How much should I pay myself?
Dear Aunty B,
Yeah!! My small online business is three years old and I just found out I made a profit!! The first two years were awful although I wasn’t forced to eat old bread rolls like Glen Condie.
I pay myself $60,000 a year and I want to pay myself more, but my husband wants me to invest it back in the business. He doesn’t earn a lot and it means life is a bit of a struggle. What do you think Aunty B? Should we starve for the business?
First, tell hubbie to butt out. It’s your business Lynette and you wear the pants. Speaking of clothes – I bet $60,000 would not even keep you in nice shoes!
Many entrepreneurs look back and wish they had not struggled so much at the start. (Mind you they are the ones that are still around!) If the business is three years old and you are confident of its ongoing success, it could be time to pay yourself a little more.
Have a look at how much you spend and work out how much you need to a week to live an adequate lifestyle.
Before you raise your pay, look at whether you can pay yourself a bonus or a commission. Check to see if you can claim any business-related expenses such as your car or phone bills.
Never forget as an entrepreneur, you have to learn to live on less. And remember what it is like to lie awake in bed at night wondering where the money for the wages bill is going to come from.