategic planning and marketing. Honestly, the time it takes me to prepare the information in these posts, and the value of the 30 plus years of experience I bring to these tips and tools, make each post of around $2,000 in value.

And you get it for free!

But the value I can give you doesn’t just rest in my own head. Sometimes I come across great articles about business and entrepreneurs that I can’t resist sharing with you.

And hey, it means I get 3 or 4 hours off not having to write or film another post of my own!

This week I came across a great article by Macquarie Bank about the 7 Pillars of being a successful entrepreneurial business:-

  1. Be patient
  2. Grow expertise by building your business organically
  3. Be disciplined with cost management
  4. Hire industry experts where needed
  5. Empower your people
  6. Keep the essence of your business alive
  7. Stay on top of new technologies and innovations.

Here’s the link to the article:-

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Starting in Business

Women Window Shopping
Are you thinking of starting your own business?
A 2014 survey showed that it is the dream of almost 60% of people in employment. I don’t know how many people not in employment wish to start a business, but either people in jobs really hate their jobs or it is built in to our genes that we want to be masters of our own destiny.
So if you want to start a business, what do you need to know?
In my opinion, having helped many successful start-ups over the last 30 years (and nursed a few failures!) I believe what you need to know is the answer to two basic questions.
Firstly, how will my business grow and prosper over many years? And secondly, what are the basic supports I need when I start?
Let’s deal with the first question first – how will your business grow and prosper over many years?
To answer this question you need information about the following:-
  • What kind of person am I?
  • What exactly is my business?
  • What skills do I need?
  • What money will I need?
  • What is my plan to grow and prosper?

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